In Ukraine land cannot be sold freely, instead agricultural land is leased to farm operators on a long term basis.
In 2000 the state and collective farms were restructured and dismantled. Farm property was divided among the farm workers in the form of shares. Individuals who own land can use it to grow crops themselves or lease it to agro companies on a long-term basis (3 – 25 years). The company holding the land lease has a renewable pre-emption right and also an acquisition pre-emption right.
The question on how the land can be maintained and tied to the Company is crucial, since Grain Alliance cannot own the land the company operates. During the 20 years of operations Grain Alliance has developed an approach on how to make sure that land owners stay loyal to the company and lease their land to Grain Alliance. One part of this approach is that the existing director and staff of the old kolkhoz companies are kept on and incorporated into the organization of Grain Alliance. When included in the business the assets of the old company, buildings, installation, infrastructure and equipment are transferred to Grain Alliance. Moreover, Grain Alliance takes a noticeable social responsibility in the villages, in which the company operates.