Land Reform in Russia: Institutional Design and Behavioral Responses 9780300156409

Table of contents :
Contents
Preface
Acknowledgments
Note on Transliteration and Sources
Glossary
Part One: Policy Design and Legislative Context
1. Russia’s Contemporary Land Reform: An Overview
2. Politics and Property Rights in the Soviet Period
3. Politics and Property Rights in the Yeltsin Period, 1992–99
4. Politics and Property Rights in the Putin Period and Beyond
Part Two: Behavioral Responses
5. Rural Households’ Land Holdings, Enlargement, and Rental
6. The Effects of Land Reform: Stratification and Class Development
7. The Effects of Rural Demographics and Labor on Households’ Land
8. The Regional Impact on Households’ Land
9. Russia’s Contemporary Land Reform: An Assessment
Appendix A: Selected Governmental Acts Concerning Land Reform in the USSR and the RSFSR, 1990–91
Appendix B: Selected Governmental Acts Concerning Land Reform in the Russian Federation, 1992–2006
Appendix C: The Post-Soviet Land Code
Appendix D: Survey Methodology and Description of Villages, 1995–2006
Notes
Index

Citation preview

Yale Agrarian Studies Series James C. Scott, series editor

The Agrarian Studies Series at Yale University Press seeks to publish outstanding and original interdisciplinary work on agriculture and rural society—for any period, in any location. Works of daring that question existing paradigms and fill abstract categories with the lived-experience of rural people are especially encouraged. —James C. Scott, Series Editor Brian Donahue, The Great Meadow: Farmers and the Land in Colonial Concord J. Gary Taylor and Patricia J. Scharlin, Smart Alliance: How a Global Corporation and Environmental Activists Transformed a Tarnished Brand Michael Goldman, Imperial Nature: The World Bank and Struggles for Social Justice in the Age of Globalization Arvid Nelson, Cold War Ecology: Forests, Farms, and People in the East German Landscape, 1945–1989 Steve Striffler, Chicken: The Dangerous Transformation of America’s Favorite Food Parker Shipton, The Nature of Entrustment: Intimacy, Exchange, and the Sacred in Africa Alissa Hamilton, Squeezed: What You Don’t Know About Orange Juice Parker Shipton, Mortgaging the Ancestors: Ideologies of Attachment in Africa Bill Winders, The Politics of Food Supply: U.S. Agricultural Policy in the World Economy James C. Scott, The Art of Not Being Governed: An Anarchist History of Upland Southeast Asia Stephen K. Wegren, Land Reform in Russia: Institutional Design and Behavioral Responses For a complete list of titles in the Yale Agrarian Studies Series please consult www.yalebooks.com.

STEPHEN K. WEGREN

Land Reform in Russia INSTITUTIONAL DESIGN AND B E H AV I O R A L R E S P O N S E S

Yale University Press New Haven & London

Copyright ∫ 2009 by Yale University. All rights reserved. This book may not be reproduced, in whole or in part, including illustrations, in any form (beyond that copying permitted by Sections 107 and 108 of the U.S. Copyright Law and except by reviewers for the public press), without written permission from the publishers. Set in Sabon type by Keystone Typesetting, Inc., Orwigsburg, Pennsylvania. Printed in the United States of America. Library of Congress Cataloging-in-Publication Data Wegren, Stephen K., 1956– Land reform in Russia : institutional design and behavioral responses / Stephen K. Wegren. p. cm. — (Yale agrarian studies series) Includes bibliographical references and index. isbn 978-0-300-15097-1 (pbk. : alk. paper) 1. Land reform—Russia (Federation) 2. Right of property—Russia (Federation) 3. Rural development—Russia (Federation) I. Title. II. Series. Yale agrarian studies. hd1333.r9w445 2009 333.3%147—dc22 2009024896 A catalogue record for this book is available from the British Library. This paper meets the requirements of ANSI/NISO Z39.48-1992 (Permanence of Paper). 10 9 8 7 6 5 4 3 2 1

In memory of Amy Virginia Long, James Millar, and David Macey

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Contents

Preface ix Acknowledgments xv Note on Transliteration and Sources xviii Glossary xix Part One: Policy Design and Legislative Context 1.

Russia’s Contemporary Land Reform: An Overview 3

2.

Politics and Property Rights in the Soviet Period 28

3.

Politics and Property Rights in the Yeltsin Period, 1992–99 51

4.

Politics and Property Rights in the Putin Period and Beyond 77 Part Two: Behavioral Responses

5.

Rural Households’ Land Holdings, Enlargement, and Rental 107

6.

The Effects of Land Reform: Stratification and Class Development 138

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7.

The Effects of Rural Demographics and Labor on Households’ Land 164

8.

The Regional Impact on Households’ Land 191

9.

Russia’s Contemporary Land Reform: An Assessment 216 Appendix A. Selected Governmental Acts Concerning Land Reform in the USSR and RSFSR, 1990–91 231 Appendix B. Selected Governmental Acts Concerning Land Reform in the Russian Federation, 1992–2006 233 Appendix C. The Post-Soviet Land Code 237 Appendix D. Survey Methodology and Description of Villages, 1995–2006 251 Notes 267 Index 329

Preface

Why write a book about contemporary Russian land reform? There are two reasons. The first is that land reform is an important and interesting case study of the impact of the design of reform on the economic system and household behavior. The second reason is that, generally speaking, land reform is important because it affects in direct and fundamental ways the existing alignments of economic and political power within a nation; land reform in post-Soviet Russia is no exception. In the late nineteenth and early twentieth centuries, Marxists, including Bolsheviks, focused on landownership not only because it was a means of production, and therefore a source of exploitation, but also because they understood that landownership supported the feudal structure in Russia and imparted economic power to landlords and the rural bourgeoisie. To break their power, one had to seize their land. Today, land reform is important to economic and political elites because they understand that the control and use of land imparts economic power and, increasingly, the accumulation of wealth in ways that were not possible when the Soviet Union existed. Further, land reform is important because it is central to the transformation of the economic system, just as early in the twentieth century the Stolypin reforms gave rise to a new class of producers and began to change the face of rural Russia before being interrupted by war and the Bolshevik revolution of 1917. Stalin’s collectivization, which was land reform by

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force, changed the social structure of the countryside and transformed the operation of Soviet agriculture for more than fifty years. Russia’s contemporary land reform is an attempt to undo the Stalinist legacy, and it already shows signs of having far-reaching social and economic effects. As Russia defines the nature of its postcommunist society, contemporary land reform raises several crucial issues that will influence its future development: (a) Who owns agricultural land? (b) Who controls and uses agricultural land? (c) How may agricultural land be used, and what are the use rights? (d) How secure are property rights? (e) How will land use be regulated and who will do it? (What is the role of the state?) As Russia wrestles with these issues, it is clear that land reform has a central place in influencing Russia’s postcommunist experience. Land reform is ongoing and will continue to evolve in the future. As Russia recovers from the economic depression of the 1990s and the economy grows, the first significant effects of land privatization are starting to be felt. Landownership and use rights are increasingly understood as crucial ingredients of economic development and power. The final outcome of Russia’s contemporary land reform will have several fundamental effects: (a) it will influence the social and class structures in the countryside and the distribution of economic power in the nation at large; (b) it will impact Russia’s economic role in the world economy; and (c) it will determine the degree to which Russia’s agricultural sector will be able to compete successfully in an era of globalization. Thus, far from being a marginal topic, land reform in Russia is no less important in influencing the fate of this country as were land reforms in Latin America, Mexico, postwar Japan, and other developing nations during the twentieth century. Despite its importance to economic development and rural social structure, Russia’s contemporary land reform, it may be argued, has not met original goals and expectations. Therefore, this study is interested in addressing the question, Why has Russian land reform turned out the way it has? A primary explanation for reform outcomes lies in the way reform was designed, that is, the content of the policies. Beyond the design of reform, socioeconomic and demographic factors also affected behavioral responses and will be shown to have a significant effect on households’ land holdings and proclivity for land expansion. Contemporary Russian land reform has been an interest of mine since the early 1990s. My decision to write a book on this topic resulted from the conviction that land reform is central to the nature of postcommunist society in Russia, as were previous land reforms in Russian history. This belief has proved correct, as it is increasingly apparent to government at every level and businessmen in Russia that control over land usage (apart from ownership) is

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fundamental to economic power and economic rights. I published my first article about Russian land reform in 1995 and since then have published a number of articles and book chapters concerning the topic. The learning process has never failed to be rewarding and interesting. When I was starting my career, Jerry Hough remarked to me that it is only after completion of a book that the author has enough expertise about the subject to begin writing the book. To a certain extent, I think that is true, and this book represents an effort to pull together the various strands of analysis from several years of field work and previous publications in order to investigate in detail the effects of and responses to land reform and to present the findings in a manner that hopefully will be useful to the reader. The book is divided into two parts. Part 1 is composed of Chapters 1–4 and is intended to provide the reader with an understanding of the institutional design of Russia’s land reform. These chapters discuss the historical, policy, and legislative contexts that shaped this reform. Part 2 is composed of Chapters 5–9 and consists of an analysis of household behavior to land reform policies. These chapters also utilize survey data obtained from rural households to show the effects of other variables such as socioeconomic status and demographic condition on the outcomes of reform. Chapter 1 serves as the introduction to the book and provides a context for subsequent chapters. It discusses the theoretical and empirical questions around which this study is structured. It also presents some basic characteristics and national trends that have emerged in landownership and in Russia’s land market during its contemporary reform. Chapter 2 reviews property rights in the later Soviet period. In particular, the evolution of land reform policies and legislation during 1990–91 at the national level and in the Russian Soviet Federated Socialist Republic (RSFSR) are discussed. The political context in which property rights began to change is considered. The basic argument of this chapter is that although Boris Yeltsin’s land reform policies and property rights in the RSFSR were more radical than those introduced by Mikhail Gorbachev in the Union of Soviet Socialist Republics (USSR), by the end of 1991 significant restrictions on property rights still existed, and it would not be accurate to characterize property rights in Yeltsin’s RSFSR as liberal. Chapter 3 reviews key land reform legislation passed during the term of Boris Yeltsin during 1992–99, analyzed within the political context that existed at the time. The chapter argues that Yeltsin’s land reform legislation, though more liberal than that which existed during the Soviet period, also contained significant restrictions on ownership or disposal of land. Chapter 4 discusses land reform during President Vladimir Putin’s two ad-

