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EasyBusiness - Development of the Free Farmland Market in Ukraine

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Detailed analysis of international experience and assessment of socio-economic effect

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DEVELOPMENT OF THE FREE FARMLAND MARKET IN UKRAINE Detailed analysis of international experience and assessment of socio-economic effect Kyiv, April 2016
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■ ■ Moratorium on selling agricultural lands harms the development of small and medium business in agricultural sector and limits land owners in their right to dispose their assets Agriculture is the strategic sector of Ukrainian economy
■ ■ ■ ■ ■ ■ ■ ■ THESIS 1. Lands will be bought for small starting price THESIS 2. Lands will be bought by foreigners THESIS 3. Farmers would not be able to compete with agro holdings The abolition of Moratorium and full liberalization of land markets would generate ~$15-40 billion of money mass in circulation. Main risks currently associated with abolition of Moratorium are not grounded in most cases
KEY FINDINGS
12% share of agriculture value added in GDP In Ukraine labor productivity in agriculture is higher than average figures in any other sector of economy. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS Key factors of agricultural sector Market for agricultural lands: the economic aspect
100% expected agriculture export growth rates to 2020 Ukraine is the biggest pro- ducer of sunflower seed oil with a good potential to in- crease its grain production and to become one of key players on meat and milk markets in future. ■ ■ ■ ■ ■ 1 2 MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
Ukraine holds 1 place in Europe for possessed arable lands 41.5 mln. ha - the area of agricul- tural lands There are only two places in the world with such high con- centration of black earth: the first is situated between North-eastern Ukraine and Russia and the second one- along Canadian prairies. Structure and current tendencies on land market MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
In ownership structure, private ownership prevails over state ownership (74% vs. 26%). ~55,000 enterprises operate in agricultural sector 6.5 mln. ha agricultural land in ownership of top-100 agroholdings MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
78% of lands are managed by enterprises with areas bigger than 1000 hectares $25-50 is the annual average rent price for arable lands MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
Current peculiarities of regulations of legal relations on the market Agricultural lands are a huge asset which is not incorpo- rated into financial flow of Ukraine and therefore does not provide a proper income to its owners 01.01.18 term of moratorium Market for agricultural lands: Legal aspect MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
Existing ways to acquire and expropriate land plots ■ ■ ■ The absence of transparent market for agricultural lands in Ukraine leads to a variety of problems, which can be classified as those linked to shadow schemes of dispossession and acquisi- tion of lands. One of the consequences of the untransparent market is low rent price for land due to the pressure from tenants and the inability to exchange or consolidate land plots ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
One of atypical methods to acquire agricultural lands passing round the Moratori- um is through the use of mortgage MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
In practice, legal entities whose statutory documents do not mention agricultural manufacturing among their activities, can acquire agricultural lands in their possession through civil transactions, except buying and selling, and under other considerations. 1995 date of approval of normative land evaluation on the state level MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
In Ukraine there is a high lev- el of land concentration by big agrarian companies 7million people became owners of the land plots MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
Outcomes 900UAH/ha - an average rent price for agricultural lands More than 2/3 of owners of land plots are elderly people, who are unable to cultivate their lands themselves MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
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International experience analysis methodology ■ ■ ■ ■ ■ For the purpose of our analy- sis of international experi- ence, 60 countries have been selected, based on two stag- es of selection Analysis of international experience MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
For the purpose of our analy- sis of international experi- ence, 60 countries have been selected, based on two stag- es of selection. All 193 countries that are recognized by the United Na- tions have been considered during the first stage of the international experience study. International experience analysis roadmap (key stages) ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
Countries’ assessment has been provided in compliance with the proposed criteria system (agricultural value added per worker (USD), To- tal arable land area (hectares), Arable land as a percentage of total land area (%)). Brief country profiles, includ- ing chronology and mecha- nism of the land market re- forms, have been created as a result of international expe- rience analysis. ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
As a result, regions were di- vided into the following: EU Old Member States, EU New Member States, EU- candidate countries, Post- Soviet countries, Asia, Africa, Latin and North Americas. Based on the analysis of in- ternational experience, we have identified four types of land markets, depending on the government regulation approach implemented. ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
International experience shows that farmland market restrictions are unlikely to be efficient. Furthermore, they typically increase bureaucra- cy and corruption on the market.. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
AUSTRIA ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ $42,000 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 1.4% SHARE OF LAND IN PRIVATE OWNERSHIP 53% PEOPLE EMPLOYED IN AGRICULTURE 1.3% 0,00% 0,20% 0,40% 0,60% 0,80% 1,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, % 0,00% 0,20% 0,40% 0,60% 0,80% 1,00% 1,20% 1,40% 1,60% 1,80% 0 10 000 20 000 30 000 40 000 50 000 60 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ö ■ ■ ■ ■ ■ ■ ■ ■ 3years the minimum land lease agreement term There are different legal acts regarding the transfer of agri- cultural land ownership rights in the nine provinces. Fre- quently, the process of farm- land purchases and sales regulated by local authorities. 3.5% stamp duty on the transaction value MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
BELGIUM ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $28,000 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE SHARE OF AGRI- CULTURE IN GDP 0.7% SHARE OF LAND IN PRIVATE OWNERSHIP 99% PEOPLE EMPLOYED IN AGRICULTURE 1.1% 0,00% 0,20% 0,40% 0,60% 0,80% 1,00% 1,20% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ 1. 2. 1hectare the average area of agricultural land plot The biggest minimum rent term in EU is established - 9 years. 10-12.5% the tax on selling the agricultural land MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
DENMARK ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 1.4% SHARE OF LAND IN PRIVATE OWNERSHIP 98% PEOPLE EMPLOYED IN AGRICULTURE 2.3% $26,650 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 125hа the maximum area of agricultural land plot In 9 provinces different laws on transfer of land ownership rights exist, land related transactions are registered by local authorities. 13-27% a tax fee on usage of crop protection products (CPP) MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
FINLAND ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $11,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 2.8% SHARE OF LAND IN PRIVATE OWNERSHIP 98% PEOPLE EMPLOYED IN AGRICULTURE 3.9% 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ Å 10years the maximum land plot leasing term Foreign individuals or legal entities are allowed to buy and lease land everywhere but in Aland region. 4% tax on land transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
FRANCE ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $7,450 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 1.7% SHARE OF LAND IN PRIVATE OWNERSHIP 80% PEOPLE EMPLOYED IN AGRICULTURE 2.8% 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 0 20 000 40 000 60 000 80 000 100 000 120 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
é é é ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 9years the minimum land plot leasing term The main tool of land pur- chase and sale regulation in the country is Sociétés d'Aménagement Foncier et d'Etablissement Rural (SAFER). 5-60% the land inheritance fee MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
GERMANY ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $32,300 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE SHARE OF AGRI- CULTURE IN GDP 0.7% SHARE OF LAND IN PRIVATE OWNERSHIP 49% PEOPLE EMPLOYED IN AGRICULTURE 1.3% 0,00% 0,20% 0,40% 0,60% 0,80% 1,00% 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 50 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 2hectares the minimum land plot size in Bavaria The land market in Germany is liberal and open, which promotes effective structural downward shift in the share of unprofitable enterprises. 3.5% tax on farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
GREECE ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 3.9% SHARE OF LAND IN PRIVATE OWNERSHIP 60% PEOPLE EMPLOYED IN AGRICULTURE 13% $11,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ 4hectares the minimum land plot size Most records of land circulation in Greece are made in hard copies. $9/ hectare tax on farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
IRELAND ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 1.6% SHARE OF LAND IN PRIVATE OWNERSHIP 91% PEOPLE EMPLOYED IN AGRICULTURE 6.1% $39,300 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ 1-8% registration fee on buying the land Individuals and legal entities residents of the EU are free to buy lands, while non-EU resi- dents require license from the Land commission. 20% share of farmland under lease agreements MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
ITALY ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 2.2% SHARE OF LAND IN PRIVATE OWNERSHIP 100% PEOPLE EMPLOYED IN AGRICULTURE 3.5% $25,700 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ 8hectares an average size of Italian farm Italian land reform in the 20th century is generally per- ceived as successful, though it was implemented too late and too softly 65% share of farmland cultivated personally by landowners MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
