EUROSTAT'S GRANT PROJECT FOR 2015 ON-GOING...

EUROSTAT'S GRANT PROJECT FOR 2015

“ON-GOING INVESTIGATIONS THROUGH PILOT STUDIES FOR

ESTABLISHING HARMONISED DATA FOR LAND PRICES AND RENTS”

EUROSTAT GRANT AGREEMENT No. 08411.2015.004-2015.561

METHODOLOGICAL REPORT

on the data for agricultural land prices and rents in Slovenia

for 2015 and 2016

Date: August 2017 Country: SLOVENIA

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I. AGRICULTURAL LAND PRICES ................................................................... 4

1) FIELD OF OBSERVATION ................................................................................. 4 2) TREATMENT OF TAXES ................................................................................... 4 3) DATA SOURCES ............................................................................................... 5

3.1) DATA SOURCE USED ............................................................................................. 5 3.2) STABILIZATION OF COOPERATION WITH ADMINISTRATIVE DATA SOURCE

IN THIS FIELD .................................................................................................................. 5

4) REFERENCE PERIOD ....................................................................................... 5 5) TIME OF DATA COLLECTION ................................................................................. 5 6) COVERAGE ....................................................................................................... 6 7) PREPARATION OF ADMINISTRATIVE DATA ................................................... 6 8) DATA EDITING .................................................................................................... 12 9) CALCULATION OF AVERAGE ANNUAL PRICES OF AGRICULTURAL LAND 14 10) TREATMENT IN THE CASE OF MISSING DATA ............................................. 14 11) AVAILABILITY OF THE RESULTS ................................................................... 16 12) METHODOLOGICAL FINDINGS ...................................................................... 16

12.1) DEVIATIONS FROM THE COMMON METHODOLOGY ..................................... 16 12.2) PROBLEMS ENCOUNTERED ............................................................................. 16 12.3) ADVANTAGES ...................................................................................................... 16 12.4) DISANDVANTAGES ............................................................................................. 16

13) PLANS (POTENTIAL AMANDMENTS) FOR THE FUTURE ............................. 17

II. AGRICULTURAL LAND RENTS ................................................................. 18

1) FIELD OF OBSERVATION ............................................................................... 18 2) TREATMENT OF TAXES ................................................................................. 18 3) DATA SOURCES ............................................................................................. 18

3.1) DATA SOURCE USED ........................................................................................... 18 3.2) STABILIZATION OF COOPERATION WITH ADMINISTRATIVE DATA SOURCE

IN THIS FIELD ................................................................................................................ 18 3.3) INVESTIGATION OF POTENTIAL ADDITIONAL DATA SOURCES ..................... 18 3.3.1) FINANCIAL ADMINISTRATION OF THE REPUBLIC OF SLOVENIA ................ 19 3.3.2) ADMINISTRATIVE UNITS (LAU 1) ...................................................................... 20 3.3.3) FARM ACCOUNTANCY DATA NETWORK (FADN) ........................................... 22

4) REFERENCE PERIOD ..................................................................................... 23 5) TIME OF DATA COLLECTION ............................................................................... 23 6) COVERAGE ..................................................................................................... 24 7) PREPARATION OF ADMINISTRATIVE DATA ................................................. 24 8) DATA EDITING .................................................................................................... 26 9) CALCULATION OF AVERAGE ANNUAL RENTS FOR AGRICULTURAL LAND27 10) TREATMENT IN THE CASE OF MISSING DATA ............................................. 28 11) AVAILABILITY OF THE RESULTS ................................................................... 30 12) METHODOLOGICAL FINDINGS ...................................................................... 30

12.1) DEVIATIONS FROM THE COMMON METHODOLOGY ..................................... 30 12.2) PROBLEMS ENCOUNTERED ............................................................................. 31 12.3) ADVANTAGES ...................................................................................................... 31 12.4) DISANDVANTAGES ............................................................................................. 31

13) PLANS (AMENDMENTS) FOR THE FUTURE .................................................. 32

III. FINAL CONCLUSIONS .............................................................................. 33

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INTRODUCTION With the previous grant 2013 we set up the data collection system for agricultural land prices and rents in Slovenia according to the defined EU target methodology on agricultural land prices and rents and established methodologies for calculating average annual agricultural land prices and rents at NUTS 3 and NUTS 2 levels. However, due to the announced changes in our main (administrative) data source for agricultural land prices (in the structure of its database as well as in data transmission) and due to incomplete data on agricultural land rents (only data on rents for agricultural land owned by the state were available), we applied for a new Eurostat grant agreement 2015. Within our second grant on this topic we wanted to stabilize the statistical process established in the first phase (technically and procedurally), to make some further investigations concerning the available administrative data source(s) for agricultural land rents, to set up a formal basis for cooperation with holders of administrative data and to ensure the publication of requested data for the reference years 2015 and 2016. Results of this grant, i.e. average annual agricultural land prices/rents for requested land uses for 2015 and 2016, are the second statistical information on agricultural land prices and rents in Slovenia (the first one was data for the reference years 2013 and 2014). As it is requested, data from both grants (2013 and 2015) are available at NUTS 2 level and at national level.

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I. AGRICULTURAL LAND PRICES 1) FIELD OF OBSERVATION

Observation units were prices for one hectare of agricultural land sold in free trade in Slovenia for further agricultural use.