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ministrations, during 2000–2008, concluding with early trends under President Dmitri Medvedev. As president, Putin addressed land reform both indirectly and directly. Indirectly, he strengthened the agricultural economy, and as a result the value of land and landownership increased. The chapter examines the way Putin’s approach to agriculture differed from Yeltsin’s and the way the state has adopted new initiatives to strengthen the agricultural sector. The chapter also discusses the political environment and the direct ways it affected land reform legislation. The status of the Russian land market is examined, including positive and negative developments and continuing impediments. The chapter concludes that Putin’s land reform policies have been more illiberal than liberal, which is not entirely surprising given the direction of political trends since 2000. The early months of Dmitri Medvedev’s administration did not suggest that radical change in the design of land reform was on the horizon. Part 2 presents a different level of analysis, shifting from the macro-level to an analysis of household behavior. The type of evidence also changes from legislation and state policy to household data gathered at the village level from various surveys. Although data from several different surveys are employed, a core survey was specifically designed to measure household responses to land reform. This survey, conducted in 2006, involved nine hundred rural households in nine regions of Russia. Chapter 5 moves beyond the design of land reform and shifts the focus to households’ behavioral responses. The chapter analyzes rural households’ responses to the opportunities presented by land reform. The central question posed by this chapter is, How efficacious was land reform in engendering private landownership? This question is addressed by examining the following subsidiary questions: (1) What types of land holdings do rural households have, what types of transactions do they engage in, and what types of obstacles are perceived to exist in the land market? (2) Are there distinct behavioral responses according to age, education, income level, and social classification that affect the enlargement of holdings by households? (3) Are there patterns in the renting out of land? For most households, an illiberal reform framework and a confluence of other factors have limited the impact of land reform. The constraining factors operated in tandem and led to a situation whereby households obtained land shares during the reform process but little real land. At the same time, the chapter shows that a certain segment of advantaged households were able to maneuver within the parameters of new opportunities and did benefit. Chapter 6 uses survey data to show how the liberal parts of reform institutions contributed to ongoing sociological changes in the countryside. The chapter widens the analytic scope by exploring the impact of Russia’s land

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reform on rural stratification and social structure. It shows that upper-income households did adapt, did utilize new opportunities, and did benefit. The effect of their adaptation is demonstrated by increased stratification and the emergence of a nascent class structure. Chapter 7 explores the link between socioeconomic conditions, rural demographics, and household responses to land reform. The chapter is specifically interested in the relationship between household labor, on one hand, and land holdings and land enlargement, on the other. The specific question that this chapter addresses is, What is the relationship between the availability of household labor and responses to land reform (land holdings and land enlargements)? The chapter shows that households with a higher labor value are able to expand land holdings more, but the problem facing the Russian countryside is that most households have low levels of household labor. Chapter 8 attempts to identify discernible regional differences in land holdings, land enlargement, and land fragmentation. The core questions this chapter addresses include: (1) how has land reform developed differently across regions? (2) Did land reform distribute land to the ‘‘right’’ households in the ‘‘right’’ regions, that is, where agriculture is strong? The chapter investigates hypotheses to explain regional differences, including household income and household labor. The chapter concludes that the ‘‘strongest’’ households ended up with more land (if strongest is defined in terms of household monetary income), but it cannot be confirmed that households in ‘‘good’’ agricultural areas benefited the most. Chapter 9 summarizes the major theoretical importance of the substantive findings and concludes with a discussion of the future trajectory of Russia’s land reform.

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Acknowledgments

As is true for virtually any book, a number of individuals and institutions contributed, directly or indirectly, to the completion of this project. It would be impossible to thank each individually, but a few warrant special mention. Several Russian scholars without whom this book would have been impossible to complete deserve special acknowledgment: Vladimir Belen’kiy, Valeri Patsiorkovski, and Natalya Shagaida (listed alphabetically). To each of them I extend my sincere thanks for their time and willingness to help me. I also thank my colleague and friend David O’Brien, who provided access to survey data that he collected during 1999 from three regions of Russia and who included me in the 2003 panel wave. These data added a useful comparative aspect to my efforts. David and I worked together on the 2001 and 2006 surveys, and we have always had an excellent and productive working relationship. Allan Mustard, who was stationed in the U.S. embassy in Moscow, was extremely helpful in establishing contacts and providing both moral and logistical support for my research in Russia. Over the years Zvi Lerman has never failed to provide insightful answers to my questions about land and agrarian reforms in postcommunist countries. His influence is seen in the notes, particularly in Chapter 1. David Macey and David O’Brien commented on various chapters and offered valuable feedback. The readers for Yale University Press provided thoughtful remarks. Together, their comments helped

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Acknowledgments

improve the clarity of the analysis. I add the usual disclaimer that full responsibility for any shortcomings in the book is mine alone. Institutional support was forthcoming from a variety of sources. The International Research and Exchanges Board (IREX) provided a short-term grant in 2000 that allowed me to collect information about land reform that produced a book chapter in 2002 and ultimately led to the design of the present book. The most important financial support came from the National Council for East European and Eurasian Research (NCEEER), which funded a survey of eight hundred rural households in five regions in 2001 and a survey of nine hundred rural households in nine regions in 2006. The data from those surveys permit a unique and detailed examination of land reform as it is unfolding in Russian villages. Without that funding this book would not have been possible. A detailed description of the methodology for those surveys and information about the villages are found in appendix D. The John G. Tower Center for Political Studies at Southern Methodist University provided funds for several research trips to Russia. In addition, Southern Methodist University granted me a semester off from teaching to work on the manuscript. I thank those institutions for their support. As usual, I am responsible for the views expressed herein. Christine Carberry prepared the index, and I thank her for her expertise and attention to detail. I thank the editorial staff at Yale University Press, whose professionalism and efficiency made the production process much less onerous than it could be. In particular, I thank Jean E. Thomson Black for shepherding the book through the review and production processes in an efficient and friendly manner. I also thank James Scott at Yale University for his support of the project—it is very gratifying to have a scholar with the stature of Jim Scott look favorably on one’s work. This book is dedicated to three important people in my life who passed away as it was being written or produced. My younger sister, Amy Virginia Long, died from health complications as the manuscript was being completed. She was one in a million, a special person who was put on this earth to enrich the lives of others. Through her energetic approach to life, she managed to experience three lives’ worth of activity during the relatively short time she was with us. Her family misses her. Jim Millar was instrumental as an inspiration and a source of enormous support for my research. Jim’s previous work on Russian agriculture greatly influenced my interest in rural issues in Russia. Several of his books are classics in the field and I still find myself consulting them more than thirty years after they were published. Furthermore, Jim doggedly persevered in his insistence to funding agencies that Russian agriculture is an important topic that is worthy of research support. He was one of my

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most important advocates and without his support my career would have been considerably different. Last, but by no means least, I wish to acknowledge David Macey, who was both a friend and a colleague. Throughout the years David was one of my biggest supporters and most valuable critics. His sharp mind and key analytical insights allowed him to critique in useful ways various drafts of articles and chapters, helping clarify and sharpen my analysis. David invariably was my reader of first resort, for this work and others. Sadly, Jim and David passed away while this book was in production, and both will be greatly missed by me personally and the field of Russian studies in general. Finally, although most of the analysis is original to this book, portions of chapters draw from previously published articles. The following publishers have kindly given reprint permission. Bellwether Publishing, for text that first appeared in ‘‘Observations on Russia’s New Agricultural Land Legislation,’’ Eurasian Geography and Economics 43, no. 8 (December 2002): 651–60. Some of this material appears in Chapter 4. Bellwether Publishing, for text that first appeared in ‘‘Land Reform in Russia: What Went Wrong?’’ Post-Soviet Affairs 24, no. 2 (April–June 2008): 121–47. Some of this material appears in Chapter 5. Blackwell Publishing, for text and evidence that first appeared in ‘‘Beyond Stratification: The Emerging Class Structure in Rural Russia,’’ Journal of Agrarian Change 6, no. 3 (July 2006): 371–98. Some of this material appears in Chapter 6.

Note on Transliteration and Sources

I have largely used the Library of Congress system of transliteration for Russian words in the notes and text. I make exceptions where names are familiar to Western readers, for example, Yeltsin (not Eltsin) and Zyuganov (not Ziuganov). In other places I have strived to keep the spelling of Russian authors’ names consistent with the way they appear in English-language publications even if such spelling does not conform to the Library of Congress system. Thus one will find Tatyana Nefedova and Natalya Shagaida. For articles in Russian-language journals I have provided the author’s name and the title. Russian journals do not have volume numbers; they have only issue numbers and dates. For Russian-language newspapers, I have not provided the author or title of an article, only the titles of published laws. Some Russian-language sources have changed their publication frequency. For example, Sel’skaia zhizn’, a newspaper that used to be a daily, has changed over time and now is published as a daily and also a weekly. Thus one will find specific dates and a range of dates in references to this paper. Other newspapers that are published weekly, such as Krest’ianskie vedomosti, are published with a number and a date. An issue of Krest’ianskie vedomosti used to be indicated by a specific date. Over time, the publication has changed to indicate the month only, and several issues (numbers) are published in a given month. Unless otherwise indicated, all translations from Russian to English in the text and in the notes are my own. xviii

Glossary

AKKOR—Association of Peasant Farms and Agricultural Cooperatives in Russia Hectare—a unit of measurement of land equal to 2.47 acres Kolkhoz—a collective farm Krai—an administrative region within Russia, larger than an oblast Krest’ianskie (fermerskie) khoziaistva—private farmers Kulak—a well-off peasant Lichnoe podsobnoe khoziaistvo—a plot for personal subsidiary farming, commonly known as a private plot Oblast—a larger administrative region within Russia, roughly similar to a province Ogorodnichestvo—collective vegetable gardening Okrug, federal—a large administrative unit in Russia encompassing several oblasts and krais Pai—a land share from a large farm Postoiannoe pol’zovanie—use rights for a land plot with unlimited duration Pozhiznennoe nasleduemoe vladenie—lifetime use with rights of inheritance Raion—a smaller administrative region found with an oblast, krai, or republic. Often referred to as a district. Sadovodstvo—collective fruit gardening Sotka—a unit of measurement of land equal to one hundred square meters Sovkhoz—a state farm xix

