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The new format will attract the maximum number of participants, including from the pool of regular users of the ProZorro online procurement system, and ensure maximum rates.
Online auctions for leasing farmland will be held on the ProZorroSales platform, Deputy Minister of Agrarian Policy Maksym Martyniuk said at a joint briefing with Deputy Minister of Economic Development and Trade Maksym Nefyodov.
The first auction in the new format will take place in autumn.
Meanwhile, technical adjustments are being made to the ProZorroSales system for it to fit the requirements of Ukraine's Land Code. A two-month buffer is also needed to complete the earlier announced offline auctions.
According to Martyniuk, the current offline format of auctions for the sale of lease rights bears a number of risks for the state and inconveniences for participants.
In the regions, cases are often where biddings are disrupted, while the procedure for ensuring participation remains complex, involving a number of bureaucratic requirements and requiring the physical presence of participants at the auction site. "It is clear that this does not add either efficiency or transparency to the process. But with the transition to the online format, all these difficulties will be removed," said Maksym Martyniuk.
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According to his assessment, most of the 2 million hectares of state lands with the status of "unoccupied land," are actually being used by farmers. "Just look at Google maps - you will see no gaps. To address this problem, a new, ultimately transparent format for land lease has been deployed," Martyniuk said.
Maksym Nefyodov emphasized that ProZorro's infrastructure is technologically prepared to host land auctions. The online bidding format will allow attracting the maximum number of participants, including from the pool of regular users of the ProZorro system, and to ensure maximum payments.
At the same time, the Ministry of Agrarian Policy is already seeing some extremely high rental rates, achieved during land auctions. For example, last year the rate was 181% for the site in the Zenkovetsky district of Poltava region, and 231% in Ternopil region. In 2018, for a site in the Tulchinsky district of Vinnytsia region, the tenant during the bidding proposed a rate of 880%. And this is already happening, even without ProZorro," said Maksym Martyniuk, stressing that the removal of territorial restrictions on participation will contribute to the intensification of trading. "Our task is to transfer 100% of land auctions online."
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According to the Ministry of Agrarian Policy, in 2017, some 1,837 land lease rights for land plots with a total area of 42,500 hectares were realized in land auctions. As a result, local budgets received UAH 118, 7 million. The average rental rate at the end of 2017 was 14.73%. In the first half of 2018, it increased to 18.75%. In January-June of 2018, local budgets' revenues from land lease rights sales amounted to UAH 77.3 million.