Ukraine is preparing auctions for the lease of state lands

The state property fund will offer 100,000 hectares of state land at auctions starting in June. As the head of the State Property Fund, Vitaliy Koval, told Forbes.ua with reference to "Business Breakfast with Volodymyr Fedorin", the Fund currently manages 386,000 hectares of state land, of which 98,000 hectares are occupied. There are also lands on the frontline territory and mined areas. In fact, because of this, the Fund has more than 100,000 hectares of land ready for lease. The lease procedure will look like this: a lot with cadastral numbers is displayed and anyone can participate in the auction - a natural person, a farm, an agricultural holding. The winner of the competition will enter into a lease agreement for 14 years, if they are annual crops, or 25 years, if they are perennial crops. 

At the same time, the rental price will be determined at the auction from the regulatory monetary assessment. Bidding will start with 12% of the regulatory monetary assessment. From the first land pool of 100,000 hectares, the Fund expects to receive UAH 1 billion in income per year.   There will also be an actual indexation, because the size of the regulatory monetary assessment can be revised. 

In total, about 800,000 hectares of land remains in state ownership, and almost half of it is currently at the disposal of the State Property Fund. According to the Economic Truth investigation, according to the State Property Fund, the total number of state agricultural lands in permanent use reaches 806,000 hectares. The National Academy of Agrarian Sciences (NAAS) currently manages 277,000 hectares of land. Since 2023, 80 enterprises and 11 scientific institutions have been transferred from the National Academy of Sciences to the Fund — in total, this is a land bank of 210,000 hectares. For the most part, problematic enterprises that have legal disputes or debts, and those that are under Russian occupation, were transferred to the FSMU. Currently, about 100,000 hectares of land used by the State Property Fund of Ukraine are encumbered by courts and criminal proceedings 

Currently, there is an opinion that the State Property Fund is unlikely to be able to effectively manage state lands. After all, the mechanism of transfer itself is not clear in the draft law, which proposes to transfer state lands to the management of the State Property Fund. Therefore, this draft law is considered to be the one created for the transfer of the lands of the National Academy of Agrarian Sciences to the Fund. As Andrii Bohdanets, a deputy of the Agrarian Committee, noted in an interview with the AgroPolit portal, the Academy has already transferred 118-120 thousand ha to the FSMU. But it is not clear what the State Property Fund will do with this land after the adoption of the draft law.

We would like to remind you that, in accordance with the norms of the current legislation, the second stage of land reform began in Ukraine on January 1, 2024. It provides, in particular, an increase in the maximum size of the plot for purchase from 100 ha to 10,000 ha. In addition, now not only individuals, but also legal entities will be able to buy land. At the same time, the requirement that only citizens of Ukraine can purchase land has been preserved. Earlier, at the end of 2023, a petition of the All-Ukrainian Agrarian Council was registered to postpone until the end of the war the increase of the maximum area of agricultural land "in the same hands" from 100 hectares to 10,000 hectares. The specified petition gathered the necessary 25,000 signatures for its consideration by the President of Ukraine, who instructed the head of government to consider this issue. But so far, no decisions of the CMU on this issue have been reported.

We will also remind you that the land reform includes the third stage, which provides for the opening of the market for foreign individuals and legal entities. But the decision on this must be approved at the all-Ukrainian referendum, which cannot be held under martial law.