Ukraine Should Not Sell Farmland To Foreigners, Minister Says

KIEV, Ukraine -- Ukraine should not sell farmland to foreigners so local producers can improve agricultural output, Agriculture Minister Mykola Prysyazhnyuk said.

Ukraine's Agriculture Minister Mykola Prysyazhnyuk.

“People who cultivate land and feed the country must become full-fledged participants in the farmland market,” Prysyazhnyuk said in a statement on the ministry’s website today. Farmers will be able to use land “efficiently” and “make production attractive for investments,” he said.

A moratorium on farmland sales is a “correct and strategically important decision,” according to the minister.

The sale of agricultural land is now banned in Ukraine. Companies lease plots from individual owners and there are around 6.5 million plots in the country.

Ukraine has 41.6 million hectares (103 million acres) of agricultural land covering 69 percent of its territory.

Arable land accounts for 32.5 million hectares. President Viktor Yanukovych, who came into power after 2010 elections, wants to start a farmland market as of Jan. 1.

Foreigners should be temporarily banned from buying farmland, he said yesterday.

Parliament probably will vote on legislation on a farmland market in September, Yanukovych also said yesterday. His office is putting together a bill.

Prime Minister Mykola Azarov’s Cabinet seeks to about double the price farmers get for leasing land, agriculture consultancy APK-Inform said on its website yesterday, citing Mykola Kalyuzhnyi, head of the state agency for land resources.

The state sets a nominal price for land plots and also leasing prices.

“Companies that lease land for production will be very much affected by the increase,” said Nikolay Vernitsky, director of Kiev-based researcher ProAgro.

“Small family farms may not be able to pay higher lease and will be taken over by larger companies.”

Source: Bloomberg

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