Mr. Volodymyr Lapa, General Director, Ukrainian Agribusiness Club

Agricultural Land Market Establishment – a chance or a threat?

Building an agricultural lands market has traditionally been a sensitive issue for Ukraine. However, if there were once discussions about its necessity in Ukraine, there no longer are. It is accepted that an unreformed land market is hindering investment.

Still, the issue remains of what kind of land market we will have. For instance, what will be the maximum amount of land that a single person can own? Will only individuals be able to purchase land, or will legal entities be able to as well? There are also questions pertaining to the access of international capital in direct or indirect form. What will be the role and aim of the government – to protect the economic rights of market players or to restore governmental land ownership? Who will have the preferential right of purchase? Will the registration system and the cadastre meet practical needs? How will problems with crossing lands be resolved during their actual allocation? Will there be a clear mechanism for land exchange, so that land is not cut into pieces if one or more owners are unwilling to sell them, despite the desires of the majority of the owners? What will be the mortgage tool? What will be the qualification requirements for potential landowners? Will the market be liquid in the presence of a significant number of restrictions? Will there be the chance to develop loans secured by long term lease and how much money will it be able to attract in this case? Finally, will “service organizations” make a profit on the land market, as now happens during the re-leasing rights process? There are many more current land reform issues, in fact, even if you don’t consider the main question: what will be the price for land and how will it be formed?