The Downsizing of Russian Agriculture1

Abstract

The hand of Adam Smith, which has already clutched the Russian peasant by his throat, will soon squeeze the life out of him (unnamed member of Russia’s Council of the Federation). 2 THIS ARTICLE ARGUES THAT the change Russian agriculture has experienced since 1991 is closer to Sturm und Drang wild market enforcement or suspension of rules than to reform. The Russian state shed its former regulative and supportive role at a time when its financial resources dried up, and it did so abruptly. Some law-making activities were initiated but they made little difference. Since 1999 the Russian state’s fiscal condition has been improving, so the state is staging a comeback to the agrarian scene. But its interventions, though justifiable and similar to other national governments’ impact on agriculture, are essentially anti-market. In the meantime, Russian commercial agriculture has been downscaled in terms of inputs and output alike. Livestock numbers and farmland have been particularly hard hit, and the ongoing agricultural recovery is more structurally and spatially selective than ever before. In the Non-Chernozem Zone of European Russia, for example, a spatially contiguous belt of agricultural colonisation has given way to an archipelago-like pattern. This article examines some acquired (socio-demographic) and inborn (environmental) constraints Russian farming faces and questions whether retaining of large swaths of farmland in Russia is compatible with a liberal economic order. The article begins with an examination of trends in three modes of farming operations. I then turn to the Russian state’s re-entering the agrarian scene — after being conspicuously absent for almost a decade — in an effort to rein in the improprieties of the wild market. Vertical integration of farms and food processors is examined, as it has spawned most if not all agricultural success stories since 1999. Human capital in rural Russia is then interpreted as a limiting factor of agricultural modernisation. Aside from the publications of students of Russian agriculture, three other sources routinely inform the author about its current condition: Russian government statistics, Russian media reports and field trips. All three sources have become more limited and fragmented, and arguably less accurate, than before 1992. After the demise of central planning regions have taken diverging tacks, and so whatever has been observed by this author and his collaborators in selected regions such as Moscow, Novgorod, the Chuvash Republic, Ryazan’ and Stavropol does not equate to a coherent picture of