According to the common methodology on land prices and rents, prices for the following land uses of agricultural land were observed:

Arable land1)

Permanent grassland (meadows, pastures)

1) Considering criteria from the common methodology on land prices and rents (15.0% of irrigable arable land of the total utilized agricultural area) Slovenia is not required to collect data on the prices of arable land to be broken down into irrigable and non-irrigable arable land, because according to the latest 2010 Agricultural Census the share of irrigable agricultural area in Slovenia is 1.1% of utilized agricultural area and also according to the latest 2016 Farm Structure Survey this share is 1.1%.

2) TREATMENT OF TAXES

The price of agricultural land sold in Slovenia does not include value added tax (VAT), but includes:

Tax on transaction of real estate

Personal income tax on capital gains from the disposal of real estate property

The contract price for the real estate is the basis for paying:

the tax on transaction of real estate (in Slovenia the tax rate of this tax is 2%) or

value added tax (VAT).

The seller of the real estate is obliged by law to pay the tax on transaction of real estate. But, if agreed between the parties, it can be also paid by the buyer of the real estate. As regards paying the personal income tax on capital gains from the disposal of real estate property, this should be paid only in a special case,

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namely if the seller of the real estate sold the real estate that was gained after 1 January 2002 (this applies also for agricultural land). Depending on the length of the ownership of the real estate, this tax rate varies from 25% to 5%. After 20 years of the ownership of the real estate, personal income tax on capital gains from the disposal of real estate property should not be paid anymore.

3) DATA SOURCES 3.1) DATA SOURCE USED Data sources were the same as in the previous (first) grant:

the main data source: o the Surveying and Mapping Authority of the Republic of Slovenia -

Mass Real Estate Valuation Office (the Real Estate Market Register)

additional data sources: o the Surveying and Mapping Authority of the Republic of Slovenia -

Real Estate Office (the Real Estate Register) o the Ministry of Agriculture, Forestry and Food (the Land Parcel

Identification System – LPIS).

3.2) STABILIZATION OF COOPERATION WITH ADMINISTRATIVE DATA SOURCE IN THIS FIELD

For providing stable and formal procedures for data collection of agricultural land prices one of the planned activities was also preparation and harmonization of the agreement and the technical protocol for data transmission between the Statistical Office of the Republic of Slovenia (SURS) and the Surveying and Mapping Authority of the Republic of Slovenia. In this connection the agreement about data transmission and the technical protocol were signed in the first stage of the grant implementation.

4) REFERENCE PERIOD

Data on agricultural land prices refer to calendar years 2015 and 2016.

5) TIME OF DATA COLLECTION According to the technical protocol on the transmission of data on registered sale transactions with real estate, signed between the Surveying and Mapping Authority of the Republic of Slovenia (Mass Real Estate Valuation Office) and the Statistical Office of the Republic of Slovenia, in mid-April

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2016, we had at our disposal data on sales of all real estate (within these data also data on sales of agricultural land) for the reference year 2015 and in mid-April 2017 data for the reference year 2016. Data refer to the state of the Real Estate Market Register on 15 April of the reference year.

6) COVERAGE

Only transactions with arable land and permanent grassland sold in Slovenia by private owners or estate agencies in free trade for further agricultural use were included. As in the previous grant, also in this grant the following transactions were excluded:

Transactions between relatives (also inheritance)

Sales for non-agricultural purposes (lifestyle buyers, kitchen gardens,

construction sites, etc.)

Speculative transactions with agricultural land

Transactions with small areas of agricultural land (under the defined

threshold, i.e. 0.1 hectare). Considering the situation of agriculture in

Slovenia we found this threshold appropriate. The shares of areas (in

hectares) are:

o For 2015 the share of agricultural land sold and later excluded due

to defined threshold into total agricultural land exchanged is 3,37

% and

o for 2016 the share of agricultural land sold and later excluded due

to defined threshold into total agricultural land exchanged is 3,38

%

Transactions with agricultural land with a building or buildings on it

Transactions with agricultural land with mixed land use

7) PREPARATION OF ADMINISTRATIVE DATA

The Surveying and Mapping Authority of the Republic of Slovenia (its Mass Real Estate Valuation Office) changed in the second half of 2015 besides the structure of its database also the procedure of data transmission on sales of real estate from the Real Estate Market Register. From 2016 on only standard data transmission, i.e. for all real estate at the reference date and via the server of the Ministry of Public Administration, is possible.

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Consequently, all these changes influenced our procedures already set up in the previous grant. Fortunately, these changes had an impact only on the procedures at the first stage of preparing administrative data:

Additional work for our Office, such as exclusion of inappropriate data records

Modification of some procedures already set up in the previous grant

When the input file was prepared appropriately (with the appropriate data records on sales of agricultural land only) procedures in the later stage remained the same as they had been set up in the first grant.

