The European Commission will provide 50 million euros in loans to Ukrainian farmers and their cooperatives to buy agricultural land. This month, the country began divesting many state-owned properties in agricultural areas. This marked the official launch of land decentralization by President Zelensky.
“We have allocated 50 million euros over two years to support small farmers so they can finance the purchase of their land. This goes hand in hand with the need to develop a proper mortgage system,” said EU envoy Katarina Maternova.
Last year, President Zelensky reorganized and modernized the national land company. During this process, various cases of fraud involving agricultural land were uncovered and reversed. For example, 5 million hectares were missing from the country’s land balance. More than thirty forms of corruption in the land market were identified.
Initially, Ukraine also planned to allow the sale of agricultural land to foreign investors. However, following protests by Ukrainian farmers and businessmen, this has been postponed indefinitely. That said, quite a few EU farmers already lease agricultural land there or operate cooperatives together with Ukrainians.
Ukraine is eager to join the European Union, but its “big neighbor” Russia is strongly opposed. Russia annexed the southern Crimean Peninsula and has been sustaining a rebellion in the eastern (agricultural) provinces for years. Nevertheless, Ukraine now has an extensive (agricultural) trade agreement with the EU.
Ukraine has over 40 million hectares of agricultural land — three times as much as Germany and many times more than the Netherlands (1.7 million hectares). Much of the land in Ukraine is still owned by state companies. Additionally, the country has many former collective farms (kolkhozes), dating back to the time when Ukraine was part of the Soviet Union.