08 July 2021, Thursday, 18:17 149

Economically Justified Average Cost Of Land In Ukraine UAH 51,200 Per Hectare - UCAB

Редактор: Daria Zubkova

The Ukrainian Club of Agrarian Business association (UCAB) estimates the economically justified average cost of land in Ukraine at UAH 51,200 per hectare.

The UCAB has said this in a statement, Ukrainian News Agency reports.

"The economically justified average cost of land in Ukraine is UAH 51,200 per hectare. In each region, the price of land will be uneven. In some regions, it will fluctuate 2-2.5 times. The most expensive hectares will be in Kyiv region - there the price of 1 hectare will fluctuate from UAH 26,500 to UAH 74,600," the statement reads.

It is noted that although the agricultural land market has opened, it is still too early to talk about the formation of the market price for land, because the number of concluded purchase and sale transactions is small.

According to the statement, the formation of the price of each individual land plot will be influenced by its normative monetary value, area, location, average yield, and rent.

At the moment, to determine the economically weighted value of land, it is necessary to take into account the current rent for land (as income from placed investments) and the rate on long-term loans in foreign currency (as a criterion for assessing the use of funds).

According to the UCAB, in 2020, the rent for land averaged UAH 3,425 per hectare in Ukraine, and the rate on long-term loans in foreign currency was 6.7%.

At the same time, the association emphasized that the maximum price for land directly correlates with high yields in 2020 in such regions as Vinnytsia, Ivano-Frankivsk, Lviv, Poltava, Sumy, Ternopil, Khmelnytskyi, Chernivtsi and Chernihiv.

In these regions, the yield exceeded 5 tons per hectare, so the price of 1 hectare could reach USD 2,000-2,500.

Ellina Yurchenko, an expert on land issues at the UCAB, believes that the lowest price will be in Volyn, Dnipropetrovsk, Donetsk, Zaporizhia, Luhansk and Kherson regions.

In her opinion, the cost will slightly exceed USD 1,000 per hectare.

As Ukrainian News Agency earlier reported, the Minister of Agrarian Policy and Food Roman Leschenko predicts that at the first stage of the launch of the land market, the average cost of 1 hectare will be about UAH 50,000.

On July 1, a law providing for the lifting of the moratorium on the sale of agricultural land came into force.