Business news from Ukraine

UKRAINE TRANSFERS FARMLAND TO 72% OF MERGED TERRITORIAL COMMUNITIES

The Cabinet of Ministers of Ukraine as of October 1, 2018 transferred over 938,700 ha of state-owned farmland located outside settlements to 479 (or 72% of the total number) merged territorial communities, according to a posting on the website of Ukraine’s Agricultural Policy and Food Ministry. According to the report, at present, the transfer plan was completed in Zakarpattia, Ivano-Frankivsk, Kirovohrad and Cherkasy regions.
The ministry said that the government would compensate expenses on stocktaking.
“This is a quality transfer, as a result of which the communities receive properly registered land parcels with cadastral numbers, clear boundaries and ready to be taken into the balance sheet. For our part, we expect effective management of this resource by local governments. We will in particular, track the dynamics of rental rates,” First Deputy Minister of Agrarian Policy and Food Maksym Martyniuk said.
In general, until the end of 2018, it is planned to transfer agricultural land to another 183 merged territorial communities.

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REVENUE FROM SALES OF FARMLAND LEASE RIGHTS IN JAN-AUG EXCEEDS ENTIRE 2017 FIGURE

Revenue of local budgets from the sale of rights to lease farmland parcels in state ownership by territorial agencies of the State Service for Geodesy, Cartography and Cadastre totaled UAH 131 million in January-August 2018.
The Agricultural Policy and Food Ministry said in a press release that in 2017, revenue from the sale of rights to lease farmland parcels in state ownership totaled UAH 118.7 million, in 2016- UAH 95.8 million and in 2015 – UAH 38.4 million.
The ministry said that the good results of land auctions were recorded in Sumy region (5,143 ha for UAH 11.98 million), Odesa region (4,162 ha for UAH 17.8 million), Donetsk region (2,897 ha for UAH 4.49 million), Chernihiv region (3,954 ha for UAH 10.9 million) and Kherson region (2,888 ha for UAH 3.14 million).

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AGRICULTURAL AND FOOD MINISTRY OF UKRAINE ANNOUNCES FARMLAND MARKET CONCEPT

The Agricultural policy and Food Ministry of Ukraine foresees in its farmland market concept that only Ukrainian citizens would be able to buy farmland.
According to a report on the ministry’s website, the basic provisions of the concept also set the maximum size of farmland, which can be owned by one person and anti-speculative mechanisms (the collection of a state duty) in case of resale of a land parcel within the first three years.
The document provides that current users are guaranteed the preservation of the land bank in case of a change of the owner of the land.
The concept introduces price benchmarks for land parcels during the first two years after the cancellation of the moratorium at a level no lower than the monetary valuation cost. Prices of all purchase/sale transactions for which property rights are registered are subject to state registration, which will allow the National Bank to regulate the mortgage market.
The document creates preferential conditions for the purchase of land by small players, primarily by farms, in particular through a mechanism for partial loan guarantees.

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PARLIAMENT PASSES BILL ON USE OF LARGE TRACTS OF FARMLAND

Ukraine’s Verkhovna Rada adopted draft law in the second reading and in general to resolve the issue of collective ownership of land, improving land use rules and stimulating irrigation. Some 236 lawmakers voted for the bill, 11 more than the required minimum of 226 votes. The bill introduces the concept of tracts of agricultural land. Within such tracts agrarians will have the opportunity to exchange plots, conclude sublease agreements without the consent of landlords, rent field roads and optimize areas for cultivation. Agrarians who own/use more than 75% of the tract will have priority rights over other users of the tract.
The bill also defines the order of inventory of land plots, which is to take place prior to the creation of arrays. As expected, it will contribute to the updating of the State Land Cadastre. Its results will be approved by local authorities.
The document provides for the protection of the rights of farmers who improve and restore hydraulic reclamation systems. In addition, a mechanism of permanent or urgent land easements is being implemented to introduce measures for land reclamation, which can be established both by contract and by a court decision.
Users of land plots on which hydrotechnical reclamation is carried out have the right to claim compensation for the costs of hydraulic reclamation of adjacent land plots from their owners or users. According to the document, lands of collective agricultural enterprises whose activities are terminated shall be transferred to municipal ownership of a local community.

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OVER 7 MLN OF NON-POLLUTED FARMLAND IN UKRAINE NOT USED

Over 7 million of non-polluted land in Ukraine remains unused for production of organic products, the press service of the Ukrsadprom association has reported.
The press service said that in 2016, the area of non-polluted farmland in the world was 57.8 million ha, including around 400,000 ha in Ukraine, which is in the 20th position. The share of certified organic area is around 1% of farmland in the country.
The association said that organic planting of fruit, berries and nuts in Ukraine becomes more popular.
“The general pace testifies to the gradual expansion of the areas of perennial plantations: now they occupy 5,000 hectares, with the pome fruits and stone fruits – 2,500 hectares, berries – 630 ha, strawberries – 170 ha, walnuts – 290 ha, hazelnuts – 40 hectares, other nuts – 50 hectares,” the association said.
In addition, according to its information, exports of organic gardening products are developing. In 2017, producers exported organic fruits and berries: frozen blueberries and blueberries, fresh apples, elderberry, birch sap, walnut kernels, sea buckthorn, frozen blackberries, wild rose, strawberries, cranberries, hawthorn, lingonberries and raspberries, and apple juice concentrate. The main consumers are the countries of the European Union.
“Organic products, especially fruit and berries, are in greatest demand in the EU, the United States and Canada, so the growth of organic fruits (apples, berries, nuts, etc.) is promising for Ukraine now,” Ukrsadprom said.