This week, parliament concluded a two-month saga of amendments to Bill No. 2194 and amended the Land Code regarding the management and deregulation of land relations. This is the second key law regulating land, and as a result, the state will transfer land located outside of local government boundaries to communities. This "great victory," long sought and anticipated by local governments, is one of the brighter sides of land reform and a topic for discussion in its own right. We will now discuss its darker side. Published on the website ZN.ua
Because we are witnessing perhaps the most large-scale and zealous manipulation of power in recent Ukrainian history. Amidst the mudflow of rhetoric about a land market about to open, the essence has long been lost. It has slipped through the fingers, along with state interests. The authorities deliberately ignore this loss. In fact, they even boast about it, stating that "finally the shadow land market will be closed and everything will work fairly." Unfortunately, the president of a country of 42 million, possessing 27,8 million hectares of black soil (8,7% of the world's total), is content to naively expect a duped amateur. Someone who, if not in on it, is certainly in on the topic, correctly presented to him by the agricultural lobby.
By signing the land turnover law a year ago, President Zelenskyy charted a new agricultural path for Ukraine, supporting parliament's focus on established agricultural holdings. We are not going to dismiss the potential impact of this government decision, which could indeed increase not only Ukraine's agricultural exports but also, according to expert forecasts, add 1% to GDP. Whatever one may say, the countries of the Global South (Mexico, Brazil, Argentina, Venezuela) are among the leaders in global agricultural rankings. This is, in fact, what major market lobbyists are actively appealing to, anticipating 2024, when they will be legally able to enter the market.
At the same time, we also won't turn our backs on the European West, which has placed its bets on the development of small and medium-sized farms. Unfortunately, the government, having made the choice for all of Ukraine, lacked the wisdom, even in hindsight, to at least try to preserve the remnants of the rural middle class that had survived independently. (While cultivating less than 40% of the country's land, farmers produce over 60% of the gross agricultural product.) Not to mention finding an answer to the key question: why did we, who were so eager to join Europe, suddenly rush headlong to Latin America?
Moreover, while implementing decentralization, again, as in Europe, they didn't prioritize people and the development of communities (rural amalgamated territorial communities in Ukraine are the majority, and their sustainability could only be stimulated by farming). Instead, they illogically enslaved people to landowners. In pursuit of profit at any cost, they will a priori bet on global mechanization and job losses, already proven in Latin America, while Ukraine's law enforcement and judicial systems are dysfunctional. So, having received land, local governments are celebrating a Pyrrhic victory.
The lack of a global state mindset among the country's top officials and the resulting imbalance in public policy are shocking. So is the cynicism of the central government. Deliberately cementing a new oligarchic agro-cluster, Bankova, under the ratings-saving umbrella of the National Security and Defense Council, is, in all seriousness, pushing a law on the status of oligarchs for discussion by deputies and the public. Attention: this is what happened in Ukraine after the same kind of pocket privatization of industrial enterprises. And yet, for the second year in a row, the very authorities who "care about national security" have pointedly ignored the handful of farmers who, with their heads raised under the Cabinet of Ministers' windows, wave national flags in the hopes of being heard. (46 surviving farms compared to 6,5 million share owners is truly a mere pittance.)
Although the reasons for this are clear. Within the "servants of the people" team, all matters of farming support and development are handled by representatives of large agroholdings, which lobbied for the land turnover law. It's all in plain sight, after all. In the Verkhovna Rada, Mykola Solsky, co-founder of the Ukrainian Agrarian Holding, chairs the relevant committee. And Taras Vysotsky, who holds a six-year background as CEO of the Ukrainian Agrarian Business Club, is the Minister of Economy for Agricultural Policy, backed by Yuriy Kosyuk, owner of MHP. (The process of re-establishing the once-abolished Ministry of Agrarian Policy, which was headed by another agrarian, a former presidential adviser on land issues, is also in the process of being re-established.) Roman Leshchenko, not finished yet).
