MyLand reported at IAMO Forum 2010
On June 16-18, 2010, in the beautiful town of Halle (Saale) in Germany, took place IAMO Forum 2010. IAMO Forum 2010 aimed to take stock of current research on institutional change in agriculture and rural areas and the corresponding challenges for new modes of governance. The conference should spell out lessons learned from recent experience and update the agenda of policy-makers in agriculture and rural affairs. The focus was on transition countries in Central and Eastern Europe and Central and East Asia.
The Forum was organized in a really interactive way, and every session started with reports and presentation, proceded to conclusions made by chairs and concluded with debates in which panelists answered questions and comments from the Forum participants.
Within the framework of the Forum there was organized a special session on "Management of State-Owned Agricultural Land in Light of Global Environmental Challenges" co-organized by BVVG Bodenverwertungs- und -verwaltungs GmbH, GTZ Deutsche Gesellschaft für Technische Zusammenarbeit GmbH and IAMO.
This session presented current issues in public land management in Mongolia, Lithuania and Ukraine, and also put special attention to the experience and current practices of agricultural and forest land privatization in the Eastern Germany after reunification. Presentations made at this session as well as presentations made at other parallel and plenary sessions are available at the web-site of IAMO.
On invitation of organizers Maksym Fedorchenko, director of the Center for Land Reform Policy of Ukraine (whose site you are currently reading), took part in the special session with a report "Unused Potential Due to Missing Land Management in Rural Areas of Ukraine". In his report Mr Fedorchenko described pre-reform situation in the country which is one of the biggest in Europe. He pointed out that before 1990 the state owned all land in the country (60.3 million ha). Agricultural land was mostly in “eternal use” of kolkhoz and permanent use of state farms. About 2 Mio ha was allocated to citizens for subsistent farming. There was almost no fallow land - agriculture was quite extensive, and production grew on account of reclamation of areas not really fit for the purpose (river banks, hill slopes, eroded and low-yield areas etc).
In 1991 land reform started. The objectives were to redistribute land, taking it from ineffective users or from those putting it to unauthporized type of use, and to facilitate access to land for new forms of farming. It was declared that there should be diversity of patterns of ownership to land and forms of agricultural businesses. Preservation and improvement of fertility of soil were among objectives of land reform. Actually these issues have always been declared top priorities of our land policy, but in reality they hardly ever lived up to declared level of proritization.
In opinion of Mr fedorchenko, results of Ukrainian land reform are the most impressive in terms of change of land ownership structure. Today the state owns slightly more than 48% of land. Many states own even smaller areas, he said, but Ukraine is remarkable because only 50 thousand ha out of 31 Mio became private through sale. After 20 years of land reform the question of market price of agricultural land is still a puzzle.
Another striking fact is that the state got rid of 40% of its land practically overnight. Such rapid transformation could be explained mostly by authoritative methods of public administration. In fact, land was declared private – just like it was declared public 80 years ago.
A special attention was paid to the issue of current utilization of state land in Ukraine. Half of the state land is not being utilized in a way which generates income. It goes about land of stock and land of common use (land of stock is state land which is currently not allocated to any user. The term “land of common use” designates areas in settlements occupied by roads, streets, squares, parks, quays, beaches, cemeteries and places for dumping, storing and processing hard waste. It is doubtful whether it is appropriate to designate these areas as agricultural). Among users of state land two groups were specifically mentioned.
Rural households - they produce up to 54% of the total agricultural output of the country (this is about 8 billion EUR). State land makes up about 15% of the total landholding of households thus playing important role in the agricultural sector. But we have to mention that these land users are out of rich of taxation, food safety regulations, bank credit and investments.
Secondly, scientific and experimental farms which have in their use almost 500 thousand ha of state farm land. The study performed by BVVG in 2006 proves that land is being utilized mostly for commercial farming, not for research, experiment and training. That example signifies that objectives of land reform are not fully implemented.
