Land reform In Ukraine: the first five years

By 1996, the state had transferred most of the agricultural land in Ukraine to collective and private ownership, but 40% still remains in state ownership. The individual sector, including household plots and private farms, has increased its role significantly, and now cultivates 15% of land in the country and accounts for a substancial share of produts sold in the marketplace. Yet the growth of private farming has slowed down after a vigorous start, and the number of independent family farms appears to have stabilized at around 33,000, at least temporarily. Internal restructuring of collectives is only beginning. The distribution of land and asset shares has been completed in about half the farms surveyed, and most farms still retain central management without radical reorganization into internally autonomous subdivisions. The new shareholders and other employees fail to discern significant changes following formal reorganization of their farm enterprises. Ukrainian agriculture remains dominated by large collective structures that continue to operate according to old principles, and the recorded diversity of new organizational forms is nothing more than a result of 'changing the sign on the door'. The failure of large farms to adapt to new economic conditions has resulted in adistinct deterioration of their financial performance. The new private farms, on the other hand, appear to be fairly profitable. Families of independent farmers in general are much more affluent and more optimistic than households of employees in farm enterprises. Yet most rural residents prefer to invest their land and asset shares in the local farm enterprises rather than risk private farming. The findings of the study suggest that land reform in Ukraine is in a danger of stagnation. The government must make every possible effort to create the necessary institutional and market conditions for injecting the stagnating reforms with renewed vigor.