Who controls and uses “in the dark” hundreds of thousands of hectares of state land, which the National Academy of Agrarian Sciences allegedly uses, and how it is transferred to private ownership.
Let's start with a short excursion. Hundreds of thousands of hectares of land still remain in the state’s possession—about 800 thousand. This, of course, is not the 10 million hectares that official statistics “drawn” on the state’s balance sheet before 2020, when half of those lands had already been transferred to private ownership. However it is still a huge resource
What is 1 ha? About one football field. That is, the state is the nominal owner of 800 thousand football fields, and in general this is the territory of the Chernivtsi region.
These lands are in constant use of various state institutions. The largest among them is the National Academy of Agricultural Sciences (NAAS). In terms of scale, this is a “state within a state”, which until recently controlled almost 500 thousand hectares.
These lands were regularly involved in corruption scandals. A year ago, the state began to withdraw some of the land from the jurisdiction of academicians and is now transferring it to the State Property Fund (SPF). The government has already transferred more than 210 thousand hectares from the National Academy to the latter, more than 270 thousand hectares remain in the National Academy of Sciences. The transfer process continues.
Firstly, part of the lands of NAAN is now under occupation. Before the transfer to the State Property Fund, this figure reached 97 thousand hectares, of which 25 thousand hectares were in Crimea.
Secondly, deputies, law enforcement officers and other businessmen collect corrupt rent from the academy’s lands. It gets to the point of absurdity. At the end of 2022, a temporary investigative commission (TCI) was created in parliament, which was supposed to restore order to the NAAN land. It all ended with the detention of the head of this VSK, a deputy from the Servant of the People Anatoly Gunko. He was caught taking a bribe in a case involving academy lands.
Thirdly, up to 100 thousand hectares, the exact figure is unknown, could be removed from state ownership through roundabout ways. Earlier, EP wrote about how former “Privat members” are trying to appropriate the land of one of the NAAN farms near the Dnieper. There are many more such stories.
When preparing the material, the EP conducted up to 20 public interviews and off-the-rec conversations. Some deputies of the agrarian committee of parliament, including its chairman Alexander Gaidu, and the President’s Office ignored the EP issue.
Agricultural holding for academicians. What does NAAN consist of?
NAAN is the successor to a similar institution that was born a hundred years ago in the wilds of the USSR. After its collapse, Ukrainian agricultural researchers began to pave an independent path and received the status of a self-governing scientific organization.
What does this status mean? The highest governing body of NAAS is the general meeting of academicians. It elects members of the presidium and the president of the academy, who manage the apparatus and network of hundreds of farms throughout the country.
NAAN is subordinate to the Cabinet of Ministers and reports to it. The leadership of the Academy independently determines its structure, resolves scientific and organizational issues and, most importantly, controls all personnel issues in subordinate farms, which have hundreds of thousands of hectares of land in constant use. This is the very source of unlimited opportunities that turned NAAN into a “corruption swamp.”
“Where did these stories come from? In the Soviet Union, they didn’t want to bother too much and simply gave land to all the departments that could exist. Army, penitentiary service, agricultural universities. Same thing with NAAN. So that she could finance herself, she was given land for commercial management. Everyone knew that it was excessive,” explains MP from Servant of the People Maryan Zablotsky.
To simplify as much as possible, the NAAS farms are divided into two types: state-owned enterprises and scientific institutions. The first ones conduct economic activities and provide for themselves. The latter primarily receive funding from the state budget through the academy. Both groups have land, but most of it is used by state-owned enterprises. Scientific institutions have only tens of thousands of hectares.
Before the transfer of farms to the State Property Fund, which started in 2023, there were about 270 farms in NAAN, including more than 170 state enterprises, each of which had in use from 2 thousand to 20 thousand hectares of land.
Reference. The right of permanent use is the perpetual right to own and use a plot of land owned by the state or municipally. Users (mainly state-owned enterprises) pay a symbolic tax to local budgets: 1% of the normative monetary valuation (NMV) of the site. Those who rent land on market terms pay on average about 8% of the NDO.