It is also quite clear that in the process of privatization the state was often left with least fertile land consisting of small fields of irregular shape, remote from one another and thus expensive to farm. Therefore the significance of the areas in ownership of the state shall not be overestimated.
According to the report, the most important features of state land management are:
1) Free-of-charge privatization of agricultural land is allowed while trade is prohibited. Lease of state-owned land is subject to auctions but auctions are missing legal basis and thus taking place occasionally. From legal point of view results of the auctions are dubious;
2) Half of state land is out of any income-generating use. The other half is mostly in permanent use which is marked with low rates and allocation done through administrative procedures, without any competition;
3) Directly or indirectly state land is subject to competence of the Parliament, President, Cabinet of Ministers, state committees and ministries, local state administrations and local elected councils. One may smell here a lot of decentralization. But the question is whether a decentralized system which does not employ uniform policies is indeed a system;
4) Land cadastre and land registry in Ukraine have been developing for 20 years. And while a lot of work has already been done the progress is still weak. The result is that information on and about land is often outdated, inaccurate, hard to find or missing;
5) Long-lasting and hardly effective struggle to bridge gaps between land policy, legislation and practice. Principles and policy statements lack necessary legal regulations and technical standards. Some important laws have been passed years ago but they are still to be implemented.
In the context of challenges the following issues were mentioned:
1) privatization of agricultural land led to considerable fragmentation. 12000 landholdings of large-scale farms turned into 7 million parcels with the total area of about 27 million ha. Modern technologies are applied only at a limited scale (not more than 7-8 Mio ha);
2) Moratorium froze lion share of arable land in ownership of citizens having little or no resources for investment, and prevented redistribution of land in favor of effective users. Significant areas of arable land - about 5-5.5 million ha - are out of any use (or partly in unauthorized use);
3) Land users are in a position to impose their will upon landowners and they often neglect rules of sustainable agriculture;
4) two priorities of Ukrainian land policy – namely preservation and improvement of soil fertility – have never been so close to realization as they have been for the last 9 months. But this – usually very promising – period failed to come to fruition. Last October the Parliament passed a law making it mandatory for farmers to have plans for scientifically sound and environmentally friendly crop rotation for the period of at least 10 years. Default would lead to heavy fines. But several days ago this law was suspended because of three considerations. First of all, there were doubts that such plans, if drafted, would be followed. Secondly, development of such plans would make a big hole in farmers’ budgets. And thirdly, this would limit adaptability of producers to fluctuation of the market. In opinion of the reporter, the regulator clearly identified itself with regulated sector to the detriment of prevailing public interest;
5) Ukraine makes a good example of private initiative working under conditions of weak state intervention. In some cases we would find very responsible farmers employing up-to-date technology and machinery and taking care of environmental and even social outcomes of their activities. But there are also farmers adhering to monoculture farming, exhausting soil, damaging environment, destroying field-protective forests and amelioration systems. That makes us think that market tools – like competition - shall be supplemented with tools of state policy aiming at sustainable land use. And then let bona fide farmers compete.
Measures to improve situation - like introduction of land market, completion of cadastre and land registry development, abolition of free-of-charge privatization and permanent use of land - have been discussed many times and advised to every Ukrainian government by international institutions and national expert community with very limited success.
Mr Fedorchenko concluded that Ukraine has already reached the point when implications of poor land management become dangerously obvious. These implications concerning environmental sustainability, food safety and security, and rural development call upon deep re-thinking of Ukraine's land policy. He expressed his belief that that this is nearly the most important challenge facing new Ukrainian government.
Center for Land Reform Policy in Ukraine is expressing its sincere gratitude to organizers and co-organizers of the Forum - IAMO and BVVG - for giving opportunity to speak at such distinguished forum in the company of renowned experts and for facilitating our trip to Halle (Salle).
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Center for Land Reform Policy in Ukraine, 2010
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