September 21, 2017 Print

UEFF's Maryan Zablotskyy receives Europe Liberty Award from Atlas Network CEO Brad Lips during Europe Liberty Forum 2017 in Budapest, Hungary.

The Ukrainian Economic Freedoms Foundation (UEFF) has won the 2017 Europe Liberty Award for its ongoing work toward land reform in Ukraine. Currently, Ukraine is one of the last remaining countries in the world where its citizens cannot buy or sell agricultural land, and UEFF has been hard at work to break down this barrier to prosperity and opportunity in Ukraine.

“UEFF will continue its fight to eliminate the ban to purchase and sell agricultural land, which is unjustly violating private property rights of 7 million people,” said Maryan Zablotskyy, co-founder and director of UEFF. “We already made significant progress towards it by resolving key regulatory issues that are an obstacle for the land reform. Transparent land auctions and resolution of escheat land issue have been a significant progress, with a series of follow-up legislation currently in different stages of adoption in Parliament and Constitutional Court.”

The labyrinth of legislation concerning land in Ukraine includes 442 separate regulations, and there are hundreds of inconsistencies existing among 15 different national land laws. Nearly 7 million Ukrainians privately own 28 million of the 32 million hectares of arable land, with the rest being owned by the Ukrainian government. Of those 7 million, about 45 percent are over the age of 60 who had initially received the land as recompense for their forced labor under the former Soviet regime. However, many now cannot take full advantage of their private ownership of such land because they are prohibited from selling it. This forces impoverished land owners who are incapable of using it to lease their land temporarily for relatively low rent payments.

The liberalization of the agricultural land market is one of UEFF’s top priorities, and its approach to achieve that end engages the issue on multiple fronts, such as decentralization of state land management, improvements of land property rights, and deregulation. Areas needing defined property rights include roads that run between land plots and escheat land, which is land belonging to deceased individuals with no next of kin.

UEFF’s victories in 2016 and 2017 were many. Its proposal to remove the monopolistic power to lease 5 million hectares of state land and devolve it to 10,500 local city councils was adopted in its first reading. A pending registered draft law mandates that land parcels must leased as a whole to protect farmers from hostile takeovers – currently a plot of 60 hectares must be leased out to as many as 12 separate parties.

Two of UEFF-drafted laws that Parliament passed, Law #2279 and Law #3006, eliminated exemptions allowing the leasing of agricultural land without a competitive auction and settled the problem posed by escheat land, respectively. The former was adopted in March 2016 and significantly increased the incomes of municipalities, allowing many to refrain from imposing land or property taxes. Previously in 2015, fewer than one in four hectares of land were sold on auction. Law #3006 – adopted in September 2016 – brought clarity to the escheat land problem. Prior to the reforms, farmers informally used the land whose owners has passed away with no next of kin but with no legal footing to stand on, which presented a constant threat of fines or takeovers from the government. Now, municipal governments are able to lease such land.

Another law UEFF has proposed include legalizing de-facto sales of agricultural land through a method called perpetual lease, which sidesteps the politically sensitive topic of the ban on selling land while allowing for trading land. The perpetual lease concept won the endorsement of the Ukrainian Parliament’s Agricultural Committee in 2016. A drafted law that eliminates the ban outright was officially registered in Parliament at the end of 2016.

A major spectacle accompanied UEFF’s submission of a constitutional complaint to the Constitutional Court of Ukraine, which was signed by 55 People’s Deputies (Members of Ukrainian Parliament). Two UEFF founders – Maryan Zablotskyy and Sergiy Fursa – publicly submitted the complaint to the Constitutional Court, joined by People’s Deputy Oleksiy Mushak, a close friend of UEFF (link in Ukrainian).

Founders of UEFF Maryan Zablotskyy and Sergiy Fursa stand near two Members of Parliament who are submitting their complaint to the Constitutional Court regarding the land sale ban - the first time such a complaint had been filed in 27 years. The red folder with the Soviet logo on it has the copy of the order from Vladimir Lenin that banned the sale of land exactly 100 years ago.

“A focus on concrete, albeit often relatively small reforms, is our chosen strategy for achieving large reforms,” continued Zablotskyy. “This has resulted in the adoption of 11 different law drafts that helped eliminate 29 different business permits, strengthen land property rights and improve tax administration. In all this, Atlas Network’s training and financial support have been instrumental.”

UEFF also engaged in shaping the public dialogue about land reform by running a national television program, called “First on Village,” (translated from Ukrainian). Launched in February 2017, it discusses rural issues and has aired 11 episodes, reaching millions of viewers.

UEFF has proved itself to be more effective than US government-supported Technical Assistance Programs. UEFF’s budget for drafting law #3006 was only $3,000, yet the USAID-funded project spent a significant portion of its $300,000 budget on its proposed alternative draft law, #3006-1, which failed. Zablotskyy explained the disconnect in a Forbes commentary, advocating for smaller grants with a wider distribution as opposed to larger ones and asking for the contractors receiving such grants to be held accountable. UEFF was able to achieve real reform with 1% of the budget of the competing reform proposals, demonstrating that solutions coming from local experts are more effective than foreign government-directed-and-funded aid.

“The team of Ukrainian Economic Freedoms Foundation (UEFF) is humbled by the prestigious European Liberty Award,” concluded Zablotskyy. “We are extremely grateful to Atlas Network for the enormous support it provided us. Ukraine is currently the key battleground for the future of freedoms in Europe, Atlas Network has recognized this and made special effort of raising a vibrant pro-freedom community.”

UEFF is the 2017 Europe Liberty Award Winner, has participated in several Atlas Leadership Academy programs, and has received a Liberating Enterprise and Entrepreneurship Grant. UEFF’s mission is to effectively advocate for greater economic freedom by achieving lower and simpler taxation, implementing deregulation and increasing property rights protection.