Ukraine meets an IMF demand and releases its farmland for sale

While in Western countries citizens complain about the withdrawal of democratic rights in the wake of the Corona crisis, in Ukraine it is about nothing less than the loss of the last remaining asset, the agricultural land belonging to seven million small farmers and the state. President Volodymir Selenski used the provisions of the Corona quarantine, under which demonstrations are banned, to whip through a land law in the Verkhovna Rada, the Ukrainian parliament, which meets the interests of the large Ukrainian agricultural holdings and, following a referendum, also allows the sale of agricultural land to foreign banks. By Ulrich Heyden, Moscow.

259 of 450 Rada deputies voted in favour of the new land law at an extraordinary session of parliament in the night to Tuesday. Selenski had pressed for the law to be passed. In doing so, he is following a demand by the IMF, which made the payment of the next eight billion euros in loans dependent on the adoption of a new land law. The vote was taken in an extraordinary session in the night of Tuesday, after a year of debates on the law. The population was not involved in the debate. Protests from various social organisations and also from nationalists were not heard. Selenski had justified the adoption of the land law on the grounds that Ukraine was threatened with national bankruptcy if the IMF loan did not come.

Small farmers are being ignored

Under the now adopted Land Act, the moratorium on the sale of agricultural land introduced in 2001 will be lifted in June 2021. Until 2024, no more than one hundred hectares may be sold to a person with Ukrainian citizenship. From 2024, 10,000 hectares may then be sold to one person or company.

The biggest scandal of the new law is the creeping expropriation of seven million small farmers. These are former workers of collective farms, who were allocated four hectares of land when the collective farms were privatised.

Ukraine has an area of more than 60 million hectares. 28 million hectares belong to former collective farm workers or their children.1 Ten million hectares belong to the state. These figures include the Crimea and Donbass.

75 percent of the former collective farm workers have leased their land to large agro-holdings. Under the new land law, the tenants – mostly large agricultural holdings, civil servants and also mafia structures – have a privilege to purchase the leased land. If the leaseholder does not want to buy the land, he can transfer his right to purchase to another interested party. The actual owner of the land has no right of objection.

The agro-holdings currently pay the smallholders miserably low lease fees of only 47 dollars per hectare. In Poland the lease fee for one hectare is 235 euros.

In a survey conducted by the Institute of Agricultural Economics in 2017, only ten percent of small farmers were prepared to sell their land. The reason is simple. The land ensures the survival of its owners, especially in economically difficult times.

Because of the de facto power of the tenants it is foreseeable that there will be no auctions when the land is sold, the Ukrainian internet portal Strana.ua. And the new land barons would take their time with the payment of the land they bought.

From servant to traitor to the people

It was not clear how many members of the party, “servants of the people” would vote for the land law. Because Selenski has lost support in his party in recent months.

226 votes were needed to pass the law. But only 206 deputies of “Servants of the People” voted for the law. Two voted against. 35 “Servants of the People” stayed away from the vote.

By Ulrich Heyden

Translate from German to Englisch, Alfonso

 

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