Ukraine farm­ers fear mar­kets

Many who faced Stalin are now against Ze­len­skiy’s plan to put land up for sale.

Orlando Sentinel - - FRONT PAGE - By Volodymyr Ver­byany

Ta­mara Tarasenko’s life be­gan against the back­drop of the vi­o­lent strug­gles for land in Ukraine, known as “the bread­bas­ket of Europe.” Now she’s 80, and she’s afraid there’s an­other fight com­ing for its fer­tile black soil.

Born be­tween the Josef Stalin-im­posed famine that killed mil­lions of peo­ple in the 1930s and the in­va­sion of Nazis who mur­dered mil­lions more to ex­ploit the land for Ger­many, Tarasenko spent most of her life on a kol­gosp, a col­lec­tive farm cre­ated from land seized by the com­mu­nists.

Af­ter Ukraine broke with the Soviet Union in 1991, she and her hus­band got six hectares that helped keep them afloat dur­ing the coun­try’s tu­mul­tuous ef­fort to trans­form it­self into a mar­ket econ­omy. And like all own­ers of farm­land in Ukraine, she wasn’t able to sell it.

Un­til now. Pres­i­dent Volodymyr Ze­len­skiy, a for­mer comic who swept to power on a pledge to crack down on cor­rup­tion and re­vive Ukraine’s sput­ter­ing econ­omy, is about to scrap a 2001 rule that banned sales to pre­vent peo­ple from be­ing strong-armed or swin­dled out of their prop­erty.

His govern­ment says it can boost the econ­omy by as much as 2% an­nu­ally for the next five years by at­tract­ing badly needed in­vest­ment and know-how and im­prove liv­ing stan­dards. But most Ukraini­ans — al­most three quar­ters, ac­cord­ing to opinion polls — think it’s a ter­ri­ble idea.

“I’m very much against it,” said Tarasenko, who lives off a pen­sion of less than $100 a month and fears she’ll be cheated out of her hold­ings in the vil­lage of Blystavyt­sya. “Who would take care of me?”

In a coun­try with a po­ten­tial arable-land mar­ket of 40 mil­lion hectares, an area al­most the size of Cal­i­for­nia, the con­cern is real. En­demic graft and mem­o­ries of the wheeler-deal­ing pri­va­ti­za­tions of the 1990s — in which the na­tion’s all-pow­er­ful oli­garchs snatched con­trol of large swathes of the econ­omy — have left many landown­ers wor­ried.

Ze­len­skiy’s op­po­nents have also stoked con­cern that cash-flush for­eign­ers will even­tu­ally be able to snap up one of Ukraine’s most valu­able re­sources, leav­ing many of the coun­try’s 41 mil­lion peo­ple forced to work for others on the soil they once owned. That has led to pub­lic protests and at least one brawl in par­lia­ment.

The plan poses what is po­ten­tially the big­gest risk yet for Ze­len­skiy, whose pledges to curb cor­rup­tion and end the Krem­lin­backed war in east­ern Ukraine boosted his pop­u­lar­ity to above 60% this fall. But his dou­bling down on lift­ing the ban has hit his pop­u­lar­ity.

Spurred on by de­mands from Western donors, in­clud­ing the In­ter­na­tional Mon­e­tary Fund, his govern­ment is push­ing to can­cel the mora­to­rium from next Oc­to­ber. While his party has a large ma­jor­ity, only 240 of par­lia­ment’s 450 law­mak­ers backed an ini­tial read­ing of a bill al­low­ing the sale of farm­land to Ukraini­ans, with lim­its on how much one per­son or com­pany can own.

The land-re­form de­bates have al­ready prompted demon­stra­tions. Pro­test­ers and po­lice clashed this month near par­lia­ment, ac­cord­ing to Hro­madske TV.

The idea is that open­ing the mar­ket can prompt a tec­tonic shift in bank­ing and agri­cul­ture and pro­pel an in­dus­try that makes up over 10% of Ukraine’s eco­nomic out­put. It’s also aimed at pro­vid­ing col­lat­eral and eas­ier ac­cess to loans for landown­ers, many of whom still use live­stock, hand tools and di­lap­i­dated trac­tors to work the fields.

Olena Perevoznyk, a 44year-old icon painter who in­her­ited sev­eral small plots from her grand­mother, is look­ing for­ward to change. The ban stopped her from sell­ing the plots to re­pay a mort­gage a decade ago, and she now rents them out for about $70 a year. As the open­ing of the mar­ket looms, she’s in­creas­ingly think­ing about start­ing a goat farm.

“It’s my long­time dream,” said Perevoznyk, who lives in the town of Brovary near Kyiv. “I’ll prob­a­bly need to sell my sep­a­rate plots and buy one par­cel.”

If the govern­ment doesn’t man­age to cre­ate a mar­ket, its goal of boost­ing the econ­omy by 40% in the next five years would be hard to achieve, said Oleg Nivievskyi, an as­sis­tant pro­fes­sor at the Kyiv School of Econ­omy.

The big­gest ques­tion is whether the re­form will even­tu­ally al­low sales to for­eign­ers. That may be a tough sell in a coun­try once con­sid­ered by the Nazis as a tar­get for “Leben­sraum,” a place for Ger­mans to take for their own.

In other for­mer com­mu­nist coun­tries that are now in the Euro­pean Union, con­cerns that for­eign­ers would buy up land proved base­less. But that doesn’t con­vince peo­ple like Fedir Bo­hdan, a 63-year-old landowner from the vil­lage of Mykhaylivk­a.

“In­vestors from the Mid­dle East and Asia have crazy amounts of money, and farm­land re­sources are lim­ited there,” he said dur­ing a protest in Kyiv against the law. “Will busi­ness­men from coun­tries like China hire lo­cals? No, they’ll hire their coun­try­men. And we will lose our work and money.”

VIN­CENT MUNDY/BLOOMBERG NEWS 2014

Res­i­den­tial build­ings sit near pri­vate farm plots near Ternopil, Ukraine.

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