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The moratorium on the sale of agricultural land has existed for over 16 years.

However, until now a significant part of society is against its abolition.

On February 17, a group of people's deputies of Ukraine registered with the Constitutional Court an idea of ​​lifting the moratorium on the sale of agricultural land. ‘In six months, the court can lift the moratorium and de jure launch the land market,’, said MP Alexei Mushak, one of the initiators of the submission. - ‘There are violations of at least five articles of the Constitution, among which the main one is a violation of the right of ownership, consisting of three parts: possession, use and disposal. The latter are deprived of the citizens of Ukraine ’.

It is worth recalling that for the first time the moratorium was introduced by the Verkhovna Rada in January 2001. The initiator of the decision is MP Anatoly Matvienko. The law provided that the moratorium will be short-term - until the adoption of the law on the turnover of agricultural land or the corresponding norm in the Land Code. Later in 2001, the parliament adopted the Land Code, but it did not say about the lifting of the moratorium - on the contrary, the law continued its operation until the end of 2005. After this, the moratorium was extended 8 more times: in 2004, 2006, 2008, 2010, 2011, 2012, 2015 and the last time in 2016 - until January 1, 2018.

Over the 16 years of the moratorium, the land issue has become one of the most speculative political slogans and overgrown with dozens of myths. VoxUkraine chose and analyzed the accuracy of common ‘land myths’.

Myth 1. After the lifting of the moratorium, the land is bought from the peasants for a pittance

“The investor will take for three kopecks for nothing from destitute people,” said the head of the Radical Party, Oleg Lyashko.

According to a study by the Kiev International Institute of Sociology, only every sixth Ukrainian supports the lifting of the moratorium. The main fears of unit owners are low land prices, pressure over land sales and fraudulent purchase schemes. However, the paradox is that more? Ukrainians surveyed in general and? owners of shares expect that the lifting of the moratorium will bring benefits to the economy of the state.

In fact, it is the moratorium that annually ‘steals’ from 6.9 million unit owners up to 90% of potential income, especially because of the low cost of renting land, which is one of the lowest in Europe. According to experts of the agricultural sector Oleg Nivievsky and Denis Nizalov, the average cost of renting agricultural land in Ukraine in 2015 was more than 10 times lower than the fair value. According to the State Geocadastre, the average rental payment in 2015 was $ 37 per hectare. The main reasons are the moratorium on the sale of land, the high cost of servicing the land bank and poor access to capital. According to experts, if the markets and production factors worked normally, the rental price could be $ 455 per hectare.

In the countries of Central and Eastern Europe, the price of land and rent began to rise immediately after the opening of the land market in the 1990s. The annual increase in rental prices was approximately 20%. Today, the average cost of renting one hectare of land in Hungary is $ 100-150, in Bulgaria - $ 279. Even more expensive land in Western Europe: in Denmark - $ 700-750, the Netherlands - $ 600-650.

Myth 2. Foreigners buy land and use it inefficiently.

‘The land will not be managed by Ukrainians ... If they enter the land market, it’s not the investor who comes, but the robber from the main road,” said Oleg Lyashko last October.

Of course, one of the most popular political myths. However, he has nothing to do with the truth. First of all, the Land Code limits the range of buyers of agricultural land by citizens and legal entities of Ukraine who are engaged in agricultural production.

However, the experience of neighboring countries also clearly demonstrates that this myth, at best, is a great exaggeration. First, in the first 5-10 years of liberalization, the overwhelming majority of countries open the market only to citizens and resident legal entities. For example, in Poland, Romania and Estonia, foreigners and foreign legal entities were for a long time forbidden to buy land. In the Czech Republic, foreigners could not buy land until 2011. In Slovakia, foreigners received the right to buy land only in 2014. Croatia has not yet opened a land market for non-residents.

In Ukraine, such restrictions are also planned: the bill on the turnover of agricultural land, which was submitted to the Verkhovna Rada, has similar reservations regarding the participation of foreign capital in agricultural land purchase and sale transactions.

Secondly, it is very doubtful that foreigners will be able to redeem a significant part of land plots in a short time. One example is neighboring Slovakia.