Diagram 1: Procedure of preparing administrative data on agricultural land prices performed at SURS

Downloading of data and saving the data on the defined place (server) at the Statistical Office

Receipt of message from the Mass Real Estate Valuation Office (via e-mail) that on the server agreed data are prepared for downloading

Converting of data

into Excel format

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Sorting and excluding of data records

relating to sales of other real estate

Result: data file with data records of

sales of agricultural land only

Excluding of inappropriate data records with agricultural land:

unchecked transactions

non-market transactions

complex transactions

transactions with incomplete data Result: data file with appropriate records of sales of agricultural land

Deduction of VAT from the sales (contracting) value (if it is included in the sales value)

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Separation of records (only in contracts with many parcels):

identifications of parcels with recording of all other data

referring to particular contract

Supplementation of data on:

area of parcel (in m2)

assessed real estate value of parcel

Contracts

with one parcel

Contracts with more than one parcel:

division of total sales value of the contract on each parcel stated (on the basis of the shares of their assessed real estate values in the Real Estate Register)

division of total area of the contract on each parcel stated (on the basis of data on areas in the Real Estate Register)

Calculation of prices for m2 of agricultural land

Data from the

Real Estate

Register

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Calculation of price for m2 of parcel (to 6 decimal places)


land use in general (agricultural land or others)

share of agricultural land (in %) on the parcel

centroids of the parcel (centroid x and centroid y of the parcel)

Merging of spatial layers of LPIS and data from the Real Estate Register (centroids of the parcel) Result: supplementation of data on detailed land use of the parcels (as it is recorded at LPIS – Land Parcel

Identification System)

Data from the

Real Estate

Register

Data from LPIS (Ministry

of Agriculture, Forestry

and Food)

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Supplementation of data on region of sales of agricultural land, namely on:

statistical region and

cohesion region


mixed land use or not of the parcel (adequate codes) and on

(in)adequacy of the record of particular sale of agricultural land for further data

processing

Storage of data on sales of

arable land and

permanent grassland in the ORACLE database

Data from the Register of Spatial

Units

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8) DATA EDITING

Compared to the first grant, in the second grant the data editing system remained more or less the same. Data on prices from the ORACLE database were verified with the generalized software tool at our Office, so called “MetaSOP”, which automatically checks the data by defined criteria (for our purpose these criteria were already set up in the first grant) and marks the inappropriate data records. In the second grant for controlling administrative data by municipality (one new municipality was established in 2015) we just added one more criterion referring to no connection among the defined municipality and some of its cadastral municipalities which from 2015 belong to the new one. Both municipalities (the defined municipality and the new one) belong to the same statistical region. Data on prices from the ORACLE database were controlled:

first by land use, in general (other transactions, except with agricultural land which could be arable land, hops or permanent grassland, were excluded at first) then

by the number of sales of the same agricultural land within a calendar year (exclusion of speculative transactions with agricultural land) then

by the size of agricultural land (threshold: 1,000 m2) then

by detailed land use (parcels with mixed land use on the same parcel were excluded) and at last

by the price level (extreme prices, compared by particular land use of agricultural land within the same statistical region, were excluded). For seeking outliers in the variable CONTRACTING_ PRICE_M2 the method was used where the acceptability interval is determined by multiplying the distance between the first quartile and the median (left tail) and multiplying the distance between the median and the third quartile (right tail). The acceptability interval is determined as [Me-C∙D_Q1,Me+C∙D_Q3 ], where D_Q1=max(Me-Q1,A∙Me), D_Q3=max(Me-Q3,A∙Me), and C is the parameter determined by parametrising the method and determines the width of the acceptability interval.

In our case strata for seeking outliers are determined by the variables STAT_REG_ID and LAND_USE_ID, while

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parameter C for determining the width of the acceptance interval equals 5 and the minimum distance multiplier is A=0. For implementing the method, the Banff procedure proc outlier with the “current” method is used.

Table 1: Number of records of arable land sold, Slovenia, 2015 and 2016

Table 2: Number of records of permanent grassland sold, Slovenia,

2015 and 2016

Records 2015 2016

Records from administrative data source (raw data)

1627 1579

Records excluded in data editing, total 885 855

of that due to speculative reason 6 0

of that due to defined threshold (1,000 m2) 540 538

of that due to building on agricultural land 3 5

of that due to mixed land use 304 281

of that due to extreme price level 32 31

Records with minor correction in data editing, total

0 0

Records after data editing (final micro data)

742 724

Records 2015 2016

Records from administrative data source (raw data)

2156 2276


of that due to speculative reason 12 16


of that due to building on agricultural land 0 1

of that due to mixed land use 268 247

of that due to extreme price level 24 14

Records with minor correction in data editing, total *

0 1

Records after data editing (final micro data)

1506 1605

Note: * Correction of code of municipality.

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9) CALCULATION OF AVERAGE ANNUAL PRICES OF AGRICULTURAL LAND For calculating average annual prices for requested land uses of agricultural land, only areas (parcels) of at least 1,000 m2 were included. Methods of calculation of average annual prices:

for statistical regions (NUTS 3 level): simple arithmetic mean of prices for m2 of arable land/permanent grassland;

for cohesion regions (NUTS 2 level): weighted arithmetic mean of average annual prices for one hectare of arable land/permanent grassland of statistical regions. Average annual prices of statistical regions for certain land use of agricultural land were weighted with data from the latest Farm Structure Survey (FSS), namely on the area of certain land use of agricultural land of statistical regions (arable land, permanent grassland). Weights for data 2015 correspond to data of FSS 2013, but data for 2016 to data of FSS 2016;

for Slovenia (NUTS 1 (0) level): weighted arithmetic mean of average annual prices for one hectare of arable land/permanent grassland of cohesion regions. Average annual prices of cohesion regions for certain land use of agricultural land were weighted with data from the latest Farm Structure Survey, namely on the area of certain land use of agricultural land of cohesion regions (arable land, permanent grassland). Weights for data 2015 correspond to data of FSS 2013, but data for 2016 to data of FSS 2016.

