Legal Regulation of Minimum Farmland Rent in the Slovak Republic: Market Effects and the Role of Soil Quality

Abstract

Agricultural land covers nearly half of the Slovak Republic and shows significant spatial variation in soil quality. Persistent undocumented ownership has resulted in most land being cultivated by tenants, making lease relations central to farmland governance and increasing the role of legal regulation. In this context, the aim of this research is to assess the economic adequacy of the statutory minimum rent mechanism by analyzing its alignment with market-based rents and examining whether soil quality, on which the minimum rent is based, also significantly influences market rent levels. The analysis draws on data on customary rents published annually by the relevant ministry and administrative land price data established by law. Inductive statistical analysis and regression modeling using the correlation coefficient were applied. Results suggest that the statutory minimum rent does not consistently align with prevailing market rents despite recent legislative amendments and that its formal link to soil quality does not appear to be directly proportional. Consequently, setting minimum rents solely based on soil quality may not fully reflect prevailing market conditions and could potentially raise questions regarding its compatibility with property protection standards as interpreted in the case law of the European Court of Human Rights (ECtHR). The findings invite further reflection on the current regulatory approach to farmland rent, including the possibility of better aligning legal standards with market conditions or reassessing the functional role of the statutory minimum within the existing framework. The results indicate that the Slovak farmland rental market demonstrates characteristics consistent with a relatively autonomous market mechanism.

1. Introduction

Land is a fundamental factor of production in agriculture [1,2] and represents a scarce and heterogeneous resource with a fixed location and varying quality [3]. The agricultural land market is subject to substantial policy interventions, particularly through regulations governing land ownership and tenure, agricultural subsidy schemes, and environmental protection measures [4,5]. Leasing land, as an alternative to purchase, has increasingly become a common practice to secure access to farmland [6,7] and ensure its efficient use, particularly in areas where land is limited or in peri-urban regions [8]. With stable long-term lease agreements, agricultural production on leased land can be comparable to that on owned land, provided that the rights of both lessors and lessees are adequately protected [9]. Land leasing facilitates the efficient utilization of potentially idle land [10], supports optimal allocation, and contributes to increased productivity, rural economic transformation, and the welfare of rural households [10,11] while also facilitating entry for young and productive farmers [12].

In Europe, rented agricultural land can account for more than 70% of the total land area at the national level [13]. In the Slovak Republic, this share is even higher, reaching up to 90% of all agricultural land [14,15]. In the European context, land abandonment is likely to have been a key alternative to land renting [16].

A lease is usually defined as a transfer of use of a physical asset for a time less than its expected useful life in return for economic consideration, governed by a lease agreement that clearly defines the responsibilities and obligations of the parties involved [17]. The legally mandated elements of a lease are typically minimal, providing the parties with greater flexibility to structure other aspects of their relationship through tailored provisions that reflect their specific needs and circumstances [17]. Landowners prefer lease contracts with as little regulation as possible, and lease regulation is considered as a ‘handbook’ for concluding lease contracts [18].

For landowners, land leases serve as a great opportunity to obtain income without cultivating the land [19]. Since land quality varies across geographic regions, land rent should be calculated taking these regional specificities into account. The calculation of land rent under specific production conditions, accounting for crop yields, is based on anticipated net operating income considering agricultural productivity, land market prices, and the discount rate [20]. In most EU countries, rent controls on land are not imposed. Legally imposed maximum rents are more commonly encountered. In Belgium and France, maximum land rental prices are determined based on land quality, categorized into three soil classes: (a) Wide Use Soils, (b) Moderately Wide Use Soils, and (c) Limited or Somewhat Limited Soils [21]. In other EU countries, such as Lithuania or Latvia, the maximum rental prices are set only for state land. Latvia and Croatia set minimum rental prices for state-owned land, while in Lithuania, minimum rents apply only to municipal land. In France, agricultural land rents are not entirely market-determined: under the Agricultural Tenancy Law, prefectures issue annual decrees establishing minimum and maximum rental limits for land within each department. These limits are based on average agricultural incomes and other regional indicators and are intended to prevent rental prices from being excessively low or high [22]. In Austria, land rental contracts are subject to approval by the local public authority, which may reject the transaction if the rental price stipulated in the contract exceeds the regional average by more than 50% [23]. The minimum rental price has also been applied in the Slovak Republic since 2003, when the Agricultural Land Lease Act was adopted. The rental price was set at a minimum of 1% of the value of agricultural land, determined according to the soil-ecological unit classification, which characterizes the quality of the soil [24,25]; however, this level has long been considered comparatively low relative to prevailing market conditions and has often been regarded as failing to reflect developments in the agricultural land rental market.

The impacts of price floor have been examined by several authors [26,27,28,29,30], but none of them applied to agricultural land or lease. However, they mention the procedures of policymakers or researchers that preceded the setting of the price floor [26,30]. In the Slovak Republic, no document, including the explanatory report to the Land Lease Act, explains the method or the reason for its determination at the specific level established by the Land Lease Act.

Price floors are a common form of policy intervention to bolster prices [31]. In general, a price floor set below the laissez-faire level has no effect, whereas a floor above it elevates the price to the floor. There are, of course, many exemptions depending on the kind of goods or services; however, if a minimum price is set so far below the laissez-faire level that it has no effect [31]. This appears to have been the case in the Slovak Republic. At the end of 2025, for the first time since 2003, the legislature adopted an amendment to this provision, increasing the minimum rental rate from 1% to 3%. This raises the question of whether the new legal regulation more accurately captures market realities, particularly given that the legislature did not specify in the explanatory report either the methodology or the rationale underlying the chosen level of the minimum rent.

Despite numerous studies on land rents and prices, there is currently no comprehensive research in the Slovak Republic examining the alignment between statutory minimum rents and market rents while simultaneously considering soil quality, on which the minimum rent is based, and the implications for property rights protection under the European Convention on Human Rights (ECHR).

This research gap is relevant considering the ongoing issue of undocumented ownership rights in the Slovak Republic, the importance of the Land Lease Act for land use, and the anticipated legislative reforms. In this context, the article assesses the economic adequacy of the statutory minimum rent mechanism by analyzing its alignment with market-based rents and examining whether soil quality, on which the minimum rent is based, significantly influences market rent levels. The study pursues two complementary objectives. First, it compares statutory minimum rents with market-based rents to evaluate the extent to which the legally determined minimum rent corresponds to actual market rents. According to the case law of the European Court of Human Rights (ECtHR), when the statutory minimum rent is set significantly below the customary or market level, questions may arise as to whether it provides adequate protection for the lessor and effectively fulfills its regulatory objective. Second, the study investigates the influence of soil quality on market rents, examining whether soil fertility and physicochemical properties constitute key determinants of rental levels. Building on these objectives, the article focuses on analyzing the relationship between statutory and customary rents for agricultural land in Slovakia, with particular emphasis on regional differences and factors influencing rent levels. The empirical section utilizes aggregated district-level data and draws on historical records of customary rents, soil quality, and administrative calculations of minimum rents. The structure of the article follows logical progression: after a review of the legislative framework and relevant literature, the methodology is presented, followed by the results, discussion, and conclusions with recommendations for policy and legislation.

Numerous studies have examined the impact of various factors on land prices and rental rates [32], with soil quality frequently identified as a key determinant. However, most existing research focuses on land prices rather than agricultural land rents [33], which is particularly relevant in the Slovak context, where the statutory minimum rent is derived from land values that explicitly reflect soil quality. Understanding whether statutory minimum rents reflect actual market conditions is crucial not only for evaluating the economic effectiveness of the regulation but also for assessing whether the current legal framework adequately balances market functioning and the protection of property rights. To address these issues, the study formulates the following research questions:

• To what extent is the statutory minimum rent for agricultural land in the Slovak Republic aligned with customary market rents across different regions?
• What is the influence of soil quality on customary rents, and does setting the minimum rent solely based on soil quality adequately reflect actual market conditions?
• What is the functional role of statutory minimum rent regulation within the Slovak farmland rental market?

