The Ukrainian government has begun implementing the land reform plans that it promised some time ago, paving the way to get rid of the legacy of the Soviet era and bring great economic benefits to the country, with food prices rising to their highest level in nearly a decade.

In a report published by the American "Bloomberg" website, the writers Volodymyr Verbiani and Anishka de Souza say that Ukraine was previously called the "breadbasket of the Soviet Union", and at present it may be able to raise its agricultural products to a high level that enables it to compete strongly in the global market. .

new law

Since July 1, a new law has allowed the purchase and sale of agricultural land for the first time in two decades, and the Ukrainian government says this measure means that one of the most fertile places on the planet will be able to achieve greater and more efficient agricultural yields by boosting investment in this field. .

According to the authors, this law is one of the long-awaited reforms in a country suffering from corruption and nepotism, and its economic situation has deteriorated in the past period, especially after the Corona virus pandemic affected global food supply chains.

Ukraine is the largest exporter of sunflower oil, and the fourth largest exporter of corn globally, and its products reach various countries of the world, from Morocco through Bangladesh to Indonesia, but despite the fertility of the land, Ukrainian corn crops are less by a third than the United States, and wheat crops are less by about a quarter from the European Union.

The new law is partly due to the legacy of the Soviet era when the sale and purchase of land was banned, and then a second ban in 2001, a decade after Ukraine gained its independence, due to fears that the wealthy and foreigners will take over most of the land, and this has hindered development because farmers could not work Except by renting land.

The new law is an important event on a global scale, not just for Ukraine, says Oleg Nevsky, an assistant professor at the Kiev School of Economics. These reforms will provide additional export revenue for Ukrainians, and will be an additional source of food for the rest of the world.

All individuals will be allowed to purchase plots of land up to 100 hectares, as part of President Volodymyr Zelensky's efforts to revive the faltering economy, and according to the estimates of the Kiev School of Economics;

This move could boost GDP by as much as 1.5 percentage points annually for the coming years.

In this context, Nevevsky asserts that this will be a factor enhancing agricultural potential while increasing production efficiency and enhancing market transparency.

He adds that land owners will benefit from the market price, while farmers will have the opportunity to diversify into higher-profit crops, and greater opportunities to obtain financing.

According to the authors, the area of ​​arable land in Ukraine may reach more than 40 million hectares in the coming period, nearly the size of California, which will meet the increasing demand from several regions such as the Arab Gulf states.

The area of ​​arable land in Ukraine may reach more than 40 million hectares in the coming period (Getty Images)

Cautious optimism

Igor Hochovsky, an agricultural logistics analyst in Kiev, sees the reforms as making way for the correction of a historical error.

Hochovsky's grandfather was a wealthy farmer growing wheat in the fields of western Ukraine, before the Soviets seized much of his land to establish collective farms in the 1940s.

Hochovsky says the new law "is an opportunity for me to take back at least the piece of land that belonged to my ancestors, and now everyone understands that agriculture is the main engine of the Ukrainian economy."

Despite all this optimism, Ukraine has a track record of failing to implement reforms, according to the authors, and suffers from endemic state corruption, something Zelensky promised to address when he took office in 2019.

The current reforms are reminiscent of what happened earlier in Russia, where privatization in the 1990s allowed big business and influencers to control large sectors of the economy.

According to the authors, there is concern among Ukrainians that the lands will become an easy target for the wealthy, and later for foreigners, in light of the government's plans to open this market to foreigners from 2024.

“If land is sold to the rich under the banner of helping the poor, it will be counterproductive in the long run,” says Tim Benton, director of research in the Emerging Risk Division at Chatham House.

Export to Gulf countries

The Covid-19 crisis has revealed the fragility of global food supply chains and the difficulty of securing food needs, which has led to the cost of supplying food rising to its highest level in nearly a decade, according to the index of the United Nations Food and Agriculture Organization.

In light of the health crisis, the rich Gulf states were closely watching Ukraine, and the Saudi Agricultural Investment and Livestock Production Company (SALIC) had acquired in 2018 Maria Agro Holding, one of the largest agricultural companies in Ukraine.

Agriculture also occupies a prominent place in the cooperation deals signed by Ukraine and the United Arab Emirates this year (2021), which amounted to 3 billion dollars.

In an article on the Atlantic Council website last March, Ukrainian Agriculture Minister Roman Leshchenko confirmed that his country aims to provide food security for the Emirates and a number of other countries in the region, including Saudi Arabia and Qatar.

In his article, Leshchenko explained that at every stage of this process, we will make sure that Ukrainians are protected from the greed of big business and corrupt officials, adding that the government will never lose sight of the central idea that Ukraine's agricultural land is the country's greatest wealth.