The land should be the main farming resource

Posted on: 11 April 2019

This has been stated by the acting Minister of Agrarian Policy and Food of Ukraine – Olga Trofimtseva during the All-Ukrainian Land Forum, initiated and organized by the All-Ukrainian Agrarian Council.

“There are several basic concepts for launching a land market in Ukraine. The concept, which the government adheres to, remains unchanged, its main points are that only citizens of Ukraine can buy agricultural land. It also provides for establishment of limits for the agricultural land, which may be owned by one person, and also maximum size of the lease area within the administrative units,” noted Olga Trofimtseva.

According to her, the maximum size of the land that can be owned is under discussion, but the benchmark is 100–200 ha per person; The maximum limit of leased land area is not more than 35% of the agricultural land of rayon and / or joined territorial community if the area of such a community is equal or exceeds the average area of rayon.

In addition, antispaculative mechanisms are introduced. Collection of state duty at the rate of 50% of the monetary valuation of a land plot in case of resale of a land plot during the first three years.

The acting Minister added that in order to ensure participation of small agricultural producers in implementation of the land reform, the State Financial and Credit Agency will be established which will provide partial guarantee of loans to a specific target group for the purchase of land plots. Thus, the imbalance formed in access to cheap credit resources between farmers and agro holdings will be redressed.

The objective of the partial loan guarantee program is to replace or reinforce the collateral that the borrower can provide for a loan, reducing the bank risks associated with provision of loans to the target group of borrowers and creating incentives for banks to provide services to small farms.

Olga Trofimtseva noted that these issues are the subject of discussion between the government officials and the agribusinesses.

For reference:

The moratorium has negative consequences both for the country’s economy and for rural development. In particular, the moratorium does not allow free functioning of mortgages of agricultural land. As a result, long-term lending to the agricultural sector, its transition to an innovative model of development, attracting investment in the agricultural sector of the economy is not possible.