“Non-academic” schemes: how and who uses public lands
In the 1990s and early 2000s, when the agricultural sector in Ukraine was just rising from its knees and no one cared about the lands of the National Academy, these farms were ruled primarily by their directors and leaders of the National Academy of Sciences.
One of the first daring attempts to encroach on the lands of the “academicians” occurred during the presidency of Yanukovych. Then the company of the daughter of businessman and politician Sergei Taruta, Trading House Ukragroprom, received more than 110 thousand hectares of NAAN land for long-term lease. After a change in power and leadership of the academy, the government reversed this decision. The land was returned, but this did not change the overall picture.
Over time, the NAAN lands turned into a stable source of corrupt rent for those government officials who were able to “persuad” academicians to cooperate, gain control over the land and use it “in the dark.” NAAN non-publicly calls these controllers “investors,” and law enforcement officers call them “curators.”
How it works? To access land, you need control over the state-owned enterprise of the National Academy, that is, over the director, but he is appointed and dismissed by the leadership of the National Academy of Sciences. Consequently, in order to gain control, the “investor”-“curator” must enter into a conspiracy with the leadership of the academy. According to the director of one of the NAAN farms, an argument of force is usually used for this.
“How does an “investor” enter? A criminal case is initiated against the president of NAAN, because of which pressure is put on him, the director of the desired enterprise is removed and the head of the “investor” is installed. He unofficially attracts certain funds there, and when the harvest is harvested, he multiplies them. Then most of the harvest is also unofficially taken and the enterprise is driven into debt. Then he sues the company in order to further cooperate with it and control it,” explains the EP’s interlocutor.
The “investor” can raise his own funds or negotiate with a certain agricultural company that will pay him for the use of the academicians’ lands. The protege-director, in return, will underestimate the yield of the state enterprise and record losses.
The average price tag for the opportunity to cultivate state lands from the NAAN system is $100-150 per hectare, according to ED sources in the agricultural market.
According to one government official, the leadership of NAAN controls 30-35% of farms. Other enterprises have “curators” who use the land at their own discretion and share the corruption rent with the National Academy.
“In most cases, people’s deputies, current and former, try to get involved. Law enforcement officers come in, starting with the SBU and ending with the National Police. Often they are just “cogs” for deputies. Everyone who can somehow put pressure on the president of NAAN, on the presidium, is coming,” notes the head of one of the farms of NAAN.
The former head of one of the farms, who worked for about 15 years in the structure of the National Academy, says that some of the directors of the National Academy of Sciences, who are already over 50-60 years old, are willing to cooperate with the new owners.
“I have several friends who received calls (from the leadership of NAAN - EP) and were asked if they wanted to continue to be directors of farms. If he wants, then they tell him: “A man will come to you, you, ‘please’, allocate 1000 hectares or 1500 hectares of land for cultivation and everything will be fine with us,” he says.
“A little man from some company comes with transport, combines, everything in the world, an agreement is drawn up for the provision of services with seeds, sowing, everything. And at the end of the season, these 1000 hectares of land “fly into the air.” How? There were sunflowers for 30 centners (yield - EP), they took more than half, and all around there were 8 centners left from those fields. For example, a commission from NAAN came and saw nothing, which means everything is fine, you are your “guy,” the interlocutor adds.
The heads of state enterprises bear personal responsibility and both the heads of NAAN and law enforcement officers can “suspend” them.
Deputy head of the SBU department Anatoly Loif is interested in crop rotations that took place on the lands of NAAN. According to Slidstvo.Info, Loif replaced Artem Shilo, the former head of the so-called economic division of the service. Journalists discovered that Loif's mother, a foreign language teacher, purchased luxury real estate in Kyiv and its suburbs.
NAAN received such letters from the suspended head of the economic division of the SBU, Artem Shila, who is now suspected of organizing a scheme to steal almost 100 million UAH from purchases at Ukrzaliznytsia.
Lost 100 thousand football fields
To enrich yourself on NAAN lands, you don’t have to own them. However, this was not enough for some far-sighted “investors” and they transferred the plots to private ownership. NABU is currently investigating two such public cases.