2. Materials and Methods

2.1. Data Sources

The study is based on data on customary rents expressed as average rental rates, published annually for the period 2018–2024 for each cadastral territory of the Slovak Republic (3559 in total), obtained from the website of the Ministry of Agriculture and Rural Development of the Slovak Republic. There are 2890 municipalities (LAU 2 as Local Administrative Units hereinafter LAU) in the Slovak Republic, with an average of 1.2 cadastral territories per municipality. Information at the level of cadastral territories is therefore more granular and closer to individual market conditions than data aggregated at the municipal level. Customary rent represents the average rental rate in each cadastral territory. In each cadastral territory, agricultural land is typically farmed by approximately three to four farmers. Based on the rental data submitted by these tenants to the respective district authority, an average rental rate is calculated, which constitutes the customary rent for that territory. Accordingly, customary rent reflects the mean level of rent paid to landowners within the given cadastral territory. At the same time, it is necessary to consider the contractual framework of land lease relations. In most cases, lease agreements are concluded for a period of ten years with a fixed annual rent agreed for the entire duration of the lease. The data submitted to the district authorities do not distinguish between newly concluded contracts, where rental levels may be expected to reflect current market conditions, and ongoing contracts approaching the end of their term, where the agreed rent may have been set several years earlier and may therefore be lower than prevailing market rates. As a result, the average rental rate may be regarded as a pragmatic proxy indicator, providing landowners as well as prospective tenants with approximate information on price levels in the land lease market. In the Slovak context, the register of customary rents constitutes the only publicly available nationwide database offering systematic information on land market conditions, including land leases. Even with its limitations, it facilitates better orientation in the land market and may support more informed decision-making by landowners regarding leasing or selling their land. Therefore, in the absence of tenant-level microdata, this indicator is considered the closest available approximation under existing data constraints.

However, an additional issue arises in cases where data from a particular cadastral territory are unavailable. If the district authority does not receive data from tenants farming at least one third of the agricultural land in the respective territory, customary rent is determined through an administrative procedure pursuant to Decree No. 172/2018 Coll. [34]. Under this procedure, customary rent is set at 2% of the land value as determined in accordance with Act No. 582/2004 Coll. [35]. The rationale for both the percentage applied and the method of determining this so-called administrative customary rent is not explicitly justified in the legislation. Empirical evidence indicates that administratively determined rents may tend to exceed observed market-based rental levels [24].

Cadastral territories in which the average rental rate was determined through this administrative procedure were therefore excluded from the analysis (Table S1). In 2024, the most recent available year and the primary focus of this study, 665 cadastral territories across all Slovak NUTS III regions were excluded, representing 18.7% of the total. Given the potential upward bias associated with the administrative procedure, these territories were omitted from further analysis. Excluded areas are present in nearly every Slovak district (LAU 1), but no district was entirely excluded, as each retained the required number of cadastral units for further analysis. In each district, the remaining cadastral units exhibit soil quality and productive potential very similar to the excluded areas, so their exclusion had no significant impact on the results. Including the excluded areas in a robustness test would likely not alter the main results. Sensitivity analysis indicates that the fundamental relationship between customary rent and the statutory minimum remains stable even with ±10% to ±20% variations in rent, supporting the validity of the conclusions if these areas were included.

Considering the above, customary rents calculated based on data submitted directly by tenants may reasonably be regarded as the closest available proxy for market rent. Nevertheless, it can be reasonably assumed that they may remain somewhat below prevailing market rental levels, as lower rental values stemming from older lease agreements exert a downward effect on the calculated average.

In addition, data on land prices published in legal regulations were used, Decree No. 38/2005 Coll. [36] of the Ministry of Agriculture of the Slovak Republic on the determination of land values and vegetation thereon for the purposes of land consolidation. Further data were obtained through calculations based on the legal framework governing land lease relations, including the statutory minimum rent level, which was originally set at 1% and is currently defined as 3% of the land value as determined pursuant to Decree No. 38/2005 Coll. [36].

2.2. Methods

This study evaluates statutory minimum rent in relation to market rent, as well as the role of soil quality in determining the level of rent, while applying general scientific methods, in particular quantitative analysis, including legal analysis, comparison, and synthesis. Quantitative data analysis is based on descriptive statistics, statistical induction, and regression analysis, which are described in greater detail below. Legal analysis relies on linguistic interpretation, which constitutes a prerequisite for the application of other interpretative methods; on material-systematic interpretation, including internationally conforming interpretation within the context of human rights protection; and finally, on teleological interpretation, which examines the purpose of the legal norm [37,38]. The comparative method is employed to determine whether similar legal regulations concerning minimum rent are applied in other EU Member States. The synthesis of the results enables a reflection on the role and scope of the existing legal regulation on minimum rent within the Slovak legal order.

To evaluate the extent to which the newly introduced legal regulation corresponds to observed market conditions, the calculated minimum rent for each cadastral territory was compared with the average rental rate for 2024.

Data for the period 2018–2024 were processed using descriptive statistical methods and visualized graphically.

To account for regional differences, comparisons across cadastral territories were conducted within districts (LAU 1). As the number of cadastral territories within individual districts often did not reach the threshold of 30 observations, the non-parametric Wilcoxon signed-rank test was employed. This paired test is appropriate for comparing the average rental rate and the minimum rent within the same cadastral territory [39]. Where statistically significant differences were observed, we identified the minimum rent level at which the difference relative to the average rental rate no longer reached statistical significance. The results were recorded and visualized in maps disaggregated by districts.

To verify the significance of the relationship between soil quality and market rents, we applied linear regression. The linear regression model is specified as:

$$\mathrm{y}=\alpha +\mathsf{\beta }\mathrm{x}+\mathsf{\epsilon },$$

(1)

where soil quality (expressed as 1% of the land price stipulated by Decree No. 38/2005 Coll. [36]) served as the independent variable $x$; the average rental rates for 2024 representing market rents were used as the dependent variable $y$; $\alpha$ is the intercept; and $\beta$ is the regression coefficient (expressing rental price elasticity with respect to land quality), and $\epsilon$ represents independently and identically distributed residuals. After confirming the statistical significance of the model, we report and interpret the Pearson correlation coefficient between these variables.

Due to regional differences and insufficient observations within individual districts, regression analyses were performed at the regional level (NUTS III).

Furthermore, given significant variability within regions (e.g., differences in average rental rates between Dunajská Streda in the south of the Trnava region and Skalica in the north), districts were grouped into more homogeneous clusters using the Kruskal–Wallis test and subsequent contrast tests, e.g., [39,40]. Regression analyses were then conducted within these 28 homogeneous district clusters representing homogenous soil quality. The results are presented in maps.

By integrating both objectives, comparison of statutory versus market rents and analysis of soil quality determinants, the study offers an integrated analytical perspective of agricultural land rental dynamics and the implications of legal regulation in the Slovak Republic.

All official land prices in this study, originally denominated in Slovak crowns (SKK) according to Decree No. 38/2005 Coll. [36], have been converted to euros (EUR) using the fixed conversion rate of 30.126 SKK per 1 euro. Unless otherwise noted, all prices in the text, tables, and analyses are expressed in EUR.

