Ukraine is preparing for the opening of the notorious land market. The country’s leadership has not yet decided on its model. First of all, you need to clearly focus on the priorities for the development of land relations. The problem is what to put first: highly developed agricultural production or the well-being of rural workers? Finding the right solution to this complex issue is the main goal of implementing land reform.
The implementation of land reform worries the Ukrainian public, both from ordinary land owners and from businessmen. The sale of land is the cornerstone in the development of the country’s agro-industrial economy. The previous Law of Ukraine prohibits the sale of land. According to most residents, this moratorium protects the property of peasants from greedy entrepreneurs.
Many leading experts in the agricultural sector strongly disagree with this opinion. They argue that the moratorium significantly impedes the full development of the agricultural industry in Ukraine. That is why the government of Arseniy Yatsenyuk initiated the development of a new land reform back in 2016. The State Strategy for the Development of the Agrarian Sector of the Economy describes the main objectives of the reform and ways to solve them.
It should be noted that for a long time the project of creating an open land market was not implemented by any government of Independent Ukraine.
Currently, the issue of land reform is particularly relevant. The current Cabinet of Ministers is working to develop a strategy to attract foreign investors that will help solve two main problems: create efficient agricultural production and significantly improve the lives of rural residents.
Stages of land reform implementation
The implementation of land reform and the creation of an open market for the sale of land will take place in two stages:
The first stage includes the right to grant the purchase/sale of state-owned agricultural land.
The second stage of the implementation of land reform involves conducting transactions for the purchase and sale of land plots owned by private individuals and entrepreneurs.
For the successful implementation of measures to create an open market for the sale of land, an appropriate legislative framework has been prepared. The land market will enable owners to fully dispose of land plots. It will help attract investment capital for business development.
Experts have different opinions on the issue of land reform in Ukraine. Some believe that lifting the ban on land sales could disempower many private owners, while others argue that the moratorium only helps create a shadow land market in the country.
Features of the implementation of land reform in Ukraine
According to experts, the previous legislative framework deprived ordinary owners of small plots of land of the right to dispose of their land, which they received in the 90s through privatization, for 15 years. This land could not be sold, received loans for it, or given to one’s descendants. Lifting the ban on the sale of land will enable owners of land plots to obtain a small asset of several tens of thousands of dollars. Many share owners, unfortunately, were unable to wait for the legal right to sell their land ownership.
Despite the positive trends in the development of the land market, the interests of the Ministry of Agrarian Policy do not coincide with the interests of 7 million land owners. The ministry stands on the side of businessmen. Therefore, one cannot rely on objectivity and assign responsibility for the implementation of land reform to this government body.
How to change the current situation?
Experts argue that a fundamental clause should be added to the law on the purchase/sale of agricultural land:
– the state, territorial community and citizens of Ukraine have the right to buy agricultural land. The right to own land should not be granted to foreign citizens and legal entities. Social activists are concerned about another serious issue regarding the purchase of land by several families. It is proposed to limit the area of land that can be owned by one person. It should not exceed 200 hectares. In addition, citizens who buy land plots and sell them within three years must pay a state duty to the state treasury. This will solve the problem of speculation.
To ensure the transparency of the open land market, the new legislative framework of Ukraine provides for the sale of land belonging to state and municipal property to be carried out only through electronic auctions. This method of selling turned out to be very effective. Private landowners have the right to sell land also through electronic auctions. In addition, they can conduct a direct land purchase and sale transaction by concluding an agreement with the client.
In order to support farmers, installment payment is offered. For example, when buying a plot of state-owned land, a farmer will pay its cost monthly, regularly paying an amount equal to the rent.
All these issues are subject to discussion in open discussions, as a result of which people will come to a consensus. Today, many land owners have conflicting feelings. They hope that by selling the share, they will be able to receive financial benefits that will improve their well-being. At the same time, they are told that low purchasing power deprives them of hope of receiving the expected profit.
Of course, the statement about the rapid improvement in the well-being of rural workers is quite contradictory. However, to refuse to create an open land market means to miss the last opportunity for the development of the agricultural sector of the Ukrainian economy. The country’s farmers desperately need investment. For an influx of investment, special economic conditions are needed that will attract investors.
The implementation of land reform in Ukraine should bring economic results in the long term. It will contribute to the development of rural infrastructure. In addition, the successful implementation of land reform will give new impetus to the development of small businesses in rural areas.
It is known that the agricultural sector of Ukraine has a significant share in GDP, approximately 12%. At the same time, agricultural exports account for 40%. Therefore, large agricultural enterprises cannot be discriminated against. For the successful operation of these companies and private farmers, the state is obliged to create all the necessary conditions.
According to statistics, in countries where there is an open land market, productivity increased by 44.8% during the first seven years. Experts predict that in the first two years after the opening of the land market in Ukraine, the cost of one hectare will increase by 76%. In their opinion, in states where there is no land market, the welfare of rural workers leaves much to be desired.