SPFU Launches the Land Bank Program: Expanding the Agricultural Land Market
On September 17, 2024, the State Property Fund of Ukraine (SPFU) presented its new Land Bank Program, designed to transform the market for state-owned agricultural land via an open and transparent online leasing platform.. The event was organized by the SPFU in partnership with the USAID/UKaid project “State-Owned Enterprise Reform Activity of Ukraine”(SOERA). Representatives of the parliament, government, international organizations, diplomatic corps and business took part in the event.
The Land Bank Program offers a unique opportunity for farmers and investors to lease state-owned land via the established and transparent Prozorro.Sale e-auction marketplace to alleviate corruption, increase private sector participation in the agriculture sector, and expand land use and agricultural productivity. As of today, the SPFU announced 45 auctions in the Vinnytsia, Lviv, Volyn, Cherkasy, Zaporizhzhia and Odesa regions, with plots varying in size from 2 to 262 hectares. The first auctions will be held on October 1. A total of 1,905 land plots with a total area of approximately 100,000 hectares will be leased by the end of 2024.
“The Land Bank will gradually bring hundreds of thousands of hectares of state land out of the shadows. This (land) has not benefited our country for decades, the land was not processed and utilized properly, corruption schemes were often formed around them. In contrast, competitive and open leasing of land will foster increased productivity and generate budget revenue. Estimated total revenue from leasing the first wave of plots is expected to be up to UAH 1.0 billion. And the land resources offered by the state will stimulate farmers to develop business, create new companies and/or small farms,” stated the Acting Chair of the State Property Fund of Ukraine, Ivanna Smachylo.
Currently, the SPFU is also working on the second wave of plots to be made available via the Land Bank. According to Ivanna Smachylo, it will include roughly 250,000 hectares. Implementation of this stage of the Land Bank Program is planned for 2025.
“The Land Bank is an opportunity for tenants to invest according to transparent and clear rules on competitive market conditions. And this is necessary for the creation of new agribusinesses and an incentive for the development of those that already exist. The Land Bank Program aims to create a transparent agricultural land rental market and increase budget revenue from land use. Broadly this means increased economic development, growth of tax revenues, creation of new jobs and, in general, effective use of resources available to the state,” stressed Oleksiy Sobolev, First Deputy Minister of Economy of Ukraine.
An interactive map of land plots was also presented at the launch event, which is now available on landbank.spfu.gov.ua. On the GIS map, the exact location, size, starting price and bidding status of each plot is available, as well as its cadastral number, destination, and other details. The online tool is convenient and easy to use. It will help auction participants to easily find a specific plot in a selected region for interest and bidding.
"The agricultural land market is one of the most competitive in the system. On average, more than three participants compete for such plots at open online auctions. As a result of the competition, the cost of leasing of communal agricultural land at auctions increases by almost 3.5 times. Thus, since the beginning of the reform, communities have received more than 642.2 million hryvnias annually. We expect that this experience will spread to new types of land in the system - state plots of the "Land Bank", - noted Serhiy But, CEO Prozorro.Sale JSC.
The implementation of the Land Bank is a significant step in reforming the management of state-owned enterprises and assets and increasing the efficiency of agricultural land use while contributing to the state budget.