“They will split Ukraine between oligarchs and agroholdings!” and other manipulations

Initially, the ban on selling land was temporary – until January 1, 2005. But since then, the parliament has continued the “moratorium” 9 times. The lifting of this ban is one of the favorite topics for manipulation by Ukrainian politicians.

Some land theses of politicians do not change from year to year. There are quotes that Ukrainian parliamentarians voices repeating themselves or after their party leader, literally or not, on every political talk show. The topic is – traditionally – intensified before the next elections this year.

Since the beginning of July – month of the Parliamentary election campaign – VoxCheck has analyzed more than 100 statements by politicians and experts on the moratorium and the land market. In this article we have summarized the main narratives on this topic. All of them were repeated from the of rostrum parliament on the day of voting for law on land market in the first reading.

The history of the moratorium on agricultural land sales started in 2001. Adopted on January 18, 2001, the Law of Ukraine “On Agreements on the Alienation of a Land Shares” No. 2242-III established that, until the settlement of the procedure for exercising the rights of citizens and legal entities for a land share (unit), by the Land Code of Ukraine, the owners of land shares temporarily may not enter into agreements on the sale, donation of a land share (unit) or otherwise dispose of these shares (units), except for the inheritance and redemption of land for state and public needs.

However, the Land Code (No. 2768-III), approved on October 25, 2001, not only defined the term of such an alienation ban until January 1, 2005, but extended it to both land units (shares) and land for rural ( farmers) and other commodity agricultural production, regardless of ownership. This was called the “moratorium on the purchase and sale of agricultural land.”

The moratorium is the postponement of the exercise of the right to purchase or otherwise dispose of agricultural land and change their purpose, as well as their inclusion into the authorized capital of enterprises.

After that, this “temporary” measure was extended by the Parliament 9 times before the entry into force of another law on the circulation of agricultural land, which was supposed to regulate the procedure for realization of the rights of citizens and legal entities for land share (units)” announced on January 18, 2001.

Therefore, parliamentarians plan not to lift the moratorium, as they usually say, but to adopt a decision on whether or not to extend it, as well as to pass a separate Law of Ukraine on the circulation of agricultural land. After all, not to extend the moratorium without a new law – will do nothing.

Thus, last year, December 20, 2018, parliamentarians extended the ban for another year. However, deputies Viktor Pynzenyk and Oleksiy Mushak immediately registered resolutions in order to abolish the results of the vote – it, they explained, was in violation of the regulation. Such resolutions blocked the signing of the moratorium until they were considered by the Verkhovna Rada Committee. The Committees decided not to adopt these resolutions this year, on January 17, only after that the law was signed and subsequently came into force. That is, already in 2019, the moratorium has not been in force for about 3 weeks, but that has changed nothing. After all it is not enough to allow to sell the land, it is necessary to establish rules of the game.

In 2018, the European Court of Human Rights ruled that a moratorium on the sale of agricultural land in Ukraine limits the rights of landowners. And not only in the right to sell the land, if you do not want or can’t continue to work on it, but also in the right to fully conduct business. For example, banks do not pledge it, because they will not be able to do anything with such mortgaged property, and, therefore, it is impossible to get a loan on “the ground”. Nor can these lands be included in the authorized capital of enterprises. So, for example, if you want to start a business with a neighbor – from him to the company comes money, from you – land, then you will not be able to register an enterprise.

Narrative 1. Ukrainians against the land market

Public opinion is often used as an argument against lifting the moratorium on agricultural land sales. Like, 70-90% of Ukrainians are against the opening of the land market and strongly against the sale of land to foreigners.

In general, Ukrainians rather do not support free land market in Ukraine than support it. Surveys on this topic appeared regularly – except for months of pre-election races and the formation of a new parliament. However, not all politicians and experts have correctly commented on the results of opinion polls.

