AGRICULTURE AND AGRICULTURE POLICY IN RUSSIA

AGRICULTURE IN RUSSIA

Russia’s northerly location limits available agricultural land, which is concentrated in the area between the Black and Caspian seas, along the borders of Ukraine and Kazakhstan, and in southern and western Siberia. Poor soil and short seasons restrict agricultural production in the European north to livestock. Erosion has depleted soil quality in many farming areas. [Source: Library of Congress, October 2006 **

Agriculture - products: grain, sugar beets, sunflower seeds, vegetables, fruits; beef, milk; Land use: agricultural land: 13.1 percent; arable land 7.3 percent; permanent crops 0.1 percent; permanent pasture 5.7 percent; forest: 49.4 percent; other: 37.5 percent (2011 est.).Irrigated land: 43,460 sq km (2008). Total renewable water resources: 4,508 cu km (2011). Freshwater withdrawal (domestic/industrial/agricultural): total: 66.2 cu km/yr (20 percent/60 percent/20 percent) per capita: 454.9 cu m/yr (2001). [Source: CIA World Factbook =]

About 9.7 percent of the labor force is engaged in agriculture (2012). By contrast about 40 percent of the labor force was employed in agriculture in 1960. In the mid-1990s, about 15 percent of the working population was occupied in agriculture, with the proportion dropping slowly as the younger population left rural areas to seek economic opportunities elsewhere. = *

There is roughly 1 billion acres of farmland in Russia. In 2005 some 7.2 percent of Russia’s land was classified as arable, but only 0.1 percent was planted with permanent crops. In 2003 about 46,000 square kilometers were irrigated. In 1995, it was estimated that one forth of forth of the federal budget propped up the farm sector on some way. [Source: Library of Congress, October 2006 **]

Agricultural Production in Russia

Like the rest of the economy, the Russian agricultural sector has experienced a long, severe recession in the 1990s. Even before the dissolution of the Soviet Union, the output of grains and other crops began to decline, and it decreased steadily through 1996 because of the unavailability of fertilizers and other inputs, bad weather, and major readjustments during the period of transition. In 1995 overall agricultural production declined 8 percent, including a drop of 5 percent in crop production and 11 percent in livestock production. That year Russia suffered its worst grain harvest since 1963, with a yield of 63.5 million tons. [Source: Library of Congress, July 1996 *]

The most dramatic declines occurred in livestock production. Farmers reduced their holdings of animals as the price of grains and other inputs increased. As meat prices rose, the composition of the average consumer's diet included less meat and more starches and vegetables. Reduced demand in turn exacerbated the decline in livestock production. *

After declines in the 1990s of more than 50 percent in every major crop, output began to increase somewhat in 1999. Between 2003 and 2005, the average annual increase was 3 percent. However, farm infrastructure has declined sharply, and farmers lack funds to purchase key inputs. Federal and subnational jurisdictions still subsidize agriculture heavily instead of developing incentives for independent entrepreneurship. In 2005 grain remained the largest crop, occupying more than 50 percent of cultivated land. Other key crops were sugar beets, sunflower seed, and vegetables. The main livestock outputs were cow’s milk, beef and veal, eggs, and pork. [Source: Library of Congress, October 2006 **]

Agricultural Areas in Russia

Climatic and geographic factors limit Russia's agricultural activity to about 10 percent of the country's total land area. Of that amount, about 60 percent is used for crops, the remainder for pasture and meadow. In the European part of Russia, the most productive land is in the Central Chernozem Economic Region and the Volga Economic Region, which occupy the grasslands between Ukraine and Kazakstan. More than 65 percent of the land in those regions is devoted to agriculture. In Siberia and the Far East, the most productive areas are the southernmost regions. Fodder crops dominate in the colder regions, and intensity of cultivation generally is higher in European Russia. [Source: Library of Congress, July 1996 *]

The frost-free growing season ranges from a few weeks in the north to many months in the south. In much of Russia the soil is not fertile enough and the growing season is not long enough to produce enough grain to provide food for the entire year. Under Stalin in the 1950s, an effort was made to increase arable land by chopping down the forests in Siberia and plowing the steppes. These efforts bore little fruit.