Data analysis was conducted using MS Excel (v365, Microsoft Corporation, Redmond, WA, USA), Statgraphics Plus (Windows 3.1, Statgraphics Technologies, The Plains, VA, USA), and R software (v4.3.1, R Foundation for Statistical Computing, Vienna, Austria; https://www.r-project.org, accessed 10 January 2026).

2.3. Sensitivity Analysis

A sensitivity analysis was performed to assess the robustness of the comparison between customary rents and statutory minimum rent. Customary rents were adjusted by ±10% and ±20% for each year, and the proportion of cadastral units exceeding the statutory minimum was recorded to evaluate the stability of the observed differences.

A sensitivity analysis was performed to determine how changes in selected variables affect the results. To ensure analytical robustness, the methodological approach was structured into three sequential stages. First, extreme observations were identified, and their influence on measures of central tendency was evaluated to assess potential distortions in the dataset. Second, distributional patterns across cadastral territories were examined through box plot visualization, enabling the detection of variability and outliers. In the final stage, a scenario-based sensitivity analysis was performed to determine how systematic variations in customary rent levels would affect the number of cadastral territories falling below and above the statutory minimum threshold.

The first stage of the analysis examined the influence of extreme observations on measures of central tendency across the full dataset. The original sample consisted of 11,319 customary rent values recorded between 2018 and 2024 across 1617 cadastral territories in which administratively determined rent was not applied. After excluding 81 extreme observations, the final sample comprised 11,238 values. The results indicate that the median of customary rents changed only marginally after the removal of outliers. For example, in 2018, the median decreased from 39.43 EUR/ha to 38.94 EUR/ha. Comparable minor adjustments were observed in all subsequent years. This suggests that extreme values exerted only a limited upward influence on the median.

By contrast, the arithmetic mean exhibited a more pronounced decrease following the exclusion of outliers. In 2018, the mean declined from 49.49 EUR/ha to 48.14 EUR/ha, with similar patterns recorded in the remaining years. This indicates that the mean is more sensitive to extreme high or low values, whereas the median demonstrates greater robustness (

Table 1. Median and mean customary rents before and after outlier exclusion.

Year	Median Customary Rent (All Values, EUR/ha)	Mean Customary Rent (All Values, EUR/ha)	Median Customary Rent (Without Outliers, EUR/ha)	Mean Customary Rent (Without Outliers, EUR/ha)
2018	39.43	49.49	38.94	48.14
2019	38.06	47.75	37.75	47.07
2020	41.63	51.36	41.28	50.55
2021	43.74	54.09	43.38	53.49
2022	45.17	56.68	45.02	56.06
2023	48.30	60.79	48.23	60.16
2024	50.20	63.67	50.00	62.59

Source: Self-calculations.

).

Overall, the relatively small changes in the median indicate that the dataset does not appear to be substantially distorted by extreme observations. However, the consistent reduction in the mean suggests that extreme customary rent values moderately inflated average rent levels in the original dataset.

From a regulatory perspective, the limited effect of outliers on the median suggests that median-based indicators may provide a relatively stable reference point. Given the limited impact of outliers on the median and the small number of observations in some districts, the Wilcoxon signed-rank test was applied to assess whether differences between customary rents and statutory minimum rents were statistically significant across the same sample of cadastral territories.

Box plots visually illustrate that the median customary rent is relatively stable, supporting the reliability of the Wilcoxon test results. The test further allows the identification of districts where the statutory minimum rent exceeds or falls below the market median. Box plots illustrate the distribution of customary rent values across cadastral territories under different assumptions for the statutory minimum rent. The first two plots compare all data versus data without outliers using the original 1% minimum rent (average 13.63 €/ha), while the latter two show the same comparison under the revised 3% minimum rent introduced in 2025 (average 40.88 €/ha). The increase from 1% to 3% of the land price reflects the legislative amendment adopted in 2025, which raised the statutory minimum rent for agricultural land (Figure 1).

The box plots confirm that the median customary rent exceeds the statutory minimum in most districts, supporting the Wilcoxon test results and suggesting that, in most cases, the legislatively defined minimum does not appear to function as a binding constraint on observed rental levels.

Scenario simulations of ±10% and ±20% changes in customary rent values confirmed that, even under moderate or more pronounced adjustments, the median customary rent in most districts remains above the statutory minimum. The following scenarios illustrate the potential impact of such variations across cadastral territories (

Table 2. Scenario analysis of customary rents relative to the statutory minimum.

Scenario	% of Cadastral Territories Above Statutory Minimum (1%)	% of Cadastral Territories Above Statutory Minimum (3%)
Original customary rent	99.28	75.61
Customary rent −10%	98.81	67.49
Customary rent +10%	99.52	81.19
Customary rent −20%	98.23	57.80
Customary rent +20%	99.78	85.53

Source: Self-calculation.

).

Scenario simulations were conducted to evaluate the potential impact of moderate (±10%) and more pronounced (±20%) changes in customary rent on compliance with the statutory minimum. Under the original 1% minimum rent scenario, almost all cadastral territories (99.3%) exceeded the statutory minimum. Reductions in customary rent of 10% or 20% decreased this share only slightly (98.8% and 98.2%, respectively), while increases of 10% or 20% raised it marginally (99.5% and 99.8%). These results suggest that the 1% statutory minimum is set at a level substantially below prevailing customary rents relative to market rents, and changes in the minimum would have only marginal effects in most districts.

With the revised 3% minimum rent adopted in 2025, approximately 75.6% of cadastral territories had customary rent above the statutory minimum. Scenario variations of ±10% and ±20% shifted this share between 67.5% and 85.5%, indicating that, although a higher minimum brings a larger proportion of territories closer to the legal threshold, most cadastral units still maintain customary rents above the statutory floor.

Overall, these simulations indicate that the statutory minimum appears to exert only limited influence under observed customary rent conditions, while the 2025 amendment brings a larger proportion of territories close to the statutory threshold in some districts. The scenario analysis confirms the robustness of the findings: even with the statutory minimum increased to 3%, most cadastral territories exceed the legal threshold, while the original 1% minimum appears unlikely to operate as a binding constraint in most districts. Moderate changes in market OVN (±10%, ±20%) do not substantially alter the overall pattern observed.

3. Results

3.1. Agricultural Land and Land Rental Market: Institutional and Economic Background

The Slovak Republic is a country situated in Central Europe, where agricultural land constitutes a key economic asset and an important object of public regulation. As of 1 January 2025, agricultural land covered 2.366 million hectares, representing approximately 48% of the national territory. Forest land occupied a further 41%, while built-up areas and other land categories represented 11%; water bodies accounted for less than 2% of the national territory [41]. From the perspective of agricultural production and land use economics, the structure of agricultural land is dominated by arable land (59%) and permanent grassland (36%). The remaining 5% consists of gardens, vineyards, orchards, and hop fields [41].

A significant share of this land is administered by the Slovak Land Fund (SLF), a legal entity established by law and registered in the Commercial Register. While it performs public functions in land administration, it does not constitute public authority. It is responsible for the management of state-owned land and land owned by unidentified owners. In 2024, the SLF administered approximately 21% of arable land and permanent grasslands, making it one of the key institutional actors in the national land rental market [42]. In terms of ownership structure, 242,874 hectares of the land administered by the SLF were owned by the Slovak Republic, while 401,084 hectares were owned by unidentified owners, reflecting persistent structural and institutional challenges in land ownership [42]. The concentration of agricultural land management in the hands of a public institution may influence the functioning of the land rental market and the design of legal instruments regulating land use. In the Slovak Republic, agricultural land is predominantly used under lease agreements, with rent levels serving as a key factor influencing farm competitiveness, the efficiency of land allocation, and the distribution of income between landowners and land users. The land rental market is also characterized by regional disparities, heterogeneous land quality, and potential asymmetries in bargaining positions between contracting parties.

