Ukraine launches free farmland trade despite criticism

After gaining independence in 1991, Ukraine had distributed about 30 million hectares of farmland to small-scale local farmers, who until now could only lease their land. Opening up Ukraine's land market has been a political hot potato for years and critics complain that it could allow local oligarchs to snap up land or help foreigners muscle out poorer Ukrainians in purchasing plots.

Ukraine on Thursday lifted a near 20-year ban on the selling of farmland, hoping the move will increase investment in the cash-hungry agriculture sector, whose products dominate the food markets of many countries.

Ukraine is a leading agricultural producer and exporter of corn, wheat and sunflower oil. Its grain exports reached 57 million tonnes in the 2019/20 season. Ukrainian lawmakers voted to lift the ban in March 2020 and gave the government more than one year to prepare for free land trade. After gaining independence in 1991, Ukraine had distributed about 30 million hectares of farmland to small-scale local farmers, who until now could only lease their land.

Opening up Ukraine's land market has been a political hot potato for years and critics complain that it could allow local oligarchs to snap up land or help foreigners muscle out poorer Ukrainians in purchasing plots. From today, individual Ukrainian citizens can buy up to 100 hectares, while companies will be able to take part in auctions from 2024.

The law prohibits foreigners and foreign companies from buying farmland currently, but this may become possible in future and the issue could be put to a referendum at some stage. "We will be the first generation of Ukrainians in 100 years who will not only own, but also dispose of their land," agriculture minister Roman Leshchenko said.

The law sets a minimum starting price for farmland and said that those who lease the land would receive a pre-emptive right to purchase and their lease agreements will be valid until the end of the term. Some farmers and lawmakers have opposed the move, saying Ukrainian farmers are too poor to buy land while some small-holders will have to sell land to survive.

Critics argue that by using various schemes, land will be concentrated either in hands of oligarchs, who already rent tens of thousands of hectares, or could come under the control of wealthy Western companies.