‘In Slovakia, a moratorium was lifted two years ago (for foreigners - Vox) - and nothing happened. Only 5-7% of land is owned by foreigners, ”says Ivan Miklos, co-chair of the Strategic Reform Advisors Group under the Cabinet of Ministers, in an interview with the Slovak Republic.

Thirdly, not allowing foreigners to enter the market is a bad idea, as this may negatively affect the value of the land. The study Restrictions on the market of agricultural land: a review of international experience and lessons for Ukraine notes that restrictions on the ownership or circulation of land, including a ban on the sale of land to foreigners, reduce demand, resulting in a lower price. ‘If the Ukrainian market of agricultural land is isolated from foreigners, the losses are borne by the owners of the shares,” the study authors say.

That is what happened in the Canadian province of Saskatchewan in 1974. The province limited the maximum amount of farmland that non-residents may own. As a result, the price of land has decreased by $ 10-85 per hectare.

There is another nuance. It is the moratorium and rental relations that contribute to the inefficient use of land. Land law expert Pavel Kulinich, studying the experience of Germany, France, Poland and the Netherlands, came to the conclusion that the right to private property plays an important role in the preservation of land. A farmer who has acquired the land at his own expense protects it as the main means of farming.

Myth 3. Most of the land very quickly bought agricultural holdings

Everything is exactly the opposite. The experience of neighboring countries - Poland, the Czech Republic, and Slovakia shows that the free market is an incentive for the development of small and medium agribusiness.

One of the ways that contributes to the development of farms is to limit the area of ​​land that may be owned by one person. Thus, in Poland, legislation limits the size of land to 500 hectares. In Hungary, the maximum area owned by an individual is 300 hectares, while the area that may be in use is 1,200 hectares. In Slovakia, the average size of plots is 0.45 ha.

Even in countries where no marginal land has been established as property, tens of thousands of farm enterprises are being created. For example, in Finland only farms are more than 30 thousand, and in general, enterprises engaged in agriculture, there are more than 100 thousand.

Secondly, the creation of a market does not mean an automatic sale of all lands. In France, 75% of the land is used on loan, and the average size of land sale transactions is 3.3 hectares. In Sweden, in 2005, 85% of land sales were on plots of less than 10 hectares, despite the fact that 40% of the land was leased.

In Ukraine, the situation is radically different. The land price is not determined by the market; it is formed on the basis of a normative monetary value, which can be either lower or higher than the market value. The low rental price allows agroholdings to accumulate a large land bank. ‘Large agricultural holdings are much more profitable to rent land for a penny than to buy at market price, or to pay rent on the basis of the market value of the land’, writes Sergei Khlan, MP from BPP.

Thanks to the moratorium, agricultural companies were able to accumulate large land banks. Although more than 50,000 companies conduct business in the agro-industrial sector, the market is monopolized - the 100 largest companies lease 6.5 million hectares of arable land (20% of the total land fund area). At the same time, the ten largest companies lease from 125 to 654 thousand hectares. In fact, the existence of a moratorium contributes to the development of agricultural holdings, because only they have access to financial resources. Peasants can not take a loan secured by land, and this makes it difficult to develop their own business.

In the end, the majority of agricultural holdings are in debt, they do not have free cash resources to purchase the entire land bank, which they currently lease. On the other hand, it is physically impossible to carry out such a number of sales transactions of land for two reasons. First, over the year, the rights registration system is able to process up to 800 thousand transactions. In 2014, the system was already running at its limits. Secondly, the sale and sale process is hindered by a high level of land fragmentation: the average size of each plot is 3.6 hectares, which is 270 thousand lots per 1 million hectares of land.

It is important to note that the marginal capacity of the rights registration system is approximately 800,000 transactions per year. In 2014, the system worked at the limit of its capabilities, which resulted in significant delays in registering lease rights. Now work out an additional 100-200 thousand additional transactions per year will be extremely problematic.

Myth 4. Cancellation of the moratorium - the road to disorder and the shadow market

“If we now lift the moratorium on the sale of land, we will face raiding. Land is plundered from the people just as industry was stolen, ”said the head of the Agrarian Party, Vitaly Skotsyk, last fall.

