Agricultural reform in Russia: a view from the farm level

K. Brooks, E. Krylatykh, Z. Lerman, A. Petrikov, V. Uzun

Research output: Contribution to journalArticlepeer-review

16 Scopus citations

Abstract

Russia has had a formal program of land reform and farm restructuring in place since 1991. Land and asset shares have been distributed to most farm workers, but the legal status of these shares remains ambiguous, and the practical mechanisms for exit of individuals and restructuring of the large farm enterprises are mostly undecided. Traditional agricultural enterprises are still largely intact, and functioning much as they did in the past, although with poorer economic outcomes. Farm enterprises have diminished in size, but remain very large compared to farms in market economies. The ongoing reforms have produced a radical change in the distribution of land ownership. As of 1994, the state holds less than 20% of agricultural land, while the individual sector accounts for 2% of farmland. The remaining 70% of agricultural land is in collective management, most of it divided into paper shares to individuals. Few shareholders express intentions to exit from the enterprises and use their land and asset shares to establish independent private farms. Low prices for agricultural products adversely affect the ability of farms to generate earnings, and combine with poorly developed financial services to constrain agricultural recovery. Rural social services are deteriorating. Farm managers are cutting back on expenditures for social services, and there has been relatively little transfer of social assets to local governments. Most local governments have no budget to accept the financial and administrative responsibilities for social services. Russia's agricultural reforms have initiated important changes, but have not yet arrested the decline in sectoral performance and rural well-being.

Original languageEnglish
JournalWorld Bank Discussion Papers
Volume327
StatePublished - 1996

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