AGRICULTURE AFTER THE COLLAPSE OF THE SOVIET UNION

AGRICULTURE AFTER THE COLLAPSE OF THE SOVIET UNION

Agriculture was in extremely sad shape after the break up of the Soviet Union. Harvests in the Soviet Union and former Soviet Union fell from 128 million metric tons in 1990 to 84 million metric tons in 1994 to 65 million metric tons in 1995 and then rose to 72 million metric tons in 1996. In Russia, grain production fell from 11 million tons in 1991 to 5 million tons in 2000. The total harvests were only 66 million metric tons in 1994 and 49.7 million tons in 1998.

As 2001, about 80 percent of Russian farms were in debt. Many had to use their land as collateral to borrow funds needed for fertilizer, seeds and machines. "Forced decollectivization" produced a vast underclass of rural poor that were little different from serfs freed in the 19th century. In many cases they were worse off because many people were forced to leave the land. Those left behind were alone and isolated. Fields and entire villages were abandoned. To save money one farmer bought a tractor in Minsk and spent 11 days driving at 20 mph to his farm.

Nouveau riche Russians bought picturesque farm houses as dachas. Winter food was grown in greenhouses. Some farmers in Siberia were taught how to raise pigs and grow watermelon under plastic sheets by Chinese farmers. Tomatoes, cucumbers, peppers, eggplant, cabbage and other vegetables are produced in greenhouses in Siberia made of birch poles and plastic.

Agricultural Land After the Collapse of the Soviet Union

As of 2001, 92.4 percent of agricultural in Russia was still owned by the government. People often worked land on which they had no claim. They ate what the grew and sold anything left over at markets. The selling and mortgaging of land was a bureaucratic night mare. Farmers desperately needed capital. Having no property to offer as collateral they needed help to secure loans. By one estimated 7 percent of the best agricultural land lay fallow because there was not enough money to develop it.

Some economist have argued that one of the first thing that Gorbachev and Yeltsin should have done was initiated land reform and given "land to anybody who was prepared to use it." The poorly thought-out land reform policy of 1992 attempting to create private farmers by eliminating the farming bureaucracy. But this didn't happened. Independent farmers were unable in obtain land, or get loans for fertilizer, tractors or farm equipment.

In 1993, a presidential decree allowed some land to be bought and sold, starting the process of decollectivization. But in 1998, there were still laws that made selling and leasing agricultural land nearly impossible. Russians were able to obtain limited ownership of farmland but could can not buy, sell, mortgage or lease agricultural real estate. In October 2001, legislation was passed that gave citizens these right to buy and sell land. Investors and farm producers want these rights extended to farmland. In 2002, legislation was passed that would allow the sale of farmland, but not to foreigners, There were provisions or guidelines for the transfer of titles of land and guarantees for the rights of shareholders.

In the 2000s there was still a lot of resistance to the idea of openly selling land on the market, especially if it meant that oligarchs and foreigners could buy it. No less than Alexander Solzhenitsyn spoke up in the issue, saying. “ ”We would lose our Russia. Land should be owned by the farmer, not a plundering landlord” or “into greedy hands of members who already have stolen billions from Russia.”

Many think that the legal code on land in Russia has to be fixed. As of the mid 2000s, the laws regarding land encouraged corruption, bureaucracy and opaque deals. This in turn scared off investors. Land was cheap. Good agricultural land in some places had an estimated value of $50 a acre because no one really wanted to buy it. There were worries that at these price the land would be purchased by speculators who would not develop the land for agriculture, and peasants would just get thrown out of work.

Collective Farms After the Collapse of the Soviet Union

In the early 1990s, Yeltsin issued a series decrees dissolving the state control of the collectives and collective farms were renamed "joint stock companies." Members of the collectives were given shares but they did not have clear legal rights to sell them in part because the collectives were never divided into individual plots of land. Most members saw the arrangement as a chance to pay lip service to the collective and extract from it what they could to sell themselves.