The first story concerns the withdrawal of almost 1 thousand hectares of land from the research farm of the National Academy of Sciences "Dmitrovka" in the Kiev region. As a result of dubious transactions, these areas were transferred in 2018-2019 to the Svitanok agricultural company owned by Tatyana Zasukha, a former deputy from the Party of Regions. These are not all the lands that the state-owned enterprise lost, and the EP will describe this story in detail in a separate material.
The second story is about the seizure of 2.5 thousand hectares in the Sumy region, which were used by the State Enterprise “OKh “Iskra” and the State Enterprise “OKh “Nadezhda”. One of the defendants in the case is former Agrarian Minister Nikolai Solsky. According to NABU, in both cases a scheme was used for free privatization of land by ATO officers with the assistance of the State GeoCadastre.
Another case is the attempts of former “Privat” members to take over 15 thousand hectares of land in the Dnepropetrovsk State Enterprise “Nauchnaya”, which was transferred to the management of the State Property Fund. However, these cases do not demonstrate the true scale of the disaster.
“A lot of land that is taken into account in the NAAN, and part of that which was “leaked” to the State Property Fund, is “empty land”. The Academy hides this information. We (farm directors - EP) cannot write off this land. It is listed on our balance sheet, and another business with ownership documents uses it. The State GeoCadastre has done a lot over the years,” notes the head of one of the NAAN farms.
According to his estimates, the state has already lost up to 100 thousand hectares used by academicians. Government agencies and NAAN prefer not to disclose figures.
“Law enforcement agencies are dealing with the facts of illegal seizure and groundless transfer of lands of enterprises and institutions under the jurisdiction of NAAN. After the final court decisions are made, it will be possible to calculate the exact area of the disputed land plots,” noted the written response of NAAN President Yaroslav Gadzal to the EP. He noted that the farms managed by NAAN are only users, and the state owns these lands through the State GeoCadastre.
During one of the meetings of the mentioned VSK, which was supposed to investigate the activities of the National Academy of Sciences, the deputy chairman of the State GeoCadastre, Yaroslav Shtyker, informed the deputies that the land cadastre had not included data on 38 thousand hectares of land of the National Academy.
“The main reasons for the absence (of data - ES) are the seizure, termination of the right of permanent use and, probably, the groundless transfer of part of the site to local government and executive authorities,” he admitted.
The presence of many disputed areas is indirectly evidenced by the presentation of the State Property Fund, which contains data from the latest inventory of state lands. The fund presented this document to deputies of the agrarian committee in March. It is at the disposal of the EP.
One of the presentation slides notes that of all the state land managed by the fund, 98 thousand hectares are burdened with “courts and criminal proceedings.” The State Property Fund now has 386 thousand hectares of land, and of these, only 210 thousand hectares are farms that were transferred to NAAN.
People's Deputies
“There was a package under the table. I didn’t even know what was in that package, I wasn’t even interested in it. And I saw that there was money there when I started to list them,” - this is how MP from the Servant of the People faction Anatoly Gunko, during the election of a preventive measure for him in the VAKS, tried to explain the nature of the probable bribe that was at his feet at the time of his arrest employees of NABU and SBU.
It was on Gunko’s initiative that at the end of 2022 a temporary investigative commission was created in the Verkhovna Rada to investigate corruption in NAAN. He headed it, but it did not work for long. In August 2023, the deputy was detained with the mentioned package of $85 thousand, which, as the investigation notes, he received from Agro-flor 2019 LLC.
“That is, 100 (presumably dollars per hectare - EP) for the enterprise officially and 150 for us and the security forces. Well, maybe 130. Usually, as soon as you go into processing, there is 50-30% (probably an advance - EP). Maybe 30, 50 per hectare (probably dollars - EP). And then I’ll give it to the security forces so that they’ll run less immediately,” - this is how Gunko explained to the company representative what is needed to receive NAAN’s lands for cultivation. These dialogues from the case materials are found in court decisions and NABU video materials.
“There were indeed conversations with this person, this is a fact, I do not deny it. But what we said, we will still explore... No one said, not a single video shows that there is money that I am asking for. This is not even in the credits,” Gunko himself notes in the EP commentary.