10) TREATMENT IN THE CASE OF MISSING DATA

For calculating average annual prices of agricultural land for requested land uses at the cohesion level the method of treatment in the case of missing (appropriate) data had been defined and used in the previous grant. We decided for the linkage method. This means that for certain land use of the statistical region we take the last known average annual price of agricultural land and adjust it with the price movement (percentage) of the average annual prices for the same land use of the other (similar) statistical region in the current period compared to the previous period (similarity of the statistical region is defined by the natural features of the statistical region). For 2015 and 2016 we had at our disposal at least one appropriate data at the statistical region level, so the defined method for the case of missing data from the previous grant was not used.

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The following tables show the number of records of agricultural land sold by statistical regions that were included in the calculations of average annual prices of agricultural land for cohesion regions.

Table 3: Number of records of arable land sold, statistical regions,

Slovenia, 2015 and 2016

Cohesion region code

Statistical region code

Statistical region name 2015 2016

SI03 SI031 Pomurska 700 729 SI03 SI032 Podravska 359 377 SI03 SI033 Koroška 6 13 SI03 SI034 Savinjska 80 87 SI03 SI035 Zasavska 4 7 SI03 SI036 Posavska 94 87 SI03 SI037 Jugovzhodna Slovenija 117 106 SI03 SI038 Primorsko-notranjska 10 11 SI04 SI041 Osrednjeslovenska 82 118 SI04 SI042 Gorenjska 36 44 SI04 SI043 Goriška 17 16 SI04 SI044 Obalno-kraška 1 9 Note:

SI03… Vzhodna Slovenija

SI04… Zahodna Slovenija

Table 4: Number of records of permanent grassland sold, statistical regions,








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11) AVAILABILITY OF THE RESULTS For 2015 and 2016 the following results are available at cohesion region level and at national level:

Average annual prices per hectare of arable land and

Average annual prices per hectare of permanent grassland

12) METHODOLOGICAL FINDINGS

12.1) DEVIATIONS FROM THE COMMON METHODOLOGY In 2016 by clarifying with the Financial Administration of the Republic of Slovenia which taxes should be paid by transaction of agricultural land and who is, usually, the payer of these taxes we asked the Financial Administration of the Republic of Slovenia to analyse their data on payers of the tax on transaction of real estate for the 2013-2015 period. This analysis showed that in more than 75% of the cases the payer of this tax was the seller of agricultural land. This means that from the Real Estate Market Register about 75% of data records on sales of agricultural land included the real estate tax, but others (about 25%) did not. Nevertheless, considering the definition of the agricultural price from the latest version of the common methodology (i.e. from February 2017) as the “actual price agreed upon the transactors” we concluded that our data on contracting prices for agricultural land received from the Real Estate Market Register were in line with the common methodology.

12.2) PROBLEMS ENCOUNTERED

RECEIVING DATA ON SALES OF AGRICULTURAL LAND Due to changes in data transmission of our main data source (structure of its database and standard export of data from the Real Estate Market Register), lots of clarifications were needed and time was spent until we received all requested information for modifying our data collection system for agricultural land prices.

12.3) ADVANTAGES Data collection from detailed administrative source(s) is of great advantage considering the principle of cost-effectiveness and coverage. With our data sources all registered transactions with agricultural land in Slovenia can be captured at the lowest costs.

12.4) DISANDVANTAGES

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Data received from external databases could not always be well controlled. For example, in spite of assurance to receive data from the main data source (i.e. Real Estate Market Register), which had been already checked, parcels for construction were still found among them, or in case of new municipality appeared in 2015, its data were recorded at the previous municipality. Further (and often unexpected) changes in the structure of external databases have an impact on procedures already set up in this statistics. In our case it happened that in June 2015 we were already informed by the Surveying and Mapping Authority of the Republic of Slovenia that due to changes in 2015 in the structure of its database modifications of some procedures already set up would have to be done on our side for data of the first next reference year, namely for 2015.

13) PLANS (POTENTIAL AMANDMENTS) FOR THE FUTURE As regards data collection of agricultural land prices in Slovenia, within this (second) grant we managed to stabilize the statistical process established in the first grant (technically and procedurally) and confirmed that the defined data collection system for agricultural land prices will be used also in the future. But, nevertheless, due to (un)expected changes in our data sources some modifications of the current data collection system still can be made in the future. For example, in the (near) future one of our additional data sources (i.e. the Real Estate Register) could be changed. For the time being we do not know yet what kind of changes will happen. But when this happens, some modifications in our procedures already set up could have been made. And, finally, as it was also stated in the methodological report for the first grant, our main data source, i.e. the Surveying and Mapping Authority of the Republic of Slovenia, has been running the Real Estate Market Register since 2007. Data on real estate prices are thus available from 2007 on, but to extend backwards the data series on agricultural land prices could not be possible and/or reasonable due to insufficient controls of data and changes in the database in this main data source and also due to unavailability of all requested data from additional data sources indispensable for splitting data on transactions with requested land uses of agricultural land (for example, states of the Real Estate Register from previous years are no longer available).

