12:11 01.07.2022

Functioning of farmland opens possibility of intensive development of agro sector in Ukraine - KSE expert

2 min read
Functioning of farmland opens possibility of intensive development of agro sector in Ukraine - KSE expert

The opening of the agricultural land market on July 1, 2021 allowed Ukrainian farmers to develop not only due to the expansion of the land bank, but also due to the increase in agricultural productivity, since the right to own land motivates farmers to invest in it, according to Roman Neiter, the expert of the Center for Food and Land Use Research of the Kyiv School of Economics (KSE).

"No one will install irrigation systems with an average cost of $3,000/ha if his lease expires in a few years and the land is de facto taken along with the infrastructure. If this land is privately owned, long-term investments make sense. And this is important for the further growth of the agricultural sector," he explained in an interview with the Interfax-Ukraine agency.

Neiter noted that before the land reform, the model of development of agricultural companies was to grow "wide" by constantly expanding the land bank, while the opening of the opportunity to own agricultural plots will lead to an increase in agricultural productivity, especially given the lower productivity in Ukraine compared to the countries of Europe and America.

According to the expert, in the future, due to climatic factors, Ukrainian farmers will have to invest more and more in land, for which the opportunity to own it is important.

"Even now it is possible to see that in Odesa and Mykolaiv regions part of the planted area has been lost due to the drought. Our climate is gradually changing - we see it in the reports of meteorologists and forecasts. We see that the arid zone is moving to the north. In order to continue to receive at least the same harvests as in previous years, every year it is necessary to invest more and more in the cultivation of the land," the expert clarified.

He emphasized that there is an element of justice in the opening of the land market, because thanks to this event, all landowners finally got the opportunity to dispose of their property, which they had been deprived of for 20 years.

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