Agricultural privatisation, land reform and farm restructuring in Central and Eastern Europe: A comparative analysis

Abstract

This concluding chapter presents a comparative analysis of agricultural privatisation and transformation policies, land reform and resulting changes in farming structures in Central and Eastern European countries (CEECs) based on the country studies in this volume, the discussion at two workshops and on additional information from a related study on the political economy of agricultural privatisation and farm restructuring (Swinnen, 1997a). Our comparative analysis yields some general patterns in both the process of agricultural privatisation and land reform, the resulting farm structure, and their determinants. Some important observations are the following: Most CEECs have chosen to restitute collective farm land to former owners. Moreover, former owners who kept legal rights to their land were restituted property rights on their land without exception. Former owners who lost their legal ownership title were restituted land only in Albania, Slovenia and the Baltic States. In Albania the majority of land is distributed to farm workers. In the majority of CEECs, state farm land is leased, pending sale of the land. For example, in Eastern Germany nationalised land is managed by the Land Utilisation and Administration Company and leased to former owners who lost their ownership titles and to legal entities. The main exceptions are the restitution of state farm land in Slovenia, and the distribution to farm workers in Albania. Non-land assets have typically been privatised through other procedures than those used for land. In many cases they are privatised using vouchers 334which can be turned into capital shares in the new co-operative farm or used for purchasing non-land assets for private use. Privatisation does not necessarily lead to full transfer of all property rights to new (private) owners. In other words, the post-reform effective property rights distribution is only partially determined by the land privatisation legislation. Following the enactment of the necessary legislation, state and collective farms have been transformed into a wide variety of farm organisations, such as producer co-operatives, joint stock companies, limited liability companies, partnerships and individual farms. Large-scale production organisations still dominate agricultural production in several CEECs. Many new land owners lease their land to the large- scale successor organisations of the collective and state farms. In 1994, they cultivated more than two-thirds of the total agricultural area in Bulgaria, Hungary, the Czech Republic and Slovakia. In several other CEECs individual farming has become the dominant farm organisation. This includes Poland and Slovenia, where small-scale farming dominated under the Communist period, and Albania, Latvia and Romania, where spontaneous privatisation led to the widespread break-up of collective farms.