The Ukrainian President said that “some politicians and business people stole from the state the lands as large as two Crimean peninsulas.” The new law will stop that, he pointed out, while expressing hope for higher growth.
Ukrainian President Volodymyr Zelensky enacted a law on the deregulation of the land market Monday, which will lift the ban on the sale of Ukrainian farmland. The bill passed its first reading in Parliament already in 2019 but ran into trouble in the Constitutional Court of Ukraine, which had delayed its final approval.
“This is a law which deprives a cabinet official of the function of registering the right to land, which he has never even seen in his life. Which finally returns to communities the right to dispose of their land. A law that clearly states that only Ukrainians can buy and sell land. The law, which I am happy to sign here and now,” Zelensky said at Ukraine 30. Land Forum, according to Unian.
The law secures a gradual land-reform, where citizens of Ukraine will be able to buy and sell farmland up to 100 hectares from July 1, 2021. From January 1, 2024, the cap will be raised to 10,000 hectares, where also legal entities can buy farmland.
“In 2014, Russia annexed the Crimean Peninsula, which belonged to our state. Over the years of the moratorium (on sale of agricultural lands), some politicians and business people stole from the state the lands as large as two Crimean peninsulas. Of course, we will do everything to return both,” said Zelensky, according to Ukrinform, referring to significant problems with the illegal sale of land, where around five million hectares of state land have been illegally appropriated, according to the President.
The new reform will change things
The land-reform lifts the ban on the sale of farmland, which came into force after the collapse of the Soviet Union. The farmland was back then given back to the people in small entities and could not be sold to protect small farmers. Due to the ban, large farmers today have to rent the land from sometimes thousands of small farmers, creating a bureaucratic burden. The new law signed by Zelensky will lift that ban and enable the sale of farmland.
Tymofiy Mylovanov, an adviser to the head of the President’s Office, said that the land-reform is expected to increase the Ukrainian GDP by 1.5 percent.
“According to the calculations of the Kyiv School of Economics, the implementation of land reform will add about two billion dollars to GDP, i.e., about 1.5 procent, in the next few years. And most importantly, it will allow landowners to receive funding secured by this land officially, rather than under gray schemes,” Mylovanov told, according to Ukrinform, noting that productivity will increase.
The government, among other things, hopes that the new law will mean more investments as investors will now be able to own their land instead of renting. Critics point out that only small spots of land will be sold at first and only Ukrainians will be able to buy farmland.
Need to be implemented correctly
Minister of Agrarian Policy and Food of Ukraine Roman Leshchenko was happy to see that the land-reform was signed. However, he also said that the real challenge now is the implementation. Leshchenko noted that the government has a plan to make sure that it is implemented correctly, which means tracking the sale and purchase of farmland.
“We believe that this is absolutely justified because society needs to make sure that it is about justice, about open data, about giving producers access to finance. This is about the sustainable development of the agricultural sector,” he said.
World Bank Director for Belarus, Moldova, and Ukraine Arup Banerji was happy to see the reform signed and expressed hope that it will work without corruption.
“We are talking about endless opportunities for Ukraine. But it also poses considerable dangers if the reform is implemented incorrectly. That is why I am glad that the law No. 2194 was signed, and the parliamentarians passed the bill No. 2194. This gives access to the land market that is transparent, non-corrupt, where citizens and communities can monitor all land transactions. And the government will be responsible for them,” Banerji said, according to Ukrinform.
At the same time, EU Ambassador to Ukraine Matti Maasikas came with a list of five things that he wanted Ukraine to do now to make sure that the reform will work.
First of all, he said that Ukraine needs to adopt and implement all resolutions regarding the land market. Secondly, make sure that every landowner knows his or her rights and opportunities with the new reform. Thereafter, make sure that all transactions are monitored and that owners can get legal support so that there is confidence in the system and furthermore establish a clear anti-corruption audit. Lastly, make sure that farmers have access to the credit market to give them resources to buy.