For successful launch of the land market, key laws and bylaws need to be adopted and reform roadmap implemented

December 21, 2020

The adoption of the Law on Agricultural Lands Turnover in 2020 was a landmark for Ukraine. As the land market will open on 1^st of July, 2021, only six months are left to complete preparations and a lot of tasks are still to be completed. The regulatory framework is not yet complete. To create valid and transparent land market, the remaining 4 key “land” bills need to be adopted as soon as possible, followed by development and implementation of over 50 bylaws. According to the Kyiv School of Economics, the government should adopt an average of two resolutions a week over the next six months to ensure the proper launch and functioning of the agricultural land market.

This status was discussed by the participants of the round table “The future of land reform – a road map for 2021”, which took place on December 17, 2020, at the Kyiv School of Economics with the assistance of EU/World Bank “Supporting Transparent Land Governance n Ukraine” Project.

“The window of opportunity will not remain open forever, and we need to move faster in the adoption of laws. It is crucial to adopt the draft law on improving governance and deregulation in the field of land relations №2194. Unfortunately, due to the lockdown, the DL will be considered only at the end of January. DL #2194 is a new “Land Constitution”. We won’t be able to fully implement land reform without it”, as said by Roman Leshchenko, Minister of Agrarian Policy and Food of Ukraine.

In addition, as noted by Roman Leshchenko, in the first half of 2021 Parliament will need to support three more important draft laws: DL #2195, introducing a transparent process of land electronic auctions, DL #3205-2, providing for the establishment of the Partial Credit Guarantee Fund to improve access of small agricultural producers to lending, in particular for the purpose of purchasing agricultural land, as well as DL №3012-2, defining the principles of land distribution in the process of privatization of agricultural land owned by state and communal enterprises.

Deputy Minister of Economic Development, Trade and Agriculture of Ukraine Taras Vysotskyi expressed confidence that the government will be able to quickly provide the necessary regulatory framework, subject to the prompt adoption of the necessary bills by the Verkhovna Rada. “The relevant bylaws are 90% ready. Everything is possible to organize, if political will is present. Technically, we will manage to develop and adopt the bylaws if the bills are voted,” Taras Vysotskyi assured.

According to the president of the Kyiv School of Economics Tymofiy Milovanov, there is a certain lag in the implementation of land reform. “Different views of different political forces, market players and public on land market reform continue to slow progress.

The government should keep on expressing leadership and clearly coordinating actions, because this reform will create capital markets and boost economic development,” he explained.

“Ukraine is on the right path to transition to a new system of public land management. In addition to the adopted laws on spatial planning, as well as the law on the State Agrarian Register, it is extremely important now to adopt the draft law #2194, which is awaiting a vote in parliament in the second reading. It will restore the right of communities to dispose of land outside settlements, simplify access to land resources for the population and business by revoking unnecessary permits and duplicating procedures for verifying land management documentation. This deregulation will enable communities to fully manage their territories,” as noted by Serhiy Kubakh, Head of Land Reform, USAID Agricultural and Rural Development Program – AGRO.

Representatives of agribusiness and experts emphasized the necessity to adopt the land bills and expressed readiness to support the government in the process of their implementation.

Christian Ben Hell, the Sector Manager for Agriculture at the EU Delegation to Ukraine highlighted that the European Union supports the opening of the land market based on the rule of law and the principles of transparency, fairness and inclusiveness. According to him, he was impressed by the results achieved to-date by the Ministry of Economic Development, Trade and Agriculture, as well as the State Geocadastre, but that there are still many tasks ahead and the work should continue. “It is important now that the draft law №2194 is adopted as it promotes transparency of land relations in Ukraine,” – said Mr. Hell. “EU is closely assessing the conditions under which the land market is prepared and will provide additional resources to support the land reform until 2026. We hope that this support contributes to creating efficient and transparent market for agricultural lands, and that Ukraine makes best possible use of the practical experience offered by international partners and EU Member States”.

Klaus Deininger, lead economist at the World Bank, confirmed that the World Bank fully supports to implementation of the historic land reform process initiated by President Zelenskyi and his team, and which will help develop Ukraine’s agricultural potential through more efficient land use, better credit access – also for smallholders-, support to local Governments and improve transparency, noting that passage by of the three remaining laws will allow the Bank to support Government with millions of dollars in terms of funding. “We commend Government for the comprehensive roadmap presented and are confident that, under the leadership of the Ministry of Agriculture, it will be implemented in time to provide the basis for additional lending by the World Bank to develop the potential of Ukraine’s small and medium farmers and its agricultural and rural economy.