Land reform: how much will a hectare cost and who will be able to buy it

Authors

Yulia Ustymovych , Oleg Gavrish

On July 1, the land reform will come into force in Ukraine. However, so far only individuals can acquire land and no more than 100 hectares per person. At the same time, farmers are in no hurry in making plans to buy land.

As noted in the episode of 's partner, the program Persha Spalta, a hectare of land costs much more than the usual rent.

How much will the land cost

Until 2024, there will be restrictions on the sale and purchase of land. According to the State Service of Ukraine for Geodesy, Cartography and Cadastre (StateGeoCadastre), the average normative price of a hectare of arable land in Ukraine will be from 21,000 to 30,000 UAH. However, this forecast does not concern the actual cost, but is only used for taxation, said Anatoly Miroshnichenko, First Deputy Chairman of the StateGeoCadastre.

We expect that in overall terms the selling price will be higher. Probably the parties will focus on the normative monetary value. But solely on the basis of those motives that the law prohibits the sale of agricultural land below the normative assessment, explained Miroshnichenko.

Based on these assessments, the most expensive land turned out to be in the Cherkasy region—$2500 can be obtained for 1 hectare. And the cheapest one is in Zhytomyr—$1100.

Top 5 regions with the highest land price

Cherkasy region—$2500 per hectare;
Chernivtsi region—$2470 per hectare;
Kharkiv region—$2460 per hectare;
Kirovohrad region—$ 2360 per hectare;
Donetsk region—$2300 per hectare.

Top 5 regions with the lowest land price

Chernihiv region—$1340 per hectare;
Rivne region—$1220 per hectare;
Volyn region—$1215 per hectare;
Lviv region—$1200 per hectare;
Zhytomyr region—$ 1100 per hectare.

Who will be able to purchase land in 2021

The land market opens up land for small farms, because the restriction on selling only to individuals and no more than 100 hectares per person will not yet allow large enterprises to buy up hectares.

Some small businesses have begun to consider purchasing hectares. However, restrictions on the amount of land that can be purchased prevents businesses from expanding significantly.

If we are talking about the berry business, then 100 hectares would be enough for us. However, we will develop the garlic business and animal husbandry—we have sheep. Therefore, 100 hectares will no longer be enough," said Oleksii Tregubov, Director at Agro Staritsa.

At the same time, he notes that rent for a share (about 2.5 hectares) in the region where the company works is 12,000 UAH. And it turns out that for a hectare per year 5,000 UAH needs to be paid. If buying it, 50,000 UAH needs to be paid, and this is the rent for 10 years, so it is cheaper for farmers to rent.

In addition, the price on the land market actually does not correspond to reality, because the market will still be limited due to the ban on the sale of more than 100 hectares and exclusively to individuals. This situation does not allow the development of demand and the formation of the market price.

If Ukraine carried out a reform according to the European model, then the price of land over the next five years would have reached $4,000-5,000, Anatoliy Amelin, the co-founder of the Ukrainian Institute for the Future, believes.