NETHERLANDS ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 1.8% SHARE OF LAND IN PRIVATE OWNERSHIP 89% PEOPLE EMPLOYED IN AGRICULTURE 2.0% $63,700 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ ■ 6years the minimum term for land plot lease No limitations for buying and selling lands exists both for residents and non-residents. 6% tax on farmland transfer . MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
PORTUGAL ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $7,400* / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE SHARE OF AGRI- CULTURE IN GDP 2.3% SHARE OF LAND IN PRIVATE OWNERSHIP 93% PEOPLE EMPLOYED IN AGRICULTURE 5.5% 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 0 5 000 10 000 15 000 20 000 25 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ 0.8% land tax Over time, the Portuguese agriculture adapted to an open market and EU mem- bership. Now farmers are much stronger and better organized and are capable of performing some of the state functions themselves. 5% tax on farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
SPAIN ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 2.5% SHARE OF LAND IN PRIVATE OWNERSHIP 70% PEOPLE EMPLOYED IN AGRICULTURE 4.2% $16,100 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ 24hectares an average area of a land plot in Spain No limitations on minimum or maximum land areas allowed for one owner or land price are legally established 6-7% tax on farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
SWEDEN ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $9,800 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 1.4% SHARE OF LAND IN PRIVATE OWNERSHIP 91% PEOPLE EMPLOYED IN AGRICULTURE 1.7% 0,00% 0,50% 1,00% 1,50% 2,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ ■ 40% share of farmland under lease agree- ments Some regions require the approval of the municipal public authority for land purchase . 1.5-3% farmland registration fee MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
SWITZERLAND ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $70,000* / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 0.8% SHARE OF LAND IN PRIVATE OWNERSHIP 100% PEOPLE EMPLOYED IN AGRICULTURE 3.2% 0,00% 0,20% 0,40% 0,60% 0,80% 1,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 5-15% possible difference in average farmland prices There are certain types of regulations in Switzerland concerning farmland market operations aimed at protec- tion of family farms’ interests. 0.03-0.3% land tax MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
UNITED KINGDOM ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 0.7% SHARE OF LAND IN PRIVATE OWNERSHIP 90% PEOPLE EMPLOYED IN AGRICULTURE 1.1% $31,400 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE 0,00% 0,10% 0,20% 0,30% 0,40% 0,50% 0,60% 0,70% 0,80% 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ 59years old the average age of British farmer Liberalized market of agricultural lands benefited industry’s productivity. 175years the maximum length of renting contract in Scotland MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
BULGARIA ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 5.2% SHARE OF LAND IN PRIVATE OWNERSHIP 98% PEOPLE EMPLOYED IN AGRICULTURE 3.9% $4,650 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 6,00% 7,00% 8,00% 0 5 000 10 000 15 000 20 000 25 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ 2020 the year of the mora- torium on land sales to foreigners started There is no price and land plot size regulation in Bulgaria. EU support and funding of agricultural sector led to an increase in its’ governmental support. 4,650$ the price of 1 ha of agricultural land MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
CROATIA ■ ■ ■ ■ ■ ■ ■ ■ ■ $7,000 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 4.3% SHARE OF LAND IN PRIVATE OWNERSHIP 66% PEOPLE EMPLOYED IN AGRICULTURE 8.7% 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ 2.9hectares the average size of agricultural farm 5% tax on the farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
CZECH REPUBLIC ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 2.7% SHARE OF LAND IN PRIVATE OWNERSHIP 80% PEOPLE EMPLOYED IN AGRICULTURE 2.6% $8,000 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 0 5 000 10 000 15 000 20 000 25 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ 1. 2. 0.4hectares the average size of the land plot Before 2011 foreigners could buy agricultural land in the Czech Republic if they are engaged in agricultural activity in the Czech Republic for three or more years. 3% tax on the farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
ESTONIA ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 3.4% SHARE OF LAND IN PRIVATE OWNERSHIP 56% PEOPLE EMPLOYED IN AGRICULTURE 3.9% $5,000 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 4,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ 5% share of agricultural land that belongs to foreigners 0.1-2.0% tax on the farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
HUNGARY ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 4.3% SHARE OF LAND IN PRIVATE OWNERSHIP 86% PEOPLE EMPLOYED IN AGRICULTURE 5.2% $4,500 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ ■ 1,800 ha restriction on the maximum land plot size The purchase and sale of land are provided by conducting a public auction. 0.5-1% farmland registration fee Spending increased for agricultural sector stimulated transition of Hungary to a new competitive level that today allows competing on the EU market. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
LATVIA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 3.3% SHARE OF LAND IN PRIVATE OWNERSHIP 99% PEOPLE EMPLOYED IN AGRICULTURE 7.3% $1,400 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 4,00% 4,50% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ 1990 the beginning of the land reform Foreign individuals are enti- tled to acquire land plots only after 3 years of the lease and farming activity in this area. 0.5-2% stamp duty on land ownership MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
LITHUANIA ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 3.4% SHARE OF LAND IN PRIVATE OWNERSHIP 79% PEOPLE EMPLOYED IN AGRICULTURE 9.0% $2,200 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE
■ ■ ■ ■ ■ ■ ■ ■ ■ 1. 2. 2,000 ha maximum land plot size to be purchased by legal entities The land market reform significantly liberalized land transfer process. Today, indi- viduals and legal entities are free to buy or sell the land. 25 years the maximum term of the lease agreement MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
POLAND ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 3.4% SHARE OF LAND IN PRIVATE OWNERSHIP 81% PEOPLE EMPLOYED IN AGRICULTURE 11% $10,300 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 4,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 500ha maximum land area to be owned All of the agricultural land purchase-sale agreements should be reported to the Agricultural Property Agency, which has a 'preferential' right. 2-5% tax on the farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
ROMANIA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 5.4% SHARE OF LAND IN PRIVATE OWNERSHIP 94% PEOPLE EMPLOYED IN AGRICULTURE 29% $6,150 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 6,00% 7,00% 8,00% 9,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ 100ha maximum land area to be owned by individuals Every land transaction must be registered and a notifica- tion about it should be pub- lished in local or central structures of the Ministry of Agriculture and Rural Development. 7years transition term MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
SLOVAK REPUBLIC ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 4.4% SHARE OF LAND IN PRIVATE OWNERSHIP 81% PEOPLE EMPLOYED IN AGRICULTURE 3.5% $1,750 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 0 5 000 10 000 15 000 20 000 25 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ á ■ 124,000 number of former owners who claimed their rights to restitution The consequence of land reform in Slovakia is a retrieval of highly fragmented ownership structure, which existed before 1948. 4% the average annual price growth for agricultural land MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
ALBANIA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $8,500 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 23% SHARE OF LAND IN PRIVATE OWNERSHIP 95% PEOPLE EMPLOYED IN AGRICULTURE 44% 0,00% 5,00% 10,00% 15,00% 20,00% 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ 99years the maximum term of lease for foreigners The land market functioning in Albania initially slowed down because of legal uncertainty about property rights, slow land registration and protests of the former landowners. 3-4% farmland registration fee MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
■ ■ ■ ■ ■ ■ BOSNIA AND HERZEGOVINA MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $3,000 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 7.6% SHARE OF LAND IN PRIVATE OWNERSHIP 85% PEOPLE EMPLOYED IN AGRICULTURE 2.5% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 14,00% 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ 80% of households are less than 5 hectares Large minefields that remained after the Bosnian war are still one of the main barriers to the development of rural areas in Bosnia and Herzegovina. 0.5% the maximum tax on abandoned agricul- tural land in certain regions MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
MACEDONIA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $3,500 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 10% SHARE OF LAND IN PRIVATE OWNERSHIP 80% PEOPLE EMPLOYED IN AGRICULTURE 18% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 14,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 180,000 estimated number of private and family farmers The right of priority purchase land in Macedonia belongs to former owners and owners of neighboring parcels. 3% tax on farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
SERBIA ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $13,000 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 9.7% SHARE OF LAND IN PRIVATE OWNERSHIP 92% PEOPLE EMPLOYED IN AGRICULTURE 21% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ 0.5hectares the minimum size for a land spot Privatization by sale has not changed the structure of agri- cultural land in Serbia very much, because often public lands were sold to private investors like large spots or as complete farms. 0.4% annual tax on agricultural land MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
TURKEY ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $27,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 8.0% SHARE OF LAND IN PRIVATE OWNERSHIP 67% PEOPLE EMPLOYED IN AGRICULTURE 20% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 2 hectares the minimum area of a land plot In Turkey, land reform and redistribution of land is the result of a long-term institu- tional development, from Ottoman rule and later traditions to the modern institutional changes. 1.5% tax on farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
