The Land and the Future
One strategic issue passed unnoticed during the presidential campaign. Parliament had prolonged the moratorium on land sales, and both presidential candidates had consented to it at the current political juncture. Their attitude was understandable, as left votes retained their market value. Hopefully, the new president will continue the agrarian reform, which is of such vital importance to society, rather than play along with temporary campaign allies and large shadow landowners. The very essence of the land issue was altered in the heat of the presidential race; the point is not preventing taking the land “away from the people,” but creating a land market infrastructure and telling people about their rights, especially in the countryside.
This year Ukraine harvested 45 million tons of grain, almost two times last year’s yields. But can one expect the government to use it the best way and that the Ukrainian countryside will experience an uplift? The end results of the 2002 bumper crops offer proof to the contrary.
“A country man between two lawyers is like a fish between two cats,” said Benjamin Franklin. The Ukrainian farmer is in a similar situation. His “lawyers” in parliament recently prolonged the moratorium on farmland sales till 2007, overriding the president’s veto with 310 yeas. However, those wishing to protect the farmer from yet another bloodthirsty cat seem to have done a poor job, if not something being the exact opposite. Land sales have a number of positive aspects and containing them has as many additional risks.
In early October, the Verkhovna Rada passed a restated bill on changes to the Land Code of Ukraine, prolonging the moratorium on farmland sales till January 1, 2007. The new law reads that individuals and legal entities owning farmlands and plots fit for agricultural commodity production, also Ukrainian nationals in possession of parcels or shares have no right to sell them or have them otherwise alienated till January 1, 2007, except by way of inheritance or withdrawal for public needs.
Characteristically, among those taking part in the duel with the president over the issue were not only the left, with their traditional and principled rejection of the idea of turning the land into commodity, but also people from both right centrist camps, who have of late been increasingly hard put to find common ground in the legislative field. This time their “reunion” was most likely facilitated by the campaign juncture as well as by the factor of the 2006 parliamentary elections; the land issue is once again on a sharp upward curve on the electoral market. More than one-third active voters live in the countryside. Also, people in parliament are anything but impoverished and they know only too well that it is best to invest in the Ukrainian land which remains to be valuated because of the absence of the market. Arguing with the president on this matter is not easy because he has his explanations of the reasons for which parliament overrode his veto: “Those slowing down its passage (i.e., the land market bill — Auth.) seem to need more time to continue the anarchy in this sphere.” The president further notes that certain structures have leased tens of thousands of hectares of land shares, and that the terms of such lease agreements are at times enforced by these structures so that such plots can be used for a long time, without redemption.” Leonid Kuchma stresses that the institution of a civilized land market would make it possible to “put an end to the squandering of plots and to raise their price to the actual market value.” He believes that, after launching the land into economic circulation, agriculture can become the most capitalized sector of the economy, with which banks, investors, insurance, and financial companies will have to reckon. However, the parliamentary moratorium answers some public moods in Ukraine where people are not as yet fully prepared to extend market relationships to the agrarian sector. This situation appears to confirm the well-known Marxist tenet about social being determining consciousness. If a Ukrainian peasant and farmer knew he could actually buy some land, he would have a totally different attitude to the matter. As it is, he is afraid that this land will be bought by other wealthy Ukrainians or by foreigners, and that he will turn from a free tiller (this status, cherished over centuries, often governs such Ukrainians’ mentality) into a hired laborer or farm hand... This prospect does not make him happy.
Is there an alternative approach?
Vice Premier Ivan Kyrylenko who, unlike his boss and presidential candidate Premier Yanukovych (who is also against the land becoming a “subject of business”), apparently knows more about all this and believes that prolonging the moratorium on farmland sales interferes with solving the problem of financing the countryside. He feels sure that introducing a land market will help increase investments in agriculture, and that this, in turn, will help improve technological support and social facilities in the rural areas. Mr. Kyrylenko says that prolonging the moratorium “holds back the development of agricultural production in terms of additional funds that are especially necessary for technological re-equipment.” Ivan Kyrylenko regrets the prolongation of the moratorium and believes that the decision was made because the whole matter was overpoliticized. He predicts that the Verkhovna Rada will return to it only after the parliamentary elections in 2006.
Sober voices supporting the market are also heard among those welcoming the moratorium. The Ukrainian Agrarian Confederation notes that farmland sales can be arranged only after forming a farmland market infrastructure and a legal framework providing for responsibility for a rational and effective usage of such lands. UAC believes that free trading in land requires the passage of certain bills and the adoption of certain regulatory documents; that pertinent market institutions must be set up, including a mortgage bank, a society for rational use of land, and that a lot of public explaining must be done in the countryside.
Andriy Shevchenko, head of the National Bank’s banking development department, told The Day that “there was talk about the setting up of a land bank in Parliament, even concrete proposals, after liquidating the Ukraine Bank. The new bank was expected to be government-run, but the idea was not supported in parliament, not even in the banking circles, including international financial institutions that advised against it, saying it wouldn’t be much use anyway. The idea makes even less sense now that the moratorium on land sales is prolonged till 2007, because the land bank was supposed to conduct mortgage loan transactions.” We were told in school that the land is part of the globe having a circular shape. Well, the vicious circle appears complete in this case.
