Experts of the Ukrainian Agri Council (UAC) presented a legislative initiative to the Verkhovna Rada Committee on Agrarian and Land Policy aimed at providing state support to agricultural producers whose land plots are located in temporarily occupied territories or active combat zones.

The proposal was discussed on May 13 during the roundtable event titled “Introducing Preferential Fees for the Use of State-Owned Land Subleased to Agricultural Producers as a Tool of State Support.”

The model, developed by Smart Country, the analytical center of the UAC, is designed to encourage farmers to restore agricultural activities in territories under Ukraine’s control by providing preferential terms for the sublease of state-owned land.

According to the UAC, Russia’s full-scale invasion has deprived a significant number of agricultural enterprises of the ability to operate on their land due to occupation or ongoing hostilities. At the same time, the agricultural sector is facing workforce shortages, loss of production capacity, and growing risks to Ukraine’s food security.

"Today, thousands of farmers have effectively lost the ability to work on their land due to occupation or continuous military operations. Our task is to offer the government a practical mechanism that will allow these farms not only to survive, but to continue production in safer regions of Ukraine," said Dmytro Kokhan, Deputy Chairman of the UAC.

The proposed mechanism would provide eligible agricultural producers with a preferential rate for the sublease of state-owned land made available through land auctions conducted by state enterprises and companies established under Law No. 3272.

UAC experts also proposed a methodology for calculating the level of support. The amount of the benefit would be determined as twice the total amount of taxes, fees, and payments included in the calculation of the minimum tax liability that the agricultural producer paid over the previous three years.

For farms that own or lease land both in occupied territories and in areas under Ukrainian control, the amount of support would be calculated proportionally based on the share of land located in occupied territories or active combat zones.

"We are proposing a model that does not require direct budget financing, yet enables farmers to restore production more quickly, retain their workforce, and continue paying taxes in Ukraine. It is an investment by the state in preserving the country’s agricultural potential," Dmytro Kokhan emphasized.

The initiative also includes a number of safeguards designed to prevent abuse. In particular, land plots obtained under the preferential mechanism may not be transferred to third parties, and more than 50% of the corporate rights of beneficiary enterprises may not be transferred during the period established by law.

According to the UAC, implementation of this mechanism would help preserve the professional capacity of Ukraine’s agricultural sector, support production in territories under government control, and strengthen the country’s food security during wartime.