The presented final version of Bill № 2178-10 on the land market, which will be submitted for the second reading in the Parliament, despite the amendments made, did not take into account the key requirements of the agrarians.

In particular, there is the requirement for a phased launch of the land market. It was repeatedly emphasized that the land reform should be carried out in two stages: initially, only natural persons of Ukraine with a one-pair-of-hands limit of up to 500 hectares should be entitled to buy land. And only after some time - two to three years - access to the land market can be granted to legal entities with a land concentration limit of 5 thousand hectares.

Such an approach would allow small farmers to compete with large farmers on an equal footing. Instead, many of them simply will not be able to take out loans for the purchase of land, since they have neither the necessary credit history, nor reporting, nor experience with banks. And most banks are not ready to work with small farmers. It takes time, and therefore a transition, to solve this problem. Instead, both individuals and legal entities, as proposed in the bill, are at risk of collapse for small-scale agrarians, since it is practically impossible for them to compete with medium and large companies that have access to financial resources.

Also, the figure for limiting the concentration of land - 10 thousand hectares was twice as high, while farmers offered up to 5 thousand hectares in one pair of hands. Given that the government itself is projected to offer a maximum of 27% of agricultural land cultivated by farmers today, even for farms with 10,000 hectares of arable land, which is the upper limit maximum effective size - will need to buy an average of only 2.7 thousand hectares. Against this background, the limit of 5,000 hectares on which farmers have insisted is more than sufficient.

In addition, the bill contains another rule that, given the presence on the market of legal entities in the first stage, can create new opportunities for fraud. This is a possibility of assignment of the priority right of land redemption.

For example, a company may “cede” its paramount right to buy land to several other firms, and at the same time “credit” them for its purchase. And those, in turn, having purchased agricultural land, will "hand over" the land back to it "for rent" for 100 or 200 years. As a result, the restriction on the amount of land in one pair of hands becomes a fiction.

Thus, the government allegedly establishes restrictions on the purchase of land up to 10 thousand hectares with one of the norms of the bill, and with another one it facilitates the implementation of "legitimate" schemes of its circumvention. This position is advantageous, above all, for agricultural oligarchs, who, if the land reform will be adopted in its current form, will be able to concentrate large tracts of land in their hands.

Tuesday, 14 January 2020

 

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