AgroInvest Report: Survey of Rural Landowners’ Involvement in the Regulation of Land Lease Relations at the Local Level

The current Ukrainian system of agrarian production is the result of the agriculture sector’s adjustment to actual conditions of quasi-market economy operations in the process of non-systemic reforms. A quasi market is a market form with a latent distribution essence which is characteristic of a command-and-administrative system. Privately owned companies develop strategies which are not oriented toward the market. In fact, they fight with each other for various state resources and use connections within the government to control the competition. In recent years, the control over land resources has been playing a particularly important role in this system of quasi-market relations.

The policy of reviving large scale agriculture production based on former kolkhoz (collective farm) and sovkhoz (soviet farm) models (however, without the social and natural conservation responsibilities) led to development of distorted land lease relationships in the sphere of land use. In Ukraine, land lease relationships are being built in such a way that interests of lessees prevail against those of lessors. For land relation purposes, a formal land owner is subordinate to a lessee acting as the actual land owner. In the process of splitting formerly collectively-owned land into units, the lessees merely usurp land owner’s rights. The actual land owner – the lessee, confronts the formal owner – the peasant, through a recently created system of formal and informal institutions.

This survey, which was conducted in various regions of Ukraine, is devoted to existing opportunities for creating basic conditions for developing the institutional environment which would be favorable for engaging land unit owners in the processes of formulating and implementing agriculture land use policies.

The favorable institutional environment should include the legislative and regulatory frameworks for setting up associations of small land owners / lessors; a network of authorities and organizations that secure their operations and implement legislative initiatives, government policies in this area and stimulate consolidation of efforts to solve land problems of the local level. These activities should also aim at development of a positive attitude of the rural population toward government initiatives in establishing local groups of interaction in exercising land ownership rights.

At the initial phase of the activities covered by this report, the Consultant studied the actual situation with agriculture land use; the degree to which rural residents from various regions of Ukraine are engaged in local land lease market operations; their participation and willingness to participate in the regulation of agriculture land lease relations; landowners’ awareness of land lease agreements and terms and conditions of leases; and landowners’ attitude toward the ability to protect their rights and sale of land plots once the moratorium on the sale/purchase of agriculture land is lifted.

Based on the summarized survey data, the Consultant prepared specific recommendations on further actions.

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