Restitution of Farm Land in Bulgaria

Ann Louise Strong*
January 1995

All of the countries of Eastern Europe and of the former Soviet Union are grappling with questions of privatization, including what to privatize and how to proceed. Restitution of property to former owners or their heirs is one means of privatization. B ulgaria has had particular success with restitution of farm land despite substantial obstacles; over 50 percent of its citizens have established valid claims to such land, and the restitution process is expected to be completed in 1995.

This article first will address the issues that underlie a decision to restitute property and then review the choices made by Bulgaria and the outcomes of those choices.

Restitution Issues
One common element of the communist era was the socialization of real property. However, there were differences between countries in the application of the tenet that property belonged to the state. Bulgaria was unusual in that virtually all residentia l property, both that existing at the onset and that constructed during the period of communist rule, was privately owned, although subject to state controls. Bulgaria was typical in that virtually all agricultural property was taken without compensation for state cooperatives and most of this subsequently was merged into giant state farms.

With the fall of communism came demands for the return of property. In most countries, lands had been seized with no compensation paid, so prior owners or their heirs believed that they had a claim founded in morality-although these claims were asserted against a different government than that which had taken the property. These claims were asserted throughout Eastern Europe and the Baltic countries, where the seizures dated from the mid-1940s, but not in the countries that had been part of the Soviet Union after 1917, suggesting that time elapsed diminishes the sense of violation of personal or familial rights. Most East European and Baltic countries, with Poland as the notable exception, have accepted the premise that property should be restituted. It is difficult to judge to what extent morality has been the deciding factor; the size of the constituency for restitution and the desire for an expeditious return of land to private ownership and management also have weighed heavily.

The decision to proceed with restitution of land triggers the need for many choices. Among them are: who is to be eligible-degree of consanguinity, years of farm labor with no prior property ownership, citizenship, residence, loss prior or subsequent to some sensitive political event are the more critical questions; what proof of prior ownership will be required-deed, other documentation, oral testimony, official records; how former and new boundaries will be established; whether the land actually los t can or will be returned or whether alternative land or compensation will be offered and, if the latter, how the lost land will be valued; whether there will be a maximum amount of land to be restituted to a claimant; and what form of recording system wi ll be adopted.

If the land had been placed in a cooperative, nominal title might have remained with the prior owner who, however, would have retained no use rights over the property and would have had the choice only to work for the cooperative in accord with its direct ives or leave. If the land had been amalgamated into a state farm, private title generally was lost. Further, since the state viewed title as meaningless, recording systems fell into disuse and often were destroyed. Deeds frequently were lost; many wer e intentionally destroyed if they were evidence that a family had belonged to the landowning class.

The Bulgarian Experience
Prior to communism, Bulgaria was a rural nation of small land owners. Largely as a result of three land reforms - those of 1879, 1921, and 1948 - there were almost no large land owners, with 93 percent of holdings under 25 acres (10 hectares) in 1946 (Cr ton, 1987). The one million farms consisted of 12 million separate parcels (Mikhailov, 1993). The communists initially forced farmers to enter cooperatives and subsequently merged most of them into state farms, with loss of title to the prior owners and n o compensation. In dramatic contrast to ownership patterns in 1946, at the height of concentration in the 1970s, the average agro-industrial complex had 5,000 workers and farmed about 59,000 acres (about 24,000 hectares). In 1989, cooperatives and state farms held 99 percent of Bulgaria's farm land. Only 19 percent of the work force was in agriculture and forestry, and many of them were part-time, retired from other jobs (Bulgaria, 1991).

Given the number of people who had been farm land owners and who had lost their property, the pressure for passage of some form of restitution act was not surprising. The farm land restitution law (The Law of Ownership, 1991) was passed in 1991, authoriz ing claims for property taken during 1946 or later and placed in cooperatives or state farms. Claims were filed representing 54 percent of the population. Claims also were filed by churches, mosques and other institutions, municipalities, and the state. The first step for the Land Commissions that were established under the law was determination of validity of the claims. Often testimony from elderly people in a village was the sole means of deciding who had owned what, since boundaries had been oblit erated with the formation of the vast state farms and land records often had been destroyed. Surveying to establish old boundaries or to set new boundaries has proved the most expensive**, time consuming aspect of the restitution process.

Claimants wanted land; fewer than 0.5 percent asked for compensation instead. With Bulgaria's high unemployment, continued inflation, and low productivity, the hunger for a piece of land, land that might offer the possibility of future appreciation, is u nderstandable. Claims exceeded the supply of land in 40 percent of the country, in part because some land had been urbanized over recent decades and so was unavailable for restitution and in part because people who worked in the cooperatives but did not contribute land are among those eligible to claim. Where there was an excess of claims, a pro rata reduction in land returned was used.

Only 13 percent of the land, but land representing almost one-third of the claimants, has been restituted in its former boundaries. This is predominantly land in mountainous areas where prior boundaries could be determined. Elsewhere, it has been the di fficult task of the Land Commissions to prepare reallotment plans, consolidating holdings but also assuring that the new land is comparable in productivity to the plots previously owned. Some restitutees have challenged these reallotment plans in court, holding up the return of land to people surrounding the challenged site.

As of 1993, 91 percent of the parcels of land restituted was under 2.5 acres (1 hectare) in size, with the remaining parcels not exceeding 12.4 acres (5 hectares). Clearly holdings this small cannot be farmed efficiently.

Yet, as people acquire title to their land, it is apparent that most intend to keep it (Kopeva and Mishev, 1993). There are almost no newly restituted properties being offered for sale, although the scarcity of farm credit and the depressed farm economy a re contributing factors. Few of the restitutees intend to farm the land themselves. They either are leasing the land to a voluntary cooperative or to a farmer in the vicinity. In this way, the wholly inefficient pattern of land ownership emerging as a result of restitution will be ameliorated.

Through restitution Bulgaria will have returned over 12 million acres (over 5 million hectares), 91 percent of it to private individuals, in the space of four years. New cadasters and land records will be in place, providing the base for a market system . This is a signal achievement.

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