Ukrainian lawmakers on Wednesday backed a key bill to create a land market and open up the sale of farmland from 2020, despite a feared public backlash.

"This day will go down in the history of Ukraine," Prime Minister Oleksiy Goncharuk, who was present in parliament during the vote, said on Facebook after the bill passed in the first of two readings.

"Finally, we can move from feudalism to real market relations as a fully fledged, developed country," he added.

During a stormy session 240 lawmakers in the 450-seat chamber backed the law as farmers and nationalists protested outside the parliament building.

The reform is awaited by investors but critics fear that opening up the land market will lead to a takeover by foreign owners or giant holdings of land which has been available only for rent since the Soviet period.

Some farmland is owned by the government in Ukraine but much is in small plots individuals received after the breakup of the Soviet Union and is currently illegal to sell.

"Don't do stupid things!", pro-Russian MP Sergiy Shakhov said passionately in session. "Ukrainians will curse you!"

While the bill was strongly promoted by President Volodymyr Zelensky, he was unable to convince some in his own party to support it, having to rely on votes from independent lawmakers.

Ukrainian farmers and activists gathered  outside parliament in Kiev to protest at the land sale reform
Ukrainian farmers and activists gathered outside parliament in Kiev to protest at the land sale reform AFP / Sergei Supinsky

The bill that must be voted on again by the end of the year launches the land market from October 2020, but only for Ukrainians and Ukrainian companies.

The government initially planned to open the market for foreigners from 2024, but this week Zelensky, obviously under pressure from critics, promised to organise a referendum on the issue.

The prospect triggers intense unease in Ukraine which experienced multiple failed economic reforms in the past three decades and where small farmers are too poor to benefit from a market opening.

"Germans, French, Chinese (...) are ready to rush and immediately buy Ukrainian land," pensioner Tetyana Kulish told AFP.

"A nation without its land simply doesn't exist," she added.

"Everyone is afraid. Nobody knows how it is going to work," said Dmytro Tkachenko, a 42-year-old farmer.

The former Soviet republic, whose stalling economy has been propped up by Western aid for years, is home to one-third of the world's fertile black soil rich in nutrients, according to the World Bank.

Opening it up for sale could lead to a 1.5 percent GDP boost, it said in a 2017 report.