War and Theft: The Takeover of Ukraine’s Agricultural LandView of the wheat field during the harvesting season near Krasne village, Ukraine

February 21, 2023

https://www.oaklandinstitute.org/war-theft-takeover-ukraine-agricultural-land

War and Theft: The Takeover of Ukraine’s Agricultural Land exposes the financial interests and the dynamics at play leading to further concentration of land and finance.

The total amount of land controlled by oligarchs, corrupt individuals, and large agribusinesses is over nine million hectares — exceeding 28 percent of Ukraine’s arable land. The largest landholders are a mix of Ukrainian oligarchs and foreign interests — mostly European and North American as well as the sovereign fund of Saudi Arabia. Prominent US pension funds, foundations, and university endowments are invested through NCH Capital, a US-based private equity fund.

Several agribusinesses, still largely controlled by oligarchs, have opened up to Western banks and investment funds — including prominent ones such as Kopernik, BNP, or Vanguard — who now control part of their shares. Most of the large landholders are substantially indebted to Western funds and institutions, notably the European Bank for Reconstruction and Development (EBRD) and the World Bank.Western financing to Ukraine in recent years has been tied to a drastic structural adjustment program that has required austerity and privatization measures, including the creation of a land market for the sale of agricultural land. President Zelenskyy put the land reform into law in 2020 against the will of the vast majority of the population who feared it would exacerbate corruption and reinforce control by powerful interests in the agricultural sector. Findings of the report concur with these concerns. While large landholders are securing massive financing from Western financial institutions, Ukrainian farmers — essential for ensuring domestic food supply — receive virtually no support. With the land market in place, amidst high economic stress and war, this difference of treatment will lead to more land consolidation by large agribusinesses.

The report also sounds the alarm that Ukraine’s crippling debt is being used as a leverage by the financial institutions to drive post-war reconstruction towards further privatization and liberalization reforms in several sectors, including agriculture.

War And Theft: The Takeover of Ukraine’s Agricultural Land

by Frédéric Mousseau and Eve Devillers. For The Oakland Institute, PO Box 18978 Oakland, CA 94619 USA

February 21, 2023

https://www.oaklandinstitute.org/war-theft-takeover-ukraine-agricultural-land

The war in Ukraine has been at the center stage of foreign policy and media reports since February 2022. Little attention, however, has been given to a major issue, which is at the core of the conflict – who controls the agricultural land in the country known as the “breadbasket of Europe?”This report addresses this gap – identifying the interests controlling Ukraine’s agricultural land and presenting an analysis of the dynamics at play around land tenure in the country. This includes the highly controversial land reform that took place in 2021 as part of the structural adjustment program initiated under the auspices of Western financial institutions, after the installation of a pro-European Union (EU) government following the Maidan Revolution in 2014.

With 33 million hectares of arable land, Ukraine has large swaths of the most fertile farmland in the world. 1 Misguided privatization and corrupt governance since the early 1990s have concentrated land in the hands of a new oligarchic class. Around 4.3 million hectares are under large-scale agri- culture, with the bulk, three million hectares, in the hands of just a dozen large agribusiness firms.

In addition, according to the government, about five million hectares – the size of two Crimea – have been “stolen” by private interests from the state of Ukraine. The total amount of land controlled by oligarchs, corrupt individuals, and large agribusinesses is thus over nine million hectares, exceeding 28 percent of the country’s arable land. The rest is used by over eight million Ukrainian farmers.

The largest landholders are a mix of oligarchs and a variety of foreign interests – mostly European and North American, including a US-based private equity fund and the sovereign fund of Saudi Arabia. All but one of the ten largest landholding firms are registered overseas, mainly in tax havens such as Cyprus or Luxembourg. Even when run and still largely controlled by an oligarch founder, a number of firms have gone public with Western banks and investment funds now controlling a significant amount of their shares.

The report identifies many prominent investors, including Vanguard Group, Kopernik Global Investors, BNP Asset Management Holding, Goldman Sachs-owned NN Investment Partners Holdings, and Norges Bank Investment Management, which manages Norway’s sovereign wealth fund. A number of large US pension funds, foundations, and university endowments are also invested in Ukrainian land through NCH Capital – a US-based private equity fund, which is the fifth largest landholder in the country.

