January 4, 2012

Ukrainian farmland price to rise

The Ukrainian government has approved a coefficient of the normative pecuniary value of farmlands; starting from January 1, 2012, it will be 1.756, which means rising of the pecuniary value of land from UAH11,900 (US$1488) to UAH20,900 (US$2614)/ha.

Rising of the land price will entail rising of rent, which makes up UAH 303/ha (US$38) on average in Ukraine.

By expert calculations of the Ukrainian Agrarian Confederation, as a result of re-valuation, the average amount of rent in Ukraine next year will be UAH533 (US$67)/ha. Taking into account that 17.4 million ha of lands are under rent, total rent amount will make up UAH9.27 billion (US$1.16 billion) against UAH5.28 billion (US$660 million), paid for rent in 2010. The least cost of land rent next year will be in Zakarpattia region - UAH 369/ha (US$46.13), the maximum - in Khmelnytsky region - UAH 601/ha.

Rent makes up about 10% (in 2010) in the structure of the products' price cost. In order to compensate for rent expenses, agricultural producers will have to economise on other items of expenses, in particular, on the wages.