15:54 03.07.2019

Phased opening of farmland market will lead to double rise in prices

2 min read
Phased opening of farmland market will lead to double rise in prices

The price of agricultural land within the phased lifting of the moratorium on farmland sales, which provides for the sale of only state-owned land, will be twice as high as the one during the simultaneous introduction into circulation of private and public land.

This opinion was expressed by Oleh Nivievsky, the senior economist of the project "Support for Reforms in Agriculture and Land Relations in Ukraine" of the Kyiv School of Economics. According to his calculations, this difference will be due to a limited offer. In addition, he noted that the average area of a state land plot is 82 hectares, and private some 3.6 hectares. This factor increases interest in state land on the part of agribusinesses, which, accordingly, will influence the price.

"Putting into circulation only state land is a kind of moratorium delay. There is a decision of the European Court for Human Rights (ECHR) that the moratorium violates human rights, and the introduction of sales of only state land at the first stage contradicts this decision. The thesis that the launch of the market starting with the sale of state land will allow setting price benchmark and work out the sales mechanism is unfounded. The average price of sale of lease rights for state-owned land is now twice as high as private land. It's worth expecting the same gap in the sale and purchase market," he explained.

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