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P A R T

Policy Design and Legislative Context

I

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1

Russia’s Contemporary Land Reform: An Overview

During the twentieth century Russia initiated four land reforms, the first three of which are commonly referred to as ‘‘great’’ land reforms. Each of those three had definite ending points, whereas the fourth land reform is ongoing.∞ This book analyzes Russia’s most recent land reform, begun in the late 1980s and bursting onto the political scene in late 1990. The principal theoretical question around which this study is structured is: What has been the impact of formal institutional change on household behavior? Drawing on institutional economics, the premise posits a link between the design of reform and behaviors that follow. The term ‘‘new institutionalism’’ refers to a framework that examines the way in which institutions affect specific types of behavior. Institutionalists have varying foci. For new institutional economists, the primary concern of research has been to document the impact of different kinds of formal institutional arrangements on economic behavior and the distribution of economic benefits.≤ This type of institutionalism seeks to explain how institutions encourage specific types of behavior while discouraging others and how this, in turn, affects the way in which economic resources are distributed between households.≥ In contrast, new institutional sociologists tend to focus on the way in which economic relations are embedded in informal social networks.∂ Historical institutionalism often focuses on path-dependency and the way

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institutions remain on long-standing trajectories.∑ Rational choice institutionalists start from different premises than does historical institutionalism but end up in a similar place. Rational choice institutionalism has been characterized as an approach that ‘‘conceptualizes institutional arrangements as equilibria from which no relevant actor has an incentive to diverge. Absent exogenous changes in parameters, it, too, postulates institutional persistence.’’∏ Because of its focus on household economic behavior and the disjuncture that present-day institutions have with the Soviet past, this study draws from institutional economists, arguing that the design of reform institutions has a profound and demonstrable impact on economic behavior. As such, the primary focus is on the formal economy, which in turn intersects with theories of embeddedness and resistance.π Although the neo-institutional paradigm is less widely accepted among some scholars,∫ an institutional approach has broad resonance in political science and has been adopted by other authors who work on policy issues other than agriculture in Russia.Ω In any event, the approach used herein does not exclude or deny the importance of factors such as informal relations, social capital, local resistance, or strategies of survival. But this study is distinguished by what it sees as the most significant factor in shaping reform and helping explain behavioral responses during Russia’s contemporary land reform. Thus, it is posited that the design of reform is central to the explanation of why there was not greater rural transformation—why common rural individuals did not obtain more agricultural land during the course of reform. In turn, the institutional design of land reform also affected rural social structure and the nature of land relations in the countryside. Although other hypotheses have been offered as to why land reform turned out as it did—for the Russian Federation and for other post-communist countries—this study postulates that the institutional design of reform is the central independent variable.∞≠ The study also addresses a series of empirical questions: (1) What has been the content of land reform policies? (2) What have been the behavioral responses to land reform policies by rural households? (3) What are the most important socioeconomic variables that affect household behavior? (4) What have been the economic and social effects of land reform policies? (5) What have been the limitations of land reform and its policies? (6) May Russia’s contemporary land reform be considered liberal or illiberal in terms of the property rights that were introduced? (7) How has contemporary land reform changed the class structure of the Russian countryside? (8) To what extent has land reform facilitated conditions that will help Russian agriculture compete in the international economy? (9) How efficacious has land reform been, that is, did it achieve its original goals, and if not, why not? (10) What is the trajectory

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of Russia’s land reform going forward? Thus the goal of this book is to analyze the institutional design of contemporary Russian land reform and the impact of that design, to examine households’ behavioral responses to reform, to evaluate the effects of reform—its achievements and shortcomings—and to further our understanding of the reasons underlying response patterns. The main focus of this book is rather different from those of authors who have written about postcommunist land reform such as Hahn, Verdery, and Allina-Pisano. Independently, they have inquired as to how and why property rights that were obtained in the postcommunist period were not necessarily connected to the economic activity that followed.∞∞ That is, in the words of Allina-Pisano, ‘‘formal property rights in Russia and Ukraine did not appear to predict the forms enterprises took or their capacity to participate in market economies.’’∞≤ Theirs is an interesting question, but we should not be surprised that a disconnect between property rights and economic activity occurred in agriculture. Although Russia’s agricultural sector was treated quite differently during price liberalization and enterprise privatization, in fact a similar disconnect may be found in industry.∞≥ There, privatization of industrial enterprises and the distribution of shares to workers did not ‘‘predict the forms enterprises took.’’ Similar to agricultural privatization, industrial privatization was often haphazard and prone to manipulation by insiders.∞∂ Moreover, the rise of industrial oligarchs evolved during several ‘‘generations.’’ The magnate class that emerged over time ultimately was entirely different from the people who initially benefited from share privatization in industry.∞∑ Thus, in the postcommunist experience the disconnect between initial property rights and economic development would appear to be inherent to privatization. Therefore, it is not particularly surprising that what happened in industry also occurred in agriculture.

The Arguments in Brief One of the original goals of Russian land reform was to privatize agricultural land and transfer ownership from large state-owned farms to individuals. As documented in this study, that goal was not really achieved if the amount of real land that was received on a per capita basis is considered. Therefore, it is argued that Russia’s contemporary land reform went awry, that its original goals were not realized and that reform may even be considered to be illusory; it was a shallow reform similar to that which other scholars have discovered in different sectors of the economy.∞∏ Eugenia Serova, who has been one of Russia’s leading analysts of agrarian reforms since the early 1990s, notes that instead of putting agricultural land in the hands of individ-

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uals, land reform in fact contributed to the emergence of super-large farming structures. She argues that ‘‘these firms are . . . much bigger than the traditional Soviet farm enterprises and their current heirs. . . . There is still no clear understanding or even definition of this new phenomenon in Russian agriculture, but it has grown rapidly in the last decade and now plays a significant role in the agri-food sector. It is a quite opposite direction to the one Russia’s agricultural development was supposed to take after the collapse of the Soviet system: the former collective and state farms are not being split into individual farms but are being united into even bigger agricultural companies.’’∞π Therefore, Russia’s contemporary land reform, though ambitious in scope and intent, has not transformed society or the rural sector in the ways that were expected. The general arguments that are substantiated in subsequent chapters may be briefly elucidated here. One major argument is that land reform policies were designed in such a way that not much real land was or was required to be distributed to rural dwellers, most of whom were employees on collective farms. In other words, not much real land was distributed to individuals—a function of the design of reform—although variation is shown across professions, household incomes, and levels of household labor. In the end, due to an inherent illiberalism within the design of reform, not much actual agricultural land was transferred to rural households on a per capita basis (although in aggregate, the amount of land that was distributed appears to be impressive, as discussed below).∞∫ Through the implementation of reform as it was designed, large farms (former collective farms) have been able to retain most of their land and continue to be the main user of Russia’s agricultural land. That said, a focus on reform institutions does not offer a complete explanation for reform gone awry, and therefore the second broad argument is that other variables—in particular, socioeconomic and demographic factors—also affected behavioral responses. The socioeconomic status of the household and the labor value of a household are shown to have a significant effect on households’ land holdings and proclivity for expanding them. The third broad argument is that the design of reform was not entirely illiberal. Land reform within the context of market reform created new opportunities for individuals and households to expand land holdings and to benefit economically. Despite imperfections in reform design and the constraints imposed by other factors, there is empirical evidence of substantial adaptation among some households, leading to specific advantages. It is argued that the ‘‘miracle of the market’’ is producing increased stratification and a rural class system.∞Ω The result is a bifurcated countryside. Advantaged households, those with

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higher income and human capital, have been able to adapt to and benefit from reform, maneuvering successfully within an illiberal reform framework. These types of households constitute a distinct minority in the Russian countryside. Less advantaged households have an illiberal reform as well as disadvantageous socioeconomic and demographic conditions to overcome. Such households constitute the majority. Therefore, for most rural households original intentions were not fulfilled and so Russia’s land reform has had much less transformative impact than was originally expected.

Why Land Reform Went Awry One of the central questions surrounding Russia’s land reform is: Why did it go awry? In addressing this question, one finds numerous hypotheses in the secondary literature. One prominent view sees resistance from bureaucratic actors, including farm managers, who wanted to protect their power, privilege, and status.≤≠ It is appropriate to include conservative politicians and elites at different levels of government who tried mightily to frustrate different aspects of land reform with the intent of maintaining the Soviet-era social and class structure in the countryside and preventing the rise of new landed entrepreneurs who might threaten conservative parties’ constituents.≤∞ Others have even argued that resistance came from the rural population in general, although this interpretation seems to this author to be tenuous at best.≤≤ But a correct understanding as to why Russia’s contemporary land reform went awry goes beyond conservative resistance. This book argues that the design of reform policies (restrictive and illiberal reform legislation) created obstacles and incentives that led to results that contradicted the original intentions of reform. In other words, original expectations could not have been met, even absent resistance, because of the way land reform policies were defined. Even if the letter of the law were followed exactly (and note that laws on paper often looked very different when they were implemented in reality), the goals of reform—to transfer agricultural land into the hands of private individuals—would be frustrated. The design of reform was further complicated by the interplay between federal and regional legislation whereby the federal government has the right to define broad principles of land legislation and regional governments are authorized to issue detailed land laws, which means that significant regional variations exist and that sometimes distribution is quite messy.≤≥ It is important to be clear, however. That the main theme of the book concerns land reform that did not meet original goals does not mean, and is not meant to imply, a lack of adaptation or change in rural Russia.≤∂ In fact,

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the evidence is clear that adaptation and change occurred at the household level despite broad obstacles. Because Russia did not try to restitute land it avoided some of the problems found in other post-Soviet countries.≤∑ But Russia’s system of land share distribution meant that significant change was limited by other systemic constraints. As a result, significant adaptation was exercised by only a narrow stratum of rural households. Thus, subsequent chapters show that a combination of factors, working together, have influenced the course of Russia’s land reform and affected its impact. Through an analysis of the design of reform as well as the other factors that affected behavioral responses to Russia’s land reform, this book hopes to make three contributions. The first concerns the literature about formal institutions. By using Russian land reform as a concrete case study, the book shows reform institutions’ impact and limitations, that is, the manner in which institutions affected choices and responses and the extent of their impact. The analysis also shows the limits of an institutional analysis. Not only did other factors impinge on behavioral responses, but not all households were affected in the same way by reform policies. The way responses to reform institutions differed according to households’ socioeconomic status and demographic condition is investigated in Part 2. Second, the book contributes to the comparative literature concerning land reform and peasant studies. Finally, the book contributes to the field of Russian studies and the postcommunist transition. Although Russia’s land reform has been analyzed by a few other authors to varying degrees, this study provides both the broadest and the most detailed analysis available in English. In particular, this book analyzes in detail aspects of land reform that have not been addressed by other authors. The originality of the book is seen not only in the conclusion that ordinary rural dwellers did not receive much land during land reform but also by the fact that survey data allow an examination and quantification by income and professional status of those who obtained land and the impact of the household demographic and labor structure on land acquisition. In short, the data employed provide for a rigorous, systematic investigation of behavioral patterns that other books do not.