AZERBAIJAN MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,000 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 5.7% SHARE OF LAND IN PRIVATE OWNERSHIP 20% PEOPLE EMPLOYED IN AGRICULTURE 37% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ 3.5 mln of farmers received land in private ownership Land market reform was carried out very effectively and quickly, despite the fact that it began later than in neighboring countries. 1998 the beginning of rapid economic growth in the country MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
ARMENIA ² ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $2,800 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 19% SHARE OF LAND IN PRIVATE OWNERSHIP 67% PEOPLE EMPLOYED IN AGRICULTURE 39% 0,00% 4,00% 8,00% 12,00% 16,00% 20,00% 0 5 000 10 000 15 000 20 000 25 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ 1. 2. 1994 the ceasefire in Nagorno-Karabakh Fast privatization liquidated previously dominant is Soviet agriculture collective and state farms. 15% land ownership tax MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
GEORGIA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,500 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 9.2% SHARE OF LAND IN PRIVATE OWNERSHIP 25% PEOPLE EMPLOYED IN AGRICULTURE 50% 0,00% 4,00% 8,00% 12,00% 16,00% 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ 40$ the minimum price for 1 hectare of agricultural land The land may be transferred by direct agreement, contract of sale (if owned privately), or put up for an auction (online auctions are available). 2014 all restrictions on foreign investments were abolished MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
KAZAKHSTAN ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $400* / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 4.7% SHARE OF LAND IN PRIVATE OWNERSHIP 1% PEOPLE EMPLOYED IN AGRICULTURE 24% 0,00% 2,00% 4,00% 6,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ 1.2% share of the agricultural land in private ownership Kazakhstan has a chance to make a real large-scale reform of the land market with the introduction of the amendments to the Land Code in 2016. 2016 the new Land Code entered into force MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
KYRGYZSTAN ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,300* / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 17% SHARE OF LAND IN PRIVATE OWNERSHIP 19% PEOPLE EMPLOYED IN AGRICULTURE 32% 0,00% 4,00% 8,00% 12,00% 16,00% 20,00% 24,00% 28,00% 32,00% 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ 2001 a prescheduled abolition of the moratorium on agri- cultural land sale After gaining independence Kyrgyzstan was the first country among CIS, which introduced private ownership of land. 75% of arable lands were privatized and the remaining 25% remained in state ownership. . 2.7 ha an average size of farmers’ land plots MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
MOLDOVA ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,700 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 15% SHARE OF LAND IN PRIVATE OWNERSHIP 69% PEOPLE EMPLOYED IN AGRICULTURE 29% 0,00% 4,00% 8,00% 12,00% 16,00% 20,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ 0.3 ha the minimum land plot size for one household The normative price is legally established and is based on cadastral and local authorities valuations . 0.1-1.3% notarial fee for land sale MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
RUSSIA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,150 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 4.2% SHARE OF LAND IN PRIVATE OWNERSHIP 39% PEOPLE EMPLOYED IN AGRICULTURE 6.7% 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ 2ha minimum land plot size Land sale and purchase are done through public tenders. 0.3% land ownership tax . MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
TAJIKISTAN ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS N/AFARMLAND VALUE FULLY RESTRICTEDMARKET TYPE SHARE OF AGRI- CULTURE IN GDP 27% SHARE OF LAND IN PRIVATE OWNERSHIP 0% PEOPLE EMPLOYED IN AGRICULTURE 53% 0 0,04 0,08 0,12 0,16 0,2 0,24 0,28 0 500 1 000 1 500 2 000 2 500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ 100% of land is in state ownership Tajikistan is an example of how excessive market regulation adversely affects the socio-economic development. . 20 years the maximum term for land lease MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
ARGENTINA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $14,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 8.3% SHARE OF LAND IN PRIVATE OWNERSHIP 98% PEOPLE EMPLOYED IN AGRICULTURE 0.5% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 0 5 000 10 000 15 000 20 000 25 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ ■ 1000ha is a maximum amount of land to be purchased by foreigner There are no established re- strictions for Argentinian citi- zens intending to purchase agricultural land. 1-9% the land tax rate set by province authorities MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
DOMINICAN REPUBLIC ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $13,100 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE SHARE OF AGRI- CULTURE IN GDP 6.2% SHARE OF LAND IN PRIVATE OWNERSHIP 75% PEOPLE EMPLOYED IN AGRICULTURE 15% 0,00% 2,00% 4,00% 6,00% 8,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ 140,000$ if the value of the land below this number, no tax is charged The Law on Foreign Invest- ments provides foreign indi- viduals with the same rights as Dominican citizens have, according to the Constitution 1% an annual tax on ownership of farmland MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
BRAZIL ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $6,850 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 5.6% SHARE OF LAND IN PRIVATE OWNERSHIP 67% PEOPLE EMPLOYED IN AGRICULTURE 15% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ 1. 2. 50modules the maximum amount of land that can be owned by individuals Up to 25% of the land can be concentrated in property of foreigners. 20% the maximum land tax rate MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
EL SALVADOR ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $17,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 11% SHARE OF LAND IN PRIVATE OWNERSHIP 88% PEOPLE EMPLOYED IN AGRICULTURE 20% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ 1. $0.12/m2 registration fee Agricultural land cannot be acquired by foreign investors, who come from countries that do not guarantee the same rights to citizens of El Salvador. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
GUATEMALA ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $6,850 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 12% SHARE OF LAND IN PRIVATE OWNERSHIP 81% PEOPLE EMPLOYED IN AGRICULTURE 33% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 14,00% 0 500 1 000 1 500 2 000 2 500 3 000 3 500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ 0.92/1,000$ the maximum tax on land ownership According to Guatemalan law, there are only minor limitations for foreigners on the land ownership. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
HONDURAS ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $8,500 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 14% SHARE OF LAND IN PRIVATE OWNERSHIP 50% PEOPLE EMPLOYED IN AGRICULTURE 36% 0,00% 4,00% 8,00% 12,00% 16,00% 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ 2,000ha the maximum size of a parcel that can be purchased in Gracias a Dios department Foreigners have a right to purchase a land according to the Law on investments adopted in 1997. 5.6% the tax on farmland registration MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
MEXICO ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $8,500 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 3.3% SHARE OF LAND IN PRIVATE OWNERSHIP 90% PEOPLE EMPLOYED IN AGRICULTURE 13% 0,00% 1,00% 2,00% 3,00% 4,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 100ha the maximum amount of land to be purchased by natural entities Resources that are located on lands of natural or legal enti- ties are owned by the state. 1,800 ha the maximum amount of land that can be owned by legal entity MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
NICARAGUA ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 21% SHARE OF LAND IN PRIVATE OWNERSHIP 85% PEOPLE EMPLOYED IN AGRICULTURE 32% 0,00% 4,00% 8,00% 12,00% 16,00% 20,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ~350ha the maximum amount of land owned by an individual There are no restrictions on foreign ownership (Act 344). MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
PANAMA ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $10,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 8.1% SHARE OF LAND IN PRIVATE OWNERSHIP 22% PEOPLE EMPLOYED IN AGRICULTURE 17% 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 6,00% 7,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 2years farmland should be in ownership of the citi- zen of Panama before selling to foreigners Law 54" On a legally enforce- able stable investment" guaranteed the same proper- ty rights to foreigners and citizens of Panama 2.1% a land tax with the tax base of $75,000 MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
PARAGUAY ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $3,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 21% SHARE OF LAND IN PRIVATE OWNERSHIP 64% PEOPLE EMPLOYED IN AGRICULTURE 23% 0,00% 4,00% 8,00% 12,00% 16,00% 20,00% 24,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ 5years of residence in the country is a prerequi- site for the right to purchase land MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
URUGUAY ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ º MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $5,100 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 8.1% SHARE OF LAND IN PRIVATE OWNERSHIP 67% PEOPLE EMPLOYED IN AGRICULTURE 9.3% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ >1000ha land plots should be registered in the National Institute of land development Today there is no document that establish limits on the plot size or the land transfer conditions to foreigners MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
CANADA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $4,750 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 1.5% SHARE OF LAND IN PRIVATE OWNERSHIP 65% PEOPLE EMPLOYED IN AGRICULTURE 2.1% 0,00% 0,50% 1,00% 1,50% 2,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 100 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 1,000 hа the maximum land plot size allowed to be purchased in Quebec There are no restrictions established on national level in Canada, however, each province has a right to impose its regulations. 0.5-2% farmland transfer tax MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
USA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $10,200 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE SHARE OF AGRI- CULTURE IN GDP 1.4% SHARE OF LAND IN PRIVATE OWNERSHIP 93% PEOPLE EMPLOYED IN AGRICULTURE 1.6% 0,00% 0,50% 1,00% 1,50% 2,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ ■ ■ Податок на сільськогоспо- дарську землю – встанов- люється окремо в кожному штаті та залежить від площі ділянки, доходів від ведення господарства, а також терміну ведення с/г діяльності на землі. >150 years період існування вільного ринку землі в США The market for agricultural land and laws governing this market are liberal making the US an attractive place for agricultural investment. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
