Page 60 - BNE_magazine_bne_September 2019

60 I Eastern Europe bne September 2019
Ukraine will approve the creation of the controversial market for farmland this year.
Ukraine to create farmland market this year presidential economic adviser says
the first year according to previous studies and should lead to accelerated investment in the Ukraine agricultural sector. Ukraine is currently a country with few really prof- itable assets. An open farmland market has the potential to add between 0.5% and 3.0% to annual GDP growth, Honcharuk said. “We’re looking for the least painful but most efficient version,” he said.
"Amending the legislation to unlock land-related transactions would gener- ate significant economic gains, including higher incomes and greater tax rev- enues. New legislation on agricultural land sales is expected to be submitted by end-September 2016," the IMF wrote.
Managing partner of ICU Investment Group Makar Paseniuk believes that one of the fastest instruments for attracting at least $15bn-20bn could be the offer of state-owned agricultural land estimated at 10mn hectares.
"Land reform would be a huge driver for the further development of our coun- try, as it can be done quickly and it will quickly attract FDI," Interfax quoted Paseniuk as saying at a financial forum organised by ICU in Odesa.
"The cost of all state farmland is $15bn- 20bn, which can be compared with the existing IMF programme in the amount of $17.5bn or more, which is twice as much as the National Bank of Ukraine (NBU)'s net reserves of $6.8bn."
The land market’s creation would be part of a staff-level agreement with the IMF in September for a three- to four-
Ben Aris in Berlin
Ukraine’s Presidential Office plans to cancel the moratorium on
the sale of farmland by the end of this year, its deputy head Oleksiy Honcharuk told Bloomberg on July 30. It will be a highly emotive reform.
Creating a market for land and privatising farmland is a priority request from the International Monetary Fund (IMF), but the issue was successfully delayed by former President Petro Poroshenko. Any such move faces strong opposition from many lawmakers.
“There’s an understanding in the team that if it’s not done this year, it will be quite difficult,” said the 35-year-old Honcharuk, identified as head of the president’s economic team and as a potential candidate for prime minister.
In December 2018, the nation's parliament, the Verkhovna Rada,
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greenlighted a law on extending the moratorium on the sale of agricultural land until January 1, 2020. In May, Ukraine's Prime Minister Volodymyr Groysman said the Ukrainian cabinet will allow sales of agriculture land only to individuals with Ukrainian citizenship and up to a maximum of 200 hectares of land per person.
“Introducing a market for land will bring several billion dollars into the budget in the first year”
The team is discussing with the World Bank the model of the farmland market, including whether to allow foreigners to enter and possible limitations on purchases.
Introducing a market for land will bring several billion dollars into the budget in
year programme to replace the current Stand-By Agreement (SBA) that expires at the year end, Honcharuk said.
The new Volodymyr Zelenskiy admin- istration is also hoping to improve the terms of its IMF deal. The deal was down- graded from a three year Extended Fund