Concepts and Analytical Focus In order to make the book accessible to nonspecialists, a purposeful attempt has been made to minimize jargon. That said, there are two concepts that arise in subsequent chapters that deserve further explication. The first is ‘‘reform institutions,’’ which is used synonymously with ‘‘institutions,’’ ‘‘design of reform,’’ or ‘‘institutional design.’’ Institutions are essentially the ‘‘rules of the game,’’ that is, they define what is politically and economically permissi-

Russia’s Contemporary Land Reform

9

ble, and they act as enforcement mechanisms. In short, institutions are the end results of political negotiation and compromise, and they affect in fundamental ways the responses to and outcomes of reform. This is a crucially important point, because it allows us to understand that responses to reform do not occur in a vacuum. When talking about reform institutions, that is, reform policies, several considerations are relevant: the process of formulating those policies (which is often quite politically messy), their content, their implementation, and the effects of and responses to those policies. For the purposes of this book, some attention is given to processes and debates, but the primary focus is on reform content (design) and effects and responses. The premise is that in order to comprehend behavioral responses to reform and their meaning, one has to understand the design of reform institutions. Although other authors have been interested in the implementation of reform, this is not a primary concern of the present book. Why? The primary justification is that although implementation of land distribution was sometimes chaotic and confused, particularly in the disorderly days of the early to mid-1990s, local officials did not have carte blanche to do what they wanted in regard to land distribution (and here I am speaking broadly about land distribution, not specifically about land distribution to private farmers alone). Local officials at the raion or village level were charged with implementing policy from above, whether the oblast or the national level. Moreover, there is strong evidence that in the disarray of Yeltsin’s Russia in the early 1990s, the center continued to have oversight capacities and issued repeated instructions when it was clear that original instructions were not being followed.≤∏ Therefore, a focus on the design of reform policies allows us to bypass the tricky and contentious issues of state capacity versus willingness to enforce institutions, capture of the state versus state autonomy, and the nature of the state (neoliberal, Keynesian, or contractarian). The influence that legal and political institutions bring to bear on peasant behavior can be seen by reference to historical France, which shows how legal institutions may act as obstacles to preferred reform outcomes. Philip Hoffman analyzed the reasons why land and labor were much less productive there than in England during the eighteenth and nineteenth centuries. By any number of measures it was clear that ‘‘whereas labor productivity increased in England, it virtually stagnated in Old Regime France’’ despite the availability of new technology and innovations in both countries. The lag in productivity was attributed to the nature of institutions in France. For example, one obstacle to land enclosures in France was the fact that ‘‘in many regions a new enclosure . . . required the unanimous consent of everyone with rights to graze on meadow. . . . The law thus granted every owner of grazing rights a veto over

10

Policy Design and Legislative Context

the enclosure.’’ Another example concerned field improvements. In this case, too, each owner had a veto over his neighbor’s improvements, and ‘‘although they all stood to benefit from consolidation or improved drainage, each one had an incentive to bargain strategically in order to appropriate other owners’ gains.’’≤π The importance of reform institutions continues to be seen in the contemporary period. New institutional economists have argued that the state plays a critical role in economic development through the definition of institutions and its support (or lack of support) for various institutional arrangements affecting property rights and third-party contract enforcement.≤∫ Moreover, the comparative politics literature shows the importance of the state and statedefined institutions, for instance, in defining the terms of trade and trade policies affecting agriculture and industry,≤Ω in defining peasant-state relations and enforcing property rights of peasants,≥≠ and in their effects on economic development in general.≥∞ As they relate to Russia, it is important to remember two things: First, the directional flow of reform was from the center to the regions (oblasts, krais, and republics) and from there to raions and villages. As it concerns land reform, the directional flow of land reform policies was not decentralized, nor did it afford local officials autonomy in the formulation of reform policies.≥≤ Second, reform strategies in each sector of the economy started with state elites and institution building.≥≥ Moreover, it was for the purpose of designing the ‘‘correct’’ strategy of reform that the West sent advisors to the Russian government to aid in the formulation of reform policies.≥∂ This occurred in the agricultural sector as well.≥∑ Explaining how reforms may be generated by elites, David Feeny writes that ‘‘the demand for institutional change concerns situations in which there are potential benefits to some party that are only attainable through the creation of a new set of institutional arrangements,’’ and this pertained to Russia’s market and land reforms.≥∏ The importance of reform institutions is further evidenced by the fact that enormous attention in Western scholarship has been given to the design of reform and the incentives that flowed from those reform institutions.≥π Thus, while acknowledging the potential and real influence that may be exerted by local leaders at the implementation stage, we need to be careful not to impute too much impact to it unless we are prepared to argue that reform institutions imposed from above range from marginal to virtually irrelevant to reform outcomes. Verdery describes chaos and confusion but does not quite ascribe these to land distribution in Romania. But in Romania land restitution was inherently messier than the type of land distribution that was chosen for Russia. If one argues that reform institutions are marginal or irrelevant, what

Russia’s Contemporary Land Reform

11

we are left with is chaos and directionless change, and that position is not sustainable. Robert Bates argues that ‘‘in a world of positive transaction costs, institutions matter. They determine what bargains can be made, what agreements enforced, and therefore what outcomes are attainable through voluntary exchange.’’≥∫ The second concept used in the analysis is borrowed from Stephen Williams, who has written an excellent book about the Stolypin reforms.≥Ω In that book he offers a typology of reforms using a liberal-illiberal spectrum and argues that liberal property rights facilitate and support the development of a liberal political system and society.∂≠ Williams argues that the Stolypin reforms were ‘‘liberal’’ and had the potential to liberalize the ‘‘illiberal’’ tsarist regime of Nicholas II. Although Williams and I differ in our understanding of the causal properties of land reform, the labels ‘‘liberal’’ and ‘‘illiberal’’ may be useful for conceptualizing contemporary land reform.∂∞ As argued in subsequent chapters, the contemporary design of Russia’s land reform has been illiberal. A primary aspect of an illiberal land reform concerns restrictions on rights of disposal of land, although the broader conceptualization of land reform whereby large farms only distributed land to a very small cohort may also be considered illiberal. Nor should we be surprised that Russia’s land reform design was illiberal. Illiberal regimes are prone to promote illiberal policies. And is it well to remember that the ‘‘founding father’’ of Russian democracy, Boris Yeltsin, left a legacy of a super-presidency, manipulated elections, the use of force against political rivals, violations of the rule of law, and arbitrary rule.∂≤ He was, it may be argued, the progenitor of the ‘‘managed democracy’’ that characterizes the Russian political system today.∂≥ Finally, the analytical focus of the book is on agricultural land. Why agricultural land? There are several reasons. The first is that, as noted by a prominent Russian scholar, ‘‘the most profound land reforms were carried out in relation to farmland, while other categories of land remained mostly in state ownership.’’∂∂ The second reason is that urban land has been subject to significantly different laws and policies than has rural land.∂∑ Any attempt to write a book about both urban and agricultural land reform would be unwieldy and would likely fail. The third reason is that there is much more agricultural land than there is urban land, which suggests the importance of magnitude. According to official government statistics, land categorized as urban constitutes one percent of Russia’s total land area; the same percentage applies to land categorized as industrial. In contrast, agricultural land comprises the second largest category of land in the Russian Federation, about 24 percent, trailing only land categorized as forest (about 65 percent). The final reason, and this is a more impressionistic one, is that agricultural land has received more attention

12

Policy Design and Legislative Context

Table 1.1. Distribution of land categories as of January 1, 2008

Designation of land Forests Agricultural use Reserve land Nature parks, preserves Land around water resources Population settlements of all kinds Land used for industry, transportation, communications, and other purposes Total

Quantity

Percentage of total land in Russia

1,104.9 403.2 104.4 34.2 27.9 19.1 16.7

64.6 23.5 6.2 2.0 1.6 1.1 1.0

1,709.8

100.0

Source: Gosudarstvennyi (natsional’nyi) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2007 godu (Moscow: Federal’noe agentstvo ob’ektov nedvizhimosti, 2008), 8. Note: Quantity of land is expressed in millions of hectares. Population settlements include 7.9 million hectares for urban settlements, and 11.2 million hectares for rural settlements.

from the Russian government in terms of laws, decrees, and government resolutions.∂∏ The distribution of land use in the Russian Federation by official designation is shown in table 1.1. The remainder of this chapter is divided into two sections and provides contextual background for the substantive chapters that follow. The first section places Russia’s contemporary land reform into a comparative perspective and briefly reviews some macrotrends. The second section presents some of the basic characteristics and national trends that have emerged in landownership and in Russia’s land market.