The “Black Earth” in the central and southern parts of Russia is one of the most fertile wheat-growing areas in the world. Chernozem, literally black earth, is a type of rich, black soil indigenous to large parts of Ukraine and southwestern Russia. In some places it is six feet deep. The breadbasket of the Soviet Union was in southern Russia between the Ukraine and the Caspian Sea, particularly inn rich black-earth farming belt in the Volga River basin.

In the “Black Earth” regions, large scale grain farming was practiced. In the early days horse-drawn equipment was used. Later horses and plows were replaced with tractors and other mechanized equipment. In the Soviet era large collectives and state farms were established here. In the non-Black Earth regions in the northern and northeastern parts of Russia, and along the Volga, the farms were smaller, and the emphasis was on root crops such a potatoes and beets, vegetables, dairying and relatively small amounts of grain, primarily rye.

Russian Farmers

Farmers around the Volga grow onions, carrots, sunflowers, cabbage, corn, peas, beans, blackberries, strawberries, gooseberries, grapes, apples, and raise ducks, geese, chickens and pigs.

Ordinary Russian have traditionally grown potatoes, onions, garlic and cabbage on little plots beside their village homes or dachas. Backyard plots and small private farm are very productive. In some places they produce 98 percent of the potatoes, 73 percent of the vegetables, 50 percent of the meat and 46 percent of the eggs grown by villagers. This is a testimony of both free enterprise and the productivity of the peasant economy.

One farmer told Priit Vesiland of National Geographic, "If you understand the earth, it will understand you but we Russian farmers have been subjected to all kinds of agricultural experiments for 70 years. We've lost all the talents we had for farming. You can't imagine what a tragic situation the collectives are in."

The land worked by Russian farmers is vast and flat. In some places the only breaks are fences between the rows of crops. After American balloonist Steve Fosset landed in his field during his attempt to circle globe, a Russian farmer said, "I do all this work to plow the field, and now this American tramples all over it." Farmers have also suffered from attacks by locusts and grasshoppers.

Agricultural Policy in Russia

Russia’s agricultural potential, limited by climatic and soil factors to 32 percent of the country’s land area, has been further depleted by policies such as overly intensive farming, overuse of chemicals, and inappropriate crop choice. In the post-Soviet era, failure to effectively convert inefficient collective farms to private ownership has further hampered production. Limited sale of agricultural land was approved only in 2002 and, because of the political sensitivity of the issue, as of 2006 comprehensive land reform legislation still had not been passed. [Source: Library of Congress, October 2006 **]

In the 1990s, Russia’s agricultural production fell sharply. After declines of more than 50 percent in every major crop, output began to increase somewhat in 1999. Between 2003 and 2005, the average annual increase was 3 percent. However, farm infrastructure has declined sharply, and farmers lack funds to purchase key inputs. Federal and subnational jurisdictions still subsidize agriculture heavily instead of developing incentives for independent entrepreneurship. In 2005 grain remained the largest crop, occupying more than 50 percent of cultivated land. Other key crops were sugar beets, sunflower seed, and vegetables. The main livestock outputs were cow’s milk, beef and veal, eggs, and pork. **

Agricultural reform has proved to be a tough challenge for Russia during its transition to a market economy. The challenge comes from the legacy of the Soviet period and from deeply imbedded cultural biases against individualism. Because of agriculture's vital economic role, large-scale agricultural reform is necessary for success in other sectors. In the mid-1990s, however, private initiative was not rewarded, and inefficient input distribution and marketing structures failed to take advantage of agricultural assets. [Source: Library of Congress, July 1996 *]

