Publication: Monitor Volume: 5 Issue: 228

Ukrainian President Leonid Kuchma signed a decree on December 3 on the acceleration of reforms in agriculture, which promises market revolution in the countryside. It effectively introduces private property of land and launches the disbanding of collective farms–a left-over of the Soviet economic system and a symbol of inefficiency in agriculture. This edict was Kuchma’s first significant economic step after his November 14 re-election. It was also a signal to the International Monetary Fund (IMF) mission, currently in Kyiv to monitor Ukraine’s implementation of the conditions to qualify the country for Extended Fund Facility [EFF] funding. The IMF suspended the US$2.6 billion EFF program for Ukraine in late September, citing the Ukrainian government’s weak fiscal policy and slow reforms, notably in agriculture.

Ukraine, whose borders encircle rich black soil, was the breadbasket of Europe in the first half of the twentieth century. Now the country has a notoriously inefficient subsidized agricultural sector, consisting chiefly of collective farms. According to Agriculture Minister Mykhaylo Hlady, most of them, despite having collectively received 4.7 billion hryvnyas (US$1 billion) in subsidies from the state during 1999, will finish the year in the red. At the same time, almost all of Ukraine’s 33,000 private farms–which were allowed only after Gorbachev’s perestroika–recorded profits, having operated without any state support.

According to the land reform decree, collective farms will be disbanded by April 1, 2000. Every farmer is entitled, at no cost, to 5 ha of land and is able to buy 25 ha more. The decree stipulates that the land may be bought, sold, mortgaged or leased. Opponents of land reform had argued that land should not become a commodity, because as such it could be bought up by foreigners. To prevent this, Kuchma’s decree does not allow foreign citizens to buy land, though it does permit 50-year leases.

Ukraine’s agriculture has remained unreformed since independence due to both firm opposition to market reform by parliamentary leftists and a strong collective-farm lobby. Legally, Kuchma’s decree is in fact somewhat flawed in that the president’s authority to issue decrees on economic issues unregulated by laws expired, per the constitution, nearly six months ago (see the Monitor, June 29). Those who oppose the decree are therefore likely to appeal against it at the Constitutional Court. The Reds, dazed by Kuchma’s relatively easy victory in the presidential elections, are not strong enough to organize an efficient political opposition to prevent land reform from being enacted. The main collective farm lobbyist in parliament, Peasants Party leader Serhy Dovhan, threatened impeachment of Kuchma over the land reform decree, which he defined as unconstitutional. His voice, however, is weak. The Peasants Party faction in parliament is now faced with a more immediate issue: its survival. After several MPs defected to pro-presidential factions, the Peasants Party caucus numbered only eight members at the end of last week (Studio 1+1 TV, December 2; UNIAN, Den, Zerkalo nedeli, December 4; Vikna-TET TV, December 6; see the Monitor, November 23).

The Monitor is a publication of the Jamestown Foundation. It is researched and written under the direction of senior analysts Jonas Bernstein, Vladimir Socor, Stephen Foye, and analysts Ilya Malyakin, Oleg Varfolomeyev and Ilias Bogatyrev. If you have any questions regarding the content of the Monitor, please contact the foundation. If you would like information on subscribing to the Monitor, or have any comments, suggestions or questions, please contact us by e-mail at, by fax at 301-562-8021, or by postal mail at The Jamestown Foundation, 4516 43rd Street NW, Washington DC 20016. Unauthorized reproduction or redistribution of the Monitor is strictly prohibited by law. Copyright (c) 1983-2002 The Jamestown Foundation Site Maintenance by Johnny Flash Productions