The so-called land market should start its work in Ukraine on July 1. According to Prime Minister Denys Shmygal, it will only benefit Ukraine as the prices for land are going to rise two times after the opening of the market as Shmygal stated at “Ukraine 30. Land” forum.
“First of all, Ukrainian landowners will benefit from the reform; about seven million Ukrainians who own the land plots. For the last 20 years, they could not legally sell their lands and they did not get the fair price of rent that is lower a few times in Ukraine than in neighboring countries. The opening of the land market will cause the growth of price for land at least twice during the first three-five years,” Shmygal reported.
Besides, according to PM, the launch of the land market will be beneficial for Ukrainian businessmen. He noted that as of today, the productiveness of agriculture in Ukraine is one of the lowest in Europe. The main reason is the absence of turnover of the agricultural lands. Shmygal noted that the moratorium blocked the possibility of long-term investments in agriculture. After the launch of the turnover of the lands, the producers will be able to plan their activity for years ahead and they will not be afraid to invest.
Meanwhile, small and medium farmers will get first-priority right for a buy-out of land, in case the landowner decides to sell his share.
“The state provides the agricultural producers with the access to cheap financial resources necessary for the purchase of land plots. Some of the programs are working now; some of them will work in the future as the Law On fund of partial guarantees of credits in agriculture was approved by the Verkhovna Rada,” Shmygal noted.
Meanwhile, the land market is also decentralization. PM noted that during the years of independence about five million hectares of lands were withdrawn to private ownership. However, after the launch of the market, the united territorial communities will be able to manage their lands and it will allow to attract investors, increase tax revenues and create new working places.
Any rent of land will take place through transparent auctions and it will allow avoiding corruption risks. The communities received a right to organize such auctions individually and get maximal incomes in their budgets.
According to PM, “as of today, the average rent for state lands makes about 7%. The successful experience of holding of the land auction of previous years shows that the average stake of the ending of such auctions can make 18% from the normative monetary value of lands. In other words, the potential of the increase of incomes to the local budgets from the efficient governing of lands makes up to 12 billion hryvnias ($437,155.32)”.
On May 24, President of Ukraine Volodymyr Zelensky publicly signed law No. 2194, which provides for the transfer of state-owned land outside settlements to communal ownership of village, settlement, and city councils.
As we reported earlier, on April 28, the Verkhovna Rada adopted the Law of Ukraine No. 2194 “On Amending the Land Code of Ukraine and Other Legislative Acts to Improve the Management and Deregulation System in the Sphere of Land Relations”.