Not only is land administered by the SLF frequently subject to lease agreements, but also land owned by private individuals and legal entities (e.g., churches and municipalities). This situation is largely due to persistent issues of land fragmentation and complex land ownership structures [14]. Many parcels are co-owned by several dozen owners, including unidentified owners, making it difficult to manage the land in any other way than to leave each owner’s share in use by the existing agricultural holdings [43].

The situation is further complicated by unclear land boundaries in the field, which were largely destroyed during the period 1948–1989. Restoring these boundaries requires re-surveying the land and preparing new cadastral plans, but many cadastral records necessary for this purpose have not been preserved [44]. Access to such plots is often problematic, typically requiring passage through land owned by other proprietors [45]. As a result, the cultivation of these lands and ownership shares is frequently technically and legally challenging, leading most landowners to lease their land to the current farmers.

These conditions raise questions regarding the interaction between the existing legal framework and market outcomes in the land rental sector and whether statutory intervention in the form of a minimum rent plays a measurable role in shaping market outcomes. It remains unclear to what extent market rents reflect objective differences in land quality and productivity, and to what extent they are influenced by institutional and market conditions. Within this context, the present inquiry examines the empirical relevance of statutory minimum rent regulation for agricultural land in the Slovak Republic, while systematically assessing the extent to which customary rents depend on land quality indicators.

3.2. Legal Framework of Agricultural Land Lease in the Slovak Republic

3.2.1. Historical Development of Lease Legislation

In the 1990s, the legal regulation of agricultural land lease was governed solely by government decrees, with lease agreements primarily guided by the general provisions of the Civil Code [46]. At the beginning of the new millennium, the legislator acknowledged that it was not possible to establish a special legal framework for agricultural land lease based on legal norms of lower legal force than an Act, in relation to the general provisions of the Civil Code [46]. In late 2003, Act No. 504/2003 Coll. on Agricultural Land Lease [47] was adopted as a lex specialis in relation to the general lease provisions of the Civil Code [46]. Since then, the legislation has been subject to frequent amendments, with at least one amendment adopted almost every year.

On 1 October 2025, the National Council of the Slovak Republic approved the seventeenth amendment to the Act, consisting of 34 provisions, with effect from 1 January 2026. Several provisions revert to the original wording of the lease regulations, while others substantially modify essential elements of lease agreements or remove provisions that were rarely, if ever, applied in practice. The latest amendment thus represents an extensive modification of the legal regulation of agricultural land lease, reflecting both historical practice and contemporary needs.

A lease agreement is generally defined in Section 663 of the Civil Code [46], according to which the lessor transfers an item to the lessee for a fee, so that the lessee may use it temporarily (for the agreed period) or derive benefits from it. The essential elements of a lease agreement include the contracting parties, the leased object, and the obligation to pay rent, including the amount of rent in the case of agricultural land leases conducted as part of an agricultural enterprise under the second part of Act No. 504/2003 Coll. [47]. In this context, the minimum rent under Section 10(1) of Act No. 504/2003 Coll. [47] was originally set at 1% of the land value determined according to a special regulation. The special regulation referred to in the footnote is Section 43(2) of Act No. 330/1991 Coll. [48], under which the Ministry issues a generally binding legal regulation. The regulation issued by the Ministry in 2005 is Decree No. 38/2005 Coll. [36] on the Determination of Land and Crop Values for Land Consolidation Purposes, which has been in force for 20 years and has never been amended, still determines land values according to Bonited Soil-Ecological Units (BSEU) in Slovak crowns.

These official land prices, which account for soil quality, range from 20,000 to 120,000 Slovak crowns (SKK) per hectare according to Decree No. 38/2005 Coll. [36] (prices remain denominated in SKK, as the regulation has never been amended). Using the fixed conversion rate of 30.126 SKK per 1 euro, this corresponds to 664–3983 EUR per hectare. Consequently, the originally prescribed minimum rent of 1% of the land value ranged from 7 EUR/ha per year for the least fertile land to 40 EUR/ha per year for the most fertile land. Since preliminary comparisons suggest that this rate was below customary rent levels observed between 2018 and 2024, the legislator adopted an amendment. The customary rent for the use of agricultural land conducted as part of an agricultural enterprise (hereinafter referred to as “customary rent”) shall mean the rent per hectare of agricultural land, published annually by 30 June for the previous year by the competent district office for each cadastral area. The data are based on information obtained from the records of agreed and paid rent, representing the average rent for the use of agricultural land conducted as part of an agricultural enterprise.

However, the explanatory memorandum to Act No. 504/2003 Coll. [47] does not mention the rationale for establishing a minimum rent and consequently provides no explanation or method for determining the rate at 1% of the land value. The customary rent was published for the first time only in 2018. Until then, information on land rent was not publicly available, and research studies relied solely on data obtained through survey questionnaires among farmers. Based on such studies [49], studies indicated that the minimum rent was generally lower than the rent agreed upon in lease contracts between landowners and tenants. Even the SLF issued internal regulations in which it set rent levels higher than the statutory minimum, initially at 1.5% of the land value and later adjusted according to the rate of inflation (The statutory minimum rent of 1% of the land value determined under Decree No. 38/2005 Coll. [36] required corresponding adjustments to the internal regulations of the (SLF), which had previously set rent between 0.6% and 1.0% of the land value according to BSEU. An internal directive from the SLF Director General, effective from 1 January 2005, raised the minimum rent for leased land to 1.5% of the BSEU-based land value. This rate remained until 2014, when it was increased to 2.2%, and since 2015, it has been adjusted annually according to the average year-on-year inflation rate published by the Statistical Office of the Slovak Republic.

Moreover, the law does not explicitly establish a sanction for violating this provision, for example, in situations where the rent is set below the statutory minimum. However, part of the legal doctrine considers that the lease agreement would be considered invalid [50]. While the landowner, as the lessor, is guaranteed by law minimum compensation for leasing the land, it remains at their discretion whether to enforce this right against the lessee, and, if necessary, to seek redress through the courts. In the absence of the landowner’s enforcement action, the lease relationship may continue to operate in the market even if the statutory minimum rent provision is violated.

In 2025, the legislator adopted a comprehensive amendment to the Act on Agricultural Land Lease, one of the changes being the introduction of a statutory minimum rent. The new legal regulation increases the minimum rent from 1% to 3%, with the justification that “the previous provision on minimum rent is outdated, as this rate has been in effect unchanged since 2003; the established minimum no longer reflects practice, and the increase is justified by the rise in agricultural land prices over the past 20 years.” The explanatory memorandum does not provide a detailed analysis of the basis on which the percentage rate was changed. Although the authors demonstrate that a legally imposed minimum price above the market price can raise the transaction price, their analysis also shows that if the minimum price is set too far below the market level, it has no practical effect [31]. Empirical indications suggest that this may have been the case with the 1% statutory minimum rent. However, this does not explain why the current minimum rent is set at 3% of the land value. On the one hand, the provision on minimum rent shall guarantee a certain income for the lessor, and on the other hand, the minimum rent must not be set too far below the market level, as the cited references indicate. It remains to be examined to what extent the minimum rent is aligned with prevailing market levels. Against this background, the study proceeds to empirically examine whether the statutory minimum rent set at 3% of land value approximates the level of rent prevailing on the market.

3.2.2. Regional Evaluation of Minimum Rent in Relation to Customary Rent

Instead of market rent, which is not publicly available, we relied on the customary rent established for each individual cadastral area. These data have been published since 2018, and their development at the regional level (NUTS III) is shown in Figure 2.

