Business news from Ukraine

PRESIDENT’S BILL ABOUT FARMLAND TURNOVER IN UKRAINE ALLOWS LEGAL ENTITIES TO PARTICIPATE IN MARKET

The president’s bill about farmland turnover in Ukraine, which should be published within two weeks, allows legal entities to participate in the land market, acting Minister of Agricultural Policy and Food of Ukraine Olha Trofimtseva has said. “The president’s position regarding legal entities is quite liberal and this is one of the disagreements that exist between us. I believe that certain restrictions, safeguards should be established at the first transitional stage, I advocate a phased opening of the market and, accordingly, its phased liberalization,” she said at a press conference.
According to Trofimtseva, the presidential bill is based on the government’s bill.
“The changes that will be made in it concern legal entities, I think we will see it soon, it will be introduced in the Verkhovna Rada as the president’s bill, but this will be the subject of discussion after the first working day of the Verkhovna Rada, after the formation of the new Cabinet [of Ministers]. This is a question of a week or two,” the acting minister said.
In addition, Trofimtseva said that as part of the land reform, at least six or seven bills will be presented that will be aimed at the normal functioning of the land market.

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GOVERNMENT IN 2018 TRANSFERS 1.46 MLN HA OF FARMLAND TO MORE THAN 659 AMALGAMATED TERRITORIAL COMMUNITIES

Ukraine’s Cabinet of Ministers in 2018 has transferred 1.46 million hectares (ha) of agricultural farmland to more than 659 amalgamated territorial communities (ATC), also known as merged/unified territorial communities, Prime Minister Volodymyr Groysman has said.
“We began transferring the land in February 2018. Over the year we gave 659 communities around 1.46 million hectares. Next year we will continue the process, so every newly formed, merged territorial community receives agricultural farmland,” Groysman said on Facebook. He added that on December 22 the government transferred more than 500,000 hectares to municipal ownership of 174 ATCs from 20 regions, completing the process for the communities created before 2018.
Ukraine’s Ministry of Agrarian Policy and Food said the transfer of agricultural farmland to ATCs would continue in 2018 for the 185 communities which were formed in 2018.
As earlier reported, the government on January 31, 2018, adopted resolution No. 60-r on transferring ownership of state-owned agricultural land parcels to newly merged communities. The policy facilitated decentralization of land ownership without changing the current legislation.
Ukraine’s State Service for Geodesy, Cartography & Cadastre began the transfer of land from February 1, 2018.
During the first week, 99% of ATCs signed agreements with the service as the first step for receiving the land parcels.
According to the government, some 485 newly merged communities received 958,900 ha of state-owned farmland in the 11 months of 2018.

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VERKHOVNA RADA’S AGRARIAN COMMITTEE RECOMMENDS PARLIAMENT TO EXTEND MORATORIUM ON FARMLAND SALES TO 2020

The Verkhovna Rada’s committee on agrarian policy and land relations has recommended the parliament adopt draft law No. 9355-5 on extending the moratorium on the sale of agricultural land until January 1, 2020, Oleh Kulynych, who chairs the committee’s subcommittee on land relations, said on Facebook. He said the committee at a meeting on December 18 considered 16 registered bills relating to the extension of the moratorium on the sale of agricultural land. The bills offered different dates for lifting the moratorium from April 22, 2019 to January 1, 2030.
“I consider the optimal term to be one year, as proposed by bill No. 9355-5 … As the chairman of the land subcommittee, I proposed to support draft law No. 9355-5 and recommend the parliament adopt the bill as law,” Kulynych said.
The draft law provides that the Cabinet of Ministers by March 1, 2019 develop and submit a draft law on the turnover of agricultural land to the Rada.

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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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