* % against the land market (against lifting the moratorium) of all respondents 

** % against the land market (against lifting the moratorium) from those who have decided

*** held with IRI

Thus, only Yulia Tymoshenko and Taras Batenko have correctly interpreted the latest sociology data in this case.

However, the Kyiv International Institute of Sociology noted that the issue of the land market is very sensitive for Ukrainians, and depending on the formulation of the question different results can be obtained.

For example, to the question “Should a citizen of Ukraine who owns land have the right to dispose of it freely, in particular to sell it?” 73.2% of respondents said “yes, one should”. At the same time, on the questions “How would you vote if a referendum on the issue of buying/selling agricultural land was held today?” 40% of respondents said that they would have voted in favor of a permit to buy / sell. 37.6% would vote against.

This, according to sociologists, indicates the non-crystallization of public opinion and a strong sensitivity to formulations.

Narrative 2. The limitation of 200,000 ha facilitates the oligarchs to take over all of Ukraine’s land

In a land reform, most notably, was criticized the fact that one person will be able to buy 210 thousand hectares of land. Therefore, a number of politicians on television shows argued that oligarchs and foreign agroholdings would buy all Ukraine. In fact, there are other institutional and financial constraints that politicians suppressing.

The draft law on turnover of agricultural land adopted in the first reading states that the total area of ​​agricultural land owned by one citizen or legal entity may not exceed 0.5% of agricultural land in Ukraine. There are 42.7 million hectares of agricultural land in Ukraine, therefore, no more than 213 thousand hectares of land can be owned by one person or entity.

However, there are other limitations. In particular, one person or legal entity cannot own more than 35% of the land of one ATC (OTG) or more than 8% of one region. Thus, one natural or legal person cannot own the whole region or district, but only separate land plots in different areas.

In addition, according to preliminary estimates, a hectare of land will cost from $ 1.5-2.2 thousand. This means that 42 million hectares of agricultural land will cost $ 63-92.4 billion. At the same time, the wealth of the top 100richest people in Ukraine reaches $ 34.8 billion. Therefore, even if they sold all their assets, their funds would still not be sufficient to buy all agricultural land in Ukraine.

Narrative 3. is There are mainly small farm businesses in the world

This narrative was mostly spread by representatives of the All-Ukrainian Union Batkivshchyna. Like, the whole world has already chosen one right strategy – small and family farms. Sometimes the MPs from “Batkivschchyna” even literally repeated their leader’s quotations on this issue. In fact, their conclusions were incorrect.

There is no clear classification of “family farms” in Eurostat. Eurostat provides data on the number of small – up to 5 ha – farms, there are 65.4% of onesin the European Union. But as earlier in the same speech, Tymoshenko stressed that the family run farm is on a plot up to 5 hectares, the verdict is not true.

In total, over 570 million farms operate in the world, according to a report by the Food and Agriculture Organization of the United Nations. But the world’s agricultural land is not 2.5 billion hectares, as the speaker says, but 4.8 billion, according to the World Bank. If you use the methodology of Ivan Kyrylenko (the same was previously suggested by the leader of their party) and divide all agricultural land into enterprises, on average, each will have not 5 but 8.5 hectares of land.

Although most – 95% of the world’s farms – actually have an area of ​​up to 5 hectares, they control 30% of the world’s agricultural areas.

It is noteworthy that the same figures in the same wording were previously voiced by Yulia Tymoshenko. However, the conclusion of the representatives of the Batkivshchyna that the whole world has chosen a small-scale farming strategy is incorrect.

In addition, it is exactly the moratorium that created the preconditions for the development of large land bank farms in Ukraine. The opening of the market coupled with smallholder land purchase loans should create incentives for the development of family farms.

Narrative 4. Other countries do not sell their land and keep it state-owned

Many experts and politicians, mainly representatives of the Batkivshchyna, refer to the experience of other countries in opening and restricting the land market. Like, in Canada, Israel and France, land is not traded at all. However, this is not true either.