Soviet-Era Agriculture Policy

Under Stalin the government socialized agriculture and created a massive bureaucracy to administer policy. Stalin's campaign of forced collectivization, which began in 1929, confiscated the land, machinery, livestock, and grain stores of the peasantry. By 1937 the government had organized approximately 99 percent of the Soviet countryside into state-run collective farms. Under this grossly inefficient system, agricultural yields declined rather than increased. The situation persisted into the 1980s, when Soviet farmers averaged about 10 percent of the output of their counterparts in the United States. [Source: Library of Congress, July 1996 *]

During Stalin's regime, the government assigned virtually all farmland to one of two basic agricultural production organizations--state farms and collective farms. The state farm was conceived in 1918 as the ideal model for socialist agriculture. It was to be a large, modern enterprise directed and financed by the government. The work force of the state farm received wages and social benefits comparable to those enjoyed by industrial workers. By contrast, the collective farm was a self-financed producer cooperative that farmed parcels of land that the state granted to it rent-free and that paid its members according to their contribution of work. *

In their early stages, the two types of organization also functioned differently in the distribution of agricultural goods. State farms delivered their entire output to state procurement agencies in response to state production quotas. Collective farms also received quotas, but they were free to sell excess output in collective-farm markets where prices were determined by supply and demand. The distinction between the two types of farms gradually narrowed, and the government converted many collective farms to state farms, where the state had more control. *

Private plots also played a role in the Soviet agricultural system. The government allotted small plots to individual farming households to produce food for their own use and for sale as an income supplement. Throughout the Soviet period, the productivity rates of private plots far exceeded their size. With only 3 percent of total sown area in the 1980s, they produced over a quarter of agricultural output. *

A number of factors made the Soviet collectivized system inefficient throughout its history. Because farmers were paid the same wages regardless of productivity, there was no incentive to work harder and more efficiently. Administrators who were unaware of the needs and capabilities of the individual farms decided input allocation and output levels, and the high degree of subsidization eliminated incentives to adopt more efficient production methods. *

Khrushchev and the Virgin Lands Campaign

Khrushchev's primary domestic concerns were improving agriculture and creating enough housing to meet demand. Great tomes on agriculture were written in his name. The last expansion of cultivated land occurred in the late 1950s and early 1960s, when the Virgin Lands program of Khrushchev opened land in southwestern Siberia (and neighboring Kazakstan) for cultivation. [Source: Library of Congress, July 1996 *]

Throughout his years of leadership, Khrushchev attempted to carry out reform in a range of fields. The problems of Soviet agriculture, a major concern of Khrushchev's, had earlier attracted the attention of the collective leadership, which introduced important innovations in this area of the Soviet economy. The state encouraged peasants to grow more on their private plots, increased payments for crops grown on collective farms, and invested more heavily in agriculture. [Source: Library of Congress *]

In his dramatic Virgin Lands campaign in the mid-1950s, Khrushchev opened vast tracts of land to farming in the northern part of the Kazak Republic and neighboring areas of the Russian Republic. These new farmlands turned out to be susceptible to droughts, but in some years they produced excellent harvests. Later innovations by Khrushchev, however, proved counterproductive. His plans for growing corn and increasing meat and dairy production failed miserably, and his reorganization of collective farms into larger units produced confusion in the countryside. *

Gorbachev Reforms

The Gorbachev agricultural reform program aimed to improve production incentives. Gorbachev sought to increase agricultural labor productivity by forming contract brigades consisting of ten to thirty farmworkers who managed a piece of land leased from a state or collective farm. The brigades were responsible for the yield of the land, which in turn determined their remuneration. After 1987 the government legalized family contract brigades and long-term leasing of land, removing the restrictions on the size of private agricultural plots and cutting into the state's holdings of arable land. [Source: Library of Congress, July 1996 *]

Although Gorbachev's reforms increased output in the agricultural sector in 1986, they failed to address fundamental problems of the system, such as the government's continued control over the prices of agricultural commodities, the distribution of agricultural inputs, and production and investment decisions. In the contract brigade system, farmers still had no real vested interest in the farms on which they worked, and production suffered accordingly. In the 1980s, the Soviet Union went from being self-sufficient in food production to becoming a net food importer.*

