Ukraine PM Touts Allowing Foreigners To Buy Land

KIEV, Ukraine -- Ukraine may open the door to foreign ownership of its farmland, some of the world's richest, in a drive to boost its agricultural productivity by turning land "into an investment resource".

Mykola Azarov

Ukraine's prime minister, Mykola Azarov, blamed the country's bureaucratic and restricted land ownership laws for turning a country once regarded as the breadbasket of the Soviet Union into a major importer of many foods.

"Who would have thought that we'd see the day when Ukraine had to buy and import meat? Who would have seriously thought about that 20 years ago," Mr Azarov told Interfax-Ukraine, the news agency, terming the shift a "threat to our security".

Boosting productivity required "huge investments", which would be facilitated by reforms encouraging farmers to gain possession their land.

"That instinct of the owner is not there yet.

"The leasing of land, the sale and resale of certain plots of land and suchlike, has effectively caused the situation in which the funds that need to be injected into Ukrainian land, into the Ukrainian agriculture complex, are being not invested," he said.

'International experience'

Liberalisation could extended to allowing foreign ownership of farms, Mr Azarov added, stressing the need to look abroad for examples of effective land governance models

Foreign investors are currently restricted to leasing land, a practice which, besides causing excessive paperwork in trying to stitch together a substantial holding, hampers their ability to use their land holdings as collateral for loans.

However, there would likely be curbs on foreign ownership, he said, stressing the need to protect the interests of Ukrainian farmers in "complex" and "political" reforms.

"Models could be created to make it quite natural for there to be a limitation on foreign citizens' rights to buy… our land on a large scale," he said.

Ukraine vs Brazil

The reforms, which Mr Azarov said could be completed by 2012, follow comments last year from the office of Ukraine's president, Viktor Yanukovych, that a moratorium on the sale of Ukraine land may be ditched.

While Ukraine in 2002 introduced legislation enshrining land ownership rights, ownership was restricted to 100 hectares, and restrictions placed on sales.

The country's land ownership rules have been widely seen as fuelling the drive by agricultural investors to other nations, notably in South America, despite Ukraine boasting in its Black Earth region particularly fertile land.

Source: Agrimoney