In fact, the shadow land market associated with the sale of land plots exists already today. Most often, according to the President of the Association Ukrainian Club of Agrarian Business Alex Lissits, it manifests itself in the design of ‘contracts (leases, - VoxUkraine) for 50 years and emphyteusismo.

According to the latest calculations of the ASTP, the volume of the shadow market is from 10 to 12 billion UAH per year.

Illegal and shadow use of land is rampant. According to the calculations of the project ‘Support for reforms in agriculture and land relations in Ukraine’, the adoption in 2015 of limiting the minimum term of the lease agreement at the level of 7 years transferred the short-term rental relations to the shadow sector. In addition, more than 2 million hectares of land of collective ownership and of the escheated inheritance are generally used on the basis of self-capture.

An important consequence of the introduction of a transparent land market is the settlement of the right of ownership and use. Owners and users will no longer need to circumvent the moratorium, which today happens quite often and contributes to the emergence of a shadow market. And, more importantly, those owners who will not be able to work the land or will be unprofitable will be able to sell the land to a more efficient farmer.

Myth 5. Moratorium - a guarantee of sovereignty and economic development of the state

‘The abolition of the moratorium on land trade is another step to turn Ukraine into a raw materials appendage,’ the statement by the party Our Land.

In fact, the opposite is true. The moratorium in no way contributes to the preservation of the sovereignty of the country. Because of the moratorium, an important state resource is destroyed, the economy loses billions, and citizens remain landless owners of land plots - they can only rent it for a penny.

The moratorium negatively affects the rights and welfare of the population. ‘It violates the rights of 6.9 million owners, most of whom are elderly people, reduces the well-being of the rural population by reducing rent and making it impossible to use land sales as a way to overcome negative shocks,’ Denis Nizalov explains.

In addition, according to the expert, the use of too cheap land resources has led to a reduction in jobs in agriculture due to the replacement of labor-intensive technologies with land-based ones.

According to the director of the investment company Dragon Capital Tomash Fiala, land reform is one of the key for Ukraine, similarly to the pension and anti-corruption. One of the positive consequences of the introduction of the market is the growth of the investment attractiveness of the industry.

“In Ukraine, a very good land, it is such a capacious asset, under which you can attract large investments - both internal and external. These investments can give an instant and powerful impetus to economic growth, ’, Fiala predicts. According to his estimates, the land market can give Ukraine an additional $ 2-3 billion investment per year, which can significantly affect the development of the domestic agro-industrial complex.

Five myths about the lifting of the moratorium on the sale of land

On February 17, a group of people's deputies of Ukraine registered with the Constitutional Court an idea of ​​lifting the moratorium on the sale of agricultural land. “After six months, the court can lift the moratorium and de jure launch the land market,” said one of the initiators of the submission, MP Alexei Mushak. - "There are violations of at least five articles of the Constitution, among which the main one is a violation of the right of ownership, consisting of three parts: possession, use and disposal. The latter are deprived of the citizens of Ukraine."

It is worth recalling that for the first time the moratorium was introduced by the Verkhovna Rada in January 2001. The initiator of the decision is MP Anatoly Matvienko. The law provided that the moratorium will be short-term - until the adoption of the law on the turnover of agricultural land or the corresponding norm in the Land Code. Later in 2001, the parliament adopted the Land Code, but it did not say about the lifting of the moratorium - on the contrary, the law continued its operation until the end of 2005. After this, the moratorium was extended 8 more times: in 2004, 2006, 2008, 2010, 2011, 2012, 2015 and the last time in 2016 - until January 1, 2018.

Over the 16 years of the moratorium, the land issue has become one of the most speculative political slogans and overgrown with dozens of myths. VoxUkraine chose and analyzed the accuracy of common "land myths".

Myth 1. After the lifting of the moratorium, the land is bought from the peasants for a pittance

"The investor will take for three kopecks for nothing from the destitute people," said the head of the Radical Party, Oleg Lyashko.

