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Land News from Ukraine


Ukraine’s government says it has found a solution for doing its part to address food security in a world that will need to produce 1 billion tons more cereal and 270 million tons more meat annually to feed 9 billion mouths by 2050.

The Kyiv Post has obtained a blueprint that outlines a bold agricultural production sharing plan that the government plans to roll out to investors. It at once addresses rising global demand for food, as well as rural Ukraine’s dire economic state that suffers from unemployment and infrastructural decay.

Essentially the plan will “intensively develop the agrarian sector without privatizing farmland” while bringing badly needed investment and modern technology, which in turn will “create sustainable rural jobs,” a government source close to the plan said on condition of anonymity because the plan isn’t official yet.

Although in the conceptual stage, the public-private partnership program envisions letting investors farm up to 4 million hectares of currently unused government land for up to 50 years in large-scale 400,000-hectare projects. The government source said each project would require an initial investment of $200 million, and much more down the road.

Not all the government land earmarked for cultivation is zoned as agricultural so the program wouldn’t presumably significantly encroach on the 32.5 million hectares of farmland that the country has.

Together, this would allow investors to reap from economies of scale by using modern land management practices and equipment such as, GPS monitoring, satellite imagery, as well as other up-to-date farming techniques to boost production.

Incentives include giving investors tax breaks, free land use, and exempts them from having to pay import duties and value-added tax on imported goods, labor and services. In addition, there’ll be no export duties, licenses and quotas, and investors won’t have to pay taxes for repatriating profits or income.

“This is just what the government of Ukraine needs to do,” said Morgan Williams, president of the U.S.-Ukraine Business Council based in Washington, D.C. . “It solves many major problems with the usage of government land and gets it into private hands and provides proper incentives…and produces income for the government. It would be a major breakthrough, a major step forward and a very positive signal the private sector.”

Investors will do contractual business exclusively with the national government, not with local administrations. And the plan foresees international arbitration should disputes arise.

Williams continued: “One, the government lands would be taken out of the control of local and mostly corrupt politicians; two, there would be long-run contracts which are good for investors, good to promote infrastructure investment and good for long-run strategic buyers of commodities; three, these would be contracts under a PSA [production sharing agreement]-type plan which could be taken to international court.”

Estimates vary, but up to 25 percent of Ukraine’s arable land is only farmed by so called efficiency farms that lease more than 50,000 hectares. And they are the ones driving productivity and yields. Investment bank Concorde Capital said in a recent agriculture report that the sector as a whole suffers from poor land management practices, lower application of fertilizers, and depreciated farming machinery that harm yields.

Experts furthermore estimate that up 5 million hectares of arable land lies fallow and unused.

And although there are many government ideas floating around on how to optimize Ukraine’s still hugely unfulfilled agricultural potential of doubling harvests to above 100 million tons of grain and oil seeds, questions linger about their proper execution.

“I’ve heard about this (plan),” said John Shmorhun, CEO of Harmelia, a 75,000-hectare grain farming business in Kharkiv Oblast. “An agricultural PSA would be unique in the world…the government is treating land as a renewable resource… (which is) a powerful instrument if managed properly. And, if the government manages to do this right it’ll be quite a coup.”

To qualify, however, investors will have to compete globally through what the governments says will be a one-stop shop run by an inter-governmental agency committee which will decide who qualifies for the project.

Preference will be given to investors who meet the following criteria: an optimal business strategy, quality of production distribution proposal, sustainable land productivity, agricultural experience, financial capacity and best combination of international know-how and Ukraine experience.

But the plan overall thus far lacks in specifics, and much remains to get the project off the ground.

However, the government source the Kyiv Post spoke with said that an agricultural PSA bill could get adopted as early as mid-October, giving the endeavor solid legislative footing. The plan also skirts Ukraine’s snail pace action on creating a land market. Currently agricultural land can’t be bought or sold but government will allow investors to use land for 50 years without addressing the issue of privatization.

Again, “the problem is execution, and how these (public sharing) agreements will be properly executed, so this wait and see …its’ also about government lands and how they’re clustered, the land cadastre has to be completed…accurately,” said Shmorhun.

Whatever the shape and size of land, the potential is still there, said Shmorhun. “Whether it’s agricultural or pasture land, you can do a lot, you could grow crops of all sorts of different sorts of operations…there’s dairy production, pig farming, greenhouse vegetables, fruits, orchards and berries – there’s room for renewal in so many sectors.”


Kyiv Post


Agricultural complex could become one of the priority areas of cooperation between the Crimea and Spain.

Chairman of the Council of Ministers of the Autonomous Republic of Crimea Anatoliy Mohyliov said this during his meeting with Ambassador Extraordinary and Plenipotentiary of the Kingdom of Spain to Ukraine Jose Rodriguez Moyano, the press service of the Crimean government reported.

"Spain is one of Europe's largest exporters of fruits and vegetables that are grown in greenhouses year-round. I am convinced that Ukraine, in particular Crimea, has the potential and all the opportunities to become an agricultural leader in Eastern Europe. Crimea has a favorable climate and the necessary land. We are interested in the exchange of experience and cooperation with Spain in this direction," Anatoliy Mohyliov said.

In turn, the Ambassador Extraordinary and Plenipotentiary of the Kingdom of Spain in Ukraine said that the Crimea is a promising platform for the development of agriculture, in particular, greenhouse agriculture. "Spain is famous for its high-quality fruits and vegetables that are grown all year round. Our experience and technology could be useful in the Crimea and we are ready to share them," Jose Rodriguez Moyano said.




Ukrainian and Dutch experts have exchanged experiences on land consolidation and implementation of the Capacity Building by Technical Assistance to Programming of Ukrainian Land Development Project (CATAPULD), the State Agency for Land resources said in a statement on Monday.

"The practical experience of the Dutch colleagues, who are the world's leaders for land consolidation, will help Ukraine's State Agency for Land Resources efficiently and effectively implement the tasks defined by the leadership of the state," the department.

The meeting was attended by partners of the Ukrainian-Dutch project - experts of the State Service of Land and Water Management of the Kingdom of the Netherlands, as well as Ukrainian ministries and agencies.

During meetings and workshops, the participants discussed the land consolidation project. Experts analyzed the results of the implementation of five pilot projects for the consolidation of land, water and forest resources, initiated by the Ministry of Agrarian Policy and Food of Ukraine and the Institute of Water Problems and Land Reclamation.




The Verkhovna Rada of the current convocation will not adopt a law on the land market, Parliament Speaker Volodymyr Lytvyn has said.

"I should calm everyone down, and say that the Verkhovna Rada has not put a draft law on the land market on its agenda," he said live on the parliament's Rada television channel on Friday.

"Moreover, a bill has been tabled to postpone the introduction of the land market until January 1, 2014," he added.

The speaker also commented on the parliament's decision to pass a law introducing a state land bank. Lytvyn said that people who are criticizing the law, speaking only about one of its proposals - the creation of a state land bank - are not reading the law.

"In my opinion, the law has significant pluses and minuses, which will have to be addressed in future," he said.

Parliamentary elections in Ukraine are scheduled for October 28.



Kyiv Post


The Verkhovna Rada has approved at second reading Bill No. 10043 introducing amendments to some legislative acts of Ukraine regarding the separation of state and municipal property.

A total of 242 MPs voted for this decision on Thursday.

As earlier reported, the parliament at its morning plenary session on Thursday canceled its decision of June 21, 2012 on the adoption of this law, because it was passed with the violations of the parliament's rules of procedure. A total of 297 MPs voted for a respective resolution in the morning. However, lawmakers returned to the consideration of this bill at the evening session.



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