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II. AGRICULTURAL LAND RENTS 1) FIELD OF OBSERVATION

Observation units were rents for one hectare of agricultural land rented in Slovenia for agricultural use.

According to the common methodology on land prices and rents, rents for the following land uses of agricultural land were observed:

Arable land

Permanent grassland

2) TREATMENT OF TAXES

The rent of agricultural land observed does not include value added tax (VAT).

3) DATA SOURCES

3.1) DATA SOURCE USED The sole data source for agricultural land rents was:

Farmland and Forest Fund of the Republic of Slovenia.

3.2) STABILIZATION OF COOPERATION WITH ADMINISTRATIVE DATA SOURCE IN THIS FIELD For providing stable and formal procedures for data collection of agricultural land rents one of the planned activities was also preparation and harmonization of the agreement and the technical protocol for data transmission between SURS and the Farmland and Forest Fund of the Republic of Slovenia. In this connection the agreement about data transmission and the technical protocol were signed in the second stage of the grant implementation.

3.3) INVESTIGATION OF POTENTIAL ADDITIONAL DATA SOURCES In Slovenia agricultural land is given for rent by the Farmland and Forest Fund of the Republic of Slovenia (this agricultural land is state-owned) and also by private owners of agricultural land.

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Within this grant our main goal was to examine the possibility to capture also rents for agricultural land owned by private owners. In this connection we focused on available data on rents for agricultural land from the following possible data sources:

Financial Administration of the Republic of Slovenia

Administrative units (LAU 1)

Farm Accountancy Data Network (FADN)

For each of the data sources stated above we studied availability of data and different quality aspects.

3.3.1) FINANCIAL ADMINISTRATION OF THE REPUBLIC OF SLOVENIA The Financial Administration of the Republic of Slovenia gathers data on rents for agricultural land from the following sources:

“Application form for determination of actual user of agricultural and forest land”: for 2015 about 1,300 rents for agricultural land, i.e. for 10,000 hectares, were recorded. But most of them were free rents;

“Declaration for personal income tax assessment for income from renting property”: about 500 such tax assessments of personal income per year are recorded.

From “Application form for determination of actual user of agricultural and forest land” it is possible to receive some data on rent for agricultural land, but, unfortunately, not for data on annual rent. These data cannot be found in this form. Within the “Declaration for personal income tax assessment for income from renting property” form all requested (detailed) data for statistical purposes also do not exist (e.g. all declarations are not fulfilled with detailed identifier of the real estate, for example they do not always have the identification marker for the real estate, because this is not obligatory). This tax should be paid after the income from this title is received. In case of rents longer than 1 year, personal income tax can be paid every year or in one-off payment. By estimation of the Financial Administration of the Republic of Slovenia, data from this source do not give the actual picture about rents for agricultural land in Slovenia.

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And when agricultural land is given for rent from a natural person to a legal person, calculation and payment of personal income tax is realized by the payer of income (i.e. legal person) with the settlement of tax deduction, but its payment is then recorded in its business record. “Personal income tax assessment for income from renting property” is a cedular (final) tax and in Slovenia its rate is 25%. Among data on rents for agricultural land the Financial Administration of the Republic of Slovenia captures also data on rents for agricultural land of the Farmland and Forest Fund of the Republic of Slovenia, which we already receive from the Fund. Considering everything mentioned above, we concluded that for the statistical purpose (i.e. for observing rents for agricultural land owned by private owners) the Financial Administration of the Republic of Slovenia could not be an additional data source due to incomplete data on agricultural land rents. 3.3.2) ADMINISTRATIVE UNITS (LAU 1) Due to incomplete data at the Financial Administration of the Republic of Slovenia, we decided to look for another (possible) administrative data source. And we found that by the Agriculture Act (OJ RS, No. 71/2011) the person (natural/legal) that gives agricultural land, farm or forest for rent is obliged to make an offer for rent of agricultural land, farm or forest and it should be published for 30 days on:

the bulletin board of the administrative unit (LAU 1) in which the majority of the land is located and

on the uniform state portal eUPRAVA. The offer for rent should contain the following information:

Parcel number

Cadastral municipality

Area (m2)

Length of the rent

Annual rent in EUR

If the renting contract is made, the administrative unit (LAU 1) has to give an approval of this legal business. At this point we should also point out that according to the Slovenian Agriculture Act, in Slovenia renting contracts that define rent in the form of work on the farm of the

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person giving agricultural land for rent or in the share of the crop and the income expected, respectively, are null and void. In this connection we asked all administrative units (LAU 1) in Slovenia (altogether 58) about some information on rents for agricultural land. For this purpose we sent them an e-mail with the following questions:

o How many approvals of renting contracts for agricultural land owned by other owners (except for agricultural land owned by the state) are usually given per year in your administrative unit (absolute number, total area of agricultural land given in rent)?

o Are among published offers for renting agricultural land also free rents of agricultural land?

o Do you send data on approval of legal business with agricultural land in some central record at the country level?

o Do you keep the records about approvals for agricultural land for rent at your administrative unit? If so, do you have at your disposal also detailed data on agricultural land given in rent?

o Do you have at your disposal the data on agricultural land given in rent at least from 2013 on?

o If needed, in what form could our Office receive these data for the statistical purpose (in paper/electronic version)?

