Expert names two scenarios for land market launch in Ukraine

Expert in farmland issues Roman Golovin says there are two possible scenarios for the launch of arable land market in Ukraine, one of which is being promoted by Ukrainian President Volodymyr Zelensky's Office, while the other one – by major land lessees.

"There are two possible models for land sales. I would call one presidential and another – oligopolistic," he told the Ukrainian online news outlet Obozrevatel on Sept 21.

According to the expert, the President's Office is willing "that this be done instantly, so that the land saw new owners in six months or a year."

"The most important thing is to give land owners the right to terminate lease deals. It is clear that no one would be really willing to buy land that is being leased... Why buy if you can't actually own and use it," he said.

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Golovin added that the presidential model involves the eventual purchase of Ukrainian land by representatives of foreign capital: "The president seeks to accurately bring this issue up on the agenda... Who can own the land? It's Ukrainians and Ukrainian companies. But founders of such companies could be foreigners."

Another model implies "land-lords, agricultural oligarchs, lessees, and farmers," the expert explains.

"They want to have a priority right to acquire [land plots] ... They will not allow foreigners [to enter the land market], and in fact, the situation will remain the same as it is now under the moratorium. It's just that there will no longer be any 'black' or 'gray' schemes, only legal ones," he added.

In this situation, lessees will be able to buy land from landowners at lower prices, without any rush, waiting for the right moment.

"[Let's imagine,] I am a lessee, and I have taken land from you for a decade. I have an agreement with you that stipulates that if you want to sell your land, I will buy it from you. Tell me, will anyone else come to buy [the land plot] to only be able to use it in 10 years? Only I can give you the best conditions [in price terms], but I won't. It was US$800, and I'll say: I'll come tomorrow and it will be $700, and in a week it will be $600, etc.," he said.

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"Today there are already hundreds of thousands of hectares of land, either under emphyteusis, or a 49-year lease. Inheritance schemes are also being used... Lessees have actually bought a third or a half of all land plots, taking advantage of the fact that people are vulnerable. This land was bought on blood, poor health, and the fact that people have no jobs," Golovin added.

The expert predicts "there will be certain competition between the president and the so-called landowners-lessees," when the land market is launched.