■ ■ ■
AUSTRALIA ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,600 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE SHARE OF AGRI- CULTURE IN GDP 2.4% SHARE OF LAND IN PRIVATE OWNERSHIP 77% PEOPLE EMPLOYED IN AGRICULTURE 3.6% 0,00% 0,75% 1,50% 2,25% 3,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ 135,997 number of farms in Australia Foreign investment is generally encouraging by the Australian government, but in some cases the government may block the purchase of land by foreigners if it would harm the public interest in Australia. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
IRAN ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $6,700 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 9.3% SHARE OF LAND IN PRIVATE OWNERSHIP 98% PEOPLE EMPLOYED IN AGRICULTURE 21% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ 150ha maximum land plot according to Pehklevi reform According to Islamic law land owners have to pay ‘kharaj” a land tax that is equal to 1/10 of the value of the crop. Cur- rently, ‘kharaj” is officially paid on a voluntary basis. 1979 the beginning of the reactionary “Iranian revolution” MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
JAPAN ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $6,450 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 7.6% SHARE OF LAND IN PRIVATE OWNERSHIP 99% PEOPLE EMPLOYED IN AGRICULTURE 3.9% 0,00% 0,50% 1,00% 1,50% 2,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ½ ■ 1946 the beginning of land reform In Japan, there is no prohibi- tion on the purchase of agri- cultural land by foreigners, but governmental policy indi- cates that the government wants agricultural land to belong to people, who will personally work on their agricultural land. 93% share of arable land in agricultural MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
SOUTH KOREA ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $3,600 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 2.3% SHARE OF LAND IN PRIVATE OWNERSHIP 92% PEOPLE EMPLOYED IN AGRICULTURE 6.1% 0,00% 1,00% 2,00% 3,00% 4,00% 0 5 000 10 000 15 000 20 000 25 000 30 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ · · · · · ■ ■ 1ha average size of farm Foreign legal entities are enti- tled to purchase agricultural land, if it’s approved by the Ministry of Internal Affairs. Foreign are those companies, where the share of foreign capital exceeds 50%. 0.2% Special tax for "rural development" MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
CAMEROON ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $550 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 22% SHARE OF LAND IN PRIVATE OWNERSHIP 3% PEOPLE EMPLOYED IN AGRICULTURE 70% 0,00% 4,00% 8,00% 12,00% 16,00% 20,00% 24,00% 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ 3% agricultural lands are registered in the public register The reform of the land market in the country was conducted in fairly chaotic manner, with no clear plan or set goals. 10% land ownership tax MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
MOROCCO ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,550 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 14% SHARE OF LAND IN PRIVATE OWNERSHIP 76% PEOPLE EMPLOYED IN AGRICULTURE 39% 0,00% 4,00% 8,00% 12,00% 16,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ ■ ■ 99years maximum farmland lease term About 42% of the all land reserves are owned by tribes. Collective lands cannot be distributed outside the community. 3-20% land transfer tax MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
NIGERIA ² ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $700 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 17% SHARE OF LAND IN PRIVATE OWNERSHIP N/A PEOPLE EMPLOYED IN AGRICULTURE 31% 0,00% 6,00% 12,00% 18,00% 24,00% 30,00% 36,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ 500ha the maximum agricul- tural land plot area for one rural owner Most observations suggest that the Decree «On Land Use» has not reached any of its goals. 10% land ownership tax MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
SOUTH AFRICA ² ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $2,950 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 2.6% SHARE OF LAND IN PRIVATE OWNERSHIP 68% PEOPLE EMPLOYED IN AGRICULTURE 9% 0,00% 1,00% 2,00% 3,00% 4,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ ■ ■ ■ 12,000ha maximum farmland plot size in ownership of individuals The objective of the current policy is to reduce the num- ber of different bureaucratic procedures and finding ways to provide more South Afri- cans of all rights to safe land. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
TUNISIA ² ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $6,950 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 11% SHARE OF LAND IN PRIVATE OWNERSHIP 94% PEOPLE EMPLOYED IN AGRICULTURE 18% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
■ ■ ■ 14.3ha Average farm size in Tunisia According to World Bank research, it takes 5 consecu- tive steps (57 days) and costs more than $6000 to register farmland plot in Tunisia. 50 ha maximum farm size according reform of 1958 MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
■ ■ ■ ■ ■ ■ KEY FINDINGS
There are three types of mar- ket players: landowners, who form a market supply, busi- ness that creates market de- mand and the state, which acts as a regulator. Coordination of economic interests of stakeholders should be the main priority for the government and the public sector. THE EFFECTS OF THE LAND MARKET REFORM IMPLEMENTATION Assessment of qualitative effects ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ The overall effect lies in addi- tional GDP generated in Ukraine in response to invest- ment climate improvement and value added creation. $15-40 billion money supply gener- ated by free land market Land market liberalization in Ukraine will help business to focus on long-term strategies. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
Social effect ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
Methodology of assess- ment of quantitative ef- fects includes four basic levels: input - the sources of income of the popula- tion - use of funds - eco- nomic impact. 20% annual average growth of land prices in the world Assessment of quantitative effects MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
■ ■ ■ ■ ■ ■ ■ ■ $1,220/ ha NMV in Ukraine in 2016 73.5% share of the agricul- tural land in private ownership 30.5 mln ha total area of agricul- tural land in private ownership 3-4.5% a ratio between the price and cost of rent, depending on the type of market MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
In terms of the moratorium on sale of agricultural land, rent- ing is the only source of pas- sive income of landowners. $7-15 bn. expected aggregate revenues from leas- ing the land 64% Share of agricultural land leased Sources of income ■ ■ ■ ■ ■ 45% 15%3% 37% від 1 до 3 років від 4 до 5 років від 6 до 10 років більше 10 років MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
■ ■ ■ ■ $8-25 bn. expected income from the primary land sales during 2025 As a result of market liberalization land becomes a liquid asset, enabling land- lords to attract new funds to finance their needs through the sale of land. 83% the share of consum- er spending in the structure of house- hold spendings MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
$50-85 billion the expected value of GDP over the next 10 years Consumption ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
■ ■ ■ ■ $8-25 bn. – the expected in- come of the popula- tion from the initial sale of land in the pe- riod up to 2025. $60-125 billion - the overall econom- ic effect of the mar- ket introduction. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
■ ■ ■ ■ ■ Key statements
In Central and Eastern European countries the average growth of land prices per year reached 20% during first years after moratorium abolition No legal entity - neither local, nor international - has enough liquidity to buy lands in such scope that could threat national sovereignty and successful development of agricultural sector in Ukraine Stereotypes of the population STATEMENT 1. Lands will be bought for a low starting price ■ ■ ■ STATEMENT 2. Lands will be purchased by foreigners · · · MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
After the moratorium is abolished, landowners will get opportunity to dispose their assets in the way they think is appropriate and therefore the level of life in rural areas will rise. STATEMENT 3. The devastation of most fertile Ukrainian soils as a result of non-residents business activity STATEMENT 4. Landowners cannot dispose their lands effectively ■ ■ STATEMENT 5. Peasants will become poor as land will be bought at a cheap rate ■ ■ STATEMENT 6. Ordinary landowners will not be able to compete with agroholdings MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
STATEMENT 7. The abolition of moratorium will vio- late the right to inherit the land ■ ■ STATEMENT 8. Abolition on moratorium will deprive farmers from stable income ■ ■ STATEMENT 9. You cannot give away land during the economic crisis and political instability, should re- duce things to order first. ■ ■ The abolition of the moratori- um allows the creation of realistic price-making on the rented lands market and leads to the establishing of market prices for rent (in Western Europe the rent pric- es fluctuate between $150 and $700 USD) The international experience shows that the land market reform was usually intro- duced during the economic crisis. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
STATEMENT 10. The land market would enter the shadow economy ■ ■ Measures to avoid predicted risks ■ ■ ■ ■ ■ ■ The abolition of the moratori- um would liquidate corrupt and ineffective practices of state-owned land management MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
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EasyBusiness - Development of the Free Farmland Market in Ukraine
EasyBusiness - Development of the Free Farmland Market in Ukraine
EasyBusiness - Development of the Free Farmland Market in Ukraine

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EasyBusiness - Development of the Free Farmland Market in Ukraine

  • 1. DEVELOPMENT OF THE FREE FARMLAND MARKET IN UKRAINE Detailed analysis of international experience and assessment of socio-economic effect Kyiv, April 2016
  • 2.
  • 3.
  • 6.
  • 7.
  • 8. ■ ■ Moratorium on selling agricultural lands harms the development of small and medium business in agricultural sector and limits land owners in their right to dispose their assets Agriculture is the strategic sector of Ukrainian economy
  • 9. ■ ■ ■ ■ ■ ■ ■ ■ THESIS 1. Lands will be bought for small starting price THESIS 2. Lands will be bought by foreigners THESIS 3. Farmers would not be able to compete with agro holdings The abolition of Moratorium and full liberalization of land markets would generate ~$15-40 billion of money mass in circulation. Main risks currently associated with abolition of Moratorium are not grounded in most cases
  • 10.
