In compliance with current legislation of Ukraine the land rent agreements can be executed for 50 years or by virtue of emphyteusis without limit in time. These regulations are effective more than 10 years, but the activation of execution of the rent agreements for a term of 50 years and emphyteusis took place only in 2016.

According to estimates of the Association ‘Ukrainian Agribusiness Club’ carried out on the basis of statistical information provided by the Ministry of Justice, by the end of 2016 nearly 14 thousand lease agreements (area of 65 thous. ha) are planned to be executed which is by 80% more comparing with 2015. Following the experts’ calculation, the similar land areas will be executed by long-term lease agreements for 50 years. Odesa, Poltava and Sumy regions are leaders for re-execution of agreements. In these regions nearly 5 thousand agreements amounting in total to 20 thous. ha of land are planned to be executed before the end of the year.

‘This course of events on the land market indicates an activation of shadow schemes, since execution of agreements for 50 years and emphyteusis de facto means selling of the land plots’ noted Alex Lissitsa, President of the Association ‘Ukrainian Agribusiness Club’. ‘It is related with both the growth of rural population poverty and with business leaders’ unbelief that the legal land market will be able to start operating in the coming years’. Experts of the Ukrainian Agribusiness Club forecast that in 2017 nearly 40 thousand emphyteusis agreements as well as the similar quantity of 50-year contracts with a total area of 300 thous. ha which, by comparison, constitute the area of agricultural lands of Chernivtsi region are to be executed.

On the basis of current prices for a hectare of land, ranging from UAH 20 thous. to 50 thous. per hectare depending on the region, it may be said that the land transactions will constitute UAH 10-12 billion in 2017. For comparison, the expenditures budget for the Regional Development Fund is foreseen to be UAH 9 billion in 2017.

In view of these shadow and semi-shadow schemes for purchase of land in some regions of Ukraine, within the following 5-7 years 80% of the Ukrainian lands can change their owner though conclusion of emphyteusis or lease agreements for 50 years.

‘Therefore, in 5 years the moratorium on sale of agricultural lands will be unnecessary since the majority of lands will be passed into the ownership of agricultural enterprises’ summed up Alex Lissitsa.