All administrative units (LAU 1) sent us their replies. After reviewing their replies and information received on the uniform state portal eUPRAVA our main findings were:

Administrative units (LAU 1) in Slovenia are obliged by the law to publish a renting offer for agricultural land, but they are not obliged to verify if they were all in the end actually realized and in what form they were realized.

Most of the administrative units (LAU 1) have published on average from 1 to 3 renting offers for agricultural land owned by private owners per year. In administrative units (LAU 1) where agriculture is more intensive this number could be as high as 10 renting offers per year.

Among offerers of agricultural land for rent were also the Farmland and Forest Fund of the Republic of Slovenia, whose data we have already at our disposal, and municipalities, parishes and public institutions, which also owned agricultural land in Slovenia.

Also some free rents of agricultural land were observed.

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Each administrative unit (LAU 1) has documents relating to approvals for agricultural land in its district at its disposal (also from 2013 on), but it does not make (keep) any records from these documents.

No administrative unit (LAU 1) sends any data from the documents relating to rents of agricultural land into a central record at the country level. In Slovenia such a record at the country level does not exist at all.

On the basis of all information and data received from administrative units (LAU 1) and on the uniform state portal eUPRAVA we concluded that administrative units (LAU 1) could also not be appropriate additional data source for agricultural land rents due to small number of renting offers published (some of them had either incomplete or not detailed data) and even smaller number of renting offers approved. Besides this, among published renting offers and approved renting contracts are also those of the Farmland and Forest Fund of the Republic of Slovenia, whose data we have already at our disposal. 3.3.3) FARM ACCOUNTANCY DATA NETWORK (FADN) At last we examined data on rents for agricultural land in the Farm Accountancy Data Network (FADN) and made some comparisons with the Farm Structure Survey Data (FSS) 2013. For this purpose we asked the Ministry of Agriculture, Forestry and Food for the FADN data for the 2013-2015 period (at the time of our grant for 2015 only provisional FADN data existed). In this connection our main findings were:

In FADN of Slovenia, separate data only on areas of agricultural land in rent existed, but not on payments of rents for agricultural land.

For the time being in FADN at the agricultural holding level only data on payments of rents for the total area of agricultural land were available. This means that data on payment of rents for agricultural land could include, besides rents for arable land and/or permanent grassland, also rents for permanent crops.

Among agricultural holdings included in FADN, also those agricultural holdings which rented the agricultural land from the Farmland and Forest Fund of the Republic of Slovenia could be found.

FADN data also showed that free rents for agricultural land or payments in another form (FADN form included also the category “payments in kind: in crops, animals, services, etc.”) also existed. In 2013 and 2014, the share of agricultural holdings with no rent

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payments for permanent grassland or in another form of payment was more than 50% and in 2015 (by provisional data) slightly less than 50%. In the same period, the share of agricultural holdings with no rents for arable land or in another form of payment increased from 18% in 2013 to 24% in 2015.

For 2013 the comparison of FADN (weighted) data on the areas of agricultural land in rent with the data from the Farm Structure Survey 2013 showed almost the same share of agricultural land rented in utilized agricultural area (UAA) and also at the agricultural holdings level there were no significant differences in data on agricultural area in rent reported for FSS 2013, which meant that those agricultural holdings captured in both surveys reported to our Office for the purpose of FSS 2013 fairly accurately.

It would be necessary to consider if in the future FADN of Slovenia can also provide the information on arable land in rent and on permanent grassland in rent, separately, and information on the owner of agricultural land rented (the Farmland and Forest Fund of the Republic of Slovenia, municipalities, persons, etc.) as well.

With relation to all the facts mentioned above, we found out that at this stage FADN data could not be used as an additional data source for rents of agricultural land owned by private owners.

4) REFERENCE PERIOD

Data on agricultural land rents refer to calendar years 2015 and 2016.

5) TIME OF DATA COLLECTION

For 2015 we received data on rents for requested land uses of agricultural land in March 2016 and for 2016 in February 2017. Data on rents refer to the state of the internal database of the data source on 31 December of the reference year. But by comparison of data on agricultural land rents within the successive years we found out in 2017 that in the previous year the administrative data source had prepared for our Office data for 2015 inappropriately (i.e. some aggregated data by all natural/legal persons on the parcel). Therefore, we asked in 2017 the data source again for the non-aggregated data on agricultural land rents for 2015, namely for data on agricultural land rents as they derived from its contracts. We received the requested data on rents for 2015 in April 2017.

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According to the technical protocol on the transmission of data on agricultural land rents, signed between the Farmland and Forest Fund of the Republic of Slovenia and the Statistical Office of the Republic of Slovenia, in the future we shall have at our disposal the requested data on agricultural land rents for the previous year by the end of January.