According to a study by the Kiev International Institute of Sociology, only every sixth Ukrainian supports the lifting of the moratorium. The main fears of unit owners are low land prices, pressure over land sales and fraudulent purchase schemes. However, the paradox is that more than ½ of the polled Ukrainians as a whole and ⅓ of the owners of the units expect that the lifting of the moratorium will bring benefits to the state's economy.

In fact, it is the moratorium that annually “steals” from 6.9 million unit owners up to 90% of potential income, especially because of the low cost of renting land, which is one of the lowest in Europe. According to experts of the agricultural sector Oleg Nivievsky and Denis Nizalov, the average cost of renting agricultural land in Ukraine in 2015 was more than 10 times lower than the fair value. According to the State Geocadastre, the average rental payment in 2015 was $ 37 per hectare. The main reasons are the moratorium on the sale of land, the high cost of servicing the land bank and poor access to capital. According to experts, if the markets and production factors worked normally, the rental price could be $ 455 per hectare.

In the countries of Central and Eastern Europe, the price of land and rent began to rise immediately after the opening of the land market in the 1990s. The annual increase in rental prices was approximately 20%. Today, the average cost of renting one hectare of land in Hungary is $ 100-150, in Bulgaria - $ 279. Even more expensive land in Western Europe: in Denmark - $ 700-750, the Netherlands - $ 600-650.

Myth 2. Foreigners buy land and use it inefficiently.

“The land will not be managed by Ukrainians ... If a land market is introduced, it’s not the investor who comes, but the robber from the main road,” said Oleg Lyashko last October.

Of course, one of the most popular political myths. However, he has nothing to do with the truth. First of all, the Land Code limits the range of buyers of agricultural land by citizens and legal entities of Ukraine who are engaged in agricultural production.

However, the experience of neighboring countries also clearly demonstrates that this myth, at best, is a great exaggeration. First, in the first 5-10 years of liberalization, the overwhelming majority of countries open the market only to citizens and resident legal entities. Например, в Польше, Румынии и Эстонии иностранцам и иностранным юридическим лицам долгое время было запрещено покупать землю. В Чехии иностранцы не могли покупать землю до 2011 года. В Словакии иностранцы получили право покупать земельные участки только в 2014 году. Хорватия еще не открыла рынок земли для нерезидентов.

In Ukraine, such restrictions are also planned: the bill on the turnover of agricultural land, which was submitted to the Verkhovna Rada, has similar reservations regarding the participation of foreign capital in agricultural land purchase and sale transactions.

Secondly, it is very doubtful that foreigners will be able to redeem a significant part of land plots in a short time. One example is neighboring Slovakia.

“In Slovakia, two years ago, the moratorium was lifted (for foreigners - Vox) - and nothing happened. Only 5-7% of land is owned by foreigners,” the co-chair of the Strategic Reform Advisors to the Cabinet of Ministers, the former Minister of Finance explains Slovak Republic Ivan Miklosh.

Thirdly, not allowing foreigners to enter the market is a bad idea, as this may negatively affect the value of the land. The study Restrictions on the market of agricultural land: a review of international experience and lessons for Ukraine notes that restrictions on the ownership or circulation of land, including a ban on the sale of land to foreigners, reduce demand, resulting in a lower price. “If the Ukrainian market of agricultural lands is isolated from foreigners, the owners are losing the shares,” the study authors say.

That is what happened in the Canadian province of Saskatchewan in 1974. The province limited the maximum amount of farmland that non-residents may own. As a result, the price of land has decreased by $ 10-85 per hectare.

There is another nuance. It is the moratorium and rental relations that contribute to the inefficient use of land. Land law expert Pavel Kulinich, studying the experience of Germany, France, Poland and the Netherlands, came to the conclusion that the right to private property plays an important role in the preservation of land. A farmer who has acquired the land at his own expense protects it as the main means of farming.

Myth 3. Most of the land very quickly bought agricultural holdings

Everything is exactly the opposite. The experience of neighboring countries - Poland, the Czech Republic, and Slovakia shows that the free market is an incentive for the development of small and medium agribusiness.

One of the ways that contributes to the development of farms is to limit the area of ​​land that may be owned by one person. Thus, in Poland, legislation limits the size of land to 500 hectares. In Hungary, the maximum area owned by an individual is 300 hectares, while the area that may be in use is 1,200 hectares. In Slovakia, the average size of plots is 0.45 ha.

