The increasing interest of foreign investors in Danish agricultural land has sparked concerns among local farming associations about national sovereignty and the implications for sustainable practices.
Growing Foreign Investment in Danish Agriculture
Denmark’s agricultural landscape is currently witnessing a surge of foreign interest, apart from investment by Danish billionares, with significant investments made by international companies and wealthy individuals in agricultural land. This trend has raised alarm among local agricultural associations, who argue that the sale of vast tracts of farmland to foreign entities could impact national interests and sustainability efforts.
Substantial Investments from Foreign Entities
In recent years, foreign investors have poured millions into large agricultural areas in Denmark. Notable players include the investment firms Dansk Demetra and Sundmark Farms, with the latter actively investing on behalf of a Dutch pension fund. The growing presence of these companies is attracting attention due to their size; they are now among the largest private investors in Danish agriculture. According to Rasmus Willig, chairperson of Andelsgaarde, as thousands of hectares are being acquired, the question of sovereignty arises more prominently.
Dansk Demetra, owned by a German reinsurance company, has invested approximately 68 million kroner in Lolland’s agricultural land over the past year alone. Over three years, the company has acquired land worth around 400 million kroner, now holding a total of approximately 5,000 hectares — an area roughly equivalent to the Danish island Fanø. In contrast, Sundmark Farms has purchased about 1,667 hectares in similar acquisitions.
Concerns Over Foreign Ownership
Rasmus Willig has previously cautioned about the risks associated with significant portions of Danish farmland falling into foreign hands. Through Andelsgaarde, which he co-founded, he is advocating for greater involvement of Danes in the green transition of agriculture. The association relies on financial contributions from its members to purchase farms that adhere to sustainable cultivation principles, aiming to mitigate climate change and biodiversity crises. Willig emphasizes that, with foreign investment coming from capital funds, the driving interests may solely focus on profit, undermining the larger goal of achieving a climate-resilient Denmark. He states, “When assets are owned by private equity funds, capital interests prevail. Foreign private equity funds do not necessarily have societal interests that are beneficial when we want to convert agricultural land to a more climate-resilient Denmark.”
Cautious Optimism Among Organic Farming Advocates
Kim Qvist, the director of Denmark’s Organic Farming Fund, concurs with Willig’s sentiments. He points out that the Danish government is aiming to convert 400,000 hectares of agricultural land into forests and natural areas as part of a recent green agreement. However, he questions whether foreign capital funds would contribute land towards a greener Denmark, arguing their primary objective is to yield returns for investors, such as Dutch pensioners.
Over his six years in practice, Kvis has bought and transformed conventional farms into organic ones using capital from Danish Økojord, which alone has raised 48 million kroner domestically. These funds have been allocated to 900 hectares leased to young farmers who are required to follow organic cultivation and implement climate action plans, ensuring protection of drinking water and a focus on biodiversity.
Growing Interest from Southern Europe
As climate conditions worsen in southern Europe due to drought and rising temperatures, it is likely that these trends will push investors from areas like Spain and Italy towards Danish farmland. Risk assessments from sources like the European Environment Agency suggest that agricultural land prices in some southern European regions could plummet by as much as 80 percent, while northern countries like Denmark may see price increases due to extended growing seasons.
Willig expresses concern that the growing attractiveness of Danish farmland as an investment vehicle may lead to even greater foreign ownership and a rapid transformation of the agricultural landscape. He urges vigilant monitoring of the purchasing pace and the overall scale of foreign investments.
Navigating Foreign Ownership Regulations
Denmark’s current laws permit anyone to buy and sell agricultural land, a system that has been in place since 2015. This regulatory shift was designed to inject fresh capital into a sector facing financial instability. However, concerns about foreign entities purchasing land have resulted in government demand for regular monitoring of ownership status, revealing that around 42,778 hectares or approximately 2 percent of Danish farmland was foreign-owned as of 2022.
The opacity in foreign ownership can often stem from purchases made through Danish firms, making it difficult to discern the ultimate owners. Experts argue that improved regulations and oversight are essential, particularly in light of ongoing agricultural land use changes.
The Need for Effective Monitoring
To mitigate the potential negative consequences of foreign ownership and enhance transparency in agricultural investments, stakeholders like Willig and Qvist are advocating for better tracking of ownership patterns. Rasmus Blædel, a PhD in agricultural frameworks, agrees that the current outdated statistics are inadequate for making informed decisions.
Blædel suggests establishing a monitoring body that can provide critical oversight during significant acquisitions, guiding efforts towards responsible land use that aligns with national goals for a sustainable and productive agricultural system.
Given the extensive ramifications of foreign investments, it remains crucial for Danish policymakers to remain proactive in overseeing agricultural land ownership, ensuring that these challenges are addressed for future generations.
