A properly functioning land market means selling and buying – then it will attract capital that will lead to a boost in agriculture productivity, says Stefan Verbunt, a Kyiv-based expert with the European Union's land market project. The 2001 land moratorium bans selling and buying land in Ukraine, which is why lending is usual mechanism.
Lease deals are
problematic due to the undeveloped land cadaster and mostly remain in the
shadow. Close monitoring and anticorruption measures are critical to bring more
order to the nation’s agrituclture land market of 42.7 million hectares, which
is 70 percent of its territory.
“Land market
is one of the top three most corrupt spheres in Ukraine along judicial system
and police,” says Verbunt. “It’s corrupt from top to bottom – that’s
what people think. So you will need to restore the public trust in government
and the land market. The government needs to explain what they do and do what
they explain.”
To make the
shadow deals a matter of the past, every parcel should be in an online public
cadaster that keeps track of all the transactions with dates, prices and other
details, explains the expert from the Netherlands, a country that has been
enjoying the benefits of land cadaster for centuries.
Meanwhile, in
Ukraine there are at least 10 million hectares of unregistered state-owned or
communal agriculture land, according to Verbunt. Moreover, the local land
market remains mostly dispersed. Small owners often offer long-term leases of
their plots to bigger agricultural firms, effectively ceding ownership.
Consolidating small land plots into larger ones would make business much
simpler, the expert admits.
Conducting land
deals through the State Land Bank would improve the situation. However, Verbunt
says the word “bank” should have never been used in the name.
“If the
people at the moment hear the word – they immediately think: oh, that’s
money!”, he explains. “And then everything goes wrong. The idea
itself is good, but it started leaning towards the microfinance and loans,
attracting all kinds of attention you basically don’t want.”
Overseeing a team
of experts from the EU, Verbunt is working closely with Ukraine’s State Land
Resources Agency through a special program “Assistance in Development of
Open and Transparent Agricultural Land Market in Ukraine.” With a budget
of 1.8 million euros, program is doing the assessment of legal and structural
gaps of developing the local land market, bringing the EU standards.
Local laws on the
land market are way too detailed and don’t leave space for the market’s
self-regulation, EU specialist comments.
The Land
Resources Agency’s staff should be subject to a special anti-corruption control
with at least two people working on the same request on land purchase, one registering
the request and the other processing it, he says.
The expert thinks
that the agency’s current head, Lyudmyla Shemelynets is inexperienced but
hardworking. However, dealing with her predecessor Sergiy Tymchenko, a member
of ex-President Viktor Yanukovych’s former ruling Party of Regions, was much
more trouble.
When the Kyiv
Post asked him to share his expectations regarding Ukraine’s newly appointed
agriculture minister Oleksiy Pavlenko, a former employee of Pharus investment
fund, the Dutch expert said: “I expect him to work his ass off!”
Verbunt hopes new
minister won’t run the agriculture industry in what he calls “a typical
Ukrainian way” – through talks about a need to develop new legislation
instead of doing things.
Kyiv Post staff writer Olena Gordiienko can be
reached at [email protected].