An Overview of Russia’s Contemporary Land Reform Each of the land reforms in Russia in the twentieth century was associated with significant political, economic, and social transformation. The first great Russian land reform of the twentieth century, the so-called Stolypin reforms, enabled peasants to convert their communal land to private property and to consolidate their scattered strips.∂π The Bolshevik Revolution ushered in Russia’s second land reform by abolishing private ownership of land for much of the twentieth century. Bolshevik land reform expropriated land from

Russia’s Contemporary Land Reform

13

landlords, the tsarist state, and the church and distributed it to ‘‘toilers of the soil.’’ By the late 1920s, individual peasants and peasant households were using more than 97 percent of the sown land in the Soviet Russia.∂∫ Stalin’s collectivization was the third land reform. It represented an entirely new phase of communist land reform: the transfer of land control from villages to stateowned and -operated large farms, the forcible liquidation of most individual farms, the essential termination of land leasing by individuals and households, and strict state regulation of land use rights of peasants.∂Ω The last Russian land reform of the twentieth century is associated with the ending of communist rule in the Soviet Union. The land and agrarian reforms of the early 1990s had multiple goals. One goal was political—to break from the Soviet past and to contravene communist values and destroy communistera institutions in rural society by distributing land to private individuals. The initiatives of 1990 and especially 1991 were interpreted as meeting a desire for mass decollectivization. It was believed that if land were distributed and free exit were facilitated, masses of farm members would quit large farms. In reality, policy impulses not to pursue mass decollectivization were evident in early 1992—a matter of weeks after the ‘‘revolutionary’’ decrees of Yeltsin were issued in December 1991. Thus it is doubtful that mass decollectivization was ever a realistic goal. There were also economic goals, namely, to ‘‘destatize’’ agricultural land, privatize it, and transfer ownership to ordinary people. It was hoped that through land privatization and distribution land use would gravitate to the most efficient and productive users, that agricultural production would improve, and that agriculture would contribute to economic growth in general. Toward this end, in contrast to Stalin’s collectivization, contemporary Russian land reform has been a ‘‘giving’’ reform, based on the transfer of private property rights for additional land. Thus the latest land reform was begun in the broader context of transformation in the economy, the political system, and society at large. Russia’s contemporary land reform occurred within the context of societal change throughout the former Soviet bloc and Central and Eastern Europe. In the late 1980s and early 1990s the nations of these regions faced critical choices as they started the transition from communism and from their command economies. The outcome of these choices was variety in economic strategies and, in particular, in the paths of postsocialist agricultural transition. Post-Soviet states faced two critical questions with regard to their agricultural systems: what to do about the land controlled by state and collective farms and how to distribute state-owned agricultural land to private individuals. In other words, former communist states faced the policy questions of how to

14

Policy Design and Legislative Context

distribute what had been collective property under communism and how to create secure (and defensible) property rights in the postcommunist period. Unlike in industry, the selling off of farm assets (property and land) to the rural population was not economically feasible for many nations. During land distribution the primary policy choices were restitution of land to former owners or creation of new owners through the distribution of farmland in the form of land shares to employees of state and collective farms. A third variety of land reform combined restitution and land share distribution which was used in Romania and Hungary, and led to enormous complications in the distribution of land and enforcement of property rights.∑≠ Poland was a case unto itself because state land represented only about onequarter of agricultural land; the rest was privately owned from 1956 onward. As noted by Nigel Swain, ‘‘getting land in Poland is more a question of getting additional land than regaining land that had been lost.’’∑∞ In Poland during the socialist period state farms had an obligation to buy land from peasants who opted to swap their land for a state pension. As a result, the state held unconsolidated parcels of land. During reform, state land was sold off and not distributed for free, and the process of acquiring it was quite complex because the state was the source of land.∑≤ Private land, which had been legal since the mid-1950s, remained in private hands and did not go through a redistribution process. There was considerable diversity in the courses chosen by the nations of Central and Eastern Europe. Several, including the three Baltic nations, Bulgaria, the Czech Republic, and Slovakia, chose restitution of land.∑≥ The forms of restitution were not uniform across nations, and choices had to be made about whether restitution would be partial, full, direct, or indirect. Most of the nations of Eastern Europe chose full and direct restitution, that is, they attempted to return land to those who had owned it prior to communist nationalization. Hungary, however, opted for partial and indirect restitution.∑∂ In any event, restitution was a messy and complicated process, in both conceptual and procedural terms. Because of this, certain issues and problems arose that were unique to the process. Studies of land restitution in Eastern Europe thus do not hold much relevance for the experience of Russia, where a different method—land distribution based on land shares—was used. Some nations, including all the central Asian states but Kyrgyzstan, did not undertake any form of land distribution.∑∑ In 2008, Uzbekistan and Tajikistan were the only two former Soviet republics where the state continued to own all agricultural land. In Belarus, the state owns land used for commercial farming but recognizes private ownership of household plots.∑∏ A land share distribution system was implemented in former Soviet states including Armenia, Georgia, Moldova, Azerbaijan, Ukraine, and Russia, as

Russia’s Contemporary Land Reform

15

well as Albania. The use of land shares was in effect an attempt to create new ‘‘owners’’ of land. Here, too, there was a certain messiness, for instance concerning the issue of whether and how to distribute land and property that had been brought into the collective by households upon the formation of the collective. In other cases the collective had legal title to land and property. This situation existed in Czechoslovakia.∑π Just as there was diversity in the methods of land distribution, so, too, have results varied from nation to nation in post-Soviet Europe. Throughout the region state ownership of agricultural land either was greatly diminished or disappeared altogether, replaced by large cooperative farms or privatized companies, which is to say that individual farms did not necessarily come to the forefront in all countries.∑∫ Nonetheless, in Slovenia, Romania, and Poland more than 60 percent of agricultural land is used by private individuals.∑Ω A common characteristic throughout postcommunist Europe is that individuals’ land holdings are quite small, usually consisting of a few hectares. Land use in the Czech Republic and Slovakia is dominated by large farming companies and cooperatives.∏≠ Land use in Hungary is equally divided between individuals’ farms, on one hand, and commercial companies and cooperatives, on the other.∏∞ Finally, land use in Bulgaria is also divided among commercial companies and individuals’ farms, although among companies there is extreme land concentration in the top 10 percent of farms.∏≤ Even among former Soviet republics, where, in general, less agricultural land is used by individuals than in Central and Eastern European nations, land use by individuals in Russia is at the lower end of the scale. By the turn of the twentieth century land use by individuals was most prominent in the Baltic states. In Latvia more than 90 percent of agricultural land was used by individuals in the form of private farms or individual plots. In Lithuania this figure was 70 percent, and in Estonia, more than 60 percent. Located roughly in the middle of the spectrum were the Trans-Caucasus nations of Georgia, Armenia, and Azerbaijan, in which 33–37 percent of agricultural land was used by individuals. Moldova, Ukraine, Russia, and Belarus were located at the bottom of the spectrum. In Moldova about 20 percent of agricultural land was used by individuals; in Ukraine (where significant land reform only began toward the end of 1999) this figure was about 18 percent, and in Russia it was 10–11 percent. Land use by individuals accelerated after 2000 in Moldova and Ukraine but did not change substantially in Russia. Russia remains a laggard among Central and Eastern European nations and among former republics that undertook land reform. Even without a mass land privatization campaign, by 2000 Belarus had a higher percentage of its agricultural land being used by individuals than did Russia.∏≥

16

Policy Design and Legislative Context

Although Russia’s contemporary land reform began in the early 1990s, there are still several open questions and issues that merit investigation. On one hand, a significant change in land relations has occurred through the introduction of private ownership of land, whereas during the Soviet period private ownership was prohibited. During the 1990s, tens of millions of hectares of land in the aggregate were transferred from state to private ownership —much of it for free—and much more than was transferred to peasants in several Latin American nations that are considered to have undergone successful land reform. During the first five years of Russia’s contemporary land reform, 1992–97, approximately 117.6 million hectares were privatized, which seems to be an impressive number.∏∂ Land from state and collective farms was distributed using a share certificate system, and 11.9 million land shares were allocated. Of this total, 7.7 million land shares (75.7 million hectares) had been distributed to private owners by 2002.∏∑ As a result of land privatization, more than 40 million Russian families have become landowners. According to one set of Russian geographers, at least 120 million Russians are using land for agriculture in one capacity or another (of a total population of about 142 million).∏∏ On the other hand, answers to a series of important questions about the effects of land reform are either ambiguous or incomplete. For example, during the 1990s land reform affected the Russian agricultural system by changing the mix of landowners and land users. The amount of total land used by households for agricultural purposes increased from 2.9 million hectares in 1990 to 5.6 million hectares at the end of 1999,∏π the amount of total land used by private farmers increased from 181,000 hectares in 1990 to 14.3 million hectares at the end of 1999 (and has continued to increase since then),∏∫ and the amount of agricultural land used by large farms declined from 209.8 million hectares in 1990 to 161.8 million hectares at the end of 1999.∏Ω But did land reform really transform Russia during the 1990s? In rural areas it might be an exaggeration to answer in the affirmative. Can we conclude that land reform contributed to economic growth or to higher agricultural production during the 1990s? No (although both the economy and agricultural production have grown since 1999, and some of this growth may be due to property rights). Did land reform lead to the emergence of a large rural middle class or to a wealthy class of producers? Not really (although since 2000 there has been evidence of nascent class formation, and new producers are emerging).π≠ Despite these negative answers, Russia’s contemporary land reform continues to be important to the long-term development of a market-based economy, and property rights continue to be a crucial issue for economic development.

