On the 22 of May, Verkhovna Rada of Ukraine plans to consider in the first reading a draft law “On Amendments to the Law of Ukraine “On Land Leasing” (to some restrictions of agricultural land leasing” (reg. #10273 from 27.03.2012). In the Association “Ukrainian agribusiness club” (UCAB) is pointed out, if the draft law is passed in the current edition, Ukraine will stop the development of commodity production of cereals and industrial crops.

Draft law #10273 provides, that the area of agricultural land for conducting of agriculture production, which can be leased by one person, including persons connected with it, the relations of control cannot exceed 10% of agricultural land in one area and registered at the location of the land area. The total area of agricultural land in leasing per person on the territory of Ukraine cannot exceed 50 thousand hectares.

According to UCAB, there are over 250 strong enterprises in Ukraine that handle larger areas on the territory of one district. In general, the cultivation of these companies consists of about 3.7 million hectares of agricultural land. These are companies that provide decent production economy, increase the rent for residents of rural areas and thus expand the land area under cultivation.  

Experts of UCAB note, that the draft law would limit development only of transparent companies that disclose the ownership structure, and actually contribute to shadowing the lease relations in Ukraine. "If now, we at least partly understand the role, played by one or another company in the agricultural market of Ukraine, - says CEO of UCAB Volodymyr Lapa - that if the draft law #10273 would be accepted in the existing edition, it is expected a wave of pseudo-investments from Cyprus or other offshore areas, where it is difficult to assess the ownership structure ". According to expert, these formally independent companies will be able to accumulate any land masses and the state can weaken the control of the lease system. 

In UCAB is considered an extremely dangerous rate of transitional provisions of draft law #10273, concerning the need for termination of "surplus" lease agreements by the January 1, 2013. Not only this rule can create chaos in the system of lease relations, it creates a dangerous precedent of retroactive force legislation, when tenants have forcibly terminate the agreement concluded in full compliance with applicable law, even if the terms of agreements are acceptable to all tenants and landlords.

"We are concerned not so the very existence of restrictions in this draft law - says the president of UCAB Alex Lissitsa - how the lack of any constructive". According to him, very dangerous is trying to crack that - formed during the decade of companies' business, not offering anything new. "The draft law does not improve working conditions for farmers and personal peasant farms," - says an expert. 

In UCAB is noted, that the conclusion of the Central scientific-expert Office of Verkhovna Rada on the draft law #10273, contains a number of significant observations from the inappropriate application of many rules and concluding, that the significant provisions of the draft law #10273 should be subjected to the laws of other projects registered by Verkhovna Rada of Ukraine. In connection with this, association hopes that the draft law #10273 will not be supported by deputies of Ukraine.

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Tetiana Kotyk