Figure 2 suggests that customary rent levels remained relatively stable over the observed period. In most regions (NUTS III), it increased by less than 20 EUR per hectare, except for the Nitra and Trnava regions, where it rose by approximately 30 EUR per hectare over the period (which are generally considered among the regions with the most fertile soils in the Slovak Republic). The annually published customary rent levels may, for several reasons, including calculation methods, data quality, and the inclusion of long-term lease agreements with fixed rents, remain somewhat below prevailing market prices. Therefore, the customary rent provides a conservative benchmark against which the statutory minimum rent can be evaluated. Political and institutional benchmarks can complement purely statistical comparisons of customary rents. In the Slovak context, historical district-level rent data, state land rental rates, and BSEU soil quality scores provide additional reference points that account for market conditions, practical public sector application, and land productivity, ensuring that minimum rent regulation aligns with both observed rents and broader policy objectives.

We compared the customary rents in the cadastral areas of each district (LAU 1) with the minimum rent under the new legal regulation, set at 3% of the land value, which ranges from €21 to €120 per hectare, using the Wilcoxon test. The paired Wilcoxon test was applied, as the analysis compares two rent values, the statutory minimum rent and the customary rent, observed within the same territorial unit (cadastral area) in the districts (LAU 1).

If no statistically significant differences are confirmed, the customary rent in each district (LAU 1) may be considered approximately equal to the statutory minimum rent. Conversely, if statistically significant differences are identified, the minimum rent for the district may appear lower than the observed customary rent. In such cases, we sought a level of minimum rent at which statistically significant differences would no longer be observed.

Failing to reject the null hypothesis indicates that there is no statistically significant difference between the statutory minimum rent and the observed customary rent in the given area. Practically, this suggests that the legally established minimum does not disrupt the market and is consistent with prevailing rental conditions. Consequently, this can be interpreted as evidence of the appropriateness of the regulation: it provides protection for lessors without artificially interfering with market transactions. However, failing to reject the null hypothesis does not imply perfect alignment; it merely indicates that, within the bounds of statistical confidence, the statutory minimum does not conflict with local market outcomes.

While the original minimum rent set at 1% was consistently lower than customary rents observed across districts of the Slovak Republic (LAU 1), we expect that at a minimum rent level of 3%, there are districts in which the customary rent is statistically comparable to the statutory minimum. Nevertheless, there are likely to be districts where this level remains below local market conditions. If this assumption is confirmed, the analysis aims to identify the parts of the country where the minimum rent is set approximately aligned with customary rents in some districts, while in others it remains lower, particularly from the perspective of soil quality. The results are presented in Figure 3.

Figure 3 presents the proposed minimum rent levels (expressed as percentages of land value) for agricultural land in individual districts (LAU 1) of the Slovak Republic, derived from Wilcoxon paired tests comparing the statutory minimum rent (3% of land value) with the customary rent in each cadastral area. Lighter shades indicate districts where the statutory minimum is closer to the customary rent (3–3.5%), while darker shades represent districts where a higher minimum rent would be required (4–6%) to avoid statistically significant differences between statutory and customary rent. The results suggest that in many districts, the current minimum rent of 3% is approximately aligned with customary rents, whereas in several districts the minimum rent would need to be increased to 4–6% to reflect local market conditions.

The spatial distribution of proposed minimum rent levels in Slovak districts closely corresponds to areas with the most fertile soils. Districts in Nitra, Nové Zámky, and Komárno (the Nitra region), Trnava, Galanta, and Dunajská Streda (the Trnava region), and the lowland areas around Bratislava and Senec exhibit higher proposed minimum rents (4–6%). Similarly, smaller fertile valleys in the southern parts of the Košice and the Banská Bystrica regions also show elevated minimum rent proposals. This pattern aligns with expectations based on soil quality: districts with high-quality agricultural land require higher statutory minimum rents to match customary rents, while districts with lower-quality soils typically have rents closer to the current statutory minimum (3–3.5%). Thus, the results suggest that soil productivity is an important factor influencing local rent levels, indicating that alignment between statutory minimums and customary rents is partially related to soil.

In most districts of the Slovak Republic, higher proposed minimum rents closely correlate with areas of fertile soil, as expected. However, the districts of Liptovský Mikuláš, Brezno, and Rimavská Sobota, where the proposed minimum rent reaches 6%, are less aligned with the overall pattern, potentially due to several factors, such as regional market specifics and tourism or alternative land use. First, in these districts, land availability is limited, and large local companies and cooperatives can afford to pay higher rents, which drives prices up even though soil quality is not particularly high. Second, tourist destinations can increase the value of land for recreational or investment purposes. Moreover, some land is used for pastures, forestry, or agrotourism, which also raises its rental price. Finally, historical ownership patterns mean that a few key players control large blocks of land, giving them leverage to set higher rents.

3.3. Land Quality and Its Role in Determining Rent

The observed spatial pattern of the proposed minimum rent levels suggests a systematic relationship between land quality and agricultural land rent. Districts requiring higher minimum rent thresholds are generally located in regions with the most productive soils, whereas areas with lower soil quality tend to have customary rents closer to the statutory minimum. This spatial association implies that differences in land rent across districts are influenced by variations in soil productivity rather than being purely random. Preliminary correlations suggest that soil quality is an important explanatory factor. To examine this relationship more rigorously, the following section applies regression analysis to assess the statistical significance and strength of the dependence of customary agricultural land rents on land quality indicators. To more precisely quantify the impact of soil quality on land rents, it is first necessary to explain the concept of a BSEU and how it functions as a standardized indicator of soil productivity.

3.3.1. Soil Classification and Productivity

In the Slovak Republic, the assessment of agricultural land is based on the BSEU classification system, established under second part of Act No. 220/2004 Coll. [52]. A BSEU serves as a classification and identification parameter, reflecting the quality and productive–ecological potential of the land at a specific site. According to Sobocká and Saksa [53], the term “bonited” in the BSEU refers to a soil-ecological unit whose designation reflects the original intent of its creation and use for the assessment of agricultural land, including purposes such as land valuation (e.g., for rental or sale), land consolidation, determination of soil production potential, and evaluation of ecological soil conditions.

The specific characteristics of BSEU are represented by a five-digit code, with more detailed information provided by a seven-digit code. The first digit of the five-digit BSEU code indicates the climatic region, the second and third digits specify the main soil unit, and the fourth and fifth digits represent the ordinal number of the slope and aspect, including soil texture, thereby specifying the soil subtype and the soil-forming substrate. In the seven-digit BSEU code, the first two digits indicate the climatic region, the next two digits characterize the main soil unit, and the fifth digit represents the combination of slope and aspect. The sixth digit reflects a combination of stoniness, gravel content, and soil depth, while the seventh digit specifies the soil texture [54].

BSEUs integrate factors such as soil type and its properties, climatic conditions (temperature and precipitation by region), and topography. This allows for the determination of the soil’s production potential, often expressed on a point scale (e.g., 1–100 points according to production potential) or through fertility categories (e.g., from very high-quality to unsuitable soil). Higher point values indicate greater production potential according to

Table 3. Categories of agricultural land production potential.

Category	Production Potential Score	Share of Land in the Slovak Republic (%)
1	100–91	5.89
2	90–81	12.36
3	80–71	11.40
4	70–61	11.83
5	60–51	13.05
6	50–41	12.28
7	40–31	9.91
8	30–21	13.02
9	20–11	8.81
10	10–1	1.45

Source: Džatko, 2002 [55]; Vilček, Koco, 2018 [56].

[55].

