Opening the land market: a twenty-year argument

Few economic questions in Ukraine were argued about for as long or as fiercely as whether farmland should be sellable. The eventual law is best understood as an answer to the objections rather than as a triumph over them.

The case for the moratorium

Millions of people received land shares in the 1990s without any market experience, in a period of hyperinflation and institutional collapse. The fear that they would sell for almost nothing to whoever arrived with cash was not irrational; it is what had just happened with vouchers in industry.

There was also a legitimate concern about concentration, and a genuinely held view that land should not be a commodity at all.

The case against it

That the moratorium did not prevent concentration; it simply moved it into long-term leases, where control was concentrated without the owner receiving a capital sum.

And that land which cannot be sold cannot be mortgaged, which starved the sector of investment for twenty years.

How the law answered both

Phasing, individuals first. Ownership caps. Beneficiary tracing. Verification of the source of funds. Exclusion of foreign ownership pending a referendum. A public price register.

Almost every element is a direct response to a specific objection raised over the previous twenty years. That is what a negotiated reform looks like.

The honest assessment

The feared mass distress sale did not occur in the first period. The safeguards may deserve some credit for that, and so may the fact that owners waited to see what prices emerged.

Accepting that the moratorium's defenders had a serious case explains why the argument ran for so long: both sides were pointing at a real risk. That is why the law trying to answer both was right. Which side was correct is not mine to pronounce on — but that the design wrote both concerns down is the reason it has held.