Most of these firms are substantially indebted to Western financial institutions, in particular the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and the International Finance Corporation (IFC) – the private sector arm of the World Bank. Together, these institutions have been major lenders to Ukrainian agribusinesses, with close to US$1.7 billion lent to just six of Ukraine’s largest landholding firms in recent years. Other key lenders are a mix of mainly European and North American financial institutions, both public and private. Not only does this debt gives creditors financial stakes in the operation of the agribusinesses, but also confers a significant level of leverage over them. This was evidenced by the debt restructuring of UkrLandFarming, one of Ukraine’s largest landholders, which involved creditors including the Export-Import agencies of the US, Canada, and Denmark, among others, and led to important organizational changes including layoffs of thousands of workers.

This international financing directly benefits oligarchs, several of whom face accusations of fraud and corrupt dealings, as well as the foreign funds and firms associated as shareholders or creditors. Meanwhile, Ukrainian farmers have had to operate with limited amounts of land and financing, and many are now on the verge of poverty. Data shows that these farmers receive virtually no support compared to agribusinesses and oligarchs.

The Partial Credit Guarantee Fund established by the World Bank to support small farmers is only US$5.4 million, a negligible amount compared to the billions channeled to large agribusinesses.

In recent years, Western countries and institutions have provided massive military and economic assistance to Ukraine, which became the top recipient of US foreign aid – marking the first time since the Marshall Plan that a European country holds this top spot.

As of December 2022, less than one year into the war, the US has allocated over US$113 billion to Ukraine, including US$65 billion of military aid, 8 which is more than the entire budget of the State Department and USAID globally (US$58 billion).

The report details how Western aid has been conditioned to a drastic structural adjustment program, which includes austerity measures, cuts in social safety nets, and the privatization of key sectors of the economy. A central condition has been the creation of a land market, put into law in 2020 under President Zelenskyy, despite opposition from a majority of Ukrainians fearing that it will exacerbate corruption in the agricultural sector and reinforce its control by powerful interests.

The findings of the report validate this concern, showing that the creation of a land market will likely further increase the amount of agricultural land in the hands of oligarchs and large agribusiness firms. The latter have already started expanding their access to land. Kernel has announced plans to increase its land bank to 700,000 hectares – up from 506,000 hectares in 2021.

Similarly, MHP, which currently controls 360,000 hectares of land, seeks to expand its holdings to 550,000 hectares. MHP is also reportedly circumventing restrictions on the purchase of land by asking its employees to buy land and lease it to the company.

Additionally, by supporting large agribusinesses, international financial institutions are in effect subsidizing the concentration of land and an industrial model of agriculture based on the intensive use of synthetic inputs, fossil fuels, and large-scale monocropping – long shown to be environmentally and socially destructive.

By contrast, small scale farmers in Ukraine demonstrate resilience and a great potential for leading the expansion of a different production model based on agroecology, environmental sustainability, and the production of healthy food. It is Ukraine’s small and medium-sized farmers who guarantee the country’s food security whereas large agribusinesses are geared towards export markets.

In December 2022, a coalition of farmers, academics, and NGOs called on the Ukrainian government to suspend the 2020 land reform law and all market transactions of land during the war and post- war period, “in order to guarantee the national security and preservation of territorial integrity of the country in wartime and post-war reconstruction period.”

As explained by Prof. Olena Borodina of the National Academy of Sciences of Ukraine (NASU), “Today, thousands of rural boys and girls, farmers, are fighting and dying in the war. They have lost everything. The processes of free land sale and purchase are increasingly liberalized and advertised. This really threatens the rights of Ukrainians to their land, for which they give their lives.”

At a time of tremendous suffering and displacement, wherein countless lives have been lost and massive financial resources spent for the control of Ukraine, this report raises major concerns about the future of land and food production in the country, which is likely to become more consolidated and controlled by oligarchs and foreign interests.

These concerns are exacerbated by Ukraine’s staggering and growing foreign debt, contracted at the expense of the population’s living conditions as a result of the measures required under the structural adjustment program. Ukraine is now the world’s third-largest debtor to the International Monetary Fund (IMF) 17 and its crippling debt burden will likely result in additional pressure from its creditors, bondholders, and international financial institutions on how post-war reconstruction – estimated to cost US$750 billion – should happen.

These powerful actors have already been explicit that they will use their leverage to further privatize the country’s public sector and liberalize its agriculture.