6) COVERAGE Only data from the renting contracts for agricultural land made between the Farmland and Forest Fund of the Republic of Slovenia and the natural/legal persons, irrespective of the length of the rent contract, were taken into account. As in the previous grant, also in this grant the following rents of agricultural land were excluded:

Rents for small areas of agricultural land (under the defined threshold)

7) PREPARATION OF ADMINISTRATIVE DATA As in the previous grant also for this grant the Farmland and Forest Fund of the Republic of Slovenia gave us data on agricultural land rents from its internal database. These data were already split into rents for arable land, meadows and pastures. The procedure of preparing administrative data on agricultural land rents remained mostly unchanged, just an additional variable (i.e. version of administrative data) had to be added in the ORACLE database due to new processing of data on agricultural land rents for 2015 and for the case that such situation occurs again in the future. Diagram 2: Procedure of preparing administrative data on agricultural land rents performed at SURS

Receipt of data from the

Farmland and Forest Fund

of the Republic of Slovenia

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Supplementation of identification number to all records related to rent for:

arable land and

permanent grassland

Calculation of rent for m2

of parcel / part of parcel (to 6 decimal places)

Supplementation of data on region of agricultural land in rent, namely on:

statistical region and

cohesion region

Conversion of codes of land use of parcels / parts of parcel to detailed land use by LPIS (Land Parcel Identification System)

Data from the

Register of Spatial

Units

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8) DATA EDITING

Also data on agricultural land rents from the ORACLE database were then verified with the generalized software tool at our Office: “MetaSOP”. Due to the receipt of detailed data and the fact that many parts of one parcel can be rented, within the “MetaSOP tool” data on agricultural land rents could be controlled only:

by the completeness of data and then

by the size of agricultural land (threshold: 1,000 m2).

Table 5: Number of records of arable land and permanent grassland in rent, total, Slovenia, 2015 and 2016

Records 2015 2016

Records from administrative data source (raw data) 138130 141475


of that due to incompleteness of data 0 0


Records after data editing (final micro data) 74031 72897


(in)adequacy of the record of particular rent for agricultural land for further data processing and

version of administrative data

Storage of data on agricultural land rent

in the ORACLE database

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Table 6: Number of records of arable land in rent, Slovenia, 2015 and 2016

Records 2015 2016






Table 7: Number of records of permanent grassland in rent, Slovenia, 2015 and 2016

Records 2015 2016






9) CALCULATION OF AVERAGE ANNUAL RENTS FOR AGRICULTURAL

LAND

For calculating average annual rents for requested land uses of agricultural land, only areas (parcels and parts of parcels) of at least 1,000 m2 were included. Methods of calculation of average annual rents:

for statistical regions (NUTS 3 level): simple arithmetic mean of annual rents for m2 of:

o arable land

o permanent grassland

o arable land and permanent grassland, total;

for cohesion regions (NUTS 2 level): weighted arithmetic mean of average annual rents for one hectare of “arable land and permanent grassland, total” of statistical regions.

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Average annual rents of statistical regions for “arable land and permanent grassland, total” were weighted with data from the latest Farm Structure Survey, namely on the rented area of agricultural land of statistical regions. Weights for data 2015 correspond to data of FSS 2013, but data for 2016 to data of FSS 2016;

for Slovenia (NUTS 1 (0) level): weighted arithmetic mean of average annual rents for one hectare of “arable land and permanent grassland, total” of cohesion regions. Average annual rents of cohesion regions for “arable land and permanent grassland, total” were weighted with data from the latest Farm Structure Survey, namely on the rented area of agricultural land of cohesion regions. Weights for data 2015 correspond to data of FSS 2013, but data for 2016 to data FSS of 2016.

10) TREATMENT IN THE CASE OF MISSING DATA As mentioned in the methodological report for the previous grant, the Farmland and Forest Fund of the Republic of Slovenia manages and gives at disposal the state-owned agricultural land. The Fund has many parcels around Slovenia. To assure rational use and cultivation of agricultural land, the Fund gives agricultural land (parcels and even parts of parcels) in exchange for rent. Rent contracts are mainly made for a long term (10 years). Regarding the facts mentioned above, a lot of data on agricultural land rents at statistical region level were available and therefore for calculating average annual rents for agricultural land at the cohesion level no method of treatment in the case of missing (appropriate) data on agricultural land rents had been developed and used. The following tables show the number of records of agricultural land in rent that were included in the calculations of average annual rents for agricultural land.

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Table 8: Number of records of arable land and permanent grassland in rent, total,

statistical regions, Slovenia, 2015 and 2016







Table 9: Number of records of arable land in rent, statistical regions,








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Table 10: Number of records of permanent grassland in rent, statistical regions,








11) AVAILABILITY OF THE RESULTS For 2015 and 2016 the following results are available at cohesion region level and at national level:

Average annual rents per hectare of arable land and permanent grassland, total

At statistical region level separate data on rents per hectare of arable land and permanent grassland were also available, but as in the Farm Structure Survey separate data on rented area of arable land and permanent grassland did not exist at all, we could not aggregate them properly to cohesion region level and national level.

12) METHODOLOGICAL FINDINGS

12.1) DEVIATIONS FROM THE COMMON METHODOLOGY Considering our data source (i.e. administrative data source), results (average annual rents per hectare of arable land and permanent grassland, total) are in line with Eurostat's methodology.

