23 November 2011
The Cabinet of Ministers issued a decree that increases the nominal cadastre value of agricultural land by 76% as of January 1, 2012. This nominal cadastre value, which varies by region, is used to calculate the minimum lease rate which farming companies have to pay land owners. The State Agency of Land Resources initially announced plans to increase this value in August and the draft was published in early November. Yegor Samusenko: Based on what companies have told us, the minimum lease rate is now USD 35-40 per ha, which means that next year it should increase to USD 60-70 per ha. This increase implies ~10% growth in the cost side for companies which pay the minimum rate and will be forced to increase their lease rates. So far we maintain our assumption that lease rates will increase to USD 100 per ha in 2013 and to USD 150 per ha in 2016.