In principle, based on this circumstance alone, we can deduce whose interests the transition year served and how the government "helped" farmers build up their promised muscle so they could begin buying land as early as July 1. However, we decided to descend from the heavens of power to the sinful earth for details and continue the "Story of the Farmer and the President" begun a year and a half ago by speaking with Mykola Strizhak, President of the Association of Farmers and Private Landowners of Ukraine (AFZU).
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So why did Zelenskyy's team, having promised to support farmers, scrap all their programs and freeze their treasury accounts? Why does the deputy minister representing agricultural holdings need a pocket Geodesy, supposedly uniting farmers? Who is tampering with the State Geocadastre, taking land from farmers, and then selling it back to them at exorbitant prices? What does the prosecutor's office have to do with this, and how is it "overseeing" what's happening in the soon-to-open market? Who is raiding successful farmer cooperatives, and why won't they face any consequences? Where will financially weakened farmers get the money to buy land starting July 1? Will they end up in debt bondage to banks waiting for their pickings? Are there safeguards in the adopted laws that could prevent agro-magnates from buying up land through controlled individuals before 2024?
Read the answers to these and many other questions in the interview.
On the farmer support program, the new government's rate, and Milovanov's fables
Nikolai Ivanovich, watching the land law saga, which is a real mess, I'm afraid to even imagine what the outcome will be. Apart from the obvious provision transferring state-owned land to local governments, there's still no comprehensive document signed by the speaker of parliament. What can you say? Is there no way to rewind the film, or do farmers have any chance?
"The government hasn't deviated from its strategic line—the land will be put into circulation. Some methodological changes could have been made during the procedural discussions, but only amendments from the 'servants of the people' were accepted and voted on. All others were rejected. So, by July 1st, we'll be approaching the same 'gains' as a year ago. The choice, supposedly under pressure from international financial institutions, has been made. Although, after the initial law was passed, I spoke with representatives of the World Bank. Well, they didn't demand that Ukraine sell its land and raise tariffs. They demanded a balanced budget. The fact that our government thought it could temporarily balance the budget by using the country's last strategic resource is our problem. Certainly not the World Bank's or the IMF's. So, there's no point in blaming the mirror..."
A whole year has passed since the key law was passed, during which farmers—and you will be the first to have access to this resource—were promised comprehensive assistance. This included a farm support fund, loan programs, and so on. Has any of this worked?
"I've already told you once that every Ukrainian is a bit of Gerasim Kalitka. Therefore, the key to the development of the Ukrainian economy lies in Karpenko-Karyi's immortal work, 'One Hundred Thousand.' But how can we satisfy the needs of a person living on the land? And this is where our 2017 concept, developed and approved by the Cabinet jointly with the Association of Farmers of Ukraine, comes into play again." Groysman. The program, if you recall, included large-scale support for small and medium-sized farmers, not just the agricultural holdings into which the state traditionally poured billions.
— If I'm not mistaken, the market mechanism was planned to be activated in January 2022.
— Absolutely right. According to the state concept for the development of Ukrainian farming, written and approved by the Cabinet of Ministers, a farmer should have been able to go to a bank and, using his 100 hectares as collateral, borrow resources for farm development and then easily buy back his land from the bank within ten years. Is that a reasonable plan?
- Completely.
— And what was necessary for this to happen? First and foremost, an institution like the Land Bank, which was planned to be created on the basis of the Ukrainian State Fund for all small farmers, with government guarantees. In this way, we would have launched the market as planned. And together with the current president and prime minister, we would have amicably cut the ribbon, launching the land market. This approach is called the continuity of state policy, taking into account institutional memory.
What else would this mean for farmers? A farmer could easily purchase the right to use his hectares, manage his farm, develop it, and pass this right on to his son, grandson, great-grandson, and so on. At the same time, the land remains a treasure of the Ukrainian people and the territory that defines Ukraine. Nothing special; everything is in accordance with Article 13 of the Constitution of Ukraine. It's just like in Europe, where land isn't sold, but the right to use it is.
