Kyiv, April 26. The creation of a free agricultural land market will facilitate the influx of investments into one of Ukraine’s most perspective sectors: agro-industrial complex. However, it is important to carefully analyze all possible consequences and introduce the necessary system of checks and balances. This is the statement of Natalya Izosimova, Director of the Foundation for Effective Governance (FEG), during the debate “A free land market will destroy the Ukrainian village”. The event was organized by the FEG in partnership with the Intelligence Squared.

“The development of a land market is one of the key priorities during the economic reforms in Ukraine. The importance of this reform lies in the fact that a free land market will release an enormous potential of the country’s agricultural sector. However, the absence of a single land cadastre and the lack of a proper legal basis may produce the situation when the launch of a land market will open the door for various shams and let speculators buy land below its fair price”, said the Director of the FEG.

The supporters of the motion, who maintain that a free land market will destroy the Ukrainian village, emphasized during the debate that Ukraine is not yet ready for the introduction of a land market.

“I believe that the main tasks of the Ukrainian government are to get rid of corruption and to work out a clear and predictable policy for the free land market and agricultural export. There are no grounds to expect that the land market will save small farmers. There is no reason to change a present farm structure in a rapid way either, but it is advisable that it is let grow step by step”, stated Jozsef Popp, Director of the Research Institute of Agricultural Economy and Professor of Debrecen University (Hungary), during his presentation.

Lora Rubchenko, the representative of Ukrainian farmers and head of the LLC Gladkivschinskoe Grain Enterprise, pointed out that the development of the agrarian sector is hindered by such pressing issues as high prices for herbicides, fertilizers, fuel and lubricants, fluctuation of prices for agricultural products and the absence of an effective grain market since December 2010 rather than by an absent land market. “I believe that finding the solution to two principal issues is topical for the society. Firstly, the land must be reserved for effective managers and secondly, the rent must be spent fairly. This is a considerable financial resource which will either boost or destabilize the country’s economy”, she said. Ms. Rubchenko also criticized the draft bill “On land market”. In her opinion, it creates the conditions which allow the government’s agent – the State Fund for Land Management – to monopolize the land market, producing the situation which will hardly improve the financial conditions of an agricultural sector but is likely to increase corruption.

The debate participants, who argued against the motion that lifting the moratorium will ruin the traditional Ukrainian village, believe that all problems of the agrarian sector are rooted in the absence of a free land market.

“It is the absence of a transparent market that lets the speculators buy land at a fraction of its price for one simple reason: the owner of a plot has no choice. The free market will help these owners attract finances by mortgaging the land”, highlighted Victor Pynzenyk, former First Vice-Prime Minister and former Minister of Finance of Ukraine. In his opinion, the lack of a land market is also the reason for corruption in this sector. “Simply recall the latest land-related bribe scandals. This situation is impossible on a free market. Try buying 1 dollar for 1 hryvnia. Neither it is possible to do with land on the market. After the ban is lifted, the need to offer bribes for buying or selling the land will disappear”, said Mr. Pynzenyk.

Michel Tereshchenko, President of Uktaine-Agri, ATS Ukraine and Linen of Desna (Ukraine-France), added that the land market is a sure way to attract investors in the agrarian sector in Ukraine and to guarantee reliable ownership rights for land plots. “After lifting the ban, five millions of Ukrainian farmers will get either some direct capital input or at least some valid pledge allowing the granting of micro-credit in order to buy the basic needed technical equipment. This will also help develop a practice of the local agriculture that is already profitable and will definitely maintain and reinforce the integrity and the attractiveness of Ukrainian villages”, he stated during the debate.

About the debates
The debate “A free land market will destroy the Ukrainian village” which was held on April 26, 2011 in Kyiv is already the thirteenth public debate in Ukraine carried out in the Oxford Union style.The event was organized by the Foundation for Effective Governance in partnership with Britain-based Intelligence Squared. During 2009-2010, the Foundation held a series of debates (debaty.org) on reforming Ukraine’s economy. Among the topics discussed were an agricultural land market, tax reform, Ukrainian-Russian relations, competitiveness of Ukrainian higher education, benefits of special economic zones, innovations and new technologies, and tourism development.
“The goal of debates is to arrange an informative and efficient conversation on those issues of Ukraine’s economy development on which we don’t have a clear and simple answer. At the same time the debates are important both for the present and the future of Ukraine”, states Natalya Izosimova, Director of the FEG. –“However, for us the process of discussion is as important as the content. We’re trying to ensure that arguments in favor of opposing opinions can be expressed in a constructive manner, and that the opposing opinions can be heard."
A partner of the Intelligence Squared Nick Pisani is confident that such debates can attract attention of the public to culture of political discussions. “The debate helps present and, most importantly, future generations of decision-makers think and act in a different way,” he says.

Profile of FEG
The Foundation for Effective Governance (FEG) www.feg.org.ua was established in 2007 by Ukrainian businessman, Rinat Akhmetov with a mission to develop and implement long-term projects and programs which encourage the long-term economic development of Ukraine. FEG is committed to help reach public and political consensus on the key areas of the economic transformation programs.
To reach its objectives, the Foundation attracts leading Ukrainian and international experts with impeccable reputation. An Advisory Board, which includes famous public and political figures from different countries, ensures the Foundation’s independence. Among the board members are former Canadian Prime Minister Kim Campbell, former U.S. Senator Lincoln Chafee, former president of the National Bank of Hungary György Surányi, and General Director of the Ukrainian office of the International Investment Bank Morgan Stanley Igor Mityukov. The International Advisory Board takes an active part in building the Foundation’s strategy, selecting the priority projects and representing FEG both inside and outside Ukraine.

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