In January-March 2024, the capitalization of the agricultural land market in Ukraine increased by UAH 202.5 billion, due to a 7% increase in the number of agricultural land sales transactions and an 11.2% increase in land prices, said Vice President of Kyiv School of Economics (KSE) for Economic Education, Professor Oleg Nivievsky at the seminar “Land Market: New Players, New Challenges, New Prospects” organized by KSE and the USAID AGRO program.
According to his information, in the first quarter of 2024, 25.7 thousand transactions of purchase and sale of agricultural land plots with a total volume of 58.8 thousand hectares were concluded in Ukraine, which is 7% higher than in the fourth quarter of 2023, which recorded a record number of transactions of purchase and sale of agricultural land for the entire time after the start of the full-scale invasion.
In the first three months of this year, the weighted average price of a hectare of agricultural land increased by 11.2%. While in the fourth quarter of last year it amounted to UAH 37.7 thousand, in January-March 2024 it increased to UAH 42.0 thousand per hectare. Thus, the capitalization of the agricultural land market has increased by UAH 202.5 billion since the beginning of this year, stated Nivievsky, and attributed these phenomena, in particular, to the opening of access to the land market for legal entities from January 1, 2024.
“Despite the full-scale war and a rather limited model, the agricultural land market in Ukraine is developing successfully. A clear indication of this is the recent decision of the National Bank to increase the liquidity ratio of agricultural land from 0.35 to 0.5. This has already opened up the possibility for the agricultural sector and landowners to attract additional funding worth $25 billion, which is comparable to the annual financial needs of farmers and landowners,” said the KSE Vice President.
Roman Neter, KSE Agrocenter expert, said that in January-March 2024, 436 legal entities purchased 2957 agricultural plots with a total area of 8.5 thousand hectares. At the same time, a little less than half of the transactions took place in March 2024, when 276 legal entities exercised their right to purchase agricultural land, acquiring 1253 land plots with a total area of 3.5 thou hectares.
He recalled that at the end of 2023, before the launch of the second stage of the land market, a number of experts expressed concerns about the possibility of large players accumulating large areas of farmland. But in the first quarter of 2024, these fears were not confirmed.
“The share of legal entities in the land market in the first quarter was only 14.5%, while the rest of the transactions are still made between individuals. At the same time, the opening of access to the land market for legal entities is already having a positive impact not only on liquidity but also on market transparency,” Nater emphasized.
Ksenia Sydorkina, USAID AGRO Program Director, said that the development of the agricultural land market is increasingly affecting the public finance system of communities after the personal income tax paid by military personnel was redirected to the state budget. Since January 2024, the increase in revenues related to agricultural land has offset the decline in other community tax revenues by a quarter. For example, in February of this year alone, taxes related to agricultural land accounted for 13% of all community tax revenues, compared to 10% in February 2023, and reached UAH 3 billion, which is 20% higher than the same period last year.
“The agricultural land market is an additional resource for the restoration of territories, the potential of which has yet to be realized by joint efforts of the government, lawmakers and communities,” said USAID AGRO Chief of Party and expressed confidence in the need to implement the reform of spatial development of territories and a number of other projects on land consolidation, irrigation development, affordable lending for small and medium-sized agricultural producers, including with the support of the Partial Guarantee Fund for Agricultural Loans, as well as with the support of the Fund.
Sydorkina said that international law experts from the Civitta, Aequo, and EasyBusiness consortium, with the support of the USAID AGRO program, have developed a concept for harmonizing Ukraine’s land legislation with EU law. The concept envisages the development and adoption of 14 legislative acts that will facilitate the approximation of Ukrainian legislation to European law, the development of land relations and the agricultural sector as a whole.
The regions of Western Ukraine became the leader in terms of agricultural land prices in the summer of 2023, according to the data of the Opendatabot service.
According to the infographics of the resource, in June of this year, the most expensive agricultural land was in Lviv (139.4 thousand UAH/ha), Ivano-Frankivsk (84.391 thousand UAH/ha) and Kyiv (61.611 thousand UAH/ha) regions. The minimum price was recorded in Kharkiv region – 26.3 thousand UAH/ha.
In July, the leading regions in terms of land prices were Rivne (144.2 thousand UAH/ha), Ivano-Frankivsk (140.9 thousand UAH/ha) and Lviv (103.647 thousand UAH/ha) regions. During this period, the cheapest land was bought in Donetsk region – 19.08 thousand UAH/ha.
