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Fwd: NYTimes.com Article: Russia's Capitalists Seeking to Discard Collective Farms
by Boris Stremlin
20 June 2002 07:07 UTC
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The following article was apparently written as a quiz for            
world-systems newbies:  the answer to the question 'WHO are the       
"capitalists" seeking to privatize the kolkhozy?' is strongly hinted  
at, but not explicilty stated.                                        
Russia's Capitalists Seeking to Discard Collective Farms              
June 20, 2002                                                         
By STEVEN LEE MYERS                                                   
KURSK, Russia, June 14 - A decade after it began its                  
spasmodic transition to capitalism, the Russian government            
is moving to dismantle one of the lasting legacies of the             
Stalinist era: the collectivization of the nation's                   
Urged by President Vladimir V. Putin, the lower house of              
Parliament, the Duma, passed a preliminary bill last month            
intended to create a legal system to buy and sell Russia's            
vast agricultural lands for the first time since the                  
country's farms were nationalized in 1917.                            
The Duma's increasingly pliant deputies are expected to               
adopt a slightly amended version by Friday, but land                  
remains a polarizing issue in Russia. The Communist and               
Agrarian parties, regional leaders and others opposed to              
the privatization of the motherland itself are threatening            
to block Mr. Putin's effort as they have similar ones since           
the collapse of the Soviet Union.                                     
Mr. Putin has described the reforms of Russia's byzantine             
property laws as critical to the country's economic                   
development. But here in the rolling fields around Kursk,             
as in much of Russia's black-earth heartland, the legacy of           
decades of collectivization is deeply rooted.                         
The prospect of change has terrified farmers and others who           
cling to the dream of the kokholzy, or collective farms,              
that still operate more than 90 percent of the nation's               
Above all, they fear a repeat of the corrupted                        
privatization of utilities and other state enterprises in             
the 1990's, when ordinary Russians received stock in the              
state businesses but most of the companies ended up in the            
hands of the richest oligarchs.                                       
Sergei I. Ivannikov, the administrator of the Kurchatovski            
district near Kursk, said the proposed land reform would be           
"quiet and slow, but it will again be the repression of the           
people." He recalled how his own grandfather was stripped             
of his farm in Voronezh during Stalin's brutal                        
collectivization campaigns in the 1930's, and he warned               
that the consequences of Mr. Putin's legislation would be             
no different.                                                         
Supporters of the privatization say it will create a true             
market in agricultural property and guarantee landowners'             
But many who are familiar with the situation in the                   
countryside complain that the legislation would in fact               
disrupt those Western-style agricultural enterprises that,            
with foreign investment, have slowly begun to revitalize              
Russian agriculture despite the fact that they have no                
clear legal rights to the land they plow.                             
"It will make it worse than when there was no law at all,"            
said Aleksandr V. Chetverikov, a Duma deputy who owns a               
company called Agroholding that operates nearly 300,000               
acres, as well as processing plants and stores, in the                
Kursk region.                                                         
For all of Russia's progress in forging a quasi-capitalist            
economy, reform of agriculture has lagged since the                   
collapse of Communism in 1991, even as production of most             
crops and livestock plummeted.                                        
In a series of presidential decrees in the early 1990's,              
Boris N. Yeltsin dissolved the state's control of its vast            
collective farms, giving their workers shares of the                  
Today, 12.8 million Russians own these shares, and the 1993           
Constitution gives them the right to buy and sell them.               
