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Nine points on Ukraine's new land market reform

Author : Danylo Monin

How Ukraine's government plans to launch the land market
08:45, 23 September 2019

Open source

I have read the bill and the presentation, which is a bit inconsistent with the text. I can say that opening a market is always a compromise. In this case, this is the trade-off is between attracting investment to the country, protecting farmers and limiting monopolization. As you might understand, three vectors will always be dissatisfied under such basic conditions.

Related: Not Chinese, Arabs or Aliens: Zelensky tells who will be able to buy Ukrainian land

Therefore, the general vision of the land market from the authorities is as follows:

  1. Allow buying both to citizens of Ukraine and legal entities of Ukraine. Foreign citizens can not directly buy land. They might do it through Ukrainian legal entities.
  2. Current tenants would have priority purchase of land. If the owner wants to sell the land plot, he is obliged to notify the tenant.
  3. Formation of a cheap resource for farmers for them to confront corporations. The 2020 draft budget includes 4.4 billion hryvnias (180 million dollars). If the difference between the National Bank rate and the lending rate is 8% (which is a real opportunity at the time of opening of the market), then this amount will be enough for farmers to buy land for 50 billion hryvnias (2 billion USD). It means a lot... Actually, it is about 1-2 million hectares. I am almost sure that the demand in 2020 would not be that high, and all farmers will be able to satisfy their desire to buy the land.

Related: Government unveils text of the land market bill in Ukraine

  1. State or communal land would be sold exclusively at auctions with the use of a qualified electronic signature.
  2. Limitation of monopolization. Not more than 35% at the local level, no more than 15% at the regional level, and no more than 0.5% at the level of Ukraine as a whole. At the same time, local authorities would be allowed to reduce this percentage. A restriction monitoring system will be created (actually up to 200,000 hectares).
  3. Restrictions on the purchase of land in the 5-km zone of the state border.
  4. If a citizen of Ukraine has land and changes citizenship, then his land is subject to alienation.
  5. Those, who obtained the land plots for use before 2002, have the opportunity to redeem it at standard cost.
  6. Foreign companies were allowed to buy land in Ukraine for non-agricultural purposes; however, particularly they did not buy it.

Related: We should know who controls Ukrainian land to launch land market, - Agriculture Minister

Is a compromise reached? I think that there will be many points of view.

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