Even in countries where no marginal land has been established as property, tens of thousands of farm enterprises are being created. For example, in Finland only farms are more than 30 thousand, and in general, enterprises engaged in agriculture, there are more than 100 thousand.

Secondly, the creation of a market does not mean an automatic sale of all lands. In France, 75% of the land is used on loan, and the average size of land sale transactions is 3.3 hectares. In Sweden, in 2005, 85% of land sales were on plots of less than 10 hectares, despite the fact that 40% of the land was leased.

In Ukraine, the situation is radically different. The land price is not determined by the market; it is formed on the basis of a normative monetary value, which can be either lower or higher than the market value. The low rental price allows agroholdings to accumulate a large land bank. “It is much more profitable for large agricultural holdings to rent land for a penny than to buy at market price, or to pay rent on the basis of the market value of land,” writes Sergei Khlan, MP from the BPP.

Thanks to the moratorium, agricultural companies were able to accumulate large land banks. Although more than 50,000 companies conduct business in the agro-industrial sector, the market is monopolized - the 100 largest companies lease 6.5 million hectares of arable land (20% of the total land fund area). At the same time, the ten largest companies lease from 125 to 654 thousand hectares. In fact, the existence of a moratorium contributes to the development of agricultural holdings, because only they have access to financial resources. Peasants can not take a loan secured by land, and this makes it difficult to develop their own business.

In the end, the majority of agricultural holdings are in debt, they do not have free cash resources to purchase the entire land bank, which they currently lease. On the other hand, it is physically impossible to carry out such a number of sales transactions of land for two reasons. First, over the year, the rights registration system is able to process up to 800 thousand transactions. In 2014, the system was already running at its limits. Secondly, the sale and sale process is hindered by a high level of land fragmentation: the average size of each plot is 3.6 hectares, which is 270 thousand lots per 1 million hectares of land.

The number of agricultural land transactions for 2013 - 3 quarters of 2015 with the change of owner / user

It is important to note that the marginal capacity of the rights registration system is approximately 800,000 transactions per year. In 2014, the system worked at the limit of its capabilities, which resulted in significant delays in registering lease rights. Now work out an additional 100-200 thousand additional transactions per year will be extremely problematic.

Myth 4. Cancellation of the moratorium - the road to disorder and the shadow market

“If we now lift the moratorium on the sale of land, we will face raiding. Land is plundered from the people just as industry was stolen, ”said the head of the Agrarian Party, Vitaly Skotsyk, last fall.

In fact, the shadow land market associated with the sale of land plots exists already today. Most often, according to the President of the Association Ukrainian Club of Agrarian Business Alex Lissits, it is manifested in the design of "contracts (leases, - VoxUkraine) for 50 years and emphyteusis".

According to the latest calculations of the ASTP, the volume of the shadow market is from 10 to 12 billion UAH per year.

Illegal and shadow use of land is rampant. According to the calculations of the project "Support for reforms in agriculture and land relations in Ukraine", the adoption in 2015 of limiting the minimum term of the lease agreement at the level of 7 years transferred the short-term rental relations to the shadow sector. In addition, more than 2 million hectares of land of collective ownership and of the escheated inheritance are generally used on the basis of self-capture.

An important consequence of the introduction of a transparent land market is the settlement of the right of ownership and use. Owners and users will no longer need to circumvent the moratorium, which today happens quite often and contributes to the emergence of a shadow market. And, more importantly, those owners who will not be able to work the land or will be unprofitable will be able to sell the land to a more efficient farmer.

Myth 5. Moratorium - a guarantee of sovereignty and economic development of the state

"The abolition of the moratorium on land trade is another step to turn Ukraine into a raw materials appendage," - the statement of the party Our Land.

In fact, the opposite is true. The moratorium in no way contributes to the preservation of the sovereignty of the country. Because of the moratorium, an important state resource is destroyed, the economy loses billions, and citizens remain landless owners of land plots - they can only rent it for a penny.

