Let us not allow land to be sold! This was the call of about 5,000 agrarians from various nooks of Ukraine, who gathered the other day in front of the Verkhovna Rada of Ukraine.
The entire Constitution Square was full of national flags, banners of the Agrarian Party, and… straw. Standing on top of the sheaves, ralliers demanded that Bill No. 3851-1 be voted into law. This law will extend special VAT conditions for agrarians until 2018.
But perhaps the most important demand of the protesters was that MPs extend the moratorium on selling farmland in Ukraine until 2021, i.e., “the time when the entire complex of legislative acts indispensable for the completion of land reform has been drawn up.”
The placards in front of parliament were more than eloquent: “To sell the land means to head for a new famine,” “Farming is Ukraine’s backbone. Don’t break it,” “To save farming means to save Ukraine!” etc.
“Farmland is by far the only powerful resource the Ukrainians still own. Please note that farmlands account for more than 70 percent of this country’s overall area. You must not squander them, when the national economy is ‘on the rocks’ and most agrarians have no money to buy land at market prices,” Andrii Hordiichuk, one of the rally organizers, member of the presidium of the Agrarian Party of Ukraine, explains. “Add to this an unreformed judicial system. This will set off an explosion. For this very reason, the position of the Agrarian Party and me in the land issue is that the moratorium should be extended for at least five years and then put to a national referendum. Extending the moratorium will also allow stopping hostile takeovers of land, the number of which is rising in Ukraine’s agro-industrial complex with every passing day.”
What frightened agrarians is an official IMF document which says that, having taken a one billion dollars worth loan past year, Ukraine pledged, among other things (raising the retirement age, passing a number of anticorruption laws, etc.), to lift the moratorium on selling farmlands before the end of this year. The government must draw up and register in parliament a relevant bill in October, and parliament is to pass it into law before the end of the year. Should we fail to do so, we will not see the next – fourth – installment which we were supposed to receive in December this year as part of the IMF cooperation program. It will be recalled that this was signed by President Petro Poroshenko, National Bank Governor Valeria Hontareva, and Prime Minister Volodymyr Hroisman. Incidentally, none of them has ever explained these conditions to Ukrainians. Moreover, when the press published the first insider material about what we received the IMF billion for, leaders of the opposition factions demanded at a conciliation commission sitting that the government, particularly, Vice Prime Minister Stepan Kubiv, show the document that sets forth the commitments Ukraine has to meet after signing changes to the memorandum on cooperation with the IMF. Kubiv answered that the document was in English and would be made public once it was translated.
Meanwhile, parliament, especially its agrarian committee, got down to business. MPs began to draw up and pass land-related bills in an enviable show of discipline. As The Day has already written, the Verkhovna Rada has at last solved the problem of a defunct legacy – the so-called no man’s lands – and enhanced the rights of the leaseholders of southern black earths. The Day has also learned from reliable sources that railroading the laws that will settle the problems of “extinct” villages is now in the pipeline. In a word, MPs are seeing to it that not a single strip of land is lost – instead, it should be accounted for and, later, put to good use.
Yet Ukraine is not yet prepared to open a full-fledged market of land, which Oleh Kulinich, chair of the parliamentary subcommittee for land, emphasizes as an expert.
In his words, farmland market must not be launched until the main hot problems are resolved.
“The first is whether foreign investors should be allowed to obtain the right to own land, the second is how to prevent concentration in the hands of one entity, the third is how to ward off hostile takeovers, and the fourth is what to do with collectively-owned lands. Incidentally, the last question has been solved as part of Bill No. 4355. The problem is not so much in the land-related laws (on the moratorium and the land market) as in the fact that the small-scale farmer should have a sufficient logistical basis and funds to survive in these conditions,” he says.
Ukraine has ideal conditions for buying up land: the state has frozen social standards, and, according to the National Bank, the inflation rate will be an estimated 30 percent by the end of the year.
KYIV. OCTOBER 4, 2016. PLACARD READS: “TO SAVE FARMING MEANS TO SAVE UKRAINE!” / Photo by Mykola TYMCHENKO, The Day
The cost of land in Ukraine is catastrophically low now. According to Taras Vysotsky, general manager of the Ukrainian Club of Agrarian Business, if a full-cycle market is to be launched, the initial price of land will vary within $1,000 per hectare. “We should not proceed here from the cost of leasing. There is such thing as standard monetary assessment of land, which varies now between 20 and 30 thousand hryvnias per hectare in the regions of Ukraine. It is on the basis of the official level of this assessment that the leasing of state-owned lands is calculated,” the expert says.
“Our land means hard work, and it smells of blood,” said Mykhailo Stelmakh in the novel Human Blood Is Not Water. For Ukrainians, it is not just a resource that performs an economic and sometimes the main social function for people – it is also a profoundly mental question: Ukrainians have often fought tooth and nail for their farmland.
On the other hand, farmland is really a resource, an object of ownership, and its owner must have a legitimate possibility to use it at their discretion – to lease it out, gift it (which can be done today), pledge it in a bank as collateral, or sell it.
I can remember discussing IMF demands informally with an MP in the parliamentary budget committee’s lobby. That was journalistic insight rather than an official document. So when we came to launching the land market before the end of 2016, he said in no uncertain terms: “I am for the market of farmland. My late mother would be still living if she could have sold the land she owned in order to pay for high-cost medical treatment,” he said.
According to official statistics, the land moratorium restricts the rights of land owners, in compliance with Part 1 of Article 90 of the Land Code of Ukraine and Article 41 of the Constitution of Ukraine, who own today 30.7 million ha of agricultural lands (74 percent of Ukraine’s total), including 27.2 million ha of arable land (83.5 percent of Ukraine’s total).
But it is one thing when we launch a land market because society is prepared for this and there are appropriate laws, and it is an entirely different thing when we do so on demand in order to get a billion-dollar loan.
As Den has already written in “Draft Budget 2017 May Be Returned to Cabinet” (No. 168, September 20, 2016), leaders of four parliamentary factions – Oleh Liashko’s Radical Party, Batkivshchyna, Samopomich, and the Opposition Bloc – warned that they would not vote for lifting the moratorium on selling agricultural lands this year if a bill to this effect were moved in parliament in the near future. The impression is that the third tranche is the last one in this program of cooperation with the IMF.
