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World Bank backs calls for Ukraine land reform, as key date nears

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The World Bank backed calls for land reform in Ukraine, as the expiry date looms of the latest ban on farmland sales, which the country's farm ministry has estimated costs the country more than $3bn a year.

Satu Kahkonen, World Bank country director for Belarus, Moldova and Ukraine, urged Ukrainian authorities to start work on a reform programme for the country's land controls, including lifting the ban on farmland sales.

The World Bank believes that sector liberalisation "can give an impetus to the development of the country", Ms Kahkonen told a conference in Odessa, according to the Xinhua news agency.

The comment follows a call earlier this week by Yuiry Kosiuk, the founder and chief executive of MHP, Ukraine's largest poultry producer and a major grain grower, for a land market shake-up.

"The land market should be free. People should have the right to sell," he said, while eschewing ideas that liberalisation would prompt a surge in deals.

"People are not ready, people would keep land," Mr Kosiuk said.

Key date ahead

The comments come ahead of the expiry on January 1, 2018 of Ukraine's latest farmland trading ban, which has been renewed several times since a new code was introduced in 2001.

The curbs came close to removal last year, with Ukraine agreeing, as part of an International Monetary Fund loan deal, to adopt laws on farmland sales by late December 2016.

However, with land reforms remaining controversial – one poll in May put popular support for free farmland sales at 11% - Ukraine's parliament, Verkhovna Rada, voted for an extension to the ban.

Lost investment

Maxim Mrtyniuk, first deputy minister for agricultural policy, in December pegged at $3.3bn a year losses to the Ukraine economy from the ban on land deals, flagging a loss of revenues to the state, and seeing the curbs as a deterrent to farm sector investment.

There has also been concern over the administration of the 10.5m hectares of farmland that remains in state hands, with only some 1.6m hectares of that registered with the official State Land Cadaster, provoking questions over the administration of the remaining 8.9m hectares.

Mr Martyniuk in June revealed a shake-up of Ukraine's state farmland registration, including use of blockchain technology.

By Mike Verdin

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