09:55 06.11.2020

Ukrainian PM predicts growth in cost of farmland fivefold in 10 years, $85 bln of extra GDP

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Ukrainian PM predicts growth in cost of farmland fivefold in 10 years, $85 bln of extra GDP

Prime Minister of Ukraine Denys Shmyhal expects that the opening of a land market in the country will bring $85 billion of additional GDP in 10 years, and the average cost of land per 1 ha will increase fivefold.

"Ukraine has underutilized its land potential of $85 billion. In 29 years, free disposal of land has been limited, which means that its value has been underestimated several times. During this time, more than 5 million hectares of land have disappeared from the state. Development of irrigation and investment in agriculture has slowed down for decades, and partially stopped at all," the prime minister said during the presentation of the Audit of the Ukrainian economy and vectors of economic development until 2030 in Kyiv on Friday.

According to the published document entitled "Audit of the Economy of Ukraine", the fair value of Ukrainian land is currently $4,960 per hectare with a standard monetary value of $955 per hectare (2018).

At the same time, since the model of the land market adopted by the government has several fundamental restrictions (a ban on legal entities from buying land until 2024, a complete ban for foreigners, restrictions on the maximum areas to purchase), the price of land will not reach its fair value in the near future.

Thus, according to the land market model adopted by the Cabinet of Ministers, the price of one hectare is predicted to increase to $2,350 in the tenth year after the implementation of the reform.

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