Ivano-Frankivsk region was the leader in terms of the cost of agricultural land in August, although prices were lower – 111.5 thousand UAH/ha. Lviv (91.987 thousand UAH/ha) and Khmelnytsky (53.019 thousand UAH/ha) regions were in the TOP-3. Zaporizhzhia region became the anti-leader in the last month of summer – 26.57 thousand UAH/ha.
The average cost of agricultural land in Ukraine in June amounted to 39.86 thousand UAH/ha, in July – 44.9 thousand UAH/ha, in August – 39.85 thousand UAH/ha.
At the same time, the area of land sold during the summer decreased from 14.9 thou hectares in June to 13.4 thou hectares in July and 10.45 thou hectares in August.
According to the report, the average cost per hectare for the entire period of work on the land market is about 37 thousand UAH/ha. In the first month after the resumption of work in May 2022, prices reached 43 thousand UAH/ha.
As reported, the Kyiv School of Economics (KSE), with the support of the USAID AGRO Program, is conducting a study of the land market in Ukraine. During the last analysis, analysts identified two systemic problems: the low level of price registration in the State Register of Rights and the underestimation of land prices during transactions.
“Since the beginning of 2023, the share of transactions with a registered price has amounted to only 18.8% of all sales transactions, while in 2022 this figure was 34.4%, and in 2021 – 55.0%. At the same time, in 60% of cases where the price of the land plot was indicated, it was at the lowest possible level, i.e. at the level of the normative monetary value (NMV). The ratio between purchase and sale prices and lease prices at electronic land auctions at 1:4.5 indicates that the registered prices of purchase and sale transactions are twice lower than the market prices,” the study says.
Source: https://opendatabot.ua/open/land
Purchase price of agricultural land in Ukraine in January-April 2023 increased by an average of 20%, since the beginning of the year there have been 13 thousand such transactions, said the Deputy Minister of Agrarian Policy on digitalization Denis Bashlyk at a press conference.
“Even if we take away the inflation factor, we see that the growth (of prices) continues. But there is no such growth in the regions that are close to the fighting,” he said.
The deputy minister said that in Lviv region at the beginning of May this year the average cost of one hectare of agricultural land amounted to 162 thousand UAH, while at the opening of the market it was 51 thousand UAH. In Kyiv region, according to him, the price has grown from 48 thousand UAH to 148 thousand UAH per hectare.
At the same time, in Chernihiv region one hectare of land costs on average 23 thousand UAH, while before the war it cost 16-17 thousand UAH, Bashlyk added, suggesting that the price increase is due to inflation.
“In 2021 in Ukraine there were 66 thousand land sales transactions for a total area of 153 thousand hectares. In 2022 there were 53 thousand such transactions, with the market actually did not work for almost half a year due to restrictions on access to registries,” the Deputy Minister also said.
СЕО “ProZorro.Selling” Sergey But reported that from the moment of launching electronic land auctions in October 2021 the system “ProZorro.Selling” already completed auctions for the purchase and lease of agricultural land for more than 1.2 billion UAH.
As reported, the market of agricultural land in Ukraine began to work on July 1, 2021. At the first stage of the reform only citizens of the country got the right to buy and sell agricultural land, one individual will be able to hold no more than 100 hectares.
The right to purchase agricultural land from January 1, 2024 will be granted to legal entities created in accordance with the legislation of Ukraine, and the ultimate beneficiary of one or more legal entities will be able to consolidate through them a total of not more than 10 thousand hectares.
The Netherlands will provide Ukrainian farmers with EUR10 million for the demining of agricultural land and EUR40 million for the purchase of seeds and agricultural equipment as part of a total package of EUR180 million in aid to Ukraine, members of the Dutch Parliament’s Agriculture Committee said at a meeting in the Verkhovna Rada.
“We would welcome the Netherlands’ assistance in demining to speed up this process. After all, this is one of the most pressing problems of farmers, especially in the southern and eastern regions,” said Oleksandr Haidu, head of the Parliamentary Committee on Agrarian and Land Policy.
He suggested paying attention to projects to restore and modernize irrigation and drainage systems, expanding new logistics routes with the EU to help Ukrainian farmers export agricultural products.