However, no one is raising the issue of land turnover right now. This definition hasn't caught on. The discussion in parliament is exclusively about sales. And no one is considering how a Ukrainian should buy land. They're discussing exclusively how they can sell it.
— But you and I know that not all of the 6,5 million shareholders want to become real owners of their land.
"It was precisely this preparatory drift, supported by the state, that was supposed to give those who wanted to farm the opportunity and the right to develop their skills. When we created the headquarters for the protection of our native land in 2019, farmers with completely different views and positions were united by a single slogan: 'The land should belong only to those who live and work in this village.'"
Let's clarify again: if Zelenskyy's team hadn't abandoned the program adopted by the previous government and had followed its outlined path, then before the official launch of land turnover, scheduled for January 1, 2022, the state would have been required to provide mechanisms to support the rural middle class?
— Yes. In 2017, there was still some sluggishness, but in 2018, as a result of the program approved by the Cabinet of Ministers, 15 more farms were added, and six thousand villagers were legally granted the status of individual family farms. The process began.
Since 2018, farmers have received consistent financial assistance for farm development, some taxes have been reduced (including the unified social contribution), and we have gained access to the State Seed Fund. Furthermore, as I already mentioned, the government guaranteed the creation of a Land Bank based on the Ukrainian State Fund, with €360 million in collateral (funded by the EU).
The bank was supposed to be established by 2019, and farmers would then see a real opportunity to obtain favorable loans and subsequently buy their land. Word-of-mouth marketing, which has always been a constant in rural areas, was planned to be launched in 2020. In other words, the state was to pursue an aggressive policy of attracting farmers to work their land. The instrument was to be fully operational a year before the market's launch (January 1, 2022).
— And you expected that after Zelenskyy landed on Bankova Street, you would be able to save this project?
How could it be otherwise? We were dealing with state institutions and documents approved by the Ukrainian government. And if the system of public administration is functioning properly, they don't have names. However, after the dissolution of parliament and the change of government, the government's course began to shift dramatically. The Kyiv School of Economics, headed by future Minister of Economy Tymofiy Mylovanov, was officially assigned to the farmers. They began a fairly close dialogue with us, as it turned out, deliberately lowering their guard. Future Minister of Justice Denys Maliuska, who had once been a contender for the post of Minister of Agriculture, also actively participated in all these discussions. He even guaranteed the farmers would defeat all the black registrars involved in corporate raiding, who "can be counted on the fingers of one hand." But at some point, we realized that the raiders, who had previously worked within the framework of Poroshenko's policies, had seamlessly integrated into the new government's strategy.
"Well, you can count them on your fingers right now. Since Maluska didn't succeed."
"The soldiers of the raider army remain the same, but the new name of their commander-in-chief has been persistently cropping up in various districts for a long time. And recently, a major scandal erupted, and the name of Mr. Solsky, head of the relevant parliamentary committee, became known throughout the country. All materials have been submitted to the presidential office, and we are awaiting a response. Although there is very little hope for justice to prevail. For them, Solsky is one of their own."
- Okay, what happened next?
Then we hit reality. Immediately after the Honcharuk government took office, the Deputy Minister of Economy for Farming and Rural Development, who had been at the forefront of the entire strategic plan, was fired. Over time, the entire team working with farmers was purged. The CEO of the Ukrainian State Fund was removed. Funding for programs was almost completely cut off. And all this happened amidst continued fine words and promises to "make everything even better than before." At the same time, preparations were underway for a law on land circulation, which lobbyists for agricultural holdings simply plucked out of their pockets. They couldn't care less about any state programs or strategies. All this was accompanied by a loud PR campaign and a devastating "argument" about eliminating the shadow land market, which, unfortunately, the president still uses.
Having, of course, figured out what was going on, we went to every public forum to defend our position. That's where we actually met with Economy Minister Milovanov. He had no counterarguments to anything I'm telling you. However, the state's interests and the goals of the new government were no longer strategically aligned. The minister was simply putting on a good face to cover up his bad behavior.
