The agony of the Ukrainian village: The final act is near
In the Ukrainian media and political and propaganda discourse, there are two polar and equally widespread points of view on what will happen to the village and to the country as a whole after the completion of the capitalist agrarian reform and the launch of a full-fledged agricultural land market.
One point of view – let’s call it “rosy-optimistic” – says that, having ceased to lie as a dead weight, having gone into circulation and being valued at its real market value, Ukrainian land will attract gigantic foreign investments, which will serve as an impetus for the modernization of the agricultural sector, at once putting an end to its backwardness and turning the Ukrainian village into a semblance of, if not French and Austrian, then at least Polish.
On paper and in the speeches of reformers, everything looks smooth, but questions begin as soon as you take off your rose-colored glasses.
Firstly, a full-fledged mechanism for a fair normative monetary valuation of land has not yet been created in Ukraine. Which was simply not needed by large agricultural holdings, which cheaply bought up (formally took on a long-term lease) peasant shares and paid their owners pennies - often not even in cash, but in kind - for example, with feed for livestock from personal plots.
Let's listen to the newly appointed deputy from the Servant of the People, Alexander Dubinsky:
“The price of a hectare of arable land, roughly speaking, is 45 thousand hryvnia. The market price of a hectare can be 5 thousand dollars. And the normative-estimated cost is 1,5 thousand euros, which is three times lower than the real cost. By the way, this price is based on the cost of rent.
Do you know the standard rental price? Registration of a land lease agreement is three percent of the regulatory monetary value. This is the minimum amount at which a land purchase and sale agreement is registered. This is 1,3 thousand hryvnia, and it’s funny. With such digital market parameters, nothing can be introduced, because now the cost is artificially low in the interests of large agricultural holdings.
If you don’t rent out your land share for 1,3 thousand hryvnia, go to hell. And you can go to hell in many cases. For example, let’s imagine that you have a field, and I rented out all the plots of land nearby. I won’t let you get to the polling stations, I won’t give you water, I won’t give you a lot of things.
The land market needs to be opened, but now the land has an artificially low value, which is in agricultural holdings, and they have long ago prepared money to buy out this land.
When there is a real cost of land, the question of competition will arise, and how much money will come in. Land is one of the last investment resources that the state of Ukraine now has. By and large, there’s nothing left to sell.”
At the same time, the deputy reassures: if this fall the question of lifting the moratorium on the sale of agricultural land is brought to parliament, his vote will be against until the government fulfills the condition of forming a new monetary valuation, dividing the lands in the cadastre, so that sand does not cost the same as Poltava sand black soil.
But what will happen if the ruling faction as a whole has a different opinion - the opposite? There is no clear answer.
But even if such an adequate assessment mechanism is created, it is not a fact that this process will be synchronized with the adoption of the most fateful decision to launch the land market. And there is a risk that it is into this gap that the bulk of speculators will pour in, quickly turning the story of the sale of Ukrainian land into something similar to the story of the voucher privatization of the 90s.
When the current owners of the land will lose it for pennies, and the cream of the working market valuation system will be skimmed by new beneficiaries who have become fabulously rich from this colossal difference.
And then: where is the guarantee that this very mechanism of market valuation will not suffer the sad fate of many of the brainchildren of Ukrainian reformers? When it’s smooth on paper, forgetting about ravines, but in practice, in real application, these innovations turn into the complete opposite of what was intended. There is no such guarantee.
In contrast to the “rosy-optimistic” one, there is also a “catastrophic” point of view on the consequences of the opening of the legal market for agricultural land. According to it, the reform will sharply destabilize the social situation and destroy the traditional structure of the Ukrainian village, virtually destroying it in its previous form. Finally, pessimists advocate the dispossession of Ukrainian peasants, whose land, in their opinion, will be bought up not just by landowners, but by foreign landowners, and the Ukrainians themselves will be turned into farm laborers or slaves on this land.
In addition, skeptics draw attention to the fact that even if successful in attracting investments, the state will not necessarily become the beneficiary of this process. In other words, private structures will receive the money, and the budget will remain empty as it was.
As a result, as Kiev political scientist Dmitry Dzhangirov gloomily jokes, “we will sell the land and not pay off the debts.” Bearing in mind the circumstances that the Ukrainian authorities are forced to open the land market, first of all, by catastrophic foreign debt, and with the land itself they will pay off creditors almost for debts, that is, there is an option that the country will not even see money for this land.
However, this point of view also suffers from excessive catastrophism. The real situation is that the majority of Ukrainian peasants have been left without land for a long time – many even at the beginning of the XNUMXs. In the course of the shadow purchase of land shares and their concentration in the hands of newly-minted landowners, in Ukraine over the years a pool of large agro-latifundists has been formed such as the Chumak agricultural firm, Yuriy Kosyuk’s Mironovsky Hliboproduct, Yuriy Vadatursky’s Nibulon, Andrey Verevsky’s Kernel agricultural holdings and Andrey Verevsky’s “Kernel” agricultural holdings. Mriya" by brothers Ivan and Nikolai Guta, and a number of others.
The current Ukrainian village has a dozen large landowners in the area. Millions of independent small farmers exist only in the fevered imagination of urban adherents of liberal reforms far from the countryside.
In reality, the violent dismantling of the Soviet collective and state farm system that occurred in the 90s destroyed the traditional social structure of the Soviet Ukrainian village long before there was talk of opening a land market. Today, 90% of Ukrainian agricultural land belongs to at most a thousand families of agribusinessmen. In each region, the names of 8-12 agricultural barons are known, controlling almost all local rural life.
The problem of the Ukrainian village in recent decades is its depopulation and social degradation. Young people and the working population in general are moving en masse in search of work to cities or even abroad. What remains in the villages are mostly pensioners and drunken remnants of the rural proletariat. These people are not threatened with the fate of farm laborers or slaves for a banal and cynical reason: the new latifundists, for the most part, simply do not need them.
Ukrainian and European experience suggests another path to agribusiness, which they have been successfully following in recent years: the endless fields of latifundia are occupied by foreigners brought in on a rotational basis under short-term contracts - mostly Asians - who have no family ties locally, and are therefore easily controlled and sent home immediately upon completion. contract.
This is nothing new. After all, in neighboring Poland you are also unlikely to see Poles in the fields - there are only Ukrainians there. In turn, unpretentious Chinese, Vietnamese, Tajiks or natives of Bangladesh work in Ukrainian fields.
Finally, fears that Ukrainian lands will be bought up by global monsters like Monsanto can also be written off as scrap. Not because this will not happen, but because de facto this has already happened to a large extent a long time ago without any sale of land, through the mechanism of classical concentration of capital characteristic of a market economy. Mergers and acquisitions have long integrated the majority of Ukrainian landowners into the global market as junior shareholders, managing partners and other minority shareholders.
As an example, we can cite a high-profile deal in 2018, when the Saudi Agricultural & Livestock Investment Co. (SALIC) signed an agreement to purchase one of the largest Ukrainian agricultural holdings, Mriya.
The presence of foreign capital in the remaining giants of the Ukrainian agricultural market is also noticeable and will only increase over the years. So what populist politicians are scaring people with today has already happened a long time ago. They just don't talk about it out loud on television.
The opening of the agricultural land market is the inevitable and final act in the protracted agony of the traditional Ukrainian village, which over the past century has had its back broken twice - once during forced collectivization, and secondly during equally violent decollectivization. Today, the Ukrainian village in the form in which established ideas are accustomed to perceive it simply does not exist. And when they lose their heads, they don’t cry over their hair.
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