Yeltsin's Agricultural Policies

The Yeltsin regime attempted to address some of the fundamental reform issues of Russian agriculture. But agricultural reform moved very slowly, causing output to decline steadily through the mid-1990s. Reform began in Russia shortly before the final collapse of the Soviet Union. In December 1990, the Congress of People's Deputies of the Russian Republic enacted a number of laws that were designed to restructure the agricultural sector and make it more commercially viable. The Law on Peasant Farms legalized private farms and allowed them to operate alongside state and collective farms, to hire labor, and to sell produce without state supervision. The same session of the congress passed the Law on Land Reform, which permitted land to be bequeathed as an inheritance from one generation to the next, but not to be bought or sold. The government also established the State Committee for Agrarian Reform, whose responsibility was to oversee the transfer of available land to private farming. [Source: Library of Congress, July 1996 *]

The main thrust of Yeltsin's agricultural reform has been toward reorganizing state and collective farms into more efficient, market-oriented units. A decree of December 1991 and its subsequent amendments provided several options to state and collective farmers for the future structure of their farms. The decree required that farmers choose either to reorganize into joint-stock companies, cooperatives, or individual private farms, or to maintain their existing structure. Under the first two arrangements, workers would hold shares in the farms and be responsible for managing the enterprises. An individual farmer could later decide to break from the larger unit and establish private ownership of his or her share of the land, as determined by an established procedure.*

This restructuring program progressed slowly. Although 95 percent of the state and collective farms underwent some form of reorganization, about one-third of them retained essentially their earlier structure. Most of the others, fearing the unstable conditions of market supply and demand that faced individual entrepreneurs, chose a form of collective ownership, either as joint-stock companies or as cooperatives. The conservatism of Russia's farmers prompted them to preserve as much as possible of the inefficient but secure Soviet-era controlled relationships of supply and output.*

As of 1996, individual private farming had not assumed the significance in Russian agriculture that reformers and Western supporters had envisioned. Although the number of private farms increased considerably following the reforms of 1990, by the early 1990s the growth of farms had stalled, and by the mid-1990s the number of private farms actually may have dropped as some individuals opted to return to a form of cooperative enterprise or left farming entirely. By the end of 1995, Russia's 280,000 private farms accounted for only 5 percent of the arable land in Russia.*

A number of factors have contributed to the slow progress of agricultural reform. Until the mid-1990s, the state government continued to act as the chief marketing agent for the food sector by establishing fixed orders for goods, thus guaranteeing farmers a market. The government also subsidized farms through guaranteed prices, which reduced the incentive of farmers to become efficient producers.*

Perhaps most important, effective land reform has not been accomplished in Russia. The original land reform law and subsequent decrees did not provide a clear definition of private property, and they did not prescribe landholders' rights and protections. The nebulous status of private landholders under the new legislation made farmers reluctant to take the risk of proprietorship. In March 1996, President Yeltsin issued a decree that allows farmers to buy and sell land. However, in April 1996 the State Duma, heavily influenced by the antireform KPRF and its ally, the Agrarian Party of Russia (representing the still formidable vested interests of collective and state farms), passed a draft law that prohibits land sales by anyone but the state. Recent opposition to the new notion of private landownership is based in a strong traditional Russian view that land must be held as collective rather than individual property.*

However, in 1996 several factors were exerting pressure on the agricultural sector to become commercially viable. The federal government has retreated from its role as a guaranteed purchaser and marketer, although some regional governments are stepping in to fill the role. And private markets are emerging slowly. Increasingly, Russian agricultural production must compete with imported goods as the gap between domestic prices and world prices narrows. In addition, the fiscal position of the federal government has forced it to reduce subsidies to many sectors of the economy, including agriculture. Subsidies are among the targets of major budget cuts to comply with the standards of the IMF and other Western lenders and achieve macroeconomic stabilization.*

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, U.S. government, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Foreign Policy, Wikipedia, BBC, CNN, and various books, websites and other publications.

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© 2008 Jeffrey Hays

Last updated May 2016

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