For assessing larger territorial units, all BSEUs are grouped into 10 categories of agricultural land production potential in the Slovak Republic [56]. The most fertile soils, categories 1–4, are in the southeastern part of the country and in the southern parts of the Trnava region and the Nitra region. Medium-quality soils, categories 5–7, are concentrated in the south of the central and eastern country, particularly in the border districts of the Banská Bystrica region and the Košice region adjacent to Hungary. The lowest-quality soils are concentrated in the northern regions, in the Prešov region and the Žilina region [57].

Importantly, similar spatial patterns of soil quality are observed by alternative evaluation frameworks. Using the soil health index (SHI) as an independent quantitative approach, ref. [58] likewise reports the highest soil quality values in the very warm climatic region of the Slovak Republic, where most agriculturally used arable soils with optimal pH conditions and without contamination are located. This convergence of results supports the robustness of the BSEU-based classification in identifying the most productive agricultural soils.

In 2000, the Research Institute of Agricultural and Food Economics prepared a price list for arable land based on seven-digit BSEU codes. The criterion for determining the official prices of agricultural land was the economic valuation of the gross annual rent effect of crop production under given soil and climatic conditions, assuming a normatively defined level of production efficiency. All changes resulting from subsequent revisions were continuously incorporated into the bonitation database and ultimately reflected in the valuation of agricultural land. This framework allows, among other outputs, official land prices to be processed according to various aggregation levels, including cadastral areas, agricultural enterprises, districts, regions, and the national level (more detailed, [56]).

Taken together, the BSEU-based classification system, the official land valuation framework grounded in the gross annual rent effect, and independent soil quality assessments consistently indicate that higher-quality soils are associated with greater economic returns, thereby providing a solid conceptual and empirical foundation for the subsequent regression analysis examining the relationship between soil quality and customary agricultural land rents.

3.3.2. Relationship Between Soil Quality and Agricultural Land Rents

While soil classification and production potential provide a structural assessment of land quality, the economic implications of these differences are further clarified by examining their effects on customary agricultural rents.

The influence of soil quality on customary agricultural land rents was examined using regression analysis, complemented by the Pearson correlation coefficient to measure the strength of the relationship between the dependent and independent variables. The dependent variable was the customary level of agricultural land rent for the year 2024, while soil quality served as the independent variable, expressed as 1% of the official land price. This value represents the statutory minimum rent level prior to the legislative amendment and was assigned to the respective BSEU within each cadastral area.

The relationship was analyzed separately for each NUTS III (Nomenclature of Territorial Units for Statistics hereinafter as NUTS) region, allowing identification of potential regional variations. Individual observations consisted of the customary agricultural land rent for the year 2024 and the corresponding soil quality of agricultural land in individual cadastral areas. This regionalized approach permits a more nuanced assessment of the extent to which variations in soil quality are reflected in customary rent levels across the Slovak Republic. The results are documented in Figure 4, which illustrates the Pearson correlation coefficient between soil quality and customary agricultural land rents across Slovak regions (NUTS III). Each region is shaded according to the strength of the correlation, with darker blue tones indicating a stronger positive relationship. The values displayed for each region represent the correlation coefficient (r) itself. For example, Bratislava and Košice regions show the strongest positive correlations (0.66 and 0.65, respectively), while Žilina and Prešov regions exhibit weaker correlations (0.22 and 0.26). This spatial pattern highlights regional differences in the extent to which higher-quality soils are associated with higher customary rents, consistent with the BSEU-based soil productivity assessments.

Although regions with the highest soil quality generally exhibit a strong relationship, it is not strictly proportional. Regions such as Trnava and Nitra, despite hosting some of the most productive soils in the Slovak Republic, display slightly weaker correlations than the Bratislava and Košice regions. This may be partly due to internal heterogeneity, where highly productive areas coexist with subregions of lower (e.g., Skalica and Senica in the Trnava region, and Zlaté Moravce and Topoľčany in the Nitra region), attenuating the aggregate relationship. Importantly, this attenuation reflects not only differences in average soil quality but also the spatial configuration and internal composition of territorial units.

In this context, the results of the correlation analysis must be interpreted with caution due to the Modifiable Areal Unit Problem (MAUP), which represents a key methodological limitation of analyses based on spatially aggregated data [59,60]. Using administrative units at the NUTS III level may obscure underlying patterns, since internal heterogeneity in soil quality is unevenly distributed. As a result, correlations estimated at this level should be understood as region-level summaries that capture dominant tendencies rather than uniform or scale-independent relationships between soil quality and agricultural land rents. Analyses conducted at finer spatial scales (e.g., districts, municipalities, or BSEU) could therefore reveal different magnitudes or functional forms of the relationship, without necessarily implying greater explanatory validity.

A further methodological consideration concerns the statistical properties of the Pearson correlation coefficient, which captures co-variation rather than absolute levels. In regions with generally high but structurally clustered soil quality, within-region correlations may appear weaker even when soils are objectively fertile. To assess whether insufficient variability in soil quality could be contributing to lower correlation coefficients, we examined the standard deviations (SD) and ranges of soil quality across regions (

Table 4. Standard deviation and range of soil quality in the regions NUTS III.

NUTS III	Standard Deviation	Range	Interpretation of Variability
Bratislava	7.19	26.58	High variability—less homogeneous soil
Banská Bystrica	4.52	20.32	Low variability—soil homogeneity
Košice	6.17	23.86	Medium variability
Nitra	6.34	32.02	Medium variability
Prešov	4.07	62.03	Presence of extreme values because of low SD and high range; after excluding the minimum and maximum, SD = 3.29 and range = 24.45—Low variability—soil homogeneity
Trenčín	6.31	30.31	Medium variability
Trnava	7.55	30.43	High variability
Žilina	2.85	25.08	Low variability—homogeneous soil

Source: Self-calculation. Note: Nomenclature of Territorial Units for Statistics hereinafter as NUTS; Standard Deviation—SD.

).

The results indicate that within-region variability is generally substantial, suggesting that limited dispersion of soil quality alone is unlikely to be the dominant driver of the observed differences in correlation strength. Instead, the findings point to the combined effects of spatial heterogeneity, aggregation at the regional level, and structural differences within territorial units as key factors shaping the observed relationship between soil quality and customary agricultural land rents.

These considerations are closely related to the MAUP, highlighting that statistical relationships in spatially aggregated data are not invariant to changes in scale or zoning, and may partially reflect artefacts of chosen territorial delineation.

Building on the identified limitations arising from spatial aggregation, the subsequent analysis examines the relationship between soil quality and customary agricultural land rents using smaller, purpose-defined territorial units with higher internal homogeneity of soil conditions. The aim of this approach is not to eliminate MAUP effects, but to assess the sensitivity of the estimated relationship to analysis scale and internal heterogeneity.

To further explore the role of internal heterogeneity and to assess the sensitivity of the estimated relationship to spatial scale, the regional units were disaggregated into districts. Differences in soil quality across districts were first tested using the Kruskal–Wallis test, followed by post hoc contrast tests to identify districts with statistically indistinguishable soil quality. Based on this, districts were grouped into subregional units with relatively homogeneous soil conditions, which served as analytical units for subsequent regression analysis. The results of subregional analysis are documented in

Table 5. Subregional clusters grouped by soil quality and strength of relationship between soil quality and customary rents.