The end of the war should be the moment and opportunity for just the opposite, i.e. the redesign of an economic model no longer dominated by oligarchy and corruption, but where land and resources are controlled by and benefit all Ukrainians. This could form the basis for the transformation of the agricultural sector to make it more democratic and environmentally and socially sustainable. International policy and financial support should be geared towards this transformation, to benefit people and farmers rather than oligarchs and foreign financial interests.

This 50 page report continues here…

https://www.oaklandinstitute.org/war-theft-takeover-ukraine-agricultural-land

https://www.oaklandinstitute.org/sites/oaklandinstitute.org/files/takeover-ukraine-agricultural-land.pdf

Here’s PM Starmer’s NFU 2023 speech which has got so many farmers fuming. By imposing inheritance tax in the October budget his promises to support family farms and stabilise the market for food… all broken

NFU23: Sir Keir explains his vision for British farming
Opposition leader Sir Keir Starmer made Labour’s pitch for the farming vote with a keynote speech that included pledges on national food resilience, rural services, and, notably, on the food bought by schools, hospitals, prisons and Whitehall departments.
“The next Labour government will commit to this – 50% of all food purchased by the public sector will be food produced locally and sustainably,” Sir Keir told NFU23 delegates.
“That is £1.2 billion of public money spent on quality food that is genuinely better for peoples’ health.
“And 50% is just the minimum. We will do everything to go beyond it.
“We’re committed to reforming public procurement. And seasonal, sustainable, British-grown food is a key part of it.”

i recommend watching these guys…..

also…..Oli at Farming Explained……Leicestershire

Agricultural Property Relief. A look at Agricultural Property Relief and a discussion of the potential effects of the new tax on farms levied by the Labour Party, with reference to David Lloyd George’s Death Duties as levied to fund his welfare reforms.

Oli also reviews the WWII Labour party’s plans to nationalise land…

Land Nationalisation. Scientist Daniel Hall proposed a reshaping of the British countryside for the twentieth century. Along with his friend, economist C S Orwin, Hall followed in the footsteps of earlier writers on scientific agricuture in demanding a British landscape designed only for agricultural efficiency. State ownership of the land would be necessary for the changes to land holdings and attendant infrastructure to be brought into being.

and Harry Metcalf…..Harry’s Farm

Big changes in the 2024 Budget have led to real anger on UK family farms. What’s going on?

In last week’s Budget, the new Labour Government introduced revised tax rates for Inheritance Tax. From April 2026, the 100% Agricultural Property relief will only be on the first £1,000,000, after that the rate will be 20%. This video explains why this is going to be so damaging to UK family farms.

This is a turning point in British history, he predicts. “People will come to realise this is a ‘closure of the mines’ moment for UK agriculture, in the same way it affected those mining towns for generations, it will change rural Britain and the British landscape forever. It knocks on to everything in market towns, the local shops, the pubs, the schools, the livestock auctioneers, the suppliers, the drivers – the lot. Family farms are just the base of the pyramid. The ‘£1 million’ sum exposes it. It’s not just short of the mark, it’s ten times short of the mark.”

Angry farmers threaten ‘militant’ action over Rachel Reeves’ inheritance tax raid on farms

Why Labour’s Budget is a ‘closure of the mines’ moment for British farming

Farmers united in outrage and disbelief over the Government’s tax grab on their livelihoods fear it could be the end of the line for them

31 October 2024 Guy Kelly

https://www.telegraph.co.uk/news/2024/10/31/labours-budget-is-a-closure-of-the-mines-moment-farmers/

Clive Bailye has always known that farming is a long game. As a child, it was one of the first lessons his father taught him as they trampled around their family’s fields in south Staffordshire. A generation before, Bailye’s father had been taught the same by his father, who began with just two acres after the Second World War.

Optimism is at the heart of things. You sow crops with planning, caution and a small dose of hope. You harvest with one eye on the next year, and the year after that. And in lean times, you have to remind yourself that things will always get better. Recently, as farmers across the UK have been hit by all manner of blights – the climate emergency, geopolitical strife, ever more powerful supermarkets, Brexit repercussions – he’s found comfort in that attitude.

