Agri-businesses can only lease plots of land from private owners / Photo from UNIAN
Ukrainian President Petro Poroshenko has signed into law a bill on prolongation of a moratorium on the sale and purchase of arable land in Ukraine until 2018, according to the presidential press service.
Respective bill No. 5123-1 on amendments to Section 10 "Transitional Provisions" of the Land Code of Ukraine, which extends the ban on the sale of farmland, was returned to Ukraine's Verkhovna Rada with the president's signature.
The document says that the moratorium shall be automatically extended until a draft bill on the sale of arable land, which is now being drawn up by the Ukrainian Agrarian Policy and Food Ministry, becomes effective.
The implementation of the law would ensure the formation of the proper legislation basis and set a clear legal mechanism for the farmland market to function, the authors of the law said.
Read alsoGermany calls on Ukraine to introduce land market and facilitate investmentThe No. 5123-1 bill was passed by parliament on October 6, 2016. Some 297 MPs backed the moratorium with the required minimum number of votes being 226.
The moratorium on the sale and purchase of farm land in Ukraine has been effective for 15 years. It was to expire on January 1, 2017. Only individuals can own farmland in Ukraine, but they have no right to sell or buy it. In this connection, agri-businesses can only lease plots of land from private owners.
Yet, experts claim such conditions have created the shadow land market in Ukraine.
Read alsoLand market launch in Ukraine can generate significant economic gains - IMFThe International Monetary Fund (IMF), Ukraine's key lender, recommends that Ukraine lift this ban.
IMF experts predict that the launch of the land market in Ukraine and the adoption of respective laws will let the country unlock great potential for economic growth. It will also boost the government's revenue, including tax receipts.