Land reform: Experts elaborate on price of farmland in Ukraine

Experts say the price of agricultural land in Ukraine may range from US$1,000 to US$2,000 per hectare (ha) in the first year after the launch of the country's farmland market, but more accurate figures can be announced after the formation of supply and demand in the market.

They made their comments during a press conference, titled "Are Ukrainians ready to sell and buy land?" hosted by UNIAN on February 24.

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"Now there is no clear understanding among experts and businesses representatives of the price per hectare, which is expected to be set at US$1,500-US$2,000. But even if a buyer is willing to pay US$2,000, it doesn't mean that a seller will receive such an amount, as there will be taxes that few people mention," member of the Verkhovna Rada's Committee on Agricultural and Land Policy Oleksiy Mushak said.

"Also, for example, there will be the issue of subsidies – an owner of a land share may lose it when he receives a large sum for his land. So, he may change his mind about selling it," he added.

Analyst, editor-in-chief of the AgroPolit news outlet Natalia Bilousova stressed that from July 1, 2021, the land market would be open only to individuals, i.e. the circle of buyers will be limited.

"Land experts mention a different price range – from US$1,000 to US$2,000 per hectare. But the price will be determined by the market when supply and demand are formed. I estimate that only up to 10% of land, which is about 2 million hectares, will be sold in the first year or two," she said.

At the same time, the cost of land lease will also increase. Belousova added that some farmers are going to raise lease payments to 18%.

CEO of the Ukrainian Institute of the Future Vadym Denysenko says most owners of land shares are unaware of how much their land may cost after the market opening.

"According to a study conducted by our institute, 78% of Ukrainians consider themselves incompetent in this matter and cannot name a fair price per hectare [of land]. The remaining 22% gave completely different answers: from UAH 1,000 to UAH 1,000,000 [US$35.84 to US$35,842] per hectare," he said.

At the same time, 51% of Ukrainians believe that the rate of lease shares will rise sharply after the launch of the market, while 26% say it will grow, but slightly.

Background

• Ukraine's Ministry for Development of Economy, Trade and Agriculture says the agricultural land may cost UAH 50,000-UAH 60,000 (US$1,792-US$2,151) per ha after the farmland market is launched in the country.
• On April 28, 2020, Ukrainian President Volodymyr Zelensky signed a bill into law to amend certain legislative acts of Ukraine on the conditions of circulation of farmland No. 552-IX, which was approved by the Verkhovna Rada on March 31, 2020. The document is designed to launch the farmland market in Ukraine from July 1, 2020.
• The law provides for phased land reform: from July 1, 2021, only citizens of Ukraine will be able to buy up to 100 hectares of farmland. During the second stage to be launched on January 1, 2024, the cap will rise to 10,000 ha, while legal entities will gain access to the market.