The moratorium negatively affects the rights and welfare of the population. "It violates the rights of 6.9 million owners, most of whom are elderly people, reduces the welfare of the rural population by reducing rent and the inability to use land sales as a way to overcome negative shocks," explains Denis Nizalov.

In addition, according to the expert, the use of too cheap land resources has led to a reduction in jobs in agriculture due to the replacement of labor-intensive technologies with land-based ones.

According to the director of the investment company Dragon Capital Tomash Fiala, land reform is one of the key for Ukraine, similarly to the pension and anti-corruption. One of the positive consequences of the introduction of the market is the growth of the investment attractiveness of the industry.

“In Ukraine, a very good land, it is such a capacious asset, under which you can attract large investments - both internal and external. These investments can give an instant and powerful impetus to economic growth, ”predicts Fiala. According to his estimates, the land market can give Ukraine an additional $ 2–3 billion in investments a year, which can significantly affect the development of the domestic agro-industrial complex.

Took in processing

According to the State Geocadastre, almost 71% of the territory of Ukraine - 42.7 million hectares - agricultural land, of which 32.5 million hectares - arable land. Almost all of them fall under the moratorium. Of these, 27 million hectares are distributed among seven million shareholders, over 10 million hectares are in state and municipal ownership. It is noteworthy that most of the plots are not the owners of the shares: even according to official data, over the past year 16.8 million hectares were leased. Moreover, the processing of agricultural holdings of about 6 million hectares, and in general, the shares are leased to about 45 thousand agricultural enterprises.

Despite the ban to sell agricultural land, arable land is in full swing. Here are a few legal ways to get such land: lease agreements up to 50 years, the indefinite right to use the site, and even the exchange of unequal shares with an additional charge.

In a vicious circle of law

Supporters of the moratorium refer to Art. 13 of the Constitution, according to which the land "is subject to the ownership of the Ukrainian people", and opponents to the next article proclaiming guarantees of land ownership rights and to art. 22 on the inadmissibility of limiting the rights of citizens by new laws, which just happened when they introduced a moratorium and the owners of the land lost the opportunity to fully dispose of them. True, the mentioned guarantees of land ownership, according to Art. 14 of the Constitution, implemented in accordance with the law. The circle closes. It seems that the only way to break it is to adopt a new law "On the turnover of agricultural land", which will remove the moratorium on their sale. On the other hand, this year the Constitutional Court of Ukraine refused to open a case on the illegality of the moratorium, which was sought by dozens of people's deputies. And although they filed a similar appeal in September, most parliamentarians apparently are not yet ready to change the legislation.

Moreover, almost everyone agrees that an open land market is needed. But not only politicians, but also the Ukrainian society as a whole was divided into two camps: those who advocate immediate lifting of the moratorium and those who see this as big risks for the shareholders themselves and the country as a whole. The latter first want to legally secure the "limiters" for the market. Consider the main economic arguments of the parties.

Advantageous freedom

The opening of the land market will boost the economy. According to the forecasts of the European Business Association, after the lifting of the moratorium, additional investments of at least $ 2 billion will pour into Ukraine, and GDP growth will rise by 1.5-2% per year. At the same time, according to the calculations of the World Bank, the annual production of agricultural products may increase by $ 15 billion.

Land owned - the ability to raise funds for business development. If the land market is opened, the owners of the plots will be able to deposit them in the authorized capital of enterprises or transfer them as collateral for a loan.

And this resource will grow, because the free purchase and sale will entail an increase in prices for both the plots themselves and for rent. Now a hectare in Bulgaria costs an average of $ 4,500, in Romania - $ 6,000, in Poland - all $ 10,000, and in Ukraine, according to various estimates, only $ 500-1,200. Accordingly, we have a very low rental rate: over the past year, the owners received an average of 1,400 UAH per hectare, or a little more than $ 50. From this point of view, foreign buyers should be allowed to land - then the prices of the plots will rise even more, and the flow of investments to Ukraine will significantly increase.

Local budgets would also benefit: those areas that own hundreds of thousands of hectares of arable land could receive tens of millions of dollars a year from leasing them.

