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The annual rent for the use of state-owned agricultural land in Ukraine grew to 12.1% of its estimated value in the first half of 2017 against 9% year-over-year (y-o-y), according to the Ukrainian Agrarian Policy and Food Ministry's press service.
"According to results of land auctions, the average rent in Ukraine was raised to 12.1% of the estimated value (UAH 38.47 million, or US$1.5 million). In the first half of 2016, this figure was 9% of the estimated value," the report said.
The regional offices of the State Service of Ukraine for Geodesy, Cartography and Cadastre concluded 614 agreements on agricultural land lease in the six months of 2017. The total area of leased plots was 14,890 hectares, the press service said.
The ministry also noted that land auctions were actively held in Chernihiv region (83 land plots with 2,700 hectares), Odesa region (71 plots, 1,780 hectares), and Cherkasy region (52 plots, 397.05 hectares).
Read alsoIMF to lift land market launch requirement from Ukraine memo - mediaIn the first half of 2016, the starting annual rent for land plots sold at auctions was set at 7.23% of the estimated value on the average, while it was 9.97% following trading. In 2015, the starting rent rate averaged out at 4% and it was 7% by the end of trading, the press service said.
As of June 30, 2017, there were 6,400 plots of state-owned agricultural land totaling 128,000 hectares in Ukraine that could be leased out at auctions.
As UNIAN reported earlier, on June 7, Ukraine's Cabinet of Ministers ordered the State Service of Ukraine for Geodesy, Cartography and Cadastre to lease out Ukrainian agricultural land solely through auctions. The lease of plots should be short-term, i.e.no more than seven years. The starting value of land will be set at at least 8% of their estimated value.
Ukrainian Prime Minister Volodymyr Groysman sees this measure as a tool to eliminate corruption in management of state-owned land.
Read alsoLand reform to let farmers buy land on favorable terms – economistThe State Service of Ukraine for Geodesy, Cartography and Cadastre said that the average payment for the lease of state-owned farmland in Ukraine was set at about UAH 2,250 per hectare ($86.6), as of January 1, 2017. It was almost twice the cost of the lease of private land. At the same time, the agency said, opening the land market in Ukraine, which could give land owners an alternative and make land tenure relations more competitive, could become one of the drivers of rental cost growth for private agricultural land plots.
The moratorium on the purchase and sale of agricultural land in Ukraine had been in effect since 2001. In October 2016, the Verkhovna Rada extended it until the end of 2017.
The memorandum with the International Monetary Fund states that Ukraine planned to adopt by the end of May 2017 a law regulating the turnover of agricultural land, as well as to begin selling agricultural land starting from 2018 after the end of the moratorium.