  • 12. 12% share of agriculture value added in GDP In Ukraine labor productivity in agriculture is higher than average figures in any other sector of economy. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS Key factors of agricultural sector Market for agricultural lands: the economic aspect
  • 13. 100% expected agriculture export growth rates to 2020 Ukraine is the biggest pro- ducer of sunflower seed oil with a good potential to in- crease its grain production and to become one of key players on meat and milk markets in future. ■ ■ ■ ■ ■ 1 2 MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 14. Ukraine holds 1 place in Europe for possessed arable lands 41.5 mln. ha - the area of agricul- tural lands There are only two places in the world with such high con- centration of black earth: the first is situated between North-eastern Ukraine and Russia and the second one- along Canadian prairies. Structure and current tendencies on land market MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 15. In ownership structure, private ownership prevails over state ownership (74% vs. 26%). ~55,000 enterprises operate in agricultural sector 6.5 mln. ha agricultural land in ownership of top-100 agroholdings MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 16. 78% of lands are managed by enterprises with areas bigger than 1000 hectares $25-50 is the annual average rent price for arable lands MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 18. Current peculiarities of regulations of legal relations on the market Agricultural lands are a huge asset which is not incorpo- rated into financial flow of Ukraine and therefore does not provide a proper income to its owners 01.01.18 term of moratorium Market for agricultural lands: Legal aspect MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 19. Existing ways to acquire and expropriate land plots ■ ■ ■ The absence of transparent market for agricultural lands in Ukraine leads to a variety of problems, which can be classified as those linked to shadow schemes of dispossession and acquisi- tion of lands. One of the consequences of the untransparent market is low rent price for land due to the pressure from tenants and the inability to exchange or consolidate land plots ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 20. One of atypical methods to acquire agricultural lands passing round the Moratori- um is through the use of mortgage MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 21. In practice, legal entities whose statutory documents do not mention agricultural manufacturing among their activities, can acquire agricultural lands in their possession through civil transactions, except buying and selling, and under other considerations. 1995 date of approval of normative land evaluation on the state level MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 22. In Ukraine there is a high lev- el of land concentration by big agrarian companies 7million people became owners of the land plots MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 23. Outcomes 900UAH/ha - an average rent price for agricultural lands More than 2/3 of owners of land plots are elderly people, who are unable to cultivate their lands themselves MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 24.
  • 26. International experience analysis methodology ■ ■ ■ ■ ■ For the purpose of our analy- sis of international experi- ence, 60 countries have been selected, based on two stag- es of selection Analysis of international experience MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 28. For the purpose of our analy- sis of international experi- ence, 60 countries have been selected, based on two stag- es of selection. All 193 countries that are recognized by the United Na- tions have been considered during the first stage of the international experience study. International experience analysis roadmap (key stages) ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 29. Countries’ assessment has been provided in compliance with the proposed criteria system (agricultural value added per worker (USD), To- tal arable land area (hectares), Arable land as a percentage of total land area (%)). Brief country profiles, includ- ing chronology and mecha- nism of the land market re- forms, have been created as a result of international expe- rience analysis. ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 30. As a result, regions were di- vided into the following: EU Old Member States, EU New Member States, EU- candidate countries, Post- Soviet countries, Asia, Africa, Latin and North Americas. Based on the analysis of in- ternational experience, we have identified four types of land markets, depending on the government regulation approach implemented. ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 31. International experience shows that farmland market restrictions are unlikely to be efficient. Furthermore, they typically increase bureaucra- cy and corruption on the market.. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 32.
  • 33.
  • 34. AUSTRIA ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ $42,000 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 1.4% SHARE OF LAND IN PRIVATE OWNERSHIP 53% PEOPLE EMPLOYED IN AGRICULTURE 1.3% 0,00% 0,20% 0,40% 0,60% 0,80% 1,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, % 0,00% 0,20% 0,40% 0,60% 0,80% 1,00% 1,20% 1,40% 1,60% 1,80% 0 10 000 20 000 30 000 40 000 50 000 60 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 35. ■ ■ ■ ö ■ ■ ■ ■ ■ ■ ■ ■ 3years the minimum land lease agreement term There are different legal acts regarding the transfer of agri- cultural land ownership rights in the nine provinces. Fre- quently, the process of farm- land purchases and sales regulated by local authorities. 3.5% stamp duty on the transaction value MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 36. BELGIUM ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $28,000 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE SHARE OF AGRI- CULTURE IN GDP 0.7% SHARE OF LAND IN PRIVATE OWNERSHIP 99% PEOPLE EMPLOYED IN AGRICULTURE 1.1% 0,00% 0,20% 0,40% 0,60% 0,80% 1,00% 1,20% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 37. ■ ■ ■ ■ ■ ■ 1. 2. 1hectare the average area of agricultural land plot The biggest minimum rent term in EU is established - 9 years. 10-12.5% the tax on selling the agricultural land MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 38. DENMARK ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 1.4% SHARE OF LAND IN PRIVATE OWNERSHIP 98% PEOPLE EMPLOYED IN AGRICULTURE 2.3% $26,650 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 39. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 125hа the maximum area of agricultural land plot In 9 provinces different laws on transfer of land ownership rights exist, land related transactions are registered by local authorities. 13-27% a tax fee on usage of crop protection products (CPP) MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 40. FINLAND ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $11,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 2.8% SHARE OF LAND IN PRIVATE OWNERSHIP 98% PEOPLE EMPLOYED IN AGRICULTURE 3.9% 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 41. ■ ■ ■ ■ ■ ■ ■ Å 10years the maximum land plot leasing term Foreign individuals or legal entities are allowed to buy and lease land everywhere but in Aland region. 4% tax on land transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 42. FRANCE ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $7,450 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 1.7% SHARE OF LAND IN PRIVATE OWNERSHIP 80% PEOPLE EMPLOYED IN AGRICULTURE 2.8% 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 0 20 000 40 000 60 000 80 000 100 000 120 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 43. é é é ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 9years the minimum land plot leasing term The main tool of land pur- chase and sale regulation in the country is Sociétés d'Aménagement Foncier et d'Etablissement Rural (SAFER). 5-60% the land inheritance fee MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 44. GERMANY ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $32,300 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE SHARE OF AGRI- CULTURE IN GDP 0.7% SHARE OF LAND IN PRIVATE OWNERSHIP 49% PEOPLE EMPLOYED IN AGRICULTURE 1.3% 0,00% 0,20% 0,40% 0,60% 0,80% 1,00% 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 50 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 45. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 2hectares the minimum land plot size in Bavaria The land market in Germany is liberal and open, which promotes effective structural downward shift in the share of unprofitable enterprises. 3.5% tax on farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 46. GREECE ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 3.9% SHARE OF LAND IN PRIVATE OWNERSHIP 60% PEOPLE EMPLOYED IN AGRICULTURE 13% $11,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 47. ■ ■ ■ ■ 4hectares the minimum land plot size Most records of land circulation in Greece are made in hard copies. $9/ hectare tax on farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 48. IRELAND ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 1.6% SHARE OF LAND IN PRIVATE OWNERSHIP 91% PEOPLE EMPLOYED IN AGRICULTURE 6.1% $39,300 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 49. ■ ■ ■ ■ ■ ■ 1-8% registration fee on buying the land Individuals and legal entities residents of the EU are free to buy lands, while non-EU resi- dents require license from the Land commission. 20% share of farmland under lease agreements MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 50. ITALY ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 2.2% SHARE OF LAND IN PRIVATE OWNERSHIP 100% PEOPLE EMPLOYED IN AGRICULTURE 3.5% $25,700 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 51. ■ ■ ■ ■ ■ ■ 8hectares an average size of Italian farm Italian land reform in the 20th century is generally per- ceived as successful, though it was implemented too late and too softly 65% share of farmland cultivated personally by landowners MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 52. NETHERLANDS ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 1.8% SHARE OF LAND IN PRIVATE OWNERSHIP 89% PEOPLE EMPLOYED IN AGRICULTURE 2.0% $63,700 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 53. ■ ■ ■ ■ ■ ■ ■ ■ ■ 6years the minimum term for land plot lease No limitations for buying and selling lands exists both for residents and non-residents. 6% tax on farmland transfer . MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 54. PORTUGAL ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $7,400* / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE SHARE OF AGRI- CULTURE IN GDP 2.3% SHARE OF LAND IN PRIVATE OWNERSHIP 93% PEOPLE EMPLOYED IN AGRICULTURE 5.5% 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 0 5 000 10 000 15 000 20 000 25 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 55. ■ ■ ■ ■ ■ ■ ■ 0.8% land tax Over time, the Portuguese agriculture adapted to an open market and EU mem- bership. Now farmers are much stronger and better organized and are capable of performing some of the state functions themselves. 5% tax on farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 56. SPAIN ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 2.5% SHARE OF LAND IN PRIVATE OWNERSHIP 70% PEOPLE EMPLOYED IN AGRICULTURE 4.2% $16,100 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 57. ■ ■ ■ ■ ■ ■ 24hectares an average area of a land plot in Spain No limitations on minimum or maximum land areas allowed for one owner or land price are legally established 6-7% tax on farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 58. SWEDEN ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $9,800 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 1.4% SHARE OF LAND IN PRIVATE OWNERSHIP 91% PEOPLE EMPLOYED IN AGRICULTURE 1.7% 0,00% 0,50% 1,00% 1,50% 2,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 59. ■ ■ ■ ■ ■ ■ ■ ■ ■ 40% share of farmland under lease agree- ments Some regions require the approval of the municipal public authority for land purchase . 1.5-3% farmland registration fee MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 60. SWITZERLAND ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $70,000* / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 0.8% SHARE OF LAND IN PRIVATE OWNERSHIP 100% PEOPLE EMPLOYED IN AGRICULTURE 3.2% 0,00% 0,20% 0,40% 0,60% 0,80% 1,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 61. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 5-15% possible difference in average farmland prices There are certain types of regulations in Switzerland concerning farmland market operations aimed at protec- tion of family farms’ interests. 0.03-0.3% land tax MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 62. UNITED KINGDOM ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 0.7% SHARE OF LAND IN PRIVATE OWNERSHIP 90% PEOPLE EMPLOYED IN AGRICULTURE 1.1% $31,400 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE 0,00% 0,10% 0,20% 0,30% 0,40% 0,50% 0,60% 0,70% 0,80% 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 63. ■ ■ ■ ■ ■ ■ ■ 59years old the average age of British farmer Liberalized market of agricultural lands benefited industry’s productivity. 175years the maximum length of renting contract in Scotland MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 64.