According to the investigation, the people's deputy offered the company to lease 1,700 hectares of state-owned farm land from the NAAN system - SE DG Tuchinskoe in the Rivne region. It is known from the case materials that he promised to appoint his own manager at this state-owned enterprise, and he was supposed to enter into an agreement with an agricultural company to “legalize” the cultivation of state land - an agreement on the provision of services or the supply of agricultural products.
From the materials of the court case it follows that the total amount of Gunko’s bribe was 221 thousand dollars - 50 dollars per hectare in the form of an advance before processing the arable land (85 thousand dollars for 1,700 hectares), the rest - 80 dollars per hectare - after harvesting. The money received, as Gunko explained to the representative of the agricultural company, will be divided between him, the president of NAAN, employees of the National Police and the head of the Rivne regional state administration, the investigation notes.
The publication’s interlocutors in NAAN and parliament say that similar “servant” schemes were used at other state enterprises run by the academy. Recordings of conversations at the disposal of detectives confirm this: the deputy and his assistants convinced agricultural firms that they could provide any plots in any region to choose from and named prices. They also boasted that they had already received such payments, and that Gunko and his partner were themselves cultivating the lands of state enterprises in the Cherkassy, Vinnitsa and Chernihiv regions.
“VSK was created precisely in order to collect more dirt on the presidium, and then grab more enterprises for itself,” says the director of one of the state-owned enterprises of NAAN.
“Gunko is simply “crazy” impudent. It's just a bulldozer. He called the directors to the VSK and in front of the deputies, boys and girls aged 28-30, crossed his legs and reproached: “Why do you have such a small harvest? You are ruining the country." And then they go backstage, Gunko says: “Look, Vasya, if you don’t do this and that, you’ll lose your job. And who at 50-60 years old wants this?” — one of the former heads of the farm from the NAAN structure says emotionally.
Gunko himself refutes everything in the EP commentary. “To say that I could influence the director or someone else is not a very real thing... To give them some commands and so on - at a minimum, I did not have the authority to do this either as the chairman of VSK or as people's deputy... They were engaged in shadow cultivation of the soil... Directors are a kind of businessmen on site... Security forces work with them, someone else works there. There are no taxes, everything is sown,” says the deputy.
He emphasized that losses at the enterprises of the National Academy are the responsibility of its president. “It is he who appoints directors, only he with his signature... Yes, the management of NAAN does not influence the farm itself, but the president receives the financial report for the year, he approves it. Why does the company show losses for three years, and its director continues to work?” - asks Gunko.
In general, the provision of land to academicians for shadow lease is a popular service on the market. Free land in Ukraine, especially in single tracts, is difficult to find, so there is always a demand from agricultural firms that have the technical resources to process it. “Many deputies are worried about the transfer of land to the State Property Fund. They took an “advance” from farmers, but they cannot guarantee that they will reap the harvest. We need to go and negotiate with the fund,” explains the owner of one of the agricultural companies to EP.
List of enterprises managed by NAAS, which the academy’s management does not control. Land bank - 93.5 thousand hectares. The government has not yet transferred these farms to the State Property Fund.
Academicians
It is hardly possible to implement most of the mentioned schemes without the knowledge of the NAAN leadership.
In July 2023, the SBU came with searches to the current president of the academy, Yaroslav Gadzal. The reason is the suspicion of the transfer of 150 thousand hectares of academy land to private individuals for cultivation, which is a third of the NAAS land bank at that time. According to the SBU, such schemes could bring its participants up to $20 million in profit per year. That is, the average “price” of one hectare could be about $130, which agrees with the estimates of the EP’s interlocutors.
However, this story does not seem to have received any continuation in the form of criminal cases. At least, journalists were unable to find them in the public domain. In the Unified Register of Judicial Decisions, the ED found two criminal proceedings in which Gadzalo appeared as a suspect and accused. Both relate to the possible provision of undue benefits in favor of the current president of NAAN.
The first is the accusation of the president of receiving unlawful benefits in the form of a car received for use from one of the directors of state-owned enterprises, allegedly for assistance in granting the status of an academician of the National Academy of Sciences to the director.
The second concerned the provision of possible unlawful benefits in the form of funds from an agricultural enterprise from the Chernihiv region - Batkivshchyna JLLC.