Over the past two weeks on October 3-17, 4.05 thousand transactions were concluded in Ukraine with agricultural land plots with a total area of 7.33 thousand hectares, which is 2.9 times and 2.6 times, respectively, higher than the figures for the previous period September 19-October 3.
As reported on the website of the Ministry of Agrarian Policy and Food on Monday, in general, for the period from July 1, 2021 to October 17, 2022, during which the agricultural land market operates in the country, 126.21 thousand transactions took place on land plots with a total area of 289, 31 thousand hectares.
According to the agency, for the period October 3-17, an average of 289 transactions with agricultural land with a total area of 0.52 thousand hectares / day were concluded daily, while for two weeks September 19 – October 3, the daily indicators of the land market averaged 93 transactions per total area of 0.17 thousand ha/day, for the week of September 12-19 – 210 transactions with a total area of 0.4 thousand ha/day, for the week of August 22-29 – 164 transactions for 0.28 thousand ha/day, and for August 15-22 – 198 transactions on 0.69 thousand hectares.
This figure is still significantly lower than before the Russian invasion: according to the latest pre-war data from the Ministry of Agrarian Policy, during the period February 11-18, an average of 621 land transactions with a total area of 1.65 thousand hectares were concluded in Ukraine daily.
In terms of the total area of sold agricultural land plots, the Kharkiv region is in the lead with an indicator of 38.2 thousand hectares. It is followed by Dnepropetrovsk – 25.4 thousand hectares, Poltava – 23.3 thousand hectares, Kirovograd – 23.1 thousand hectares and Kherson – 21 thousand hectares of the region.
According to the Ministry of Agrarian Policy, since the beginning of the full-scale Russian invasion in Ukraine, 25.24 thousand transactions have been concluded with agricultural land with a total area of 44.78 thousand hectares. Most land plots sold during the war were in Khmelnitsky (4.92 thousand hectares), Poltava (4.89 thousand hectares), Vinnitsa (4.87 thousand hectares), Kirovograd (4.71 thousand hectares) and Dnipropetrovsk regions (4.08 thousand ha).
It is specified that over the past two weeks, the average price of 1 ha of agricultural land has not changed compared to the previous two-week reporting period and remained at the level of UAH 37.21 thousand / ha.
As reported, the agricultural land market, launched in Ukraine as part of the government’s land reform, began operating on July 1, 2021. At the first stage of the reform, only citizens of the country will be able to buy and sell land. One individual can have at his disposal no more than 100 hectares.
The right to acquire agricultural land on January 1, 2024 will be given to legal entities established in accordance with the legislation of Ukraine, while the final beneficiary of one or several legal entities will be able to consolidate through them a total of no more than 10 thousand hectares.
The share of land plots cultivated by the 25 largest agricultural holdings is 9% (3.88 million hectares) of the total area of agricultural land in Ukraine, the investment company Concorde Capital (Kyiv) said during the presentation of the agricultural online platform KupiPai.
According to it, the land bank of Kernel agricultural holding (the main beneficiary is Andriy Verevsky) is 510,000 hectares, Ukrlandfarming (Oleh Bakhmatiuk) 475,000 hectares, MHP (Yuriy Kosiuk) 370,000 hectares, Agroprosperis (George Rohr and Maurice Tabasinik) 300,000 hectares, Astarta (Viktor Ivanchik) 243,000 hectares.
Continental Farmers cultivates 195,000 hectares, Epicentr Agro 160,000 hectares, Harveast 127,000 hectares, Ukrprominvest-Agro 120,000 hectares, Agroton and Agrain 110,000 hectares, Vitagro and Privat-agro 85,000 hectares.
Concorde Capital said the land bank TAS-Agro and Nibulon are 83,000 hectares each, Agrovisty, Svitanka and LNZ 80,000 hectares each, Agrotrade 71,000 hectares, Ristone Holdings 67,000 hectares, Grain Alliance 57,000 hectares, AgroGeneration 56,000 hectares.
The investment company said the total area of Ukraine is 60.3 million hectares, including 42,700 hectares are suitable for agriculture (of which 31.1 million hectares are privately owned, 10.4 million hectares are state-owned, 1.2 million hectares of another form of ownership). At the same time, 89% of the 31.1 million hectares of land plots in private ownership are private shares of citizens.
Concorde Capital said that according to data for 2019, 56% of land plots were cultivated by individual tenants, 29% were individual owners, 8% of the land was leased from the state, and 7% were not cultivated at all.
