Sustainable Development Facets: Farmland Market Demand Estimation
Volume 7, Issue 3 (2018), pp. 513–525
Pub. online: 30 March 2018 Type: Article Open Access
30 March 2018
30 March 2018
Present research is developed in light of the farmland market establishment in Ukraine. Agriculture is one of the key sectors of national economy, which determine its development. Thus, the farmland users determine the transition of the national economy to sustainable development. The purpose of this paper is in developing a methodology for quantitative assessment demand quantity and price on farmland market in Ukraine. In the present research, we propose a methodology for estimating demand on agricultural land in Ukraine based on the operational data of the corporate agricultural producers and macroeconomic situation in the country. Using the discounted profit margins for the corporate agricultural producers, which operated in Ukraine in 2015, we estimate land price and demand quantity that is conditional on profitability of agricultural production towards to sustainability. As a result, we find that after establishing the land market in Ukraine, demand on the agricultural farmland is expected to be significant and is likely to generate substantial capital flows towards landowners. In addition, existence of the transferable land-property lights will make the land available for the collateral purposes. That is expected to enable Ukrainian corporate and private agricultural of any size to the improved access to capital. Specifically, this paper is amount the first one, where demand prices on the possible land market in Ukraine are estimated. Opening one third of the arable land area to the market (sample of the corporate agricultural producers covered by the research due to the data related limitations), agriculture may benefit with 30 to 50 billion euros of the capital investments.