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12.2) PROBLEMS ENCOUNTERED CONTROLING OF ADMINISTRATIVE DATA The Farmland and Forest Fund of the Republic of Slovenia gives besides parcels also parts of parcel in rent. Among them are also parcels with mixed land use and so we cannot control their data on actual land use with appropriate administrative data source. Furthermore, within the year some contracts expire, some of them are renewed (with or without changes), and also new renting contracts are made. Consequently, data records from the internal database of the administrative source cannot be completely controlled within the years. In this connection we could not detect that for 2015 we received some aggregated data by parcel (by natural/legal persons) instead of non-aggregated. Therefore, all the procedures of preparing, editing and processing of data on agricultural land rents for 2015 had to be done again. Some additional controls about data received have been made at our Office, but, in general, we are forced to trust the administrative source about its data. INCLUDING ADDITIONAL DATA ON AGRICULTURAL LAND RENTS All rents for requested land uses of agricultural land that existed in Slovenia are not covered by our sole data source, i.e. Farmland and Forest Fund of the Republic of Slovenia (according to the results of the 2010 Agricultural Census in Slovenia agricultural land in rent by the Fund represents about a third of all agricultural land in rent in Slovenia). But this Fund gives only state-owned agricultural land for rent and it is assumed that these rents paid to the Fund are lower than rents for agricultural land paid to private owners of agricultural land. So within this grant our main goal was to find out if any useful administrative data on rents for agricultural land owned by private owners existed. After our examinations we found out that these data were (and still are) either incomplete or not detailed enough to be used for our statistical purpose.

12.3) ADVANTAGES

Our administrative data with detailed data on agricultural land rents reduces besides the costs for the survey also the time spent and the number of additional activities needed in the data editing phase.

12.4) DISANDVANTAGES As mentioned in the methodological report for the first grant:

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All rents for agricultural land that existed in Slovenia are not covered by this source, but just rents for state-owned agricultural land;

Rents for m2 of state-owned agricultural land can vary significantly within a statistical region (due to various reasons), but it is still all right, so these data cannot be checked objectively (automatically) within a particular statistical region. In this connection we are forced to trust our administrative data source.

13) PLANS (AMENDMENTS) FOR THE FUTURE Within the second grant we tried to capture from available administrative sources data on rents for agricultural land owned by private owners, but we found out that the examined administrative sources in this field could not provide us the requested information (i.e. detailed data on rents for agricultural land owned by private owners). Besides this, as mentioned in the first grant, in the near future primary data collection (a statistical survey) for these data is not planned in Slovenia due to cost-effectiveness. We know that these data are very difficult to capture by the regular statistical survey. This fact confirmed also experiences from other EU Member States, i.e. these data are, besides the prices of agricultural land, of sensitive nature and agricultural producers are not in favour of revealing them properly. The current data collection system thus remains incomplete, but for the time being the only possible. Therefore, this system will be used also in the future and it will be modified, i.e. completed with additional data on rents for agricultural land owned by private owners of agricultural land, when possible. But as it seems now, this could not be realized in the near future. The first step in this direction could be a consideration if FADN of Slovenia in the future can provide also the information on arable land in rent and on permanent grassland in rent separately, and information on the owner of agricultural land rented (the Farmland and Forest Fund of the Republic of Slovenia, municipalities, persons, etc.) as well. So in the third phase of establishing the data collection system for agricultural land prices and rents (within the grant 2016 “On-going investigations through pilot studies for establishing harmonized data on land prices and rents”) we will focus mainly on examining the possibility to separate data on weights for agricultural land in rent into weight for arable land in rent and weight for permanent grassland in rent. In this connection we intend to make some further analyses of FADN data and the structure of other administrative data in this field to find out if FADN could be used as a complementary data source for dividing total weight for agricultural land in rent into separate weights for arable land in rent and permanent grassland in rent at NUTS 3 and NUTS 2 levels.

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As regards extending backwards the data series on agricultural land rents before 2013 our opinion is the same as it was stated in the methodological report for the first grant, i.e. this extension could not be possible or reasonable because in Slovenia data on rents for agricultural land owned by private owners of agricultural land do not exist yet, while the Farmland and Forest Fund of the Republic of Slovenia cannot guarantee all data needed from its database for the previous period.

III. FINAL CONCLUSIONS Within our second grant on this topic we wanted to stabilize the statistical process established in the first phase (technically and procedurally), to make some further investigations concerning the available administrative data source(s) for agricultural land rents, to set up a formal basis for cooperation with holders of administrative data and to ensure the publication of requested data for the reference years 2015 and 2016. In this connection we:

Signed an agreement about data transmission and technical protocol with the following data providers: the Surveying and Mapping Authority of the Republic of Slovenia and with the Farmland and Forest Fund of the Republic of Slovenia;

Examined all the changes that had occurred in our main data source for agricultural land prices (i.e. the Surveying and Mapping Authority of the Republic of Slovenia) and then we made appropriate modifications of our data collection system.

As regards assuring the data on rents for agricultural land owned by private owners, at first we examined the availability of data of the Financial Administration of the Republic of Slovenia, but after clarifications of some additional questions with this administration we found out there were no possibilities to use these data for the requested statistical purpose and so we then looked for another alternative. By further examinations we found some data at administrative units (LAU 1) and on the uniform state portal eUPRAVA, namely within the announcements of rents for agricultural land. Also by these sources we met with little success and so we made at last also some analyses of data on agricultural land rents from the Farm Accountancy Data Network (FADN). Unfortunately, we found out that by all potential administrative sources that we had examined the requested data could not be used for our statistical purpose. Their data were either incomplete or not detailed enough to meet the defined methodological requirements in this field.

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Results of this grant, i.e. average annual agricultural land prices/rents for requested land uses for 2015 and 2016 at NUTS 2 level and at national level, are the second statistical information on agricultural land prices and rents in Slovenia (the first one was data for the reference years 2013 and 2014). According to our planned calendar of publishing data these results will be published in Slovenia on 28 September 2017 in the First Release and on the SI-STAT Data Portal.

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