Russia’s Contemporary Land Reform

17

Basic Characteristics of Russia’s Contemporary Land Reform There are many different classifications of land reform depending on what the researcher is interested in and the questions he is asking. Land reforms vary with the cultural and historical background of the country, the political system, the existing economic system, and the class structure of society at the time land reform begins. One typology of land reform considers how reform changes the mode of agricultural production, the dominant producers, the elite that controls the state, and the structure of rural classes.π∞ Alternatively, one may be interested in the source of land reform—the place whence the impetus for reform originates. There are land reforms that are instituted from above, but not all are the same. Some are initiated by revolutionary governments in order to build or consolidate political support among peasants who may be a numerical majority in society, as happened, for example, in Mexico starting with the rule of Cardenas in the 1930s.π≤ There are also land reforms from above initiated by nonrevolutionary governments that change land relations for the purpose of spurring economic development. Examples include the reforms of eighteenth-century France and nineteenthcentury Russia.π≥ A different category altogether is land reform from below, often begun by peasants to acquire land by various means. One form of obtaining land from below is the expropriation of landlords’ land as part of an antibourgeois revolution, civil war, or national liberation movement. In other words, land reform is led by a revolutionary or anti-government party. Examples include the reforms of China in the 1940s, Cuba in the 1950s, and Nicaragua in the late 1970s.π∂ Finally, there are land reforms from below that are more or less spontaneous, not led by a revolutionary party but rather the result of peasants’ taking land on their own, as in Russia in the weeks leading up to the 1917 Bolshevik revolution.π∑ As was the case with earlier Russian land reforms of the twentieth century, the contemporary reform has been a top-down, state-sponsored reform that did not grow out of rural pressures from below and was not led by a revolutionary party or group but, rather, was an outgrowth of the attempt to remake and reform the Soviet economic system during the Gorbachev period. The late Soviet and early post-Soviet state was not a unified actor, however. Throughout the 1990s there was a distinct split between ‘‘liberals’’ and ‘‘conservatives’’ in terms of policy preferences. By 2008, liberals had become politically marginalized, and conservatives had either been co-opted or emasculated. As political relations evolved in Moscow, so, too, did the macro-trends and characteristics of the land reform. The discussion below begins with an overview of privatization for all types of land before looking specifically at agricultural

18

Policy Design and Legislative Context

land. The following basic questions are addressed: How is agricultural land used? Who owns agricultural land? What are the types of land markets, and what are the trends in those markets? The underlying fact running through the description of these characteristics is that the design of reform influenced its outcome. AN OVERVIEW OF LAND PRIVATIZATION

Although this book concentrates on agricultural land privatization, it is useful to provide some sense of the extent of privatization for all types of land. Table 1.2 shows the distribution of landownership in Russia’s seven federal okrugs and corresponding nine regions which were surveyed in 2006.π∏ The table shows that only about 7 percent of Russia’s total land was in private hands at the beginning of 2008. Furthermore, the table demonstrates that considerable variation in privatization—for all types of land—is found across okrugs, ranging from a low of less than 1 percent in the Far Eastern federal okrug to a high of 35 percent in the Central federal okrug. Among regions surveyed in 2006, Amur oblast and Krasnoyarsk krai had the lowest levels of privatized land, at 1 and 4 percent, respectively, whereas Voronezh oblast had the highest at 56 percent. The variation in privatization of land is explained, first, by the fact that agricultural land accounts for the bulk of land that has been privatized throughout the nation. In other words, in regions where there is more agricultural land, levels of land privatization should be higher because agricultural land is more likely to be privatized than urban or industrial land. Second, regional levels of land privatization are influenced by the amount of forest land, reserve lands, national parks, military land, land used for industrial, communication, and transportation needs, and land surrounding bodies of water. Land in these categories cannot be privatized. The degree of regional land privatization also has been influenced by regional legislation in that some regions allow much larger privatized land holdings than others. Thus, the table shows that considerable variation in land privatization is evident throughout Russia, although the overall privatization rate is quite low. I now turn to a consideration of agricultural land in particular. AGRICULTURAL LAND USE

Although land legislation passed in 1990–91 was perceived to be quite radical and was assumed by some observers to have the goal of complete decollectivization, in fact that was never the intent of President Boris Yeltsin, as he indicated when he stated that collective farms that were profitable and producing well should be allowed to continue working.ππ Russia’s contemporary land reform was designed in such a way that only a small percentage of

Russia’s Contemporary Land Reform

19

Table 1.2. Land privatization by region as of January 1, 2008 (in thousands of hectares)

Russian Federation Central federal okrug Moscow oblast (not including Moscow city) Voronezh oblast Northwest federal okrug Leningrad oblast (not including St. Petersburg) Southern federal okrug Krasnodar krai Volga federal okrug Republic of Tatarstan Urals federal okrug Kurgan oblast Siberian federal okrug Altai krai Krasnoyarsk krai Far Eastern federal okrug Amur oblast

Total land owned by citizens (%)

Total land

Owned by citizens

Owned by companies

Owned by state and municipalities

1,709,824 65,020 4,579

125,084 22,565 796

7,119 1,765 425

1,577,620 40,691 3,359

5,221 168,696

2,937 4,659

42 366

2,243 163,671

56 3

8,390

429

55

7,907

5

59,131 7,548 103,697 6,784 181,849 7,148 514,495 16,799 236,679 616,932

21,975 3,217 33,262 2,532 9,420 3,119 30,980 6,443 3,239 2,223

1,109 281 2,124 569 406 152 1,143 210 61 106

36,047 4,051 68,312 3,684 172,024 3,877 482,272 10,146 233,379 614,603

37 43 32 37 5 44 6 38 1 [1

36,191

1,180

45

34,965

3

7.3 35 17

Source: Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2007 godu (Moscow: Federal’noe agentstvo kadastra ob’ektov nedvizhimosti, 2008), 199–201; author’s calculations. Note: Numbers have been rounded.

real land from the collective sector was to be distributed so that state and collective farms could continue to function. Thus there never was a concerted attempt to completely abolish collective farms or the collective sector in Russia as there was in some Eastern European states. As a result, in Russia large farms continue to use most agricultural land and physically dominate the

20

Policy Design and Legislative Context

countryside. (A few thousand state and collective farms still exist, although their number is much smaller than in the past because most large farms have reorganized into a variety of legal entities.)π∫ During the farm privatization process, state and collective farms were required to allocate a certain portion of their agricultural land for redistribution to private plot operators, would-be private farmers, and raion land funds. Land that was retained by a large farm was to be ‘‘privatized’’ through the issuance of land shares to farm members and certain categories of service personnel. As part of the land reform process, persons who wanted to start a family private farm were allowed to withdraw from a large farm with a physical plot of land. In essence, Russia’s contemporary land reform was to take land from state-owned socialist farms and distribute it for private ‘‘ownership.’’ But ‘‘ownership’’ has different nuances. The fact that rural privatization was never intended to fully dismantle the Soviet-era collective farm structure helps explain why most agricultural land continues to be used by large farming enterprises (the successors of state and collective farms, now often referred to as corporate farms). In 2003, for example, large farms accounted for about 67 percent of a total of 220.8 million hectares of agricultural land in Russia. Private farms used a little less than 8 percent, and household plots accounted for less than 5 percent of agricultural land. In total, private use occupied about 13 percent of all agricultural land. The remaining 20 percent of agricultural land is used for pastures, meadows, reserve land, and subsidiary agriculture at industrial enterprises.πΩ Thus, although Russian land reform privatized land and transferred use rights, most agricultural land continues to be used by large farms, and individuals use relatively little, in stark contrast to the experiences in other post-Soviet states.∫≠ Even so, the amount of land used by private individuals and households did increase substantially from 3.8 million hectares in 1990 to more than 20 million hectares by 1996 and to almost 25 million hectares by the beginning of 2008 (see table 1.3).∫∞ Finally, it is clear that there is a fair amount of continuity among rural households between the Soviet and post-Soviet periods in terms of land use. Although the number of privately owned plots has increased, as has the amount of privately owned land, contemporary household land plots are used for growing food, much as they were in the Soviet period, and the average size of these land plots is small. Nationally, in 2007 the average size of a private plot was .44 hectares, the size of a plot in a collective fruit orchard was .09 hectares, and the size of a plot in a collective vegetable garden was .10 hectares.∫≤ Trends in land use by individuals and households from 1991 to 2008 are indicated in table 1.3.

Russia’s Contemporary Land Reform

21

Table 1.3 Land use by individuals and households, 1991–2008 Type of land use Number of private farms (thous.) Quantity of land (thous. ha.) Number of private plots (million) Quantity of land (thous. ha.) Number of collective orchards (million) Quantity of land (thous. ha.) Number of collective gardens Quantity of land (thous. ha.) Number of land plots for individual housing construction (thous.)* Quantity of land (thous. ha.) Number of dacha plots (thous.) Quantity of land (thous. ha.) Total land used by individuals and households (mil. ha.)

1991

1996

2002

2008

4.4 181.0 16.3 3,244.0 8.5

279.1 11,982.1 16.0 5,613.0 15.0

263.9 14,289.7 15.8 6,469.4 14.6

267.0 14,516.0 16.0 7,075.0 14.0

575.0 4.5 345.0 426.1

1,248.5 7.4 603.3 5,789.8

1,262.2 4.5 422.8 6,407.0

1,248.9 2.9 299.9 7,315.0

56.2 28.2 2.3 4.4

580.2 76.6 11.2 20.0

649.2 90.6 13.3 23.1

808.7 120.9 24.5 24.9

Sources: Gosudarstvennyi (natsional’nyi) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2001 godu (Moscow: Federal’naia sluzhba zemel’nogo kadastra Rossii, 2002), 46; Gosudarstvennyi (natsional’nyi) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2007 godu (Moscow: Federal’noe agentstvo ob’ektov nedvizhimosti, 2008), 90. *Data are from 1992 since this category did not exist in 1991.

The table shows several distinctive trends. First, the amount of agricultural land used by private family farms continues to increase, leading to a growth in the average size of a private farm to more than 54 hectares in 2008, representing a significant move toward commercially viable farms.∫≥ Nonetheless, the number of private farms pales in comparison to the number of other types of land usage by individuals and households. Second, whereas the number of private plots has remained essentially level since 1991, with insignificant variation, the quantity of land used for private plot operations has more than doubled, indicating a growth in the amount of land used by households. The data include urban and rural households, but virtually every rural household has a private plot. Third, the number of collective orchards and the quantity of land used for them had increased substantially by 2008 in comparison to 1991. Fourth, the number of collective gardens declined by about one-third,

22

Policy Design and Legislative Context

and the amount of land used for this purpose decreased by about 8 percent. The table also includes land uses that apply mostly to urban households. Overall, the table shows a significant increase in the amount of land used by private individuals and households in the period 1991–2008. Thus, there is clear evidence that opportunities to expand land holdings and usage were utilized by both rural and urban households. WHO OWNS AGRICULTURAL LAND?

