Restrictions On Farmland Sales Markets: A Survey Of International Experience And Lessons For Ukraine

Land market in Ukraine is yet emerging. Despite establishment of private property for land and 25 years of reforms, it is not fully functional. Its ‘rental’ arm has been the main farmland transaction channel for farmers and landowners. Its ‘sales and purchases’ arm is virtually dysfunctional due to the farmland sales moratorium that effectively prohibits sales transactions in the farmland market. The moratorium was introduced in 2001 and it was supposed to be a transitional measure for 5 years. But since then, it has been extended several times and currently is set to expire on January 1st 2017. Another precondition for moratorium expiration is adoption of the Law of Ukraine on Agricultural Land Turnover that should specify rights and restrictions on the farmland sales market, e.g. restrictions on the access to the market, caps on the size of land owned, preemptive rights etc. Ukraine has seen numerous ideas on the types and levels of restrictions, especially in times when another ‘moratorium lifting dead-line’ was approaching. Current political debate is not an exception. This report contributes to this debate by providing recommendations on the structure of the farmland market turnover. These recommendations are based on the review of international experience and results of empirical analysis.