On the freezing of accounts, the deputy minister's lies, and the prosecutor's office's share
— The law ultimately adopted wasn't as liberal as the agroholdings wanted. Moreover, you were promised a year of support and a head start.
"This is a unique situation. In the budget—on paper—all the programs were left in place, no changes were made to laws or Cabinet decisions, the funds were allocated, but—stupidly, brazenly, I can't think of any other words—they blocked the flow of funds into treasury accounts. For two years, farmers have received pennies."
- And who continued to lie to your face all this time?
"Well, let's say it was Taras Vysotsky, who spoke to us. He was nominated by the Ukrainian Club of Agrarian Business (UCAB) to the post of Deputy Minister of Economy. Only those with 100 hectares or more of land can join this club. So, these aren't just agroholdings, but large agricultural traders. It must be said that the deputy minister was just as charming and promising as Milovanov, plus he was an ace in digitalization, which he spoke extensively about to the farmers. Vysotsky held regular Zoom and Viber conferences, but not only did he resolve some issues and not others, he resolved nothing at all. A master of deception."
- And you?
"We continued to show initiative. During this period, we met with the president and Prime Minister Honcharuk, as I already told you, so Zelenskyy has long been aware of all the problems. Then there was a meeting with the new Prime Minister, Denys Shmyhal, where, on behalf of the country's farmers, I voiced complaints about Deputy Minister of Economy Vysotsky. Shmyhal reprimanded him and... sent him back to work. All this would be very funny if it weren't so sad. However, in Ukraine today, names carry weight—Verevskyi, Bakhmatyuk, and Kosyuk—not state interests."
— So this whole year was wasted?
— Well, why not... Taras Vysotsky and company created their own puppet public organization with the grandiose name "All-Ukrainian Congress of Farmers." Which, in fact, has a glorious clause in its charter about "conducting intensive dialogue with the authorities," and has blessed all the government's amendments. It's impossible to understand who these farmers are: there's no information on the Congress website. The ministry also refuses to answer questions about this. Information has surfaced that supposedly some farmers from the Poltava region are members.
— And what initiatives did Congress bless? Incidentally, that's a popular term for loyal structures in power these days.
The Congress, acting on behalf of supposed farmers, began to manage the Ukrainian State Fund, and its committees were also filled with insiders. Furthermore, the fake Congress initiated initiatives to optimize and reduce farmer support programs, as well as to cut the amount of assistance to farms.
- Well, this is some kind of nonsense...
"If this weren't about the strategic resource of an entire country, you could say so. But overall, it's a crime against the state. The growth in the number of farms has stopped abruptly. Kuchma came to power with 10,000 farms and left with 40,000. Under Yushchenko, no one was involved in agriculture at all. Under Yanukovych, the figure fell to 38,000, and in Poroshenko's first years, to 32,000. However, through cooperation with the government, we managed to halt this process. In 2018, there was an increase of 9,000, and in the first six months of 2019, an increase of 5,000. As of today, 46,000 farms are officially registered in the country."
Since 2020, the number of farms has declined sharply. Individual family farms with 2–4 hectares have also stopped growing. People are going underground and selling their produce for cash, wanting nothing to do with the state. Meanwhile, all official statistics are classified.
— This is some kind of sabotage against farming. Are they interfering with the land registry?
— Of course! Just four days ago, I had a conversation with the executive director about a situation in the Petrovsky district. A farmer had almost 50 hectares of land in permanent use. And then it suddenly turned out that ten hectares had disappeared. It turned out that a creative employee of the State Geocadastre had divided them among five people and then bought the land from them at 10 rubles per hectare. And then, accordingly, she offered the farmer to buy his land from her. For 20 rubles per hectare. But the farmer turned out to be a stubborn fellow. Seeing the violation of the law, he went... where? That's right, to the prosecutor's office. The prosecutor promised to summon the offender and dot the i's. Then someone from this prosecutor offered the farmer a deal—30 rubles per hectare.