Then opposition leader, Sir Keir Starmer, addresses 2023 NFU Conference in Birmingham

Farmer and author James Rebanks: ‘I hate the word rewilding – it’s been weaponised’

“This is a multigenerational, long-term vocation. You can’t make money in a single year, and it doesn’t work on a single generation,” Bailye says. “[Farmers] have been on our knees, but you keep the next generation in mind and think, ‘It might not be working for me, but think ahead. It will get there eventually, even if it’s 200 years.’” He sighs. “Well, after this, that’s just not the case anymore. This is the end of the line.”

The “this” Bailye refers to is Labour’s Budget announcement that from April 2026, it will reform the Agricultural Property Relief (APR), which allows farmers to easily pass their businesses to the next generation, by introducing a 20 per cent tax rate on the value of all farms and businesses worth more than £1 million. It is an inheritance tax tweak that seems not just ill thought-out but, to some at least, wilfully capricious. Farmers are united in disbelief and outrage; behind them, a chorus of high-profile support grows more and more vociferous. If Labour felt taking on farmers would be easy, they may now be thinking twice.

“Rachel Reeves. I literally daren’t comment,” wrote Jeremy Clarkson – who is, among other things, surely the loudest and most influential voice in British agriculture these days – to his eight million followers on X. He eventually did dare, of course. “Farmers. I know that you have been shafted today. But please don’t despair. Just look after yourselves for five short years and this shower will be gone.”

Clarkson’s neighbour, the popular YouTuber and farmer Harry Metcalfe, simply called it “the end of family farms in the UK”. Rachel Johnson, the writer and broadcaster, asked if it is “really worth f—ing family farms, undermining food security, forcing land clearances and fire sales of agricultural assets, breaking the continuity of generations of stewardship, just to raise a measly £500 million to chuck into the black hole?”

‘Inheritance tax change will cripple family farms’

James Rebanks, the bestselling author and upland farmer, also took to social media to rail against various decisions and betrayals – both by Labour and Conservative governments – against the farming community. “The damage done to these relationships will last for a very long time – it’s a disaster of epic proportions,” he said, as well as referring to the UK as “one of the stupidest countries on earth when it comes to [agricultural] policy”.

And Kirstie Allsopp, the TV property presenter, wrote that Reeves has “f- – – -d all farmers, […] destroyed their ability to pass farms on to their children, and broken the future of all our great estates. The Government has zero understanding of what matters to rural voters.” Later she wondered aloud what all this meant for The Archers.

Bailye, 51, is less sweary but, being in the direct line of fire, even more distressed. He variously calls it a “kick in the teeth”, a “kick in the b- – — ks” and a “complete blindside” for farmers like him. The 750 acres of combined arable crops he farms near Lichfield was inherited from his father, who took it over from his father. Through sweat and toil, judicious borrowing and wise investments, each generation “worked, made a profit, paid their taxes and managed to grow the business a bit”.

But that was then. “I’ve got two boys, one’s 13 and one’s 11, and they’ve shown an interest but I’ve never known whether they’d take it on after me. Well, I do know now: it isn’t available to them. And quite frankly I’d encourage them to do absolutely anything else, given the way we’re treated by governments.”

In Bailye’s view, Labour’s decision to treat farmers as excessively wealthy types who aren’t paying their fair share suggests the Government has fallen for the great fallacy about his livelihood: that because farmers have vast lands, usually a big old house and some very expensive machinery, they must be stinking rich.

“The idea of ‘farmers pretending they’re poor’ is ridiculous. In terms of asset wealth, there’s no getting away from the idea that if you own a farm, and you have the equipment to farm, you have significant asset wealth. But you can’t live off assets. You live off the profits those assets generate, and typical farming returns, if you’re good at it and smart with subsidies and know what you’re doing, you’re doing well if you’re getting 1 or 2 per cent return on investment.

“That doesn’t make people wealthy when it comes to putting food on the table and keeping the lights on. There are family farms with well in excess of £1 million in assets that are living below the poverty line, and certainly far less than the living wage. But that’s a difficult thing to get across to the general public if you see a farmer in his big house and shiny tractor.”

Victoria Vyvyan, president of the Country Land and Business Association, called Labour’s move “nothing short of a betrayal” of the agricultural community, given now-Secretary of State Steve Reed had last year said: “We have no intention of changing [Agricultural Property Relief].”

