The landreform is set to change the agricultural sector in Ukraine completely, but not all people know about it, says a new study.
14.1 percent of all farmers in Ukraine don’t know about the landreform, concludes a new study named ‘Land Market in Ukraine,’ according to Ukrinform. The landreform went into force earlier this year and enabled the sale and purchase of agricultural land for the first time since Ukraine gained independence in 1991.
The study, however, also shows that 85.9 percent of the farmers in Ukraine know about the opening of the market, which is expected to bring investments and growth to the Ukrainian agricultural sector as farmers now can own land.
The survey also showed that 80.8 percent of the people who have farmland are leasing the land out, while 14.5 percent cultivate it themselves, and 4.7 percent don’t do anything. Of the owners who lease it out, 61.4 percent does it to a farmer and 36.3 percent to an agricultural holding, the study says.
A new beginning
In July, the so-called landreform entered into force and ended a more than 30-year ban on selling Ukrainian farmland. The state owned the land during the Soviet Union. After its collapse, the Ukrainian government subdivided the land into small units of 0.1 to 0.3 hectares in size, given back to the people. It was illegal to sell the land, and large agricultural holdings instead had to lease it, a considerable administrative burden that negatively affected investments.
Ukraine has 42 million hectares of farmland, and the reform should help release the potential in the agricultural sector, as farmers can now own their land. The Ukrainian Agri Council estimates that the Ukrainian state budget losses around 815 million dollars per year due to the land market working in the shadows.
The land market is opened in phases. Only Ukrainians will be able to buy farmland in the first period and not more than 100 hectares per person. That will change from January 2024, where all companies registered in Ukraine can buy more than 10,000 hectares. That means that foreigners aren’t allowed to buy farmland directly but can do so through a company registered in Ukraine.
According to the survey of the Ukrainian landowners, only 5.0 percent of them plan to sell their land shares over the next three years, while 2.8 percent are planning to sell within 3-5 years and 7.2 percent within 5-10 years. More than half – 55.0 percent – are not planning to sell their farmland at all, and 25.0 percent did not answer.
The landreform met fierce resistance in parliament, and the reform is also unpopular among the current owners of the land in Ukraine. The survey, conducted among 1,058 people, shows that 5.6 percent support the reform, while 62.9 percent don’t support it.