The salt of the earth-4. A neighbor’s experience against our optimism

Соль земли-4. Соседский опыт против нашего оптимизма

While some political forces to organize rallies against the land market, while others expose them “selfish” concepts in the expert community continues the debate sluggish theorists on the topic “what will it be?”. But why dream when you can look at the experience of their neighbors, including Russia, where the sale of agricultural land permitted since 2003. Believe that to study the experience of the aggressor is not comme Il faut? Well, well… don’t read! No one is forcing…

Despite the fact that Ukraine was in the small list of countries where the rights of landowners are limited by the moratorium on the sale of land, our farmland is treated with more than 20 foreign companies. Some of them have already bought the corporate rights in Ukrainian entities or registered enterprise here and pay taxes.

This means that they (as well as Ukrainian legal entities and natural persons) will be entitled to buy agricultural land. The only exceptions are citizens of Russia, registered in Ukraine, company or owning a foreign company, which in turn will register a legal entity here. Russian we do not sell anything. Until…

Well, there is still the question of whether our earth’s Northern neighbor so that his investors will be ready to disguise with the risk of their investments (if you will identify the transaction to void, and the land will be taken).

The fact that in Russia about 400 million hectares of farmland – almost 24% of the territory. About 114,8 million hectares were distributed to units, but still completely legally only 107,9 million hectares, Although more than 20 years have passed. Almost 68% of all agricultural land are in state and municipal ownership. This land, as we have rented.

And where is the market turnover of agricultural land, introduced in 2003, together with the adoption of the Federal law of the same name? Why Russian oligarchs, who are richer than ours, and there will be more, so far I have acquired a very small part Agropoli? And this despite the fact that the land tax in the Russian Federation, established by body of the municipality may not exceed 0,3% of the cadastral value for land plots. That is quite low. And building selhoztechnika not prohibited by law.

The other rules in its principles similar to those that enters Ukraine. For example, according to our laws, one person (whether natural or legal) will have the right to concentrate its ownership of not more than 15% of agricultural land within a specific area and not more than 1% of agricultural land in Ukraine. In Russia, the maximum size is set by the regional authorities but cannot exceed 10% of the area of agricultural territory of the region.

Purchase of land by foreigners in Russia are forbidden. And so we will. But this applies only to those legal entities, whose authorized capital the part of the foreign capital exceeds 50% (they can only lease land). And if less – it is considered the Russian firm.

Besides, foreigners are virtually unlimited to buy land through the acquisition of property shares (stakes) in the common ownership of land, consists of land with/x destination. So with supposedly strict ban for foreigners is also sheer wickedness.

Someone will say: why write about the Russian experience, we are not going to focus on the aggressor? So no one makes to navigate. Just silly not to notice and study the existing experience and up making mistakes and reinventing the wheel. Especially as the Russian model of the land market is not the most optimal.

And the main controversial rule is the “right of first night” of a state or municipality. In accordance with article 8 of the Federal law of the Russian Federation No. 101, they have the preemptive right to purchase the land at the price at which the land sold by a private owner.

That is, if you are the owner of agricultural land in Russia and want to sell it at auction, you first must propose to the Executive power. Only when the government refuses to put up for auction. If no one bought a plot and you decide to lower the price, need to offer land to the state and only in case of their failure to implement the station.

It is this bureaucratic procedure, according to some experts, has led to the fact that the agricultural land market in Russia, despite the opportunity to buy and sell, more like ours: the land is mostly public or private (share) and are in a long-term lease.

Another specific feature common to Ukraine and Russia, is that the value are large coherent areas of land. That is these tend to concentrate in the hands of agricultural holdings for the export-oriented industrial agriculture. It is not surprising that we and the Russians are going neck and neck, fighting for second or third place in the rating of grain exporters (first place traditionally in the U.S., more than half of their grain export is corn).

Is a different model, for example, in Poland. There is dominated by family farms, which owns 80% of arable land. The bulk of the land is divided between more than 3 million private farms, with the area of each of them on average is less than 7 hectares. the Maximum square footage that can be owned by one person – 500 ha.

But we have such fragmentation is hardly suitable. Especially because Poland did not become a great agricultural power and the breadbasket of Europe. In the export of grain and many other crops, it has lagged behind us at times.

We also learned to work efficiently, “big”, this creates a logistics infrastructure and is actively developing processing. Cutting our land into pieces, corny we lose our competitive advantage.

Now about the aliens. The most liberal towards them the law (if you look at our neighbors) in Romania. It also has the biggest share of foreign owners of agricultural land in Europe. And you know how much they bought? Only 900 thousand hectares, which is 11% of the total area of arable land.

So if someone thinks that allowing the sale of Ukrainian land to foreigners, we immediately lose the bet, but with a huge profit to the budget, he is seriously mistaken. It is not a crowd of investors willing to buy our privatization assets under doors MFI and land auctions would not slaughter willing.

In any business, including agriculture, foreign investment attracted by the microclimate in the country, security of property rights and ease of doing business. We have it still stalled. Therefore, the expectations of the Ministry of economy that in 2020, Ukraine will be sold to 5% of the 42 million hectares of agricultural land and it will give us $2 billion, I seem to be too optimistic.Galina Akimova

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