Ukraine’s parliament has finally passed a law legalizing the sale of farmland and lifting the country’s 19-year moratorium on land transactions. The law will come into effect on July 1, 2021.
The moratorium’s cancellation brings Ukraine a step closer to receiving a much-needed aid package from the International Monetary Fund (IMF).
After midnight, during an emergency session of parliament that began on March 30, 259 lawmakers voted in favor of the second reading of the bill No. 2178-10, which would permit Ukrainian citizens to buy and sell farmland for cultivation.
The draft law was passed in its first reading back in November. It was introduced for its second reading on Feb. 6, but spent nearly two months blocked in parliament.
During those two months, lawmakers substantially trimmed the initial proposal to create the final text. They lowered the permitted amount of land that one person or entity can acquire from 200,000 hectares to just 100 hectares. The amount will increase to 10,000 hectares in 2024.
In addition, banks get the opportunity to obtain land as recovery of collateral, however, such land plots should be sold at auction within two years.
In addition, it is stipulated that until January 1, 2030 the selling price of agricultural land plots allocated to land plot holders cannot be less than their regulatory monetary value.
In the final text, foreigners and companies based abroad are banned from buying farmland in Ukraine. According to President Volodymyr Zelensky, this ban may be lifted after a nationwide referendum.
However, such a referendum is unlikely to take place anytime soon, as, according to polls, over 80% of Ukrainians are against selling agricultural land to foreigners.
Lifting the land moratorium was among the primary demands of the IMF to greenlight a $5.5-billion loan program for Ukraine.