Ukraine’s accession to the EU provides for the harmonization of Ukrainian legislation with the law of the European Union. This includes land legislation. 

Why is massive land valuation necessary? Is free land privatization really possible? And how to create additional opportunities for land mortgages?

The EasyBusiness team, together with AEQUO Law Firm and CIVITTA, with the support of the USAID Agricultural and Rural Development Program, analyzed the best international practices of land relations regulation and developed a concept for harmonizing Ukraine’s land legislation with EU law.

The RPR Coalition shares the key theses with you.

See the infographic here.

Organic production

The development of organic production is hampered by the lack of reliable information about the land plots where organic farming is carried out. According to the National Economic Strategy, by 2030 the share of agricultural land under organic production should be at least 3%, while now it is about 0.6%.

Instead, information on land plots used for organic agricultural production should be entered into the State Land Cadastre and made available to farmers, officials and the public.

Land mortgage

Currently, about 65% of agricultural land is cultivated by tenants, but the right to lease land cannot be used as collateral to obtain credit, which limits access to financial institutions for agricultural producers. 

The concept proposes to create an effective mechanism for pledging land lease rights to help farmers attract credit resources for the development of their farms. This mechanism should include, among other things, procedures for foreclosing on land plots as collateral and the forced sale of land lease rights at transparent auctions.

Mass monetary valuation

Today, the regulatory monetary valuation of land plots does not reflect their market value, which leads to a shortfall in tax payments to local budgets and income for land owners and lessors.

The EasyBusiness team offers mass land valuation based on the market value of land plots and calculated automatically using the software of the State Land Cadastre.

Cadastral and registration system

Many of the functions of the State Land Cadastre are not implemented due to lack of funding. Instead, the allocation of a portion of the fees from the provision of administrative cadastral services to finance the cadastral system is often self-sustaining.

Right of permanent use

Currently, state and municipal enterprises own large areas of land on the right of permanent use. They receive land without bidding and at a reduced price, which creates corruption risks.

It is necessary to transform the right of permanent use of state and municipal land into the right to own and use land for maintenance and construction of real estate.

Land consolidation

As a result of the division of 27.5 million hectares of land into shares with an average size of 4 hectares, agricultural land has become too fragmented. Land plots belonging to the same owner or user are located in different parts of the fields, creating a strip of land and complicating cultivation.

Instead, a mechanism of land consolidation should be introduced, through which the land plots of each owner will be united or located adjacent to each other. Such a mechanism should be simple and cost-effective.

Protection of land and soil

There is no comprehensive mechanism for land protection due to a lack of information on soil quality. This creates obstacles to ensuring effective land protection.

It is necessary to establish at the legislative level the procedure for the formation and use of reliable information on soil quality characteristics through the introduction of such information to the State Land Cadastre. 

Land acquisition for public needs

The rights of landowners are unreasonably and excessively violated when land is seized for public needs. It is necessary to introduce additional guarantees for landowners by introducing clear criteria under which the owner can demand the purchase of the entire plot or the return of the seized part of it if, after the seizure of such part, it is impossible to use the remaining plot for its intended purpose. 

Restrictions on property rights for individuals and legal entities

EU citizens and legal entities registered in the EU should be allowed to acquire agricultural land plots.

Free privatization of land

Currently, the available free land in the country is not enough to realize the right to receive free ownership of 6 land plots for various purposes with an average area of 2.5 hectares for all citizens. Moreover, there is no such mechanism in the legislation of EU member states.

The right to free land ownership should be abolished as it creates inequality, corruption, and hinders Ukraine’s economic development.