In 2023, the Ukrainian agricultural land market reached its historical peak, marking a significant increase in capitalization to 115.1 billion UAH, which accounts for approximately 10% of the country’s GDP. According to the Ministry of Agrarian Policy, this is a record figure in the history of the market. There was also a noted increase in the weighted average price of agricultural land by 10.4%, reaching a mark of 38.5 thousand UAH per hectare in 2023. Despite only 1% of the land being sold, almost all of it remains within the agricultural production sector, indicating the stability of this sector.
One of the key factors in this success has been the implementation of the “Prozorro.Sales” system, which allows for the leasing of communal lands. This has led to regular revenues in the budgets of communities amounting to significant sums of income, reaching 355.2 million UAH annually. These funds account for 10-12% of the overall budget of the communities, which additionally stimulates the development of rural areas. For example, how much does 1 hectare of land cost in the Poltava region – more than 35,000 UAH.
Starting from January 1, 2024, a new phase of land reform began, expanding opportunities for the acquisition of agricultural land. Now, legal entities can purchase private plots with a total area of no more than 10,000 hectares. It is important to note that the sale of communal and state lands remains prohibited. Individuals and legal entities cannot own more than 10,000 hectares, and foreigners are deprived of the right to purchase or sell land. The minimum purchase price for agricultural lands must correspond to the normative monetary valuation, and tenants have a preferential right to purchase the plots.
According to the Ministry of Agrarian Policy, the second stage of land reform contributes to the increase in the value of private agricultural plots and the incomes of their owners. In addition, an increase in revenues to local community budgets is expected. These changes open up opportunities for Ukrainian agricultural producers to obtain bank loans secured by land, which promotes the further development of agriculture in the country.
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