Prospects for family farming in Russia

Abstract

DURING SEPTEMBER AND OCTOBER 1996 the Rural Development Institute, in conjunction with Moscow's Agrarian Institute, conducted field research in the Rostov, Samara and Vladimir oblasti of Russia on a range of agrarian reform issues. RDI researchers used 'rapid rural appraisal' techniques to conduct extensive interviews of 14 managers of agricultural enterprises, 25 family2 farmers, 17 oblast' and raion officials, and seven rural pensioners. This was RDI's seventh round of rural fieldwork conducted in Russia on these issues.3 This field research was carried out against the background of RDI's rural fieldwork in 26 other countries over nearly three decades, including fieldwork in nine other countries where there have been major issues involving transition away from central planning and collective agriculture. Russian agriculture continues to struggle. The 1996 grain harvest of 69 million tons, although up from 63.4 million tons in 1995, is nevertheless one of the smallest harvests since the 1960s.4 Although Russia's agriculture currently faces problems attributable to the difficult macroeconomic environment, the basic problems are long-standing and due to the inefficiencies of collective agriculture. World experience demonstrates that smaller farms operated by single families and small groups consistently out-produce collective farms.5 Even during earlier periods when the collectives were heavily subsidised and when there were no macroeconomic changes, family farms in areas with agro-climatic conditions similar to conditions in Russia consistently produced more grain per hectare than Russian (and earlier Soviet) collectives. Canada's family farms (average size: 242 hectares) produced at least 35% more grain per hectare than Soviet collectives, and Finland's family farms (average size: 13 hectares) at least 60% more.6 The current gap is even greater: Russia's grain-planted hectares, at Finnish yield levels, would have yielded over 150 million tons of grain, instead of 69 million tons. Although most collective and state farms in Russia have been privatised and re-registered as joint stock companies, production cooperatives and partnerships, they continue to function as inefficient behemoths (average size: 4800 hectares)7 whose hundreds of members have little incentive to maximise production, reduce production costs or preserve capital assets. These huge enterprises must be broken up into much smaller production units that can provide meaningful incentives to those who cultivate the land. Today, only 6% of Russia's agricultural land, and about the same percentage of agricultural households, is found in family farms. However, RDI's fieldwork findings strongly suggest that much of the legal and practical groundwork is in place for large-scale voluntary exodus from the large agricultural enterprises, and for associated