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Ukraine is advised to create an agency to guarantee the farmers' costs.
World Bank Director for Ukraine, Belarus and Moldova Satu Kahkonen says US$500 million will be needed to partially guarantee the costs of farmers to buy land in Ukraine, according to the World Bank estimates.
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The World Bank predicts demand for land purchases from 2,200 farmers in the first few years after the opening of the agricultural land market in Ukraine, Kahkonen said during the discussion of relevant financing mechanisms for such purchases, as reported by the Ukrainian news outlet LIGA.net on September 5.
According to Kahkonen, it is necessary to create a special neutral agency to guarantee farmers' costs at $500 million.
Ukrainian Prime Minister Oleksiy Honcharuk earlier said experts and the World Bank had elaborated 25 different scenarios and combinations to achieve best effect for Ukraine's economy after opening the agricultural land market.
According to him, a tool is needed to compensate farmers for the interest rate on loans to buy land. The prime minister noted the final parameters of such a mechanism had not yet been determined, but assured the land market would not be launched before it was formed.
Ukrainian President Volodymyr Zelensky instructed the government to draft a bill on the agricultural land market before October 1 and ensure that the Verkhovna Rada, Ukraine's parliament, pass it by December 1.
The opening of the land market may bring the Ukrainian economy up to $1.5 billion annually, as well as additional 1.5% of annual growth in Ukraine's GDP.