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Experts Note Moratorium on Land Sites Sales Stifles Production

Experts mention the biggest obstacle to growing of Ukraine's promising agriculture sector is the continuing moratorium on the sale of farmland. The enduring rationale for the ban is that the Ukraine's land has to belong to all the people - perhaps a holdover from the era of Soviet collective farms.

However, the ban on land property sales is curtailing much-needed investing. Investors, in general, don't wish to waste a lot of money into developing land that they don't own.

Critics admit that parliament delays passage of two laws needed to lift the moratorium, as many influential businessmen and politicians profit from a land market that is kept in the shadows and rife with corruption and manipulation. For example, land not used for agricultural purposes can be purchased and sold.

Extended last December through 2012, the farm land moratorium prevents the soil from being used in free way as commodity and collateral. Farmers, hence, find it difficult and costly to borrow.

Investors in Ukraine's land sector also find the ban a disincentive to commit, blocking millions of dollars of investing. "Many traditional multinationals are afraid of introduction into the market of Ukraine because of the risk involved with leasing land and having it possibly revoked for unknown reasons," admitted Jens Bruno, business controller for Grain Alliance, a Swedish company that operates 30 000 hectares in Ukraine.



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