TY - JOUR
T1 - Land reform and farm restructuring in Moldova
T2 - progress and prospects
AU - Lerman, Z.
AU - Csaki, C.
AU - Moroz, V.
PY - 1998
Y1 - 1998
N2 - The most prominent outcome of agricultural reforms in Moldova is the elimination of the monopoly of the state on ownership of land. As of January 1998, the state owns 18% of agricultural land, and the rest has been privatized. Yet private ownership does not necessarily mean individual ownership. Most of the privatized land remains in collectives and various corporatized farms, while the individual sector accounts for only 20% of agricultural land. While initially the agricultural reforms in Moldova stagnated because of internal fratiousness and political indecision, there has been a definite accelertion in the pace of reform since 1995. The number of exits from collective enterprises increased, and the land holdings of private farms established outside the collectivist framework more than trebled during the last two years, reaching 8% of agricultural land. The study reveals a definite relationship between the economic conditions of collective farms and the willingness of individuals to risk independent private farming. The reorganization of collectives was merely 'a change of the signon the door', and their failure to adjust to the new reality has resulted in rapidly deteriorating profitability. This, in turn, stimulated vigorous establishment of private farms by former members of collectives, who now report improved profitability and higher incomes. Land reform in Moldova has produced a highly positive impact on the families of private farmers: they are much better off and more optimistic than the families of rural residents who decided to remain in collectives. The transition from collective to individual agriculture in Moldova has not resulted in a decline to subsistence farming. The individual farm sector has developed to distinct commercial orientation. Fully 80% of private farmers surveyed report some revenue from sales of farm products, and on average they sell nearly 30% of their output. The growth of private farming is accompanied by emergence of various market services, which primarily include commercial private channels for sales of farm products and supply of farm inputs. Even the collectives and various large corporatized farms are moving away from exclusive use of state procurement and processing, and are beginning to rely to an increasing extent on private traders. The case of Moldova before and after 1995 indicates that political indecision is lethal for reform. Yet, once the government decides to remove the basic obstacles to change, pressure from below, from the grassroots, can be counted on to produce rapid and accelerating movement toward private farming and market-oriented services. While the government certainly has a role in providing public goods and services in a market environment, the experience of Moldova since 1995 shows that the process of transition to the market does not require tinkering by government bureaucrats.
AB - The most prominent outcome of agricultural reforms in Moldova is the elimination of the monopoly of the state on ownership of land. As of January 1998, the state owns 18% of agricultural land, and the rest has been privatized. Yet private ownership does not necessarily mean individual ownership. Most of the privatized land remains in collectives and various corporatized farms, while the individual sector accounts for only 20% of agricultural land. While initially the agricultural reforms in Moldova stagnated because of internal fratiousness and political indecision, there has been a definite accelertion in the pace of reform since 1995. The number of exits from collective enterprises increased, and the land holdings of private farms established outside the collectivist framework more than trebled during the last two years, reaching 8% of agricultural land. The study reveals a definite relationship between the economic conditions of collective farms and the willingness of individuals to risk independent private farming. The reorganization of collectives was merely 'a change of the signon the door', and their failure to adjust to the new reality has resulted in rapidly deteriorating profitability. This, in turn, stimulated vigorous establishment of private farms by former members of collectives, who now report improved profitability and higher incomes. Land reform in Moldova has produced a highly positive impact on the families of private farmers: they are much better off and more optimistic than the families of rural residents who decided to remain in collectives. The transition from collective to individual agriculture in Moldova has not resulted in a decline to subsistence farming. The individual farm sector has developed to distinct commercial orientation. Fully 80% of private farmers surveyed report some revenue from sales of farm products, and on average they sell nearly 30% of their output. The growth of private farming is accompanied by emergence of various market services, which primarily include commercial private channels for sales of farm products and supply of farm inputs. Even the collectives and various large corporatized farms are moving away from exclusive use of state procurement and processing, and are beginning to rely to an increasing extent on private traders. The case of Moldova before and after 1995 indicates that political indecision is lethal for reform. Yet, once the government decides to remove the basic obstacles to change, pressure from below, from the grassroots, can be counted on to produce rapid and accelerating movement toward private farming and market-oriented services. While the government certainly has a role in providing public goods and services in a market environment, the experience of Moldova since 1995 shows that the process of transition to the market does not require tinkering by government bureaucrats.
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AN - SCOPUS:0031784105
SN - 0259-210X
JO - World Bank Discussion Papers
JF - World Bank Discussion Papers
IS - 398
ER -