Recently, there has taken place in Cherkasy the first regional discussion of the land reform road map with the participation of independent experts, representatives of profile ministries, farmers, and land share owners. The land reform is one of the priority reforms and programs defined by the Sustainable Development Strategy for Ukraine by 2020, approved by the Decree of the President of Ukraine No. 5/2015 of January 12, 2015.
The most controversial issue that is currently on the agenda is lifting the moratorium on the agricultural land sale. Representatives of large and medium agribusiness spoke, for the most part, against lifting the moratorium, apparently fearing for the activities of their farms. According to the agrarians, if competitors bought out even a small part of the lands owned by their enterprises, it could damage their business. While supporters of lifting the moratorium emphasized the fact that the agricultural land sale was definitely beneficial to the villagers—land share owners.
An equally important issue is the enforcement of the agrarian receipt mechanism. The Law of Ukraine on Agrarian Receipts was adopted back in 2012, however, a pilot project for the use of agrarian receipts was launched in Poltava Oblast only this year. How does the mechanism work? The supplier provides an agrarian with seeds or plant protection products for which the other is obliged to settle up with the future harvest. The agrarian receipt must be registered by a notary in the register of agrarian receipts. After fulfilling the obligation on the agrarian receipt, the creditor returns it to the agrarian and it is paid off with the obligatory mark in the register.
Also, changes have been made to the Law of Ukraine on Land Lease in relation to defining the substantive terms of the lease agreement. Such terms include:
– The leased property (a land plot cadastral number, location, and size).
– Term of the lease agreement.
– Rent with indication of its size, indexation, settlement method and terms, rental periods, order of its introduction and review, and responsibility for its non-payment.
By agreement of the parties, other terms may be specified in the land lease agreement. In the event that the land lease agreement provides for the implementation of measures aimed at the protection and improvement of the leased property, a deal shall be included in the agreement regarding compensating the lessee for the costs of such measures.
The land lease agreement may involve leasing several land plots that are owned by the same lessor (while in case of state and communal lands these are the land plots that are possessed by a single executive power body or a local self-government body).
The term of lease of agricultural lands for carrying out commercial agricultural production, running agricultural holdings and private farming cannot be less than 7 years.
The right to use the land plot arises from the moment of state registration of these rights.
Also, a law was passed on the definition of the structure, content, and procedure for approval of land management documentation, which:
– Unified all types of land management documentation.
– Determined their structure, content, and title.
– Determined the list of subjects that coordinated and approved specific land management documentation.
During the last six months, many legal positions regarding land legal relations were set forth in decisions of the Supreme Court of Ukraine.
- Termination of the land plot lease agreement.
In accordance with current legislation, the land plot lease agreement may be terminated if the land is not used for its intended purpose. The fact that the land plot is not used by the lessee for a certain period is not a ground for the land lease agreement termination.
- Grounds violating the lessee’s priority right.
The grounds violating the lessee’s priority right are:
– If the lessor has entered into a lease agreement with the new lessee at the time when he/she received a written notice from the previous lessee about the intention to renew the lease agreement.
– If the lessor has entered into a lease agreement with the new lessee on the same terms as proposed by the previous lessee when he/she intended to renew the lease agreement.
If the lessor has entered into a lease agreement with a new lessee, and the ground for refusing to renew the lease agreement with the previous lessee was that the lessor has informed the previous lessee of the necessity to use the leased land for his/her own needs.
- Renewal of the land lease agreement.
The land lease agreement is renewed in the presence of the following legal facts: the lessee continues to use the allocated land plot; the lessee duly fulfills his/her obligations under the agreement; the absence of a written notice from the lessor about refusal to renew the lease agreement; the parties sign an additional deal on renewal of the lease agreements.
- Land rent.
Normatively, the land monetary valuation is obligatory for determining the size of the rent for state and communal lands.
In addition to all changes already made to the normative legal acts and legal positions of the Supreme Court of Ukraine, there are still projects that are waiting to be implemented. In particular, it is a draft Law of Ukraine On Land Consolidation and a draft Law of Ukraine On the Land Market, which, if adopted, will make significant changes in the agro-industrial sector. These projects are aimed at working out a complex of measures in an economically reasonable unifying the plots of all forms of ownership, that are designed for carrying out commercial agricultural production and farming, formed in the process of allocating in kind (on-site) land shares, and/or change of their boundaries, farming areas to create agricultural lands, the location, size, configuration, and composition of the areas of which provide sustainable land use.
So, as we see, the road to reforming the agrarian sector is long and thorny, but without change there is no future.
Best regards and sincere wishes,
of the Rezultat law firm Maxim Polishkevych