Land legislation adopted in the Russian Soviet Federated Socialist Republic (RSFSR) during 1990–91 and in the Russian Federation after 1991 created widespread landownership. In rural areas virtually every household owned one form of land or another.∫∂ Farm reorganization and the distribution of land shares ended in 1994, and by 1995 about 56 percent of all agricultural land already had been privatized. By 2003 this figure had increased to 60 percent.∫∑ For households that were not registered as private farms, the most common types of land usage and ownership during the 1990s were, in descending order of popularity, private plots (land around the house or detached but in the vicinity of the house), collective fruit gardens, and collective vegetable gardens.∫∏ These types of land plots may be owned jointly by the members of the household or by an individual. And as noted above, these types of plots are normally quite small. These types of land represent actual land plots, not abstract rights. Land reform legislation opened up numerous possibilities for a household to acquire or obtain use rights to additional land. For example, a household could privatize the land plot it had been using but did not own in the Soviet period. It could obtain ownership rights through land share distribution from a reorganized collective farm (assuming that household members worked on the farm or provided services to it). It could obtain formal use rights to additional land from a local large farm, it could obtain informal use rights from a large farm, friends, neighbors, or relatives. Or it could obtain formal use rights by leasing additional land from another individual or household or from the municipal government. Thus, land use for rural dwellers is often multifaceted. Although land reform brought ownership rights, note that ‘‘ownership’’ does not necessarily mean that a rural dweller or rural household possessed a physical plot of land. For them, landownership usually combined ownership of a physical land plot and more abstract land use rights represented by land shares. This leads to two main points concerning landownership by rural households in Russia. The first is that private land use, which was discussed above, is different from landownership. According to one well-known Russian expert on land reform, almost all private plots have been privatized and

Russia’s Contemporary Land Reform

23

are privately owned. She estimates that 93 percent of land used for household plots is owned as private property.∫π For private farming, the situation is more complex because some land is owned and other land is rented.∫∫ Most commonly, land is leased from rural dwellers who did not convert their land shares to real land. Land leased from municipal governments and privately owned land account for the remainder of land holdings.∫Ω The amount of real agricultural land that is privately owned is most certainly less than the amount privately used (about 13 percent, as indicated above). A rough calculation of actual private landownership by rural dwellers probably would yield a figure of less than 5 percent of all agricultural land.Ω≠ And thus, although official statistics assert that almost 60 percent of agricultural land is privately owned, this figure is virtually useless as a measure of real privatization because of the loose definition of ‘‘landownership.’’Ω∞ The government’s loose definition of landownership raises the second main point, which is that the bulk of a rural household’s ‘‘landownership’’ is in the form of land shares.Ω≤ Land shares were distributed as part of the process of privatizing large farms during 1992–94. This process has been described in detail elsewhere, and a short review will suffice here.Ω≥ Only on exit from a large farm to start a private farm was the land shareholder able to convert his paper shares into tangible property. Withdrawal from a large farm for other purposes would result in compensation for land shares but not actual land plots. The design of Russia’s land reform was such that only a small percentage of privatized agricultural land was in the form of real land, that is, physically defined plots with demarcated boundaries. To illustrate, at the national level in 2003 about 89 percent of the agricultural land that was ‘‘privately owned’’ was in the form of land shares.Ω∂ Land shares represent ownership in principle —a paper entitlement for a land allotment of a defined (regulated) size, without the owner’s knowing the land’s location or quality. Land ‘‘owned’’ through the land share system is officially classified as private property and held in ‘‘ownership’’ (sobstvennost’), and on that basis official data indicate that most land used by rural households is held in ownership, which in reality has little meaning for most rural households. Furthermore, land privatization in the form of land shares was part of farm privatization, but it was not really individual ownership for two reasons. First, persons exiting a large farm with physical land held the land in joint ownership with the other members of the household. Second, land remained, in essence, shared collective ownership because most households leased their land shares back to their parent farm, and in that respect land privatization was something less than it appeared on paper. Therefore, land shares remain the largest single component of privatized land for most households in rural

24

Policy Design and Legislative Context

Russia. Russian land reform, realized via the issuance of land shares, transferred not real land but only abstract rights to the vast majority of individuals or households. This occurrence was the result of a deliberate decision about the design of reform. LAND MARKETS AND NATIONAL TRENDS

After several years of legislative confusion, President Boris Yeltsin in October 1993 issued a decree legitimizing the buying and selling of agricultural land, and thus since 1994 Russia has had a land market which has attracted scholarly attention.Ω∑ Since then, several million land transactions have been concluded every year in Russia, many of which are based on the land shares that most rural households received as part of the farm privatization process. There are two broad types of land transactions: market and nonmarket. Market transactions involve monetary transfers and are considered formal transactions. They consist chiefly of the buying and selling of land and renting of land—either leasing land in or leasing land out.Ω∏ A nonmarket transaction is one that entails no exchange of money other than perhaps some administrative fees. These types of transactions include transfer of land as a gift or through inheritance. Another type of nonmarket transaction that is informal is the use of land belonging to friends, relatives, neighbors, or a large farm. These types of transactions are hard to track because there is no written record, but one prominent Russian specialist has estimated that informal uses of land may involve up to 36 million hectares of agricultural land.Ωπ In terms of recorded volumes of land transactions, market transactions are more numerous. National-level data show that the Russian land market is primarily a land leasing market and not a purchase market, although the number of purchases and the area of land purchased have increased significantly since 2001.Ω∫ Overall, in terms of area and number of transactions, the leasing of state and municipal land accounted for about 98 percent of market transactions during the early years of land reform, though this figure declined to about 93 percent of all transactions in 2001 and 89 percent in 2002. Leasing from state and municipal sources as a percentage of all market transactions has continued to decline, but it still accounted for 80 percent of total land transactions in 2007.ΩΩ Table 1.4 summarizes national-level trends in land transactions for the nation as whole and for each of the seven federal okrugs in Russia. The table displays all types of land transactions, not only those involving agricultural land, but is nonetheless useful for indicating broad patterns in the most common types of transactions. As a result of Yeltsin’s October 1993 decree, a private land market has developed as well. A person wishing to lease privately owned land could lease

Russia’s Contemporary Land Reform

25

Table 1.4. National and regional distribution of land transactions in 2007 (number of transactions)

Leasing of state and municipal land Russian Federation 3,628,109 Central federal okrug 718,107 Northwest federal okrug 465,453 Southern federal okrug 461,634 Volga federal okrug 944,865 Urals federal okrug 200,685 Siberian federal okrug 609,850 Far Eastern federal 227,515 okrug

Sale of lease rights of Sale of state Sale of land Land state and and to citizens Land transferred municipal municipal and transferred through land land companies through gift inheritance 13,835 1,543 1,947 3,473 2,846 2,921 686 419

233,706 47,826 18,128 37,884 64,402 18,458 40,072 6,936

405,670 137,114 24,673 61,366 84,758 42,734 45,143 9,882

49,715 18,241 3,658 7,477 10,451 3,951 4,873 1,064

162,151 65,168 11,804 27,613 35,049 9,703 10,206 2,608

Source: Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2007 godu (Moscow: Federal’noe agentstvo kadastra ob’ektov nedvizhimosti, 2008), 176.

land shares or could lease actual plots of land that had been converted from land shares. Today the situation is still in flux. The 2002 law titled ‘‘On Agricultural Land Transactions’’ states that land leases must be written for a specific plot of land and requires that preexisting leases of shares be rewritten for specific plots of land—which implies that land shares must be converted to physical plots of land—or to transfer the shares to a trust whose manager supervises the distribution of revenues to the lessee and the owner.∞≠≠ Leases based on land shares were to be rewritten by January 1, 2004, but the deadline was extended to January 2006. Interviews conducted in Moscow in December 2006 revealed that the process had yet to be completed; this resulted in confusion as to the legal status of land shares and preexisting leases.∞≠∞ Subsequently, the deadline for implementing the change was delayed to January 2010. Private individuals may also purchase land from state and municipal land funds or from private individuals. The number of purchases from state or municipal land funds has increased dramatically from 23,969 such transactions in 2000 to 233,706 transactions in 2007.∞≠≤ Most transactions conducted between individuals involve small-scale collective gardening (sadovodstvo), the operation of private plots, and individual housing construction. These three uses have accounted for more than 95 percent of transactions between individuals since the mid-1990s, and in 2007 they accounted for 60 percent of private purchase transactions conducted between citizens.∞≠≥ These

26

Policy Design and Legislative Context

types of transactions involve very small plots of land. For example, in 2007 the average size of a purchase transaction for an individual housing plot or dacha plot was .12 hectares, and for a private plot or garden plot it was .21 hectares.∞≠∂ The popularity of purchases of agricultural land by so-called juridical persons—banks, food processors, and other companies—has increased. In recent years, new agricultural operators have begun to acquire farm assets and significant quantities of farmland and to introduce various organizational changes in farming operations and land use.∞≠∑

Conclusion Russia’s contemporary land reform differs in several respects from the previous three. Although this land reform is ongoing and the effects have yet to be fully felt, more than fifteen years into the process it is clear that the original goals of reform have not been met and the impact has not transformed rural Russia in the ways that were expected.∞≠∏ This book explores behavioral patterns and the reasons why the reform went awry, starting with the institutional design. I argue that the design of Russia’s contemporary land reform has had an enormous influence on its outcomes. Others have argued that local responses to economic incentives provided in reform legislation were ‘‘more important’’ in determining outcomes than was the design of reform institutions.∞≠π Of course, local responses are significant—that is where implementation occurs. But in order to understand reality, it is exceedingly important to specify the question precisely. In the process of reorganization and privatization of large farms, farm directors and other local bureaucrats had a fair amount of latitude to shape reform to their benefit, with the result that in many cases (certainly not all) the transformation was superficial, as eloquently described by Allina-Pisano.∞≠∫ But if we are talking about the distribution of agricultural land, there was much less leeway. Reform policies specified who was to get land, how the quantity was to be determined, the process by which land would be distributed, and the nature of distribution (which varied by type of intended use). Was the process at times ‘‘massaged’’ by farm leaders? Absolutely.∞≠Ω As is well known, farm managers had considerable latitude in the quality of land that they distributed, primarily to private farmers. Part 1 deals not with the narrow question of quality of land, however, but more broadly the question of why millions of rural dwellers and farm workers received so little real land. That the design of reform was illiberal goes far in explaining the reform’s outcomes. It is acknowledged that reform policies were sometimes influenced by peculiarities of implementation at the local level, that what laws said on

Russia’s Contemporary Land Reform

27

paper sometimes was not reflected fully by reality, and that local leaders could manipulate policies toward their own ends. That said, two facts remain incontrovertible: (1) a strong state in rural areas meant that local latitude was less than may be assumed;∞∞≠ and (2) if we ask how is it that ordinary rural dwellers and employees on collective farms did not end up with much real land, the answer is that the design of reform stipulated the mass distribution of land shares, not real land. Writing about the course of privatization and the corruption therein, Jerry Hough has argued that ‘‘Russia had a strong state and ample institutional rules. The Russian state . . . created a powerful set of incentives. . . . Unfortunately, the logic of those incentives led normal economic men to the behavior that is rightly deplored.’’∞∞∞ Thus, reform institutions influence behavior in fundamental ways. Chapter 2 begins the analysis of Russia’s land reform by examining the development of property rights in the late Soviet period.

