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10 April 2017

Kernel's statement on land reform in Ukraine

Due to the wide discussion in the Ukrainian mass media and the frequent requests of journalists asking the Company whether the lifting of the moratorium on the sale of agricultural land is appropriate, we inform of Kernel's position on this issue.

Ukraine has a great potential for agricultural development. In order to compete in the global markets with the USA and the Latin American countries, the Ukrainian agrarian sector needs a strategically correct fundamental land reform that will enable to raise investments amounting to billions of dollars, and will contribute to the development of the country's economy. In addition, the reform should equally take into account the interests of about 7 million owners of agricultural land.

The statement of Prime Minister of Ukraine Vladimir Groysman on granting the right to purchase land of up to 200 hectares exclusively to individuals is merely a political step and has nothing in common with the real reform. Firstly, most of individuals in Ukraine unfortunately do not have financial possibilities and other resources to purchase and cultivate land. This means that the owners of land shares will not receive a real value for such shares upon sale due to lack of demand. On the other hand, the activities that cannot be economically successful with a land bank of 200 hectares form the basis of the Ukrainian agrarian sector. Furthermore, the market of individuals will promote the development of shadow schemes for buying up land and further prosperity of corruption.

In our opinion, the Government and Parliament are not ready to take a constructive decision now. Given such circumstances, we consider it appropriate not to lift the moratorium until a well-reasoned consolidated position of the authorities is developed, taking into account the interests of land owners and the economy of Ukraine. Taking of wrong short-sighted decisions will result in the irreversible negative consequences that cannot be eliminated in the future.

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