On November 13 2019, the Verkhovna Rada of Ukraine adopted in the first reading a draft law “On Amending Certain Legislative Acts of Ukraine Concerning the Turnover of Agricultural Land” (No. 2178-10). The draft law provides for the lifting of the ban on the sale of land from October 1, 2020.
On January 13, 2020, Ukrinform held a public discussion on “How has the draft law on land turnover changed after amendments?”
During the event, representatives of the Cabinet of Ministers, deputies of the Servant of the People faction, the Verkhovna Rada Agrarian Committee voiced the final version of land reform in Ukraine and explained the proposed changes to the bill.
According to this document, citizens of Ukraine, territorial communities, the state, legal entities of Ukraine, foreign citizens and stateless persons will have the right of ownership of agricultural land plots in case of acquisition by inheritance and with the obligation to alienate the plot during the year.
About What They Talked
It should be noted right away that there is not enough land for everyone. And the notorious norm of up to two hectares for every Ukrainian, adopted in the 90s of the last century, cannot be realized physically. Because of the required 100 million hectares, there are about 45 million in the state. Therefore, “the advantage will be given to those who work on the ground”, Minister of Economic Development, Trade and Agriculture of Ukraine Timofey Milovanov said.
Also, foreigners will not be able to buy land. “Society requires the inaccessibility of foreigners, and this is guaranteed today,” minister added.
Even if a decision is taken on the right to sell farmland to foreigners after the all-Ukraine referendum, as President Volodymyr Zelensky mentioned, there will still be restrictions on the 50 km area of state borders.
In addition, the acquisition of Ukrainian agricultural land is prohibited for legal entities whose participants are citizens of the aggressor state or another state if it is not possible to establish the ultimate beneficiary of such a legal entity, Zelensky said.
At the same time, Roman Leshchenko, the Presidential Commissioner for Land Issues, noted that restricting the admission of foreigners to the Ukrainian agricultural land market does not affect investment obligations.
Journalists asked about the people with dual citizenship, which is practically forbidden in our country, can buy agricultural land, but everyone knows that it exists. Milovanov answered that there are no screening mechanisms for such people. They have the right to vote in elections, respectively, and they can buy land.
One legal entity or individual cannot own more than 10 thousand hectares. “What happens if an individual, a citizen of Ukraine, has acquired, for example, one thousand hectares, and it is also the founder of a legal entity for which five thousand hectares were bought? This means that in aggregate it already has six thousand hectares and the legal entity can buy another four thousand hectares so that together there are 10 thousand. Or this individual can buy on himself directly,” Mykola Solsky head of the Committee on Agrarian Policy noted.
The control mechanism itself at the stage of signing the contract for the sale of agricultural land was determined after consultation with the Ministry of Justice, notaries, private notaries.The notary checks how much land is registered on this person. In addition, at the same time checks in which enterprises he is the founder. And it also establishes how many of these enterprises, where he is the founder, are already owned. Based on this, he can certify the transaction if the limit is not exceeded more than 10 thousand hectares of land.
Purchase and sale of land will be carried out only in non-cash form. “There will be no cash settlements. We will fight against shadow markets. Therefore, it will be possible to pay for acquired land only in non-cash form. It will be necessary to show where this money came from,” Milovanov said.
For whom privileges and loans
The bill provides preferential conditions for the acquisition of agricultural land for those who constantly use it, Minister added.
“Ukraine will support reducing the cost of interest rate for the purchase of land. We expect that there will be a percentage under which it will be possible to take a loan, the rate of interest will be up to 3-5%, These are very acceptable preferential conditions at the inflation rate, or less than inflation. We will compensate banks for the interest rate of the National Bank. This is what is called a discount rate. We will also support the small farmers, ” Minister said.
Also noted that a loan guarantee fund will also be created so that people working on the ground but not having a credit history can apply to banks. And the state, for its part, will guarantee risks so that banks can issue loans.
However, according to Milovanov, those who will have 500 hectares, possibly up to 1000 hectares of land, will be able to count on help. But holdings or large farms with tens of thousands of hectares should not be expected.
Actually not everything is rosy for farmers. The fact is that in the late nineties at the beginning of the two thousandths, part of the land in Ukraine was transferred for permanent use to farmers and farms about 530 thousand hectares, so this land could not be obtained without bribes to officials of Ukrainian service for Geodesy, Cartography and Cadastre. And many farmers have already paid for it. Now they are given the opportunity, to acquire this land again with a 7-year installment plan. And in fact, many farmers have already paid for it. Now they are given the opportunity, at their request, to acquire this land again with a 7-year installment plan.
The Process divided to stages
“Land reform will be implemented in stages, based on the needs of society. that the draft law on land circulation was improved, the adoption of which will put things in order in land relations, but this is only one of several bills”. The presidential Commissioner for Land Affairs Roman Leshchenko said.
“We are talking about 10 basic bills, ranging from decentralization and transfer of land to localities, providing pre-emptive institutions, an anti-raider package, a direct financing program to support small and medium producers, putting things in order in all government programs, issues related to spatial geodata, and ensuring proper infrastructure filling in the relevant cadastral data. For three months, basic bills were developed, some of which were considered in the process I, the other part – preparing to consider” Leshchenko Added.