According to National Police investigators, in 2016-2020, Batkivshchyna JLLC cultivated the lands of the State Enterprise "DG Tavria" in the Zaporozhye region. Therefore, the company allegedly had the right of first priority to purchase the grown crop. According to the investigation, Batkivshchyna JLLC was controlled by ex-deputy from the Petro Poroshenko Bloc Oleg Dmitrenko, who, after being elected to parliament in 2014, transferred the company to his parents.
According to the court ruling, in February 2020, Gadzalo allegedly turned to Dmitrenko and stated that in order to continue cultivating the lands of the State Enterprise "DG Tavria", the company must provide him with 4 million UAH. After this, Gadzalo allegedly “provided a telephone number and a contact person for transferring funds to the bank account of a private enterprise controlled by the president of NAAN.”
This controlled enterprise turned out to be the private agricultural company “Nauchnaya” from the Lviv region. On February 20, 2020, 4 million UAH were transferred from Batkivshchyna JLLC to the account of PA Naukova. This company really cannot be called a stranger to the president of NAAN.
The director and owner of this company is Bogdan Grebenko from the city of Gorodok. Yaroslav Gadzal’s wife Galina has been working in the same company for many years, this is indicated in the declarations of the President of NAAN. Gadzal’s wife also has a joint company with Grebenko, the Ukragroimpeks Production and Trade Enterprise. PA "Nauchnaya" also has in use more than 3.7 thousand land plots in the Lviv region.
However, Gadzal's guilt was not proven in any case. They were united and then closed due to law enforcement officers’ failure to comply with the deadlines for submitting indictments to the court.
The EP approached the President of NAAN with a request to comment on the influence of deputies on the directors and activities of farms, as well as to clarify the details of closed criminal cases, but within ten days did not receive a response. After the publication of the material, the EP received written answers from the press service of Yaroslav Gadzal
What about science?
What is NAAN even for? Agricultural science in a country where the lion's share of exports comes from agricultural products is considered a strategic sector. The main work of the National Academy is the selection of new plant varieties, animal breeds, testing of developments, preserving a library of varieties and breeds for future research.
In the private sector, it works like this, explains EP, an academician of the National Academy of Sciences, and now the director of one of the companies in the seed market: there is a fundamental development that is analyzed for applied use, and then applied research occurs. The result is a specific product, such as seeds, that can be capitalized and thus return funds for research.
In the case of NAAN, it is impossible to capitalize the product, that is, to sell the seeds of the developed variety in the required volumes. We need capacity for seed production and work with the market. However, the academy’s budget barely covers the salaries of employees, and there is no talk of equipment and marketing at all. Therefore, they sell mainly varieties, not seeds.
“The state spends resources on unprofitable scientific research. This “mine” has been laid since 1990—money for research has not been returned,” the academician sums up.
NAAS lacks specialists. Due to low salaries, most scientists are unmotivated. Those who come to the academy gain experience and go to private structures. A number of private companies that are engaged in the selection and sale of seeds in Ukraine are headed by people from NAAS.
As a result, foreign companies predominate in the field of breeding in Ukraine. For growing sunflowers, for example, varieties of foreign companies are almost entirely used. The situation is similar with soybeans, corn, and wheat. Although these products are the basis of Ukrainian exports, only a third of the varieties on the Ukrainian market are NAAN products. We are talking mainly about varieties that are resistant to unstable and arid climates, primarily in the south of the country.
According to the market interlocutors interviewed by ED, the valuable part of the academy’s developments rests mainly on the enthusiasm of a dozen scientists at the NAAS Institutes.
Other state-owned companies that do business are becoming corporatized, they have supervisory boards and competitions for leading positions. But NAAN is a structure with an uncertain status, it chooses its leadership and uses hundreds of thousands of hectares of land, which over the past 10-20 years have predominantly generated corrupt rent for a select few.
It is not yet known exactly how much land will remain in NAAN and how much will go to the State Property Fund. The fund promises to form the first land pools in the near future and begin leasing them to businesses through auctions. However, there are reasonable questions. When it will be? Will the fund gain real control over these farms? Will this process not be delayed in the interests of the curators of state-owned enterprises of NAAN and will some of the lands be lost during the transfer?
