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Ukraine Moves To Lift Ban On Farmland Sale


Ukraine is one of the world's top grain exporters.
Ukraine is one of the world's top grain exporters.

KYIV -- Ukraine's parliament has passed a bill in its first reading to remove a ban on the sale of farmland, a move supported by the country's foreign backers and hailed by Prime Minister Oleksiy Honcharuk as a step away from "feudalism."

A total of 240 lawmakers supported the bill in the 450-seat Verkhovna Rada on November 13 to lift the nearly two-decade ban in October 2020, as dozens of protesters opposed to the reform gathered outside the parliament building.

The proposed legislation, which is strongly promoted by President Volodymyr Zelenskiy, must be voted on a second time to come into force.

"This day will go down in the history of Ukraine," Honcharuk said in a Facebook post after the vote. "Finally, we can move away from feudalism to real market relations as a fully fledged, developed country," the prime minister added.

Those who want to scrap the moratorium on the sale of agricultural land, which was introduced in 2001, say the move would unlock enormous investment potential.

The farmland vote came a day before a new International Monetary Fund (IMF) mission starts work in Kyiv. As one of Ukraine's biggest lenders, the IMF has advocated for the creation of a viable land market.

Kyiv is looking to seal a three-year, $6 billion loan program, one that the Washington-based lender said will be tied to fiscal austerity and deep, structural changes.

A big obstacle for the IMF so far has been the legal effort by Ihor Kolomoyskiy, Zelenskiy's main media backer, to regain ownership of PrivatBank, the country's largest lender, which required an injection of $5.5 billion to keep it afloat before it was nationalized.

Critics of the farmland bill, however, raised concerns that it could allow local oligarchs and foreigners to force out poorer Ukrainians in purchasing plots of land.

The draft bill limits the area that could be accumulated by one person or entity and stipulates that foreigners will not be able to buy land until 2024, but Zelenskiy has said that matter should be put to a referendum.

Ukraine, one of the world's top grain exporters, has more than 40 million hectares of fertile farmland that cover nearly 70 percent of its territory.

Creating a farmland market by lifting the moratorium could add $15 billion a year to Ukraine's economic output and increase yearly gross domestic product by about 1.5 percentage points, according to the World Bank.

The European Union representative office in Ukraine said the bloc supports plans to open the land market in Ukraine, but it insisted that the reform must be "based on rule of law and principles of sustainability, fairness, inclusiveness, and transparency of land-related data."

"Priority to small farmers, safeguards must be put in place to avoid concentration of land ownership," it said.

With reporting by Reuters and AFP
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