[permaculture] Opinion: Ukraine Is Not Ready For A Free Market In Agriculture Land - Tsarizm

Lawrence London lfljvenaura at gmail.com
Tue Oct 10 03:26:21 EDT 2017


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Eastern Europe
Opinion: Ukraine Is Not Ready For A Free Market In Agriculture Land

October 9, 2017, Written by Yuri Vanetik <https://tsarizm.com/author/yuri/>
By: Dr. Vitaly Skotsyk And Yuri Vanetik

[image: Opinion: Ukraine Is Not Ready For A Free Market In Agriculture Land]
*Image by Dobrych <https://creativecommons.org/licenses/by-sa/2.0/>*

In its recent agreement with the International Monetary Fund to obtain its
next round of funding, Ukraine has taken on an obligation to pass laws
launching an agrarian land market in May 2017. As of now there is a
moratorium on the sale of agrarian land, but it is to be lifted next year.
Free marketplace for agrarian land in Ukraine sounds attractive on the
surface, but it is an obligation difficult to fulfill quickly without dire
consequences for Ukraine’s already devastated economy.

There are major challenges to opening a private market for land in Ukraine.
First, historically Ukrainians view a marketplace for land with suspicion.
Without a proper education and infrastructure that ensures fair dealings,
Ukrainian populace is likely to turn to mass scale violence if farm land is
turned into a commodity. An open market in agrarian land in Ukraine needs
to be predicated on a well thought through system that considers interests
of farmers. Even if the laws are drafted in a manner that contemplates an
even-handed marketplace, the implementation of new laws is likely to be
manipulated from the get-go. A free market in a rigged system is inexorably
destined for major abuses, and in Ukraine it would enable a small group of
oligarchs tied to government elites to seize full control of all the
agriculture land. Finally, as it stands, Ukraine’s Constitution does not
allow for private ownership of agrarian land. It would need to be amended
for such laws to legitimately exist.

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Millions of Ukrainians are forced to survive on less than $150 per month.
According to the United Nations, about 70% of them live below the poverty
line. Ukrainians have always been agrarians, and perceive land as a
national treasure rather than a commodity. Moreover, Crimea and important
Eastern regions of Ukraine are occupied by movements for independence
backed by Russia. The backdrop to an unregulated market for agricultural
land is a war-torn, famished, and corrupt country.

[image: Opinion: Ukraine Is Not Ready For A Free Market In Agriculture Land]
*Image by Сколівські Бескиди

Ukraine has no subsidies system for farmers, like the Europe or US. Nor is
there a system of affordable farming loans like in America. Ukrainian
farmers are economic peasants, forced to subsist in a survival economy.
If a private land market is launched today, most farmers would not be able
to buy the land that they work on via leasehold. According to research by
Ukrainian Agrarian University, only 4% of agricultural producers can afford
to purchase land plots.

There is a great risk land resources will be monopolized and used for short
term speculation. Ukraine is known for its anti-economic monopolies. Back
in the 1990s all state industries ended up in the hands of several
financial clans. The ubiquitous poverty of the Ukrainian people allowed
several oligarch families to obtain nearly all industries for next to
nothing on the ‘gray’ market manipulated by side deals and illicit schemes.
Instead of investing in development, they simply pumped out resources from
factories and plants. Naturally, majority of these enterprises are either
no longer competitive or have been depleted and abandoned.

The private land market planned for next year is destined for the same dire
consequences, unless there are major changes in the rule of law, ensuring
fair dealings. Otherwise, a small corrupt elite with large assets, but
neither experience not desire to cultivate the land, will buy it up. Their
goal will be to resell it with profit. This will lead to possible paralysis
of agricultural production. The country that is known as a ‘bread basket’
of Europe will face extreme shortage of food.

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Sadly, ubiquitous corruption is a symbol of Ukrainian reality. It can make
any reform, even the most progressive one, fail. The system of government
bodies managing land issues is also riddled by it. Farmers often complain
that officials demand bribes from them for processing paperwork. Law
enforcement apparatus, prosecutors, and courts are also burdened with
corruption that is challenging to measure and even harder for westerners to
truly comprehend. Recently, there has been an increase of third-world style
business “takeovers”, where farmers were illegally deprived of their land
or property, or their harvest was stolen either under color of law or
through brute force and threats of violence. It often happens that police
take “a neutral stance” in Ukraine, and ignore brazen criminal activity
perpetrated by their financial sponsors. The courts themselves are part of
these criminal schemes with aggressive takeovers of businesses usually
occurring based on paid for courts decisions. Foreign investors with high
hope to literally grow their business in Ukraine are not spared.

[image: Opinion: Ukraine Is Not Ready For A Free Market In Agriculture Land]
*Image by Gridih <https://creativecommons.org/licenses/by-sa/3.0/>*

The land plot records are terribly mishandled. There are 61 administrative
districts that have more land registered than there is actual land. Upon a
detailed check, one can find out that some plots that have been designated
as farm land are in fact a forest or a lake. In over 26 years since Ukraine
became a sovereign nation, no proper land inventory has been carried out,
no national land cadaster has been formed, and no borders for private,
community and state property have been set. If the agricultural land is
seized by Ukraine’s business and political elite, many villages will be
destroyed. Ukraine should set its land policy and infrastructure prior to
opening its land market. Successful land reform is predicated on
predictable and fair rule of law that addresses monopolization by foreign
factions or corrupt elites.

The land reform drafts proposed by the Ukrainian government so far would
lead to chaotic sales of land, benefiting corrupt government officials and
business oligarchs. No long term rational land policy has been proposed by
Ukraine’s government. Ukrainian agriculture experts believe that proper
agricultural reform can contribute $504 billion in investments in the
Ukrainian economy, provide about 3 million additional jobs over the first
five years, and double the income of every Ukrainian.

[image: Opinion: Ukraine Is Not Ready For A Free Market In Agriculture Land]
*Image by Шенклян Сергій <https://creativecommons.org/licenses/by-sa/3.0/> *

Thoughtfully implemented, economically sound land market in Ukraine will
assure Ukraine’s economic revival. A stable Ukraine can guarantee food
security for many countries of the world, a high stake given the impending
global food crisis. On the other hand, a hastily implemented
speculator-driven market introduced into a corrupt regime, is destined to

*Dr. Vitaliy Skotsyk is the Chairman of the Agrarian Party of Ukraine. He
is an expert on agriculture and economy. Yuri Vanetik is a private investor
and GOP Strategist. He serves on the board of Gen-Next Foundation and is a
Lincoln Fellow at the Claremont Institute.*

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