Vyvyan added that an estimated 70,000 family farms could be hit by the new rules: “This puts dynamite beneath the livelihoods of British farming, and flies in the face of growth and investment.” Tom Bradshaw, president of the National Farmers’ Union (NFU), agreed, calling it a “disastrous Budget for family farmers”, especially since there was a “shameless breaking of clear promises [that] will snatch away the next generation’s ability to carry on producing British food, plan for the future and shepherd the environment.”

How agricultural property relief works

You can pass on some agricultural property free of inheritance tax, either during your lifetime or as part of your will.

Agricultural property that qualifies for agricultural relief is land or pasture that is used to grow crops or to rear animals.

It also includes:

Growing crops
Stud farms for breeding and rearing horses and grazing
Trees that are planted and harvested at least every 10 years (short-rotation coppice)
Land not currently being farmed under the “habitat scheme”
Land not currently being farmed under a crop rotation scheme
The value of milk quota associated with the land
Some agricultural shares and securities
Farm buildings, farm cottages and farmhouses

These do not qualify for agricultural relief:

Farm equipment and machinery
Derelict buildings
Harvested crops
Livestock
Property subject to a binding contract for sale

Source: Gov.uk

Bailye is now having to face his own future. His parents, who still own the land, are alive, albeit elderly and in ill health. “When things pass to me, to pay that tax bill I’d have no choice but to sell at least 20 per cent of the assets passed to me, and what would be left wouldn’t be a viable farm, or I’d have to borrow to pay that tax bill, but with 1 per cent returns, you can’t afford the interest, never mind the repayments. No bank would lend it. So I’d have no choice but to sell the lot. And that would be it,” he says.

Even if he could secure that loan or make the business viable again, the next generation only inherits a burden. “Let’s say, for argument’s sake, that you did manage to get through that, why would you want to pass that on to your own children for them to go through the same? You wouldn’t. It’s removed any incentive to invest in UK agriculture whatsoever.”

In his spare time, Bailye runs the Farming Forum, a website he calls “Mumsnet for farmers”. On Thursday it was ablaze with “thousands” of apoplectic agricultural workers and landowners at a loss as to why they have been targeted. Bailye now wonders what form of protest they’ll take. “You’ve got a demographic of people now who I think feel they have very little to lose. And there are very few industries that have the ability to literally shut down the economy. I mean, can you imagine just a thousand tractors driving, quite legally at 20mph, at rush hour, on main roads? You’d grind the country to a halt,” he says.

“Others talk about going on strike, refusing to let food leave their farms. But can they afford to do that? Everybody wants to do something, but everyone’s terrified of being imprisoned for being the one to organise it…”

Family farmers are, he concedes, “a small minority”, but they are also the vital warp in the fabric of rural communities already under profound stress. Rip that out and the whole lot falls apart, Bailye says, leaving behind only vast “megafarms” or, more likely, former family farmland that will “will inevitably fall into the hands of large corporations and institutional investors that really will have no desire to farm it”.

“They’ll be far more interested in potential development, energy uses and carbon offsetting – all the other uses for farmland that I don’t think most people want. And the irony is that those companies will probably be non-UK or based offshore and not even paying tax anyway…”

This is a turning point in British history, he predicts. “People will come to realise this is a ‘closure of the mines’ moment for UK agriculture, in the same way it affected those mining towns for generations, it will change rural Britain and the British landscape forever. It knocks on to everything in those towns, the local shops, the pubs, the schools, the livestock auctioneers, the markets, the suppliers, the drivers – the lot. Family farms are just the base of the pyramid. I just cannot believe this wasn’t thought through, and the ‘£1 million’ sum exposes it. It’s not just short of the mark, it’s ten times short of the mark.”

On Thursday, farmers on social media were sharing a clip of a politician making very sound points to an audience at the NFU conference just last year. He seemed to get it: “Losing a farm is not like losing any other business, it can’t come back. That’s why the lack of urgency from the Government, the lack of attention to detail, the lack of long-term planning… It’s not on, you deserve better than that.”

The speaker was Sir Keir Starmer. Bailye has now shared the clip himself. “And frankly, the last prime minister who told lies like that had to resign,” he says.

Across the country, farmers have been hit by an almighty, sudden blight. But as always, they’ll play the long game. The next general election is in 2029. Starmer and Reeves may have just sown the seeds of revolt.