  • 65.
  • 66. BULGARIA ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 5.2% SHARE OF LAND IN PRIVATE OWNERSHIP 98% PEOPLE EMPLOYED IN AGRICULTURE 3.9% $4,650 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 6,00% 7,00% 8,00% 0 5 000 10 000 15 000 20 000 25 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 67. ■ ■ ■ ■ ■ ■ ■ 2020 the year of the mora- torium on land sales to foreigners started There is no price and land plot size regulation in Bulgaria. EU support and funding of agricultural sector led to an increase in its’ governmental support. 4,650$ the price of 1 ha of agricultural land MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 68. CROATIA ■ ■ ■ ■ ■ ■ ■ ■ ■ $7,000 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 4.3% SHARE OF LAND IN PRIVATE OWNERSHIP 66% PEOPLE EMPLOYED IN AGRICULTURE 8.7% 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 69. ■ ■ ■ 2.9hectares the average size of agricultural farm 5% tax on the farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 70. CZECH REPUBLIC ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 2.7% SHARE OF LAND IN PRIVATE OWNERSHIP 80% PEOPLE EMPLOYED IN AGRICULTURE 2.6% $8,000 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 0 5 000 10 000 15 000 20 000 25 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 71. ■ ■ ■ ■ 1. 2. 0.4hectares the average size of the land plot Before 2011 foreigners could buy agricultural land in the Czech Republic if they are engaged in agricultural activity in the Czech Republic for three or more years. 3% tax on the farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 72. ESTONIA ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 3.4% SHARE OF LAND IN PRIVATE OWNERSHIP 56% PEOPLE EMPLOYED IN AGRICULTURE 3.9% $5,000 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 4,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 73. ■ ■ ■ ■ 5% share of agricultural land that belongs to foreigners 0.1-2.0% tax on the farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 74. HUNGARY ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 4.3% SHARE OF LAND IN PRIVATE OWNERSHIP 86% PEOPLE EMPLOYED IN AGRICULTURE 5.2% $4,500 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 75. ■ ■ ■ ■ ■ ■ ■ ■ ■ 1,800 ha restriction on the maximum land plot size The purchase and sale of land are provided by conducting a public auction. 0.5-1% farmland registration fee Spending increased for agricultural sector stimulated transition of Hungary to a new competitive level that today allows competing on the EU market. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 76. LATVIA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 3.3% SHARE OF LAND IN PRIVATE OWNERSHIP 99% PEOPLE EMPLOYED IN AGRICULTURE 7.3% $1,400 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 4,00% 4,50% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 77. ■ ■ ■ ■ ■ ■ ■ ■ 1990 the beginning of the land reform Foreign individuals are enti- tled to acquire land plots only after 3 years of the lease and farming activity in this area. 0.5-2% stamp duty on land ownership MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 78. LITHUANIA ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 3.4% SHARE OF LAND IN PRIVATE OWNERSHIP 79% PEOPLE EMPLOYED IN AGRICULTURE 9.0% $2,200 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE
  • 79. ■ ■ ■ ■ ■ ■ ■ ■ ■ 1. 2. 2,000 ha maximum land plot size to be purchased by legal entities The land market reform significantly liberalized land transfer process. Today, indi- viduals and legal entities are free to buy or sell the land. 25 years the maximum term of the lease agreement MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 80. POLAND ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 3.4% SHARE OF LAND IN PRIVATE OWNERSHIP 81% PEOPLE EMPLOYED IN AGRICULTURE 11% $10,300 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 4,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 81. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 500ha maximum land area to be owned All of the agricultural land purchase-sale agreements should be reported to the Agricultural Property Agency, which has a 'preferential' right. 2-5% tax on the farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 82. ROMANIA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 5.4% SHARE OF LAND IN PRIVATE OWNERSHIP 94% PEOPLE EMPLOYED IN AGRICULTURE 29% $6,150 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 6,00% 7,00% 8,00% 9,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 83. ■ ■ ■ ■ ■ ■ ■ 100ha maximum land area to be owned by individuals Every land transaction must be registered and a notifica- tion about it should be pub- lished in local or central structures of the Ministry of Agriculture and Rural Development. 7years transition term MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 84. SLOVAK REPUBLIC ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS SHARE OF AGRI- CULTURE IN GDP 4.4% SHARE OF LAND IN PRIVATE OWNERSHIP 81% PEOPLE EMPLOYED IN AGRICULTURE 3.5% $1,750 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 0 5 000 10 000 15 000 20 000 25 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 85. ■ ■ ■ ■ á ■ 124,000 number of former owners who claimed their rights to restitution The consequence of land reform in Slovakia is a retrieval of highly fragmented ownership structure, which existed before 1948. 4% the average annual price growth for agricultural land MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 86.
  • 87.
  • 88. ALBANIA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $8,500 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 23% SHARE OF LAND IN PRIVATE OWNERSHIP 95% PEOPLE EMPLOYED IN AGRICULTURE 44% 0,00% 5,00% 10,00% 15,00% 20,00% 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 89. ■ ■ ■ ■ ■ ■ ■ ■ 99years the maximum term of lease for foreigners The land market functioning in Albania initially slowed down because of legal uncertainty about property rights, slow land registration and protests of the former landowners. 3-4% farmland registration fee MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 90. ■ ■ ■ ■ ■ ■ BOSNIA AND HERZEGOVINA MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $3,000 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 7.6% SHARE OF LAND IN PRIVATE OWNERSHIP 85% PEOPLE EMPLOYED IN AGRICULTURE 2.5% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 14,00% 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 91. ■ ■ ■ ■ 80% of households are less than 5 hectares Large minefields that remained after the Bosnian war are still one of the main barriers to the development of rural areas in Bosnia and Herzegovina. 0.5% the maximum tax on abandoned agricul- tural land in certain regions MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 92. MACEDONIA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $3,500 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 10% SHARE OF LAND IN PRIVATE OWNERSHIP 80% PEOPLE EMPLOYED IN AGRICULTURE 18% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 14,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 93. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 180,000 estimated number of private and family farmers The right of priority purchase land in Macedonia belongs to former owners and owners of neighboring parcels. 3% tax on farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 94. SERBIA ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $13,000 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 9.7% SHARE OF LAND IN PRIVATE OWNERSHIP 92% PEOPLE EMPLOYED IN AGRICULTURE 21% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 95. ■ ■ ■ ■ 0.5hectares the minimum size for a land spot Privatization by sale has not changed the structure of agri- cultural land in Serbia very much, because often public lands were sold to private investors like large spots or as complete farms. 0.4% annual tax on agricultural land MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 96. TURKEY ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $27,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 8.0% SHARE OF LAND IN PRIVATE OWNERSHIP 67% PEOPLE EMPLOYED IN AGRICULTURE 20% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 97. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 2 hectares the minimum area of a land plot In Turkey, land reform and redistribution of land is the result of a long-term institu- tional development, from Ottoman rule and later traditions to the modern institutional changes. 1.5% tax on farmland transfer MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 98.
  • 99.
