Moratorium on land sales would not be repealed in 2012

05.10.2010 20:21
Articles about real estate | Moratorium on land sales would not be repealed in 2012 "Even after the removal of only 5 - 6% of Ukrainians would be willing to sell their shares", - said the interview «proUA» Director of the Center for "Land Reform Policy in Ukraine" Maxim Fedorchenko

Last week, President Viktor Yanukovych has said that the government has already prepared a package of bills to regulate the land market. And in the next six months, these documents will be accepted. Many domestic experts interpreted this statement as the authorities' intention in the near future to lift the moratorium on the sale of agricultural land.

Related article: The minimum price of land in Ukraine - about 3 thousand hryvnia per hectare

True, there is Deputy Prime Minister Boris Kolesnikov, a little chastened supporters of the free sale of land. By the logic of the vice-premier the first stage of "land reform" may be the introduction of administrative means a minimum period of 15 years for rental units from villagers. This is the approach finally allow land owners to feel (and feel in your pocket) the benefit of whether they have a similar property.

«ProUA» decided to find out what the President was referring to and what will the initiative of government officials. With these questions, we turned to Maxim Fedorchenko, director of the Center for "Land Reform Policy in Ukraine"

Do you think many people in Ukraine believe that maintaining a moratorium on the sale of agricultural land - a political move. But even the apolitical experts claim that lifting the ban to laws of the land market and land cadastre. As things stand now, with the formation of these documents?

- In itself, the adoption of these laws does not automatically mean the introduction of a land market. Even if at the same time with the introduction of these laws of the Land Code will exclude an item on the moratorium, the market will start to work very poorly. Moreover, this work is limited to transactions of sale in a fairly small amount, the mortgage of agricultural land we will see any time soon. There are several reasons, but most importantly - the lack of cadastral and registration system.

As is known, the function of registration of ownership of property and land is now assigned to the Ministry of Justice. However, the registration law shall only take effect January 1, 2012. Thus, no registration, no market, no land mortgage sooner should be expected.

In my opinion, are relevant laws on the market and the inventory is much lower than the urgency of completing the technical training - that is, the creation of cartographic basis, land information system and registry rights.

By the way, the developers of the document say that the bill "On state land cadastre" will be submitted to the parliament later this month. Do not get so that the law will act as the most "base" will not be another few years?

- This law is always "about to be filed." And even already applied and been accepted, and was vetoed by the President of Ukraine. So law-past of this law is very rapid. Much more important is that it was where to attach the bill. He, like the lever of Archimedes needed a fulcrum, and then the earth "rise" in the sense to capitalize.

In essence, the law will describe to us the order of conducting the inventory, rather than the process of its creation. Accordingly, while the law of the inventory will be in limbo, just a few years there was a law on state registration of rights to property - without registration and registry.

Nevertheless, the law of the inventory is needed. Not least because, together with the law on registration of rights, it will create a full-fledged legal framework Ukrainian cadastral and registration system (CRS). With these two laws, even if not yet in operation, all involved in the process of inventory and registration of rights organizations will be able to communicate effectively in the preparation of running cattle. And that leaves: wide track, and cars - for the narrow gauge railway.

With regard to the prospects for creating the inventory in the next two years - I think that these prospects were rather vague at the beginning of 2010, when experts from around the world pointed to the possibility of completion of works on inventory until June 2012. I think that right now the outlook may be even dimmer as the main cadastral department of the country last year in a state of uncertainty personnel.

It is thought that the first step in land reform may be the administration of the terms and rates of land rent (interest)? In your opinion, such a step would benefit the owners of the units?

- However, the timing of enforcement can hardly be considered a positive innovation. Firstly, such prinudilovka contrary to the principle of freedom of contract, on which the market economy, secondly, freedom of contract suggests the possibility of early termination, ie in principle, to force the parties to be in certain respects during any period is difficult.

Thirdly, it gives a trump unfair and inefficient tenants - need a long peasant skirts obbivat court to get rid of this scourge. I am confident that the government should not interfere in the process, which is already going.

In a classic "market" situation, the landowner is not interested in long-term lease. The fact that at the conclusion of the lease for a new term, the owner has the right to increase the value of land at the cost of improvements made by the lessee. Accordingly, the rent rises, even at a constant rate. That's why the owner of an interest as often as possible "to capitalize" these improvements.

However, our situation is non-classical - the price of land formed by the formula, and reflected in the cost of improvements it is extremely difficult, if not impossible.

With regard to rents - they must be the product of competition, but here they are still the product of administrative influence. In a recent study of the Ukrainian club of agrarian business, the experts proved that the growth in rental rates due primarily to increases in the minimum lease rates and active actions of the authorities to be renegotiated leases with the new minimum rates.

Competition is the rental market is not - 7 million landlords have 50,000 tenants. In addition, quite a lot of land is located outside the processing. That is why the minimum rental rates have not received a full distribution - because it is undeveloped competition.

However, these minimum rates have a downside: he who pays them, the owner of the land should not be anything more, even if his business could afford to pay and a higher rent. Thus, the state limits the value of the land as a resource for agro-business - but at the expense of land owners who do not put more than 3 percent of the normative value of the land.

I am confident that global trends will lead to the fact that in Ukraine there competition in the market rent of agricultural land. If the state will erect administrative barriers, the process may be delayed but it can not be stopped.

In fact, many experts say that Ukraine is not settled by the transfer of local government units, the owners have died without leaving heirs, incredibly complex. Because of this increased percentage of "no man's land"?

- The process resolved, but recognition of unclaimed property and transfer it to the state or municipal property related litigation. This effort, money ... So, this process does not go. He seems to be piling up. If we look at the inventory data, the area of public agricultural lands only decreases from year to year, and the area of private agricultural land - is increasing. "Middle ground" is still hiding in the private land - not yet adopted the relevant judicial decisions.

You should also take into account the fact that the land, lost the owner can easily become the object of "unjust enrichment", ie it can be used in agriculture without registration of contracts and payment of rent. Not be ruled out that local authorities dispose of it today as its ... So to answer your question may be another question: "Who benefits?"

In your opinion, what in the country today, this percentage? What percentage of land that is nowhere recorded in government statistics? Why so complicated?

- I do not know how much land "no" in the statistics. But I can assure you that the land, that there "is", raises many questions. State agricultural land today manages a fairly large number of bodies. When was adopted by the Land Code, the CMU was obliged to assess how much land is used by a public and communal structures, and how much they truly need. This was not done.

In a strict sense, the land - only about 11 million hectares, including 5.6 million hectares of arable land - in many cases, deserve re-training in the lands of other categories or in need of preservation.

When removing the moratorium, according to your opinion, what percentage of Ukrainians ready to sell their shares?

- I think this percentage is not high, no higher than 5-6%, especially during the first two years. Will sell mostly to those who have left the village, are in straitened circumstances, or do not have heirs. This view is also shared by experts interviewed by me in the study of issues related to ownership of the land for farming purposes, which I conducted in March-April 2010.

It is not excluded that in some areas, this percentage will be higher in some - lower, and here and there will be no sales.

In addition, it is now possible to speak of a gradual reduction of the role of households in agricultural production and increasing the role of the corporate sector. Accordingly, at least to reduce the role of the household could start selling the land. However, this prospect will begin to show themselves, I think, three years later.

Your forecast - a moratorium on land sale will be canceled in 2012?

I would say that the moratorium will not be revoked before that date, and is unlikely to be lifted during 2012.
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