2

Politics and Property Rights in the Soviet Period

My analysis of contemporary land reform in Russia begins by reviewing property rights as they existed in the late Soviet period. In particular, this chapter discusses the evolution of legislation during 1990–91 at the national level (the USSR) and in the Russian Soviet Federated Socialist Republic (RSFSR). The purpose of this review is to provide contextual background and to form a basis for understanding the emergence of postcommunist legislation. During the Soviet period individuals had land rights, but these rights were those of users, not landowners.∞ As established in the 1922 Land Code and Soviet Constitution, there was no private ownership of land, and all land belonged to the state. Thus, the term ‘‘property rights’’ did not really apply to Soviet society, at least until late 1990 in the Russian Republic (RSFSR). A better term would be ‘‘use rights.’’ Toward the end of 1990 in the RSFSR a breakthrough of sorts occurred: the concept of property rights took on new meaning when the private ownership of land became legal. This chapter discusses not only the legislative initiatives that were introduced but also the political context in which property rights began to change. The basic argument of this chapter is that although the land reform policies and system of property rights introduced in the RSFSR by Boris Yeltsin were more ‘‘radical’’ than those introduced by President Mikhail Gorbachev for the USSR as a whole, by the end of 1991 it would not be accurate to characterize property rights in Yeltsin’s RSFSR as ‘‘liberal.’’ The interested reader will find a 28

The Soviet Period

29

list of relevant laws, decrees, and governmental resolutions concerning land reform during the late Soviet period in appendix A, which may serve as a useful guide for the discussion below.

Property Rights in Soviet Society and Access to Agricultural Land It is often forgotten that many different groups of people had access to agricultural land and enjoyed use rights in the Soviet Union, or those rights are misunderstood. Plots of agricultural land were allocated by the state for smallscale uses. These plots, though quite small, were free in the sense that the user paid no leasing fees. (Collective farm households paid land taxes on their private plot based on the size of the plot, but for the most part these were quite small, and many households were exempt. In addition, some types of users and plots were exempt from land taxes.)≤ Use rights applied to rural and urban dwellers. Although large segments of the Soviet population had access to agricultural land plots, use rights were variable and not entirely secure, reflecting the illiberal nature of the Soviet regime. Access to land used for agricultural purposes was restricted according to type of user, plot size, and duration of use. In rural Soviet society three categories of persons had use rights to agricultural land. The first was made up of individual farmers (edinolichnye krest’ianskie khoziaistva)—people who were not employed by a state or collective farm but for whom agricultural production was their sole means of income. As late as 1950 this category of households cultivated 1.9 million hectares of land.≥ During the 1950s, however, individual farmers became numerically insignificant, and by 1960 they cultivated only about 10,000 hectares. They numbered fewer than 20,000 households in 1964.∂ The second category of peasantry with use rights was much larger, and it included rural dwellers who were employed by a collective farm (kolkhoz). Almost all collective farm families enjoyed land use rights through access to land that could be used for personal subsidiary agriculture (lichnoe podsobnoe khoziaistvo, or private plots, as they were commonly referred to in the Western literature). The term ‘‘private’’ connoted not private ownership but rather the fact that the individual or household was able to use these small plots for food production that was outside the scope of state planning and quotas. In the 1980s, no fewer than 13 million collective farm families had private plots, and by the end of the 1980s it was estimated that 98 percent of collective farm families operated a private plot.∑ Thus, private plots constituted the primary use rights of collective farm families. Private plots and state policy toward them have been analyzed elsewhere;

30

Policy Design and Legislative Context

the purpose here is to briefly review their place in the agricultural system and what they represented in terms of property rights.∏ As has been frequently noted, the Soviet regime was often ambivalent about this vestige of ‘‘capitalism,’’ which, it hoped, eventually would be replaced by collective agriculture (and at times the regime adopted restrictive policies to hinder private production). Nonetheless, private plots did not disappear over time. For example, in 1940, about 5.3 million hectares were used by collective and state farm households, as well as various urban and industrial workers, for subsidiary agriculture (excluding land used by individual farmers—edinolichnye krest’ianskie khoziaistva—which is a different category and cannot be used for comparison over time). The amount of land used for personal subsidiary agriculture increased from 7.5 million hectares in 1950 to 8.2 million hectares in 1965, 8.5 million hectares in 1976, 8.4 million hectares in 1980, and 8.6 million hectares in 1985.π Despite ideological antipathy toward private plots, the Soviet regime permitted private agriculture to continue because of economic necessity. Collective Farm Statutes adopted in 1935, 1969, and 1988 permitted households in which at least one person was employed by a collective farm to claim land to be used for lichnoe podsobnoe khoziaistvo. It is noteworthy that the 1988 Farm Statutes referred to private plots as a ‘‘component part’’ of the agricultural system in the USSR. Households used their land to grow food, most of which was consumed. During the 1940s, 1950s, and 1960s this nonmonetary income was a considerable source of total household income, although over time monetary income from collective farm salaries became more important and income from private plots less so.∫ Some households’ produce was sold, primarily to state procurement organizations, the parent farm, consumer cooperatives, or urban farm markets.Ω It has been estimated that most households sold no more than 10 percent of the food grown on their private plot, although the actual amount varied by the type of commodity, the region of the country, and the demographic structure of the family. The most commonly sold food products were potatoes and vegetables. The amount of food that was sold by a household was often a function of proximity to an urban market and the level of socioeconomic development of the large farm: the higher the level of development, the less important were the private plot and sales of produce. Each collective farm had a land fund—land that was set aside for use by its members for small-scale agricultural production that was not subject to state planning. Collective farm management made decisions regarding the allocation of land plots to member households. Land used for private plots by collective farm households could not exceed .5 hectares, and usually this land

The Soviet Period

31

was not surrounding or adjacent to the house in which the family lived. The 1969 Farm Statutes increased the maximum size of a private plot to 1 hectare, although the land under the house and the yard around the house now counted toward the maximum permissible size. The size of plots used by households varied by family size, occupation, and regional location.∞≠ Actual sizes were considerably smaller than the maximum allowed by law. In 1988, for example, the average size of a private plot for a collective farm family of three persons was .26 hectares and for a two-person household it was .28 hectares.∞∞ Use rights were given to single-person households or to households with two or more members. For a one-person household the use rights were more or less straightforward, although they were not entirely secure (see below). In the latter case, the amount of land that a household used as a private plot could be modified if there were changes in the demographic structure of the household or if able-bodied members of the household voluntarily left the collective farm. For example, a household that lost members by death or migration could in theory (and also in reality) have the size of its private plot reduced. Households were not given documentary title to the land plot that they used. Use rights essentially were granted in perpetuity, assuming that at least one member of the household remained employed by the collective farm. Boundaries of private plots could be changed depending on the needs of the collective farm, although plot sizes were usually not affected. Use rights, therefore, were not entirely secure. Although the private plot was not private property, its use could be passed on to direct descendents and relatives who were employed by the collective farm. Agreement by the collective farm management was necessary, however, before the transfer was considered legitimate. Finally, though food produced on private plots was outside the state plan, restrictions were placed on how these land plots could be used; that is, limits were placed on the number of large animals (cows, horses, goats, and sheep) allowed. The 1969 Farm Statutes relaxed these limits somewhat, and the 1988 Farm Statutes abolished them altogether. The third category of peasantry who had use rights to agricultural land were workers on state farms (sovkhozy). State farm workers were granted use rights from their enterprises’ land fund for subsidiary agriculture. As with collective farm families, the land plots were located either partially or wholly away from the household dwelling. Normally, maximum permissible sizes were somewhat smaller than for collective farm families (.3 hectares), but plots could be expanded to .5 hectares depending on the region and the size of the family.∞≤ If a state farm worker or employee left the state farm, was sent for additional education, or was conscripted, the plot was reduced to .15 hectares.∞≥

32

Policy Design and Legislative Context

Farm workers were not the only people who enjoyed land use rights. Farm specialists (on either state or collective farms) had the right to a plot of land for subsidiary agriculture up to .25 hectares in size. Others who provided services to state and collective farms—teachers, village administrators, cultural workers, workers in trade networks, repairmen in repair stations—were also allowed a plot of up to .25 hectares. These persons were exempt from paying land taxes. If the person stopped providing service to the farm, the family retained use of the land plot, but it was reduced to .15 hectares. If the service worker died, was transferred, or became disabled, the family retained use of the full plot.∞∂ Other rural service personnel also were given use rights to agricultural land plots, but under conditions different from those for farm workers however. First, use rights for a land plot were assigned to the individual, not the household, as with collective farm families. Second, the size of the land plot was fixed and not dependent on the size of the family. Third, the right to use a land plot was conditional on continuation of employment and expired on termination of employment.∞∑ For example, workers and those employed in railroads and road construction could be granted up to .25 hectares per family; postal and communication workers in rural areas were granted up to .25 hectares; and workers and employees in the hunting, forestry, and timber industries were allowed up to .3 hectares. In these cases, land plots were assigned using land belonging to the respective organizations. If they owned insufficient land, other land could be assigned from the general state land fund.∞∏ Finally, urban dwellers and industrial workers also were given use rights to agricultural land plots in the form of collective gardens (