The Verkhovna Rada has adopted a draft law that launches a mechanism for transparent leasing of state agricultural land

For the first time in the history of independent Ukraine, state enterprises will now lease lands through a corporatization mechanism via transparent online auctions. This will serve as an additional source of revenue for the state budget. What was happening before?

Currently, there are approximately 700 state-owned enterprises, institutions, and organizations in Ukraine that have over 700,000 hectares of state agricultural land under their possession. The majority of them do not cultivate the land themselves as they lack the necessary equipment and personnel.

However, they do not give up the land and often lease it in shadow arrangements. This situation leads to the state-owned lands hardly generating any benefits for the state budget.

The new law introduces transparent mechanisms that prevent such abuses and ensure new revenue streams for the state budget. It allows for officially leasing state agricultural lands through open online auctions.

According to the law, the first auctions for obtaining the right to lease will be conducted in early 2024. During the initial stage of the reform, over 300,000 hectares will be leased out.

This will enable entrepreneurs to lease well-formed, cohesive land plots for the medium term, giving a significant boost to the revival of Ukrainian farming and attracting investments into the agricultural sector.

On the other hand, the state will receive fair lease payments for the land, resulting in higher income for the state budget. As a result, the defense forces will receive additional funds for armament.