But, in reality, they cannot do so since in most cases the            
collective farms never divided up their properties into               
actual plots of land.                                                 
One of the most contentious provisions of Mr. Putin's                 
proposed legislation would do away with the system that               
allows shareholders to lease their properties to large, new           
agricultural companies in return for annual rent, usually             
paid in grain or wheat. These enterprises would have to               
operate the properties in trust, turning over all profits             
to the owners. Economists and the owners of these new                 
enterprises agree that such a provision would effectively             
shut down the nascent industry.                                       
Individuals own less than 10 percent of Russia's roughly 1            
billion acres of farmland. The rest remains under the                 
control of the state or former collectives, said Yevgeniya            
V. Serova, an agricultural economist at the Institute of              
the Economy in Transition, in Moscow. There is virtually no           
property trade.                                                       
The legislation backed by the government would seek to                
stimulate sales - and so generate greater tax revenue - by            
establishing national guidelines for the transfer of titles           
for agricultural property and providing legal guarantees              
for the property rights of "shareholders" that exist now              
only in theory.                                                       
At the same time, the bill would extend considerable power            
to local authorities to zone land exclusively for                     
agriculture, to limit the maximum amount a single owner can           
purchase and to restrict sales to foreigners in border                
In areas like the Kursk region, many fear the free sale of            
land will strip peasants of what share they have in the               
land as wealthy investors buy up plots. Few peasants would            
be able to buy enough land to do more than subsistence                
Moreover, since few of the former collectives' shares                 
represent actual plots, the prospect of fairly dividing the           
sprawling collectives into a patchwork of smaller plots               
seems nearly impossible. In Russia's vast farmlands, one of           
the most striking features is the absence of fences, and              
few believe they will soon appear.                                    
Near Kurchatov, the Rodina collective still works the land            
much as it did during the Soviet era, only with worse                 
results because of the lack of subsidies and the rapid                
decay of its equipment. It has 570 stockholders today. But            
they still rely on the collective's director, Garik M.                
Khazaryan, for their food, their health care, even their              
At the end of each harvest, the shareholders receive their            
yearly salary, which last fall amounted to three liters of            
sunflower-seed oil and 200 kilograms of grain, worth                  
roughly $200.                                                         
Even by Russian standards it is a pittance, though as Mr.             
Khazaryan explained, they also buy their meat and bread at            
a discount from the collective's warehouse. But the                   
prospect of selling their shares offers little hope and               
even more risk since it would mean abandoning what social             
protection the collective offers.                                     
"It's stupid to sell," said Vasily P. Sarogin, 47, who                
lives with his wife on Rodina but does no work there. "What           
if something changes? The kokholz will become better off,             
and they'll be able to give me more."                                 
In Russia, the dream of owning a farm has yet to take root,           
not only because of the collective history, but also                  
because of the economic difficulties of succeeding alone.             
In Krasnaya Sloboda, a village west of Kursk, Yuri N.                 
Baimirov, is one of the rare Russians who holds clear title           
to his land: just over 60 acres squeezed between the fields           
of his former collective. In 1997, he persuaded the                   
collective to turn his shares into plots, and for a year              
tried to make it on his own. He failed.                               
"The first year, when I worked the land, I had the feeling            
that it really belonged to me," Mr. Baimirov, 40, said.               
"But because I was no longer part of the collective, I had            
no fertilizer. I had no equipment."                                   
Prohibitions on mortgaging land meant he could raise no               
capital. Now he leases his plot to another farmer. He also            
works for him, receiving a monthly salary of $50 and 800              
kilograms of grain in the fall. He would consider selling             
his land, but there is no market for it.                              
Mr. Chetverikov, the Duma deputy, has built his enterprise            
by controlling the entire cycle of production, leasing land           
for crops and livestock and taking over food-processing               
plants that deliver direct to the company's stores.                   
Agroholding has leased nearly 50,000 acres of land from two           
dying collectives in the Kursk region, one called Demetra             
and another called The Dream of the Collective Farmer.                
The company has poured money into fertilizers and new                 
equipment, including German harvesters that have increased            
yields significantly. Vitaly V. Toichkin, Demetra's                   
director, proudly noted that only three days ago,                     
representatives of a Belgian brewery visited and offered to           
buy this year's crop of barley, declaring it beer worthy.             
Mr. Chetverikov said he favored privatization but feared              
that the prohibition on leasing would disrupt the system he           
has built.                                                            
He also expressed fear that regional authorities, with whom           
he has clashed in the past, would have the power to take              
over lands that his company has improved. A basis of those            
fears, he acknowledged, is the fact that nearly two-thirds            
of the company's lands have no clear owner and would fall             
to the state. "It's no man's land," he said.                          
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