  • 100. AZERBAIJAN MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,000 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 5.7% SHARE OF LAND IN PRIVATE OWNERSHIP 20% PEOPLE EMPLOYED IN AGRICULTURE 37% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 101. ■ ■ ■ ■ ■ ■ ■ 3.5 mln of farmers received land in private ownership Land market reform was carried out very effectively and quickly, despite the fact that it began later than in neighboring countries. 1998 the beginning of rapid economic growth in the country MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 102. ARMENIA ² ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $2,800 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 19% SHARE OF LAND IN PRIVATE OWNERSHIP 67% PEOPLE EMPLOYED IN AGRICULTURE 39% 0,00% 4,00% 8,00% 12,00% 16,00% 20,00% 0 5 000 10 000 15 000 20 000 25 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 103. ■ ■ ■ ■ 1. 2. 1994 the ceasefire in Nagorno-Karabakh Fast privatization liquidated previously dominant is Soviet agriculture collective and state farms. 15% land ownership tax MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 104. GEORGIA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,500 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 9.2% SHARE OF LAND IN PRIVATE OWNERSHIP 25% PEOPLE EMPLOYED IN AGRICULTURE 50% 0,00% 4,00% 8,00% 12,00% 16,00% 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 105. ■ ■ ■ ■ ■ ■ 40$ the minimum price for 1 hectare of agricultural land The land may be transferred by direct agreement, contract of sale (if owned privately), or put up for an auction (online auctions are available). 2014 all restrictions on foreign investments were abolished MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 106. KAZAKHSTAN ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $400* / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 4.7% SHARE OF LAND IN PRIVATE OWNERSHIP 1% PEOPLE EMPLOYED IN AGRICULTURE 24% 0,00% 2,00% 4,00% 6,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 107. ■ ■ ■ ■ ■ 1.2% share of the agricultural land in private ownership Kazakhstan has a chance to make a real large-scale reform of the land market with the introduction of the amendments to the Land Code in 2016. 2016 the new Land Code entered into force MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 108. KYRGYZSTAN ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,300* / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 17% SHARE OF LAND IN PRIVATE OWNERSHIP 19% PEOPLE EMPLOYED IN AGRICULTURE 32% 0,00% 4,00% 8,00% 12,00% 16,00% 20,00% 24,00% 28,00% 32,00% 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 109. ■ ■ ■ ■ ■ ■ ■ 2001 a prescheduled abolition of the moratorium on agri- cultural land sale After gaining independence Kyrgyzstan was the first country among CIS, which introduced private ownership of land. 75% of arable lands were privatized and the remaining 25% remained in state ownership. . 2.7 ha an average size of farmers’ land plots MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 110. MOLDOVA ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,700 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 15% SHARE OF LAND IN PRIVATE OWNERSHIP 69% PEOPLE EMPLOYED IN AGRICULTURE 29% 0,00% 4,00% 8,00% 12,00% 16,00% 20,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 111. ■ ■ ■ ■ ■ ■ ■ ■ 0.3 ha the minimum land plot size for one household The normative price is legally established and is based on cadastral and local authorities valuations . 0.1-1.3% notarial fee for land sale MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 112. RUSSIA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,150 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 4.2% SHARE OF LAND IN PRIVATE OWNERSHIP 39% PEOPLE EMPLOYED IN AGRICULTURE 6.7% 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 113. ■ ■ ■ ■ ■ ■ 2ha minimum land plot size Land sale and purchase are done through public tenders. 0.3% land ownership tax . MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 114. TAJIKISTAN ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS N/AFARMLAND VALUE FULLY RESTRICTEDMARKET TYPE SHARE OF AGRI- CULTURE IN GDP 27% SHARE OF LAND IN PRIVATE OWNERSHIP 0% PEOPLE EMPLOYED IN AGRICULTURE 53% 0 0,04 0,08 0,12 0,16 0,2 0,24 0,28 0 500 1 000 1 500 2 000 2 500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 115. ■ ■ ■ ■ ■ ■ 100% of land is in state ownership Tajikistan is an example of how excessive market regulation adversely affects the socio-economic development. . 20 years the maximum term for land lease MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 116.
  • 117.
  • 118. ARGENTINA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $14,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 8.3% SHARE OF LAND IN PRIVATE OWNERSHIP 98% PEOPLE EMPLOYED IN AGRICULTURE 0.5% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 0 5 000 10 000 15 000 20 000 25 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 119. ■ ■ ■ ■ ■ ■ ■ ■ ■ 1000ha is a maximum amount of land to be purchased by foreigner There are no established re- strictions for Argentinian citi- zens intending to purchase agricultural land. 1-9% the land tax rate set by province authorities MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 120. DOMINICAN REPUBLIC ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $13,100 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE SHARE OF AGRI- CULTURE IN GDP 6.2% SHARE OF LAND IN PRIVATE OWNERSHIP 75% PEOPLE EMPLOYED IN AGRICULTURE 15% 0,00% 2,00% 4,00% 6,00% 8,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 121. ■ ■ ■ ■ ■ ■ ■ 140,000$ if the value of the land below this number, no tax is charged The Law on Foreign Invest- ments provides foreign indi- viduals with the same rights as Dominican citizens have, according to the Constitution 1% an annual tax on ownership of farmland MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 122. BRAZIL ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $6,850 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 5.6% SHARE OF LAND IN PRIVATE OWNERSHIP 67% PEOPLE EMPLOYED IN AGRICULTURE 15% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 123. ■ ■ ■ ■ ■ ■ 1. 2. 50modules the maximum amount of land that can be owned by individuals Up to 25% of the land can be concentrated in property of foreigners. 20% the maximum land tax rate MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 124. EL SALVADOR ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $17,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 11% SHARE OF LAND IN PRIVATE OWNERSHIP 88% PEOPLE EMPLOYED IN AGRICULTURE 20% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 125. ■ ■ ■ 1. $0.12/m2 registration fee Agricultural land cannot be acquired by foreign investors, who come from countries that do not guarantee the same rights to citizens of El Salvador. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 126. GUATEMALA ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $6,850 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 12% SHARE OF LAND IN PRIVATE OWNERSHIP 81% PEOPLE EMPLOYED IN AGRICULTURE 33% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 14,00% 0 500 1 000 1 500 2 000 2 500 3 000 3 500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 127. ■ ■ ■ ■ ■ 0.92/1,000$ the maximum tax on land ownership According to Guatemalan law, there are only minor limitations for foreigners on the land ownership. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 128. HONDURAS ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $8,500 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 14% SHARE OF LAND IN PRIVATE OWNERSHIP 50% PEOPLE EMPLOYED IN AGRICULTURE 36% 0,00% 4,00% 8,00% 12,00% 16,00% 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 129. ■ ■ ■ ■ ■ 2,000ha the maximum size of a parcel that can be purchased in Gracias a Dios department Foreigners have a right to purchase a land according to the Law on investments adopted in 1997. 5.6% the tax on farmland registration MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 130. MEXICO ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $8,500 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 3.3% SHARE OF LAND IN PRIVATE OWNERSHIP 90% PEOPLE EMPLOYED IN AGRICULTURE 13% 0,00% 1,00% 2,00% 3,00% 4,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 131. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 100ha the maximum amount of land to be purchased by natural entities Resources that are located on lands of natural or legal enti- ties are owned by the state. 1,800 ha the maximum amount of land that can be owned by legal entity MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 132. NICARAGUA ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 21% SHARE OF LAND IN PRIVATE OWNERSHIP 85% PEOPLE EMPLOYED IN AGRICULTURE 32% 0,00% 4,00% 8,00% 12,00% 16,00% 20,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 133. ■ ■ ■ ■ ■ ~350ha the maximum amount of land owned by an individual There are no restrictions on foreign ownership (Act 344). MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 134. PANAMA ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $10,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 8.1% SHARE OF LAND IN PRIVATE OWNERSHIP 22% PEOPLE EMPLOYED IN AGRICULTURE 17% 0,00% 1,00% 2,00% 3,00% 4,00% 5,00% 6,00% 7,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 135. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 2years farmland should be in ownership of the citi- zen of Panama before selling to foreigners Law 54" On a legally enforce- able stable investment" guaranteed the same proper- ty rights to foreigners and citizens of Panama 2.1% a land tax with the tax base of $75,000 MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 136. PARAGUAY ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $3,000 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 21% SHARE OF LAND IN PRIVATE OWNERSHIP 64% PEOPLE EMPLOYED IN AGRICULTURE 23% 0,00% 4,00% 8,00% 12,00% 16,00% 20,00% 24,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 137. ■ ■ ■ ■ ■ ■ 5years of residence in the country is a prerequi- site for the right to purchase land MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 138. URUGUAY ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ º MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $5,100 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 8.1% SHARE OF LAND IN PRIVATE OWNERSHIP 67% PEOPLE EMPLOYED IN AGRICULTURE 9.3% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 139. ■ ■ ■ ■ ■ >1000ha land plots should be registered in the National Institute of land development Today there is no document that establish limits on the plot size or the land transfer conditions to foreigners MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 140.
  • 141.
  • 142. CANADA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $4,750 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 1.5% SHARE OF LAND IN PRIVATE OWNERSHIP 65% PEOPLE EMPLOYED IN AGRICULTURE 2.1% 0,00% 0,50% 1,00% 1,50% 2,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 100 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 143. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 1,000 hа the maximum land plot size allowed to be purchased in Quebec There are no restrictions established on national level in Canada, however, each province has a right to impose its regulations. 0.5-2% farmland transfer tax MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 144. USA ■ ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $10,200 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE SHARE OF AGRI- CULTURE IN GDP 1.4% SHARE OF LAND IN PRIVATE OWNERSHIP 93% PEOPLE EMPLOYED IN AGRICULTURE 1.6% 0,00% 0,50% 1,00% 1,50% 2,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 145. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ Податок на сільськогоспо- дарську землю – встанов- люється окремо в кожному штаті та залежить від площі ділянки, доходів від ведення господарства, а також терміну ведення с/г діяльності на землі. >150 years період існування вільного ринку землі в США The market for agricultural land and laws governing this market are liberal making the US an attractive place for agricultural investment. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 146.