The Baltic countries include: Latvia, Lithuania, Estonia. All land resources in Latvia were transferred to private ownership through a restitution mechanism. A historical property right was restored in Lithuania and possibility to purchase land became available. In Estonia, the transition to new forms of ownership and management began with the aim of restoring historical justice and restoring the ownership of those who owned the land until 1940. That is, the land was not devided between all citizens in any of these countries, and different privatization mechanisms were implemented.

According to Article 9 of the Constitution of the Congo, the land market is closed, so the allegation is fictitious. And the civil war in the Congo took place on the basis of interethnic conflict.

92% of landowners in Poland are small farms. They have up to 20 hectares and cover 52% of the territory. However, there are holdings of 100 hectares or more. Although they are only 1% in number, they are owning 22% of territory. From 2016, EU citizens can also buy agricultural land in Poland.

Safer(Sociétés d’Aménagement Foncier et d’Etablissement Rural) has been operating in France since 1960, it’s a Land Development and Settlement Agency, a non-profit organization under the auspices of the French Ministry of Agrarian Policy.

To purchase agricultural land in France can any person, who submits request to the appropriate auction held by the agency, has submitted plan for the development of the territory and confirmed the availability of funds for this plan. However, the sales agreement may contain special conditions, including technical specifications that must be fulfilled for at least 10 years.

So, Tymoshenko is not telling truth, because it is possible to buy agricultural land in France at an auction and a contract of sale may indeed contain special conditions for the development of the territory for a maximum of 10 years, but prior rent is not a major condition.

In Israel, most of the land is truly state-owned, along with agricultural land. 93% of the land in Israel is truly state-owned. 7% of land in Israel is privately owned and can be bought by foreigners as well as local investors.

89% of Canadian land is state-owned, but it is predominantly non-agricultural land, while agricultural land accounts for only 7% of all Canadian territory. According to the Canadian Statistics Agency, 61,5% of Canadian agricultural land is owned by farmers that cultivates it. It can be both the state and private investors.

The French experience in land management was explained above: a person can purchase agricultural land in France after the auction of the land development agency and settlement, where he has provided a plan for the development of the territory and confirmed the availability of funds for this plan. However, a sales agreement may contain special conditions, such as technical terms, which are designed for at least 10 years.

The maximum amount of agricultural land that can be owned by one person is limited to 3 ha throughout Japan and 12 hectares in Hokkaido.

In Poland, restrictions on the area of ​​land owned by individuals are 300 ha, and for legal entities – 500 ha

There are no restrictions on the area of ​​agricultural land owned by both citizens and foreigners. In Germany

In Denmark, agricultural land is sold only on condition that its purpose is not changed. Individual farmers can own 150 ha of land.

Narrative 5. The valuation of Ukrainian land is underestimated, in Europe the land costs tens of thousands of dollars.

“How can you sell Ukrainian land for $ 1000 per hectare if land is ten times more expensive in Europe?” – repeated opponents of the land market not only for the last 4 months, but also for the last 3 years. However, most politicians and experts are wrong here too: the land price in European countries has often been called incorrectly, sometimes even double the official figures.

According to preliminary estimates, a hectare of land in Ukraine will cost $ 1.5-2.2 thousand per hectare.

In Europe, prices per hectare of land start from around 2,000 euros (~ $ 2.2 thousand) in Romania. The policies and experts named per hectare are as follows:

• Czech Republic – EUR 6462 (~ $ 7.1 thousand),
• Slovakia – 3009 euros (~ $ 3.3 thousand),
• Hungary – 4368 euros (~ $ 4.8 thousand),
• The Netherlands – € 68,197 (~ $ 75,000),
• Poland – EUR 9699 (~ $ 10.7 thousand, or 41.5 thousand zlotyh)
• United Kingdom – € 23,450 (~ $ 26,000).

Prices for the sale of agricultural land in Austria are not available.