It's hard to say how the land issue ended up in the hands of the security forces, but the proposal came from them. Not only would you give up the land, you'd also lose your desire to live there. Do you understand the system we have in place? And this is far from an isolated incident. Therefore, I can state with absolute certainty that today the kingpins of the land crime system work in the prosecutor's office. The prosecutor's office was supposed to restore order. And it did. And not just in the State Geocadastre, but also in the amalgamated territorial communities, to which the law recently transferred state lands between settlements. The land bank has been transferred from the Ukrainian State Fund to the prosecutor's office. And everyone knows it.
Moreover, World Bank representatives, with whom I continue to communicate, are horrified by the facts they are encountering today. A multitude of different schemes have been put into effect. (We described them in detail in the article "Land Monetization." – I.V.) We've long known that our officials are very resourceful, but our foreign partners have proven unprepared to deal with this level of corruption. And this is only the preparatory stage of land reform. Land Cruisers are often stolen in our country, but for some reason no one has thought to legalize it. But we are witnessing precisely this process with land.
And yet, we continue to spread this message on every corner, organizing roundtables, writing official letters—to the president, the prime minister, the parliament… There's been zero response. Only a few deputies have responded.
— And what about the new Ministry of Agriculture, headed by Roman Leshchenko?
— In the process of being recreated. Leshchenko, who comes from an agribusiness background, was the Presidential Commissioner for Land Issues and also headed the State Geocadastre. Essentially, he's a co-author of the current government's land policy.
On allies in parliament, pro-government titushki, and farmers' protests
— Who are your real allies in the Rada?
"Batkivshchyna," the Svoboda majoritarians, and a number of deputies from the presidential faction share our concerns but are subject to party discipline. Plus the Opposition Platform — For Life and Holos, which we don't really trust. Yulia Tymoshenko filed a petition to the Constitutional Court back in November 2019 challenging the constitutionality of the land transfer bill and the prohibition on selling land, including to foreigners. However, the constitutional crisis we're currently experiencing makes it impossible to make any predictions about the court's possible decision. After Tupytskyi's dismissal, no judge will take on more than they fear losing.
— You said there's still room for methodological adjustments. Have you made any suggestions?
"We regularly sent all our proposals to the head of the committee, Mr. Solsky. He dutifully submitted them to the committee for consideration, and then withdrew them, citing a collective decision."
Here it's worth returning to the beginning of our conversation and stating that if a bandit occupies a key position in a relevant committee, then the laws they lobby for will protect bandits. This person, as I've already said, has been caught red-handed more than once. Or rather, his people have been caught red-handed. He himself, of course, won't get himself into trouble. The fact is that what we have here isn't even corporate raiding anymore, but the most common form of banditry. Because corporate raiding is the intellectual seizure of an asset. In Ukraine, land is seized with bats and thugs. And if this is how it's all being done, then bandits have come to power in the agricultural sector.
— Who is the land being taken from? The farmers?
"For those with 5-10 hectares, it hasn't reached them yet. But where cooperatives have been established, it's a free-for-all. If a cooperative is unprofitable, no one needs it. If it's successful, Solsky's people are right there. They find Ivan Ivanovich Ivanov, transfer the documents to him, and write fictitious minutes of a meeting of cooperative members, who supposedly elected a new leader. A black registrar registers the new management and that's it. Then all your evidence that the signature is forged will be "considered" in the capital's Pechersky Court. Do you have any more questions?"
— Yes. What's your forecast? How can you even do that if the government isn't just ignoring the problem, but is simply squeezing out yours? What will an exhausted farmer take to the bank on July 1st? Will he end up in debt bondage to the bank, which will gain another source of income by selling off land that bankrupt farmers can't buy? And agro-giants might even figure it out and, without waiting until 2024, begin accumulating land through private individuals.
"Anything could happen. There are countless schemes. There are no safety devices. All of this could trigger a classic rural protest."
— Do you really think that farmers have the internal resources for protest?