Collectives still existed in the mid 2000s. At that time many farms continued to be run according to the Soviet collective model, but they had had difficulty staying afloat without subsidies from Moscow plus no one wanted their products: wheat, sunflowers, corn, cattle and sheep. With the loss of their government subsidies many collectives were effectively bankrupt, paying their workers with grain or sugar rather than money. Some workers were not paid in cash for more than six years. Alcoholism and theft were a problem. Bricks were stolen from the buildings on the collective farms to make other buildings.

A typical collective farm embraced dilapidated buildings and rusting equipment, was $1.7 million in debt, had cut the number of workers from 1,200 to 500 and slashed production from 47,000 tons a year to 11,000. Even well-run collectives with 10,000 pigs, 6,000 beef cattle and 1,300 milk cows could not afford fertilizer, tractors or building materials.

Many collectives suffered because their manager sold the machinery yet they were still required to maintain Soviet duties such as running their own schools and maintaining roads without help from the government. Even after the collapse of the Soviet Union, socialist ideals persisted. Farmers were supposed to be motivated by ideas like increasing production and working collectively rather than accumulating property or money.

Company-Run Collective Farms

Taking advantage of fire sale prices, some of Russia's resource-rich companies such as Gazprom and Sibneft Oil bought stakes in collectives that show a potential for profit through production or liquidation. Some Western companies invested too even though they were not given title to an land.

Some collective farms were able to secure financing to buy large Jon Deere combines and harvesters, which greatly improved efficiency and the profitability of the farm. Several hundred members of some collectives rented their land to Russian companies such as Yuzhny Put (Southern Way), who in return gave the farm capital to buy machines, fertilizers and quality seeds

Under the above arrangement, collective members were paid with a certain amount of grain and other crops, for which buyers were arranged. But for all intents and purposes the members were wage workers and the wages they received were almost double what they are the collectives paid, plus the wages were paid in a timely, regular manner, which often was not the case at state-run collectives. Workers with needed skills could earn significantly more.

The company-run collectives used about a tenth of the manpower used to run the collectives in the Soviet era. Residents of the collectives who didn’t work there were allowed to continue living there. They received some money from the company plus they could grow fruit and vegetables and sell them, and were hired for construction and seasonal work jobs.

Most members of the company-run collectives were happy with the arrangement. One chief of a tractor brigade told the Los Angeles Times, “Most people here just want to have a job, to be paid regularly and decently, to have a normal life—and they don’t really care in a big way who gives them this chance. If it’s a capitalist, what does it matter?”

Private Farmers in Post-Soviet Russia

As of 2001, only 7.6 percent of the agricultural land in Russia in private hands was worked by private farmers—on 265,000 private farms. In 1995, there were only 277,000 private farms on 5 percent of Russia's agricultural land. There were 258,000 of them in 1993, an increase of 49,000 from 1992.

Private farms in the 1990s were profitable because income was not declared and the farms were started with machinery appropriated from the collective farms. One successful private farmer interviewed by National Geographic owned 173 acres of land and leased 700 more acres from a local collective. He owned two combines, seven tractors, two heavy trucks, two light trucks and a $28,000 planting machines. In 2001, he raised wheat, rye, beets and 270 acres of popping corn which he was contracted to sell to an American broker. He made $70,000 in revenues, including $35,000 in profits which was reinvested back into the farm.

The most successful private farmers obtained land in the early years after the collapse of the Soviet Union when credit and land were cheap. They struggled in the early 1990s and began turning a profit after the collapse of the ruble n 1998 when the demand and prices for domestically-produced agricultural products rose. One farmer told National Geographic, "When something's your own, your roots are sunk deep, and shoots spring up around them. That's what holds things together.”

Private farms have not been as successful as originally hoped. Obstacles include high interest loans, reluctance of collective farms to give up their land, and a lack of cash and government subsidies. Many farmers have the will but not the resources. Things that farmers need—tractors, fertilizer, storage buildings and pesticide—are extremely expensive and credit is not available to purchase them in advance. The availability of these things is often controlled by local collective and state farm directors who act like Soviet era bosses.

Farms produce large amounts of potatoes and cabbage but often there is no one to buy them. Some farmers load their harvest on trucks only to have them turned back by gangsters who set up roadblocks and demand a "toll" to be allowed to pass.

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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