Deputies, entrepreneurs, local "princes." Who profits from prison lands?

The state owns 800,000 hectares of agricultural land, which is slightly less than the area of Cyprus. These lands are managed by some unusual state agencies.

While the National Academy of Agrarian Sciences (NAAS) and the State Property Fund (SPF) seem like logical managers of such assets, the Ministry of Justice, particularly through the penitentiary system, does not. Until recently, the State Criminal-Executive Service (SCES), formerly the Penitentiary Service, owned five percent of all state agricultural lands.

According to the plan and the Soviet "tradition," prisoners were supposed to grow food on these lands. However, over the years of independence, officials, power representatives, and employees of state enterprises (SE) devised schemes to transfer penitentiary lands for cultivation by private companies, resulting in chronic losses for the state.

In 2023, based on the SPF, a so-called Land Bank was established—an institution intended to receive agricultural lands from non-core agencies and transparently lease them out. In the summer of 2024, it will be the turn of the penitentiary lands.

However, state land continues to be profited from to this day. EP managed to find out who is involved in this.

Why does the Ministry of Justice need agricultural lands?

During the Soviet occupation, correctional colonies and other penal institutions were allocated plots near their complexes to grow agricultural products with the help of prisoners.

This practice continued after 1991: the Ministry of Justice established numerous state enterprises at prisons, which were granted the right to use land plots permanently. Prisoners convicted of minor offenses cultivated these lands and grew various products. The SE then sold these products within the penal institutions.

Given that not all land was accounted for and registered in the cadastre, there was ample opportunity for abuse. Very quickly, the heads of agricultural state enterprises at the colonies, local agricultural businessmen, and law enforcement officials realized they could profit from this.

Legislation did not allow for transparent leasing of the land through auctions. As with other state lands that state enterprises used under the right of permanent use (essentially, cheap lifetime leases), subleasing them was prohibited.

The ban can be circumvented through agreements with private entities, such as profit-sharing contracts, joint land cultivation, provision of services, and similar arrangements. These contracts are non-public and mainly contain undervalued prices for the products, so ultimately the SE does not profit from these deals, and the state loses out as well.