  • 148. AUSTRALIA ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,600 / HAFARMLAND VALUE FULLY LIBERALIZEDMARKET TYPE SHARE OF AGRI- CULTURE IN GDP 2.4% SHARE OF LAND IN PRIVATE OWNERSHIP 77% PEOPLE EMPLOYED IN AGRICULTURE 3.6% 0,00% 0,75% 1,50% 2,25% 3,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 149. ■ ■ ■ ■ ■ 135,997 number of farms in Australia Foreign investment is generally encouraging by the Australian government, but in some cases the government may block the purchase of land by foreigners if it would harm the public interest in Australia. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 150. IRAN ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $6,700 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 9.3% SHARE OF LAND IN PRIVATE OWNERSHIP 98% PEOPLE EMPLOYED IN AGRICULTURE 21% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 151. ■ ■ ■ 150ha maximum land plot according to Pehklevi reform According to Islamic law land owners have to pay ‘kharaj” a land tax that is equal to 1/10 of the value of the crop. Cur- rently, ‘kharaj” is officially paid on a voluntary basis. 1979 the beginning of the reactionary “Iranian revolution” MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 152. JAPAN ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $6,450 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 7.6% SHARE OF LAND IN PRIVATE OWNERSHIP 99% PEOPLE EMPLOYED IN AGRICULTURE 3.9% 0,00% 0,50% 1,00% 1,50% 2,00% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 153. ■ ■ ■ ■ ½ ■ 1946 the beginning of land reform In Japan, there is no prohibi- tion on the purchase of agri- cultural land by foreigners, but governmental policy indi- cates that the government wants agricultural land to belong to people, who will personally work on their agricultural land. 93% share of arable land in agricultural MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 154. SOUTH KOREA ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $3,600 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 2.3% SHARE OF LAND IN PRIVATE OWNERSHIP 92% PEOPLE EMPLOYED IN AGRICULTURE 6.1% 0,00% 1,00% 2,00% 3,00% 4,00% 0 5 000 10 000 15 000 20 000 25 000 30 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 155. ■ ■ ■ ■ ■ ■ · · · · · ■ ■ 1ha average size of farm Foreign legal entities are enti- tled to purchase agricultural land, if it’s approved by the Ministry of Internal Affairs. Foreign are those companies, where the share of foreign capital exceeds 50%. 0.2% Special tax for "rural development" MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 156.
  • 157.
  • 158. CAMEROON ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $550 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 22% SHARE OF LAND IN PRIVATE OWNERSHIP 3% PEOPLE EMPLOYED IN AGRICULTURE 70% 0,00% 4,00% 8,00% 12,00% 16,00% 20,00% 24,00% 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 159. ■ ■ ■ ■ ■ 3% agricultural lands are registered in the public register The reform of the land market in the country was conducted in fairly chaotic manner, with no clear plan or set goals. 10% land ownership tax MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 160. MOROCCO ■ ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $1,550 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 14% SHARE OF LAND IN PRIVATE OWNERSHIP 76% PEOPLE EMPLOYED IN AGRICULTURE 39% 0,00% 4,00% 8,00% 12,00% 16,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 161. ■ ■ ■ ■ ■ ■ ■ ■ 99years maximum farmland lease term About 42% of the all land reserves are owned by tribes. Collective lands cannot be distributed outside the community. 3-20% land transfer tax MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 162. NIGERIA ² ■ ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $700 / HAFARMLAND VALUE OPEN WITH RESTRICTIONS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 17% SHARE OF LAND IN PRIVATE OWNERSHIP N/A PEOPLE EMPLOYED IN AGRICULTURE 31% 0,00% 6,00% 12,00% 18,00% 24,00% 30,00% 36,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 163. ■ ■ ■ 500ha the maximum agricul- tural land plot area for one rural owner Most observations suggest that the Decree «On Land Use» has not reached any of its goals. 10% land ownership tax MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 164. SOUTH AFRICA ² ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $2,950 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 2.6% SHARE OF LAND IN PRIVATE OWNERSHIP 68% PEOPLE EMPLOYED IN AGRICULTURE 9% 0,00% 1,00% 2,00% 3,00% 4,00% 0 2 000 4 000 6 000 8 000 10 000 12 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 165. ■ ■ ■ ■ ■ ■ 12,000ha maximum farmland plot size in ownership of individuals The objective of the current policy is to reduce the num- ber of different bureaucratic procedures and finding ways to provide more South Afri- cans of all rights to safe land. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 166. TUNISIA ² ■ ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS $6,950 / HAFARMLAND VALUE RESTRICTED TO FOREIGNERS MARKET TYPE SHARE OF AGRI- CULTURE IN GDP 11% SHARE OF LAND IN PRIVATE OWNERSHIP 94% PEOPLE EMPLOYED IN AGRICULTURE 18% 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 0 1 000 2 000 3 000 4 000 5 000 6 000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP per capita, $ Agriculture, value added per worker, $ Agriculture, value added, %
  • 167. ■ ■ ■ 14.3ha Average farm size in Tunisia According to World Bank research, it takes 5 consecu- tive steps (57 days) and costs more than $6000 to register farmland plot in Tunisia. 50 ha maximum farm size according reform of 1958 MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 168.
  • 170. There are three types of mar- ket players: landowners, who form a market supply, busi- ness that creates market de- mand and the state, which acts as a regulator. Coordination of economic interests of stakeholders should be the main priority for the government and the public sector. THE EFFECTS OF THE LAND MARKET REFORM IMPLEMENTATION Assessment of qualitative effects ■ ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 171. ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ The overall effect lies in addi- tional GDP generated in Ukraine in response to invest- ment climate improvement and value added creation. $15-40 billion money supply gener- ated by free land market Land market liberalization in Ukraine will help business to focus on long-term strategies. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 174. Methodology of assess- ment of quantitative ef- fects includes four basic levels: input - the sources of income of the popula- tion - use of funds - eco- nomic impact. 20% annual average growth of land prices in the world Assessment of quantitative effects MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 175. ■ ■ ■ ■ ■ ■ ■ ■ $1,220/ ha NMV in Ukraine in 2016 73.5% share of the agricul- tural land in private ownership 30.5 mln ha total area of agricul- tural land in private ownership 3-4.5% a ratio between the price and cost of rent, depending on the type of market MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 176. In terms of the moratorium on sale of agricultural land, rent- ing is the only source of pas- sive income of landowners. $7-15 bn. expected aggregate revenues from leas- ing the land 64% Share of agricultural land leased Sources of income ■ ■ ■ ■ ■ 45% 15%3% 37% від 1 до 3 років від 4 до 5 років від 6 до 10 років більше 10 років MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 177. ■ ■ ■ ■ $8-25 bn. expected income from the primary land sales during 2025 As a result of market liberalization land becomes a liquid asset, enabling land- lords to attract new funds to finance their needs through the sale of land. 83% the share of consum- er spending in the structure of house- hold spendings MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 178. $50-85 billion the expected value of GDP over the next 10 years Consumption ■ ■ ■ ■ MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 179. ■ ■ ■ ■ $8-25 bn. – the expected in- come of the popula- tion from the initial sale of land in the pe- riod up to 2025. $60-125 billion - the overall econom- ic effect of the mar- ket introduction. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 180.
  • 182. In Central and Eastern European countries the average growth of land prices per year reached 20% during first years after moratorium abolition No legal entity - neither local, nor international - has enough liquidity to buy lands in such scope that could threat national sovereignty and successful development of agricultural sector in Ukraine Stereotypes of the population STATEMENT 1. Lands will be bought for a low starting price ■ ■ ■ STATEMENT 2. Lands will be purchased by foreigners · · · MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 183. After the moratorium is abolished, landowners will get opportunity to dispose their assets in the way they think is appropriate and therefore the level of life in rural areas will rise. STATEMENT 3. The devastation of most fertile Ukrainian soils as a result of non-residents business activity STATEMENT 4. Landowners cannot dispose their lands effectively ■ ■ STATEMENT 5. Peasants will become poor as land will be bought at a cheap rate ■ ■ STATEMENT 6. Ordinary landowners will not be able to compete with agroholdings MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 184. STATEMENT 7. The abolition of moratorium will vio- late the right to inherit the land ■ ■ STATEMENT 8. Abolition on moratorium will deprive farmers from stable income ■ ■ STATEMENT 9. You cannot give away land during the economic crisis and political instability, should re- duce things to order first. ■ ■ The abolition of the moratori- um allows the creation of realistic price-making on the rented lands market and leads to the establishing of market prices for rent (in Western Europe the rent pric- es fluctuate between $150 and $700 USD) The international experience shows that the land market reform was usually intro- duced during the economic crisis. MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 185. STATEMENT 10. The land market would enter the shadow economy ■ ■ Measures to avoid predicted risks ■ ■ ■ ■ ■ ■ The abolition of the moratori- um would liquidate corrupt and ineffective practices of state-owned land management MARKET OVERVIEW INTERNATIONAL EXPERIENCE RESULTS RISKS
  • 186.
  • 187.
  • 189.
  • 190.
  • 191.
  • 192.
  • 193.