NUTS III	Group of Districts (LAU 1) by the Soil Quality	Pearson Correlation Coefficient (%)
The Bratislava region	Malacky	0.66
	Pezinok, Bratislava I–V	0.66
	Senec	0.66
The Banská Bystrica region	Banská Bystrica, Banská Štiavnica, Brezno, Detva	0.0
	Žiar and Hronom, Žarnovica, Zvolen, Revúca	0.28
	Krupina, Poltár, Rimavská Sobota	0.59
	Lučenec, Veľký Ktíš	0.49
The Košice region	Gelnica, Rožňava, Spišká Nová Ves	0.25
	Košice I–IV, Košice—okolie, Sobrance	0.61
	Michalovce, Trebišov	0.24
The Nitra region	Nitra	0.24
	Levice, Topoľčany	0.54
	Zlaté Moravce	0.60
	Komárno, Nové Zámky, Šaľa	0.24
The Prešov region	Vranov and Topľou	0.33
	Prešov, Humenné	0.41
	Bardejov, Stropkov, Svidník	0.18
	Levoča, Sabinov, Snina	0.25
	Kežmarok, Medzilaborce, Poprad, Stará Ľubovňa	0.21
The Trenčín region	Považská Bystrica, Púchov, Myjava, Prievidza	0.28
	Ilava, Trenčín	0.41
	Nové Mesto and Váhom, Bánovce and Bebravou	0.46
	Partizánske	0.47
The Trnava region	Senica, Skalica	0.27
	Hlohovec, Piešťany, Trnava	0.64
	Dunajská Streda, Galanta	0.16
The Žilina region	Turčianske Teplice, Martin, Bytča	0.26
	Čadca, Dolný Kubín, Kysucké Nové Mesto, Liptovský Mikuláš, Námestovo, Ružomberok, Tvrdošín, Žilina	0.15

Source: self-calculation.

.

Subregional analyses reveal a non-linear pattern: correlations between soil quality and rent are strongest at moderate fertility levels, while at very high or very low soil quality, correlations tend to be weakened. This suggests that while soil quality is an important determinant of rental values, its explanatory power diminishes at extreme soil quality, where other factors may dominate.

To further interpret these correlations, the SD and range of customary rents were calculated for each subregional unit. SD values ranged from 10.81 to 37.43, and ranged from 51.07 to 281, indicating that rent variability is generally sufficient within each unit. Consequently, low correlations in some units are due to other economic or institutional factors beyond soil quality.

Figure 5 illustrates the spatial distribution of Pearson correlation coefficients at the district level, calculated within each subregional unit. Non-contiguous districts assigned to the same group cannot be shown as coherent clusters, but the map highlights differences in relationship strength across subregions. Soil quality predicts rents most clearly at intermediate fertility, while in regions of very high or very low fertility, other determinants dominate. The dark blue band of strongest correlation runs predominantly through medium-quality soil regions. Lowest-quality northern soils and the most fertile southwest soil also show dependence on soil quality, but it is weaker.

These results underscore the importance of accounting for subregional structural heterogeneity and residual soil fertility when interpreting correlation coefficients. Furthermore, findings highlight the need to incorporate local economic, social, and environmental factors alongside soil quality [61,62].

4. Discussion

The customary rent for agricultural land in Slovakia is variable and influenced by soil quality, though not strictly proportionally. In many areas, additional economic, social, and natural factors significantly affect rent levels, raising the question of whether a uniform statutory minimum rent is appropriate, or whether regional adjustments at the district (LAU 1) or regional (NUTS III) level, as applied in France, could better reflect local conditions. In France, minimum and maximum rents are set at the department (NUTS III) level and reviewed regularly, with the methodology reassessed every six years [22,63].

Sensitivity analysis indicates that even moderate (±10%) or more pronounced (±20%) variations in customary rents do not significantly alter the pattern of rents relative to the statutory minimum. Approximately 48% of Slovak districts would require a higher minimum rent to match customary levels. In these districts, statutory minimum rents often remain below market values, and adequate remuneration for landowners is primarily determined by market mechanisms rather than statutory provisions. When market rents exceed the statutory minimum, landowners typically receive the prevailing market rate, rendering legal protections largely redundant, while tenants face higher payments that can influence their expenditure and investment decisions, as regulatory minimums exert minimal economic impact under such conditions.

Updating minimum rents only once every 20 years, without a clear methodology, may inadequately reflect evolving market conditions. Comparative practices in Belgium and France, with annual rent reviews, demonstrate the benefits of more frequent updates [22]. In Slovakia, aligning updates with the minimum lease term (e.g., every five years) or linking minimum rents to a rolling average of customary rents could enhance regulatory responsiveness and data accuracy. Given the potential benefits of more regular updates and the need for regional differentiation, it may be advantageous to implement minimum rents through procedurally adjustable regulations rather than fixed statutory law. At the same time, market mechanisms appear largely capable of determining appropriate rent levels independently, often providing compensation above the statutory minimum. Similarly, in other EU Member States, minimum rental prices are generally applied in specific circumstances, such as leases of state-owned land (e.g., in Croatia and Latvia) or municipal land (e.g., in Lithuania) [22]. In these cases, minimum rents serve to protect public interests, ensuring that the state or municipality receives appropriate consideration. Such regulations are most effective when regularly reviewed and aligned with prevailing market conditions. Without periodic revision, regulatory objectives may be less effectively achieved. Comparative data indicate that regulated rents in France are lower than in some neighboring countries. For instance, the average land rent in France is around €140/ha, compared to €800/ha in the Netherlands, €530/ha in Denmark, and approximately €300/ha in Ireland or Austria [64]. Since both minimum and maximum rents are applied in France, it is challenging to assess the precise influence of price floors versus ceilings, although ceilings likely have a stronger effect [65,66]. The notably lower rents in France, as shown by international comparisons, are largely a result of its regulated land tenure system, where administrative ceilings and floors, along with tenant protections, shape the rental market. The French land tenure regime combines rent control with extensive tenant protection, while prefectural authorities annually set administrative rent ceilings and floors based on regional agricultural performance indicators. These measures are designed to support farm stability, preserve family farming structures, and limit speculative pressures in land markets, but they also compress rental values relative to more market-oriented systems. This effect is particularly significant given that approximately 60–80% of agricultural land in France is cultivated under tenancy, meaning that the regulated rental framework largely shapes the overall agricultural structure [67]. The system was established after World War II to stabilize rural communities, prevent speculative land markets, facilitate land access for farmers without capital, and encourage long-term investment in land improvement [68]. In practice, agricultural leases reduce the attractiveness of tenanted land for investors and lead landowners to accept relatively low rents. Moreover, land market governance is further reinforced by Sociétés d’aménagement foncier et d’établissement rural (SAFER), which monitor agricultural land transactions, exercise pre-emption rights, and allocate land to priority users such as young or family farmers, thereby further limiting speculative pressure on land prices and rents. While this system contributes to affordable land access, stable family farming structures, and long-term investment in soil and infrastructure, it also results in relatively low returns for landowners and may reduce incentives to lease land or encourage alternative land uses [69,70].

For Slovakia, this experience suggests that any consideration of regulated mini-mum rents should carefully balance the protective objectives of tenancy law with the risk of suppressing price signals important for efficient land allocation; instead of strict rent controls, policy instruments such as transparent regional rent reference indices or rental benchmarks could enhance market transparency while preserving flexibility, while an institutional model inspired by SAFER could help monitor farmland transactions, prioritize young farmers, and limit speculative purchases.