In turn, full-fledged landowners, unlike tenants, are more motivated to take care of their plots. It is no secret that, say, permanent crops of corn and sunflower, which provide a large income, deplete even the most fertile soil, but the owner must think about the future, and not just about quick profits. Always a plus if the land belongs to those who process it.

Rescue ban

The relative cheapness of agricultural land in Ukraine can be an argument against the immediate opening of the market. Skeptics fear that big capital will quickly and cheaply buy hectares from small farmers even before the plots manage to rise in price. By the way, this field is for speculation. But small farms, which are often difficult to pay for even the rent of shares, will lose the competition for the right to buy the land they cultivate. This development is fraught with excessive concentration of land resources and undermining competition in the Ukrainian agricultural sector. Although there is another opinion: even a large tenant is unprofitable land market with additional costs for the redemption of the land, which they already use.

Some opponents of the rapid lifting of the moratorium on the sale of land are even more categorical in the matter of admitting foreigners to this strategic resource. There are even warnings that, in the worst case, Russia may begin economic expansion, buying Ukrainian lands through offshore companies and dummy owners. True, opponents have a counter-argument against this: the land cannot simply be taken and taken out, and any land owner in Ukraine must comply with our legislation, not to mention taxes paid to the Ukrainian budget.

The other extreme is a possible failure of land reform, as in Madagascar, where foreign investors have been buying land on a large scale, while local residents have remained cheap labor. The sad truth is that due to economies of scale, large companies can make profits, but the potential of the population is not fully utilized. And this is a brake on the economy.

Another negative scenario is the purchase of a significant part of the country's agricultural land by global producers of biofuels, who are constantly looking for sources of raw materials. As you know, the crops they need (from rape to corn) greatly deplete the soil.
And finally, in the conditions of a weak and corrupt law enforcement and judicial system, lifting the ban on the sale of agricultural land can open the door for raider attacks on farmers.

Harsh conditions

However, the supporters of the moratorium on the sale of agricultural land usually do not defend it in any scenario, but put forward several conditions for lifting the ban, which are taken from European practice. These include strengthening the institutions of property rights, reducing corruption and introducing strict rules of the game. Many require the establishment of such restrictions as the maximum number of hectares for sale in one hand (say, Prime Minister Vladimir Groisman says 200 hectares), issuing permits for the purchase of only individuals who are engaged in agriculture and live in the region of the acquisition of the site. From the economic prerequisites for the opening of the land market - financial support for farmers (cheap loans, subsidies), opportunities for creating agricultural cooperatives. The task is to make small players more technological and competitive.

Main resource

The overwhelming majority of Ukrainians, according to various polls, are opposed to the introduction of a fully-fledged land market at present, however, in the expert circle there are more and more supporters of lifting the moratorium. As in all cases of mass conflict of opinions, each side has its own truth.

It's all about resources. In the modern world, this is primarily not land, but labor, that is, people. Look at the aforementioned Madagascar, where over 80% of the work force is employed in agriculture (data from the CIA). And in Ukraine - about 5.8%. True, in most developed countries - only 1-4% (Poland with 12% is a rare exception). These are the people that should be provided with work on the land, and with maximum labor productivity. If we leave out the question of unemployment, then attracting the rest is more expensive, because they can be employed in other industries that generate more added value. But the return per hectare or weave is not so important. And this is not at all the same as productivity: it is possible to sweat over a hectare by hand and get a chic crop, however, those who managed to process ten hectares with the help of special equipment will collect much more, although he may have mediocre figures in terms of one hectare.

Now it is clear why both sides of the conflict around the moratorium are right in their own way. On the one hand, Ukraine will use a significant share of the population in agriculture in order to take seriously the risks of the failure of land reform, but on the other hand, Madagascar’s scenario, where almost everyone depends on the land, will not be even in the most extreme cases if китайцы с чемоданами юаней скупят миллионы гектаров. Впрочем, это лишь один из аспектов необъятного, как земля, вопроса. 30 октября "ДС" проведет "Дискуссионный клуб", где две команды экспертов сойдутся в баттле о том, убивает или спасает Украину мораторий на продажу сельхозземель.

Больше новостей о финансах, бизнесе и промышленности читайте в рубрике Экономика

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