Wind turbines manufactured by Vestas Wind Systems A/S operate on farmland beyond rural houses and farm buildings at the Botievo wind farm operated by DTEK Holdings Ltd. in Botievo, Ukraine, on Thursday, May 26, 2016. DTEK is controlled by Ukrainian billionaire Rinat Akhmetov. Photographer: Vincent Mundy/Bloomberg
Ukraine's ban on the sale of agricultural land prevents holders from using the asset as collateral to access credit and means large tracts are left unused © Bloomberg

Ukraine’s president has ordered his new government to draft legislation by October overturning the ban on the sale of the country’s farmland and to speed up privatisation and other stalled reforms to boost investment, growth and living standards.

Addressing a round-table gathering of top officials on Monday, Volodymyr Zelensky — the former comedian who won Ukraine’s presidential elections earlier this year by a landslide — set a short deadline for results, warning voters wanted fast and deep changes.

“The only thing we lack is time . . . society won’t wait for something to start working in . . . several years,” he said, days after Oleksiy Honcharuk was approved as prime minister by a newly elected parliament, in which the president’s Servant of the People party holds an outright majority.

Mr Zelensky’s politically sensitive push to lift the longstanding ban on agriculture land sales is likely to please western backers, including the IMF, from which Kiev hopes to secure a further multi-billion-dollar loan programme this autumn.

The fund, World Bank and other international financial institutions have long urged Ukraine to establish a competitive and open land market, arguing it could add billions of dollars to foreign direct investment inflows and increase annual economic growth by 1-2 per cent.

Millions of Ukrainians have been issued land parcels since the 1990s,with many leasing it to farming groups. Most remaining farmland is held in government landbanks for lease to farmers.

The ban on sales — which has been repeatedly prolonged by populist lawmakers to avoid land purchases by foreign buyers — has prevented landholders from using the asset as collateral to access credit, left large plots of government farmland unused and prevented the establishment of real market value, analysts say.

Mr Zelensky stressed on Monday that reform should include protective measures for poor Ukrainian landholders.

International agriculture companies operating in Ukraine have said they are comfortable with the current practice of securing long-term leases on farmland.

Mr Zelensky plans to kick-start large-scale privatisations of state enterprises by April next year in a move expected by international financial institutions to lure additional funds and boost investment in businesses that have been mismanaged and are prone to rent-seeking by vested interests.

Two top state assets the country has struggled to privatise in past years are electricity generator Centerenergo and Odessa Portside chemical plant.

Sitting alongside Mr Zelensky during the televised roundtable event, Mr Honcharuk expressed approval for the president’s directives.

“The goal of my team is to attain a minimum of 40 per cent economic growth over five years . . . to create some 1m new jobs,” Mr Honcharuk added.

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