Soil quality primarily influences customary rents at moderate fertility levels, while other factors dominate at very low or very high fertility. Consequently, setting minimum rents solely based on soil quality risks misalignment with actual market values. Legal regulation should provide flexibility for parties to negotiate lease terms reflecting specific circumstances, ensuring fair compensation in line with ECHR principles, which, although primarily developed in the context of residential rent regulation, can analogously inform the assessment of statutory minimum rent for agricultural land. The ECtHR emphasizes that state intervention in contractual freedom must strike a fair balance between public interest and property rights, without imposing an excessive burden on owners. When statutory minimum rent is set significantly below the customary or market level, it fails to provide adequate protection for the lessor and does not achieve its regulatory objective [71,72]. Moreover, the legal regulation of leases should provide parties with greater flexibility to negotiate terms reflecting their specific circumstances. This view is also supported by Merrill: “The legally mandated elements of a lease are typically minimal, providing the parties with greater flexibility to structure other aspects of their relationship through tailored provisions that reflect their specific needs and circumstances” [17]. We consider that the current form of legal regulation may no longer fully correspond to present market realities and can obscure relationships between market participants without offering substantial added value. From a law and economics perspective, legal rules should enhance market efficiency and provide clear benefits. Overly complex or obsolete regulations, often termed legal inflation, can obscure market relationships and reduce the practical utility of the law [73,74,75]. As a result, provisions such as rigid minimum rent regulations may increase regulatory complexity without clearly demonstrable benefits [76]. Rather than imposing rigid legal constraints on farmland rents, the legislator could focus on ensuring the availability of publicly accessible, up-to-date statistical data on the land rental market. This would enable market participants to make well-informed, evidence-based decisions and reduce potential information asymmetry. Farmland markets should be monitored closely using official statistics, and enhancing the reporting of land price data can further support participants in making market-reflective decisions [21].

In summary, to better align regulation with market realities, two approaches can be considered. First, one possible policy option would be to reconsider the continued use of a statutory minimum rent and explore whether greater reliance on market-based determination of rents could achieve regulatory objectives more effectively. The abolition of a statutory minimum rent may be appropriate, particularly in situations where the agricultural land market functions efficiently—that is, where sufficient competition exists among tenants and landlords and reliable data on customary rents are available. In such cases, market mechanisms can independently determine appropriate rents, rendering administrative minimums unnecessary or potentially distorting market efficiency. Conversely, maintaining a minimum rent, as practiced in other EU countries, may be necessary for the lease of state or municipal property, where the protection of public interest is required.

The second option is revising the regulatory mechanism, which may be appropriate before considering its complete abolition in cases where the minimum rent still serves a protective or stabilizing function, but its current design is insufficiently aligned with market conditions. Specifically, this applies to situations where (a) certain areas have market rents close to or below the statutory minimum, thereby protecting landowners from excessively low rates; (b) maintaining a minimum rent can support transparency and stability in the rental market; (c) adjustments to the mechanism could account for regional differences in soil quality and customary rents, for example by linking the minimum rent to a five-year average of customary rents or to region-specific rates; (d) regulation continues to serve as a tool for safeguarding public interest, such as in the lease of state or municipal property. In these cases, retaining the minimum rent is more advantageous than its complete removal, and its effectiveness can be substantially enhanced through careful revision and more flexible adaptation to current market conditions.

In summary, if the methodology for setting minimum rent is revised and regularly reassessed as is the practice in France with annual adjustments based, for instance, on the productive potential of the land, which is influenced not only by soil characteristics but also by broader social and environmental factors (such as climate change, major infrastructure development, or the establishment of protected areas), the regulatory framework would better reflect actual market and contextual conditions. Alternatively, minimum rent could be linked to the customary rent observed in previous years, for example, the annual customary rent or a rolling five-year average. Empirical evidence shows that customary rents are relatively stable from year to year, and linking minimum rents to these values would encourage accurate reporting and calculation, ensuring data are reflective of actual market conditions rather than a bureaucratic exercise. Although the upcoming Land Use Register will further improve the quality of customary rent data starting from 2029, implementing a system that incentivizes accurate reporting in the interim can enhance data quality. This approach ensures that regulatory decisions are based on actual market values, supporting fair compensation for landowners. Under the current legal framework, empirical results suggest that the abolition of minimum rent could be justified, as in up to 81% of cases the difference between customary and minimum rents exceeds 10%. However, a legislative commitment to regularly adjust the minimum rent and its methodology could safeguard landowners’ rights in line with the ECtHR case law.

5. Conclusions

The research results suggest that the current legislation establishing minimum rent for agricultural land in the Slovak Republic may not fully account for regional differences in soil quality and customary rent levels. A uniform nationwide minimum rate, set as a fixed percentage of the administratively determined land value, appears to fulfil its protective function only to a limited extent in a few districts. In practice, the new minimum rent corresponds to the market rent in only approximately half of the districts, while in the remaining districts, the market rent exceeds the established minimum price. To make the minimum rent effective in these areas, an increase of approximately 0.5 to 3 percentage points would likely be required.

From a legislative perspective, this study provides policy recommendations: Minimum rent may benefit from regional differentiation rather than uniform nationwide application. If it is to be based on a percentage of the land price reflecting its quality, then this percentage would need to be calibrated so that the resulting rent approximates the customary rent in the given region. Alternatively, minimum rent could be directly tied to the customary rent at the cadastral area level, either for the previous year or as an average of the last five consecutive years (which corresponds to the minimum lease term) for which data are published. Figures show that the customary rent did not undergo significant changes during the observed period. At the same time, such an approach could create incentives for the involved parties to approach the calculation of customary rent more responsibly and provide data for its computation, particularly if this variable was perceived as meaningful and not just administrative. It is true that the register of user relationships is expected to eliminate many deficiencies in the calculation of customary rent and contribute to higher-quality underlying data, but only from 2029 onwards. Until then, the quality of data could potentially be enhanced by strengthening the practical relevance of customary rent calculations for both tenants and district offices.

This study also highlights practical limitations of the current system. The law does not stipulate penalties for failing to meet the minimum rent. Therefore, the lessor must assert their claims through the courts. This process is lengthy and complex, as the plaintiff must demonstrate a discrepancy between the rent stated in the lease agreement, or in its draft, and the minimum rent. This requires determining the relevant BSEU value of the leased plot, converting this land value into euros, and subsequently calculating 3% of this value as the legally established minimum rent. In addition, many lessors, due to the persistent issue of undocumented ownership relations and undefined land boundaries, may not know the precise location of the plot they lease and therefore may be unable to determine the minimum rent guaranteed to them by law, which reduces the practical enforceability of the statutory minimum. Consequently, many lessors accept the rent proposed by tenants without independently verifying the statutory minimum value. Furthermore, spatial autocorrelation appears to be present in the data, which should be acknowledged as a limitation of this study. The aggregation of districts was performed using the Kruskal–Wallis test and contrast tests, with districts showing no statistically significant differences in customary rent being merged. Therefore, it is likely that calculating spatial autocorrelation between neighboring districts would not have a substantial impact on the results. While initially considered, the calculation of spatial autocorrelation was deemed beyond the scope of this study due to the anticipated limited effect and the need for a more detailed analysis of natural factors influencing soil quality, thereby leaving room for further research.

Regional differences further complicate the effectiveness of the regulation. This study demonstrated a positive correlation between customary rent and soil quality across all regions, although the strength of this relationship varied (Pearson’s coefficient ranging from 0.22 in the Žilina Region to 0.66 in the Bratislava Region). In areas with the most fertile and, conversely, the least fertile soils, the relationship between rent and soil quality is weaker than in areas with soils of medium quality. This suggests that in cases of extreme soil quality, other factors dominate the determination of customary rent. Therefore, deriving minimum rent solely from land value and applying it uniformly across the Slovak Republic may not fully correspond to prevailing market conditions and could raise questions in the light of the ECtHR case law.

Future regulation of minimum rent, if maintained, would benefit from transparent empirical analysis, regular review (rather than revision at very long intervals), and reflection of the principles of proportionality and protection of property rights, in accordance with the ECtHR case law. A more flexible, regionally differentiated, and evidence-based framework may better accommodate the interests of both lessors and tenants, reduce regulatory complexity, and support alignment with European human rights standards.