The AGRARIAN ASSOCIATION OF UKRAINE (AAU) supports the adoption of the key Land market law by the Parliament of Ukraine, notwithstanding it is not market-oriented and effective. It is vital that, in this symbolic vote, Ukraine has chosen the path of cooperation with the IMF and promotes the policy of market reforms.
The land reform is about our future, which depends on the trust of investors, both internal and external, ready to create and develop long-term projects in Ukraine. In order for the country to get the most out of the reforms, it is necessary to analyse the new situation with specialists and determine what is right and how to resolve the current setbacks – discrimination of foreigners and border regions. Addressing these two main points will make Ukraine more attractive, and AAU suggests to remember the primary model of reform.
We have to mention that we already have an effective model of agricultural production which developed thanks to the diversity of its participants. Currently, Ukrainian farmers occupy 85 % of the market while large agro-companies operate on 13% and foreigners work on 2%. Thanks to mutual co-existence, cooperation and healthy competition, an agricultural sector was established which can be called the pride of the Ukrainian Nation. To break this balance today would be a disaster.
Today, all market participants who have already proven they are real owners should have equal opportunity to balance their land bank; that means being able to buy out land at a mutually beneficial price and thus removing relevant restrictions. A free market is needed to boost the economy and increase the wealth of Ukraine. A limit of 10,000 hectares per legal entity with a similar right for foreigners will allow agriculture to develop and bring GDP growth to the country. Diversity of market participants will protect the interests of primary landowners – the reform was originally meant to restore their property rights. This encompasses approximately 7 million landowners whose assets are significantly undervalued today.
Unfortunately, the adopted land law blocks the land market in the border regions, making them worse-off. Our borderlands should receive the maximum investor attention; investors should be drawn to the region bringing more prosperity to the local people than the rest of Ukraine to overcome handicaps and thus become a natural shield and protection of Ukraine against separatist sentiment. They need to understand that their home is warm and comfortable thanks to Ukraine, and the spirit of competition and entrepreneurship is welcomed there. But today, these regions are doomed to futility, and we provoke them into separatism, ignoring history.
Ukraine must become, as the President recently stated, the “most profitable start-up”, the preferred harbour for investment ships. Today, an investor should want to invest his resources in Ukraine so that tomorrow he will wish Ukraine prosperity and success. But now, we are essentially chasing investors away!
Conversely, look at the US, where Treasury Secretary Steven Mnuchin made the statement on March 30 that “it is a great time for long-term investors to continue investing in the US.” We believe that Ukraine cannot afford to lose the competition for investment resources.
Without adopting these criteria, Ukraine will not move forward – it would be reform without reform – and this means that the reform MUST continue.