"I believe that government officials should always have common sense and the desire to correct a mistake when they discover it. After all, the issue isn't even about prematurely reopening land to the public, but about the model that will work afterward. We can continue to dance to the tune of agroholdings, or we can start implementing mechanisms that, while already in full swing, will help farmers navigate their path, preserve their land, and gradually strengthen their farms. However, to achieve this, the president needs to replace his advisers and take out his earplugs."
We often talk to farmers and seek an answer to the question you raised. What should we do next? I remember when I was in first grade, my mother baked nine loaves of bread every Friday. We'd eat one right away with milk, and the other eight would be saved for the week. Then I remember myself in fourth grade, standing in line for bread, in 1964. My father and I stood and listened to people express their outrage at Khrushchev's policies. Sometimes we didn't have enough bread, so we'd go to our neighbor, Baba Ulyana, and buy some from her to get through the day. And now I wonder: why were we so stupid and didn't continue baking our own bread every Friday? Why did we go to that damned store and wait for a factory-made loaf when we could feed ourselves? How did the authorities manage to manipulate us into such a state that we simply lost our minds?
It's the same today. They want to teach farmers that our land will be sold. But this is a futile plan. Because today, the entire life of those who work the land is aimed at reminding the Ukrainian people and the government how our mothers and grandmothers baked bread every Friday. And that we not only can, but must learn to do it ourselves.
— What steps do you expect from the agricultural lobby?
I specifically studied Bakhmatyuk's business based on the criminal case being conducted by the National Anti-Corruption Bureau of Ukraine (NABU). Over the course of its entire business history, his holding company received 29,3 billion hryvnias from the state on a non-repayable basis. According to Forbes, his net worth is $1,1 billion. So, Bakhmatyuk is only as effective as the state invested in him? There's no data on how much is being pumped into Kosyuk or Verevskyi. However, there is a figure of 1 billion hryvnias that Groysman's Cabinet invested in rural areas, acquiring 1 farms and 15 individual family farms. So, calculate how many farmers could have benefited from 29,3 billion.
— About 400 thousand approximately.
"And almost a million jobs. In fact, when they tell you there was no money in Ukraine, don't believe it. There was! But instead of nearly half a million farmers, we raised one oligarch. And if you add in all the other elite recipients, we would have had the coveted 1.5 million farms with inheritance rights, which would have preserved the Ukrainian nation, tradition, and culture. And we would have been in Europe long ago."
As for the magical argument of the now new government about the "shadow" that some creative people created in 2001, and others heroically decided to combat 20 years later by thoughtlessly selling off their land, it's simple. The law states that during the moratorium on land transfers, any change in ownership is invalid. Period. But instead of enforcing the law, we're passing a new one that essentially legitimizes the "shadow." In other words, we're not talking about its elimination, but rather about its banal legalization.
— How does the Association intend to proceed?
"When they implemented the fuel and lubricants licensing law, they cited the idea of effectively combating the shadow trade in fuels and lubricants and smuggling. When they introduced the tax invoice blocking mechanism, the argument was the same. As a result, not a single liter of diesel fuel, not a single kilogram of grain, not a single smuggler was officially discovered, but in the process, hundreds of farms were undermined. They prepared, so to speak, financially for the purchase of land."
This is the true face of the current government. They are clearing the land of its villagers to smoothly transfer it to national agricultural traders, and eventually to transnational companies. This is the latest and most serious challenge not only for Ukrainian farmers but for the state as a whole. We will face this challenge from the government at the next AFZU congress, and perhaps even sooner. Because the government has clearly offered the villagers the worst possible land reform option. But this isn't the end; more will come, and more will come!
Inna Vedernikova
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In topic: Who owns the agricultural holdings that have emerged over the past 10 years?
The agricultural lobby in the Rada: which politicians are playing on the side of large holdings?
How the owner of the largest agricultural holding lobbies for a law that benefits him
State Geocadastre under control: How Roman Leshchenko is helping Servants of the People
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