The government assures that the Act on consolidation of agricultural land is a requirement that the country must meet on its way to membership in the European Union. However, it is difficult not to notice that regulations may be beneficial to large landowners.
The Ministry of Agrarian Policy of Ukraine has prepared a draft law on the consolidation of agricultural land. As the ministry emphasized, these regulations are an integral condition for Ukraine’s membership in the EU. However, in the EU, land consolidation is intended to optimize the use of resources and reduce production costs. The farming conditions in Ukraine are completely different from those in Europe, just as the agricultural model there is different.
Optimization and development
According to the Ministry of Agrarian Policy, the introduction of legal mechanisms for land consolidation in Ukraine is aimed at “increasing the competitiveness of agricultural producers – especially small and medium-sized ones – by combining fragmented plots into larger, integral wholes, according to a simple, democratic and de-bureaucratic procedure” – we read on the Ukrainian website AgroPolit.
The prepared act is intended – as the government justifies – to solve the problems of inefficient use of land resources, attract investors, and improve socio-economic conditions in rural areas. Everything on paper seems clear and logical: the law will enable the connection of narrow plots, farmers operating on distant plots will be able to exchange them to incur lower production costs, it will be possible to plow unnecessary access roads and develop fallow lands and wastelands that were previously inaccessible.
Small and big
In a country like Poland, where agriculture is based on family farms, such consolidation would be desirable. Especially since our regulations in this area do not work very well. Land relations and agriculture in Ukraine, however, are a different story. After the fall of communism, the land there became state owned. The future oligarchs immediately leased it. The workers of almost 12,000 collective farms were given 4-hectare plots of land. There were approximately 6.77 million such plots – we read in AgroPolit.
The land market in Ukraine was only freed by President Volodymyr Zelensky. The first reform started in July 2022, and the second one entered into force on January 1, 2024. Land sales were limited to legal entities. However, land purchases are not as successful as the government expected. The ongoing war and uncertainty of the future are not conducive to such investments – we learn from the Ukrainian agricultural media.
Who is merging for?
Why may the proposed act on consolidation raise doubts as to the legislators’ intentions and possible effects? Firstly, it seems unlikely that small farmers will actually benefit from these regulations, as the government assumes. Until now, owners of small areas could not even afford to buy their own machines. They use the land for their own needs or lease it to large companies. However, contrary to the intentions of many, they do not want to sell their land because they treat it as a capital investment and are counting on an increase in price.
It is difficult to suspect that these small farmers will now be able to afford to expand their farms. Also noteworthy in the act are the provisions that the party interested in consolidation is to bear the costs of the process, go through the bureaucratic path and take responsibility for changing the local development plan. As we also read in the study on AgroPolit, the initiators of land consolidation may be owners who jointly own 50 percent. area of a given mass of agricultural land. So is this actually helping small farmers to develop, or rather encouraging large farmers to expand their holdings?
As noted by AgroPolit, the proposed act would also introduce changes to the Civil Code, the Land Code, the Act on Agricultural Real Estate, the Cadastre of State Lands and the Protection of Land.
– .