Ukraine prolongs land sale moratorium

Ukraine’s parliament approved a law on Nov. 20 to prolong the moratorium on agricultural land sales. The ban on trading farm land – which was scheduled to expire in 2013 after the adoption of the “On land market” law – is now extended until Jan. 1, 2016. Afterwards, the moratorium will be lifted if a law “On the exchange of farm land” is adopted.

Alexander Paraschiy: We treat this news as encouraging for large incumbent agricultural companies as it preserves the status quo on the land market for at least another three years. The law “On land market”, the adoption of which was necessary to unfreeze the land trade in 2013, was too controversial and could have added more headaches for listed farming companies by restricting the amount of farm land owned as well as the owner’s residence. Secondly, the appearance of a free land market would (hypothetically) ease the access of smaller farmers to financing, thus removing a competitive advantage enjoyed by large-scale farming firms and increase their land bank expansion costs.