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№ 2021/3

Economic policy and the formation of the new system of economic management

SIDENKO Volodymyr Romanovych¹

¹State Institution "Institute for Economics and Forecasting, NAS of Ukraine"

THE GLOBAL CONTEXT OF LAND MARKET LIBERALIZATION IN UKRAINE: OPPORTUNITIES AND RISKS FOR RURAL DEVELOPMENT

Ekon. prognozuvannâ 2021; 3:7-32

https://doi.org/10.15407/eip2021.03.007

ABSTRACT ▼

The article considers various global factors influencing rural development under the conditions of liberalization of the agricultural land market in Ukraine. The author assesses the impact of global processes and global capital on the development of national farms, income distribution, access to land resources, production processes and equitable development in this country. It is proved that globalization, leading to increased concentration of agri-food production and business and expanding the role of large transnationalized corporations, is primarily aimed at exploiting the country’s existing comparative advantages, rather than increasing them, and promotes, in many recipient countries, a model of double economy split in the technological and socio-economic dimensions into qualitatively heterogeneous sectors.
The author concludes that although global factors of agricultural production may have a relatively positive impact in macroeconomic terms, the dominance of multinational (transnational) companies, large exporting companies and financially powerful sovereign welfare funds in the market may create risks and threats of crowding out Ukrainian farmers from the market and blocking the sustainable development of rural areas. At the same time, Ukraine's agricultural sector will be transformed into a raw-material link of global food production chains dominated by large transnationalized entities, and a kind of raw-material enclave of transnationalized production will be created within the Ukrainian economy.
The article argues that in today's global economy, where cardinal transformations are taking place and uncertainty is growing, land will become an increasingly valuable asset, attractive not only to agricultural producers but also to land speculators and those who try to maintain the value of their assets under the conditions of growing global risks. Under such conditions, investment in land will not at all necessarily contribute to the development of agricultural production, because speculative capital in the face of widespread expectations of a long and significant upward trend in land prices will prevail over productive agricultural capital. In general, this might lead to a significant increase in the cost of agricultural production and food prices.
The author proves that the liberalization of the land market leads to increased risks of transfer of the control over Ukraine’s land resources to foreigners (sovereign financial funds and major international corporations), given their dramatic advantage by available financial resources for land acquisition, compared to those possessed by Ukraine’s residents.
The article substantiates a set of policy measures and national policy instruments necessary to minimize the risks associated with the introduction (in the context of globalization) of free purchase and sale of agricultural land, which comply with the regulation principles of the European Union.
Prepared within the scientific project on "Spatial justice in land use for sustainable development of rural areas", under completion in accordance with the Resolution of the Presidium of the NAS of Ukraine of 23.12.2020 No 296 (state registration No 0120U100816).

Keywords:agricultural land market, rural development, globalization, global capital, multinational (transnational) corporations, sovereign development funds, economic and social risks and threats

JEL: F23, F63, Q01, Q15

Article in Ukrainian (pp. 7 - 32)

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№ 2021/3

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