Where Will Demand For Land Come From? Evidence From Farm Models

Farmland market in Ukraine is not fully functional due to the farmland sales ban or moratorium that effectively prohibits sales transactions for over 15 years already. Yet under the pressure of economic hardship and badly needed investments in the country and to some extend under the pressure from international donors, the moratorium is expected to be lifted from 2018. One of the important parameters of the future farmland sales market is a potential demand. Its estimate will help to analyse a potential price development over the initial period after lifting moratorium, an extend of needed market restrictions and potential demand for financial resources from the banking sector. In this paper we try to estimate a potential farmland demand from agricultural producers using two approaches: 1) by using recent farm surveys, and 2) farm level performance data for a population of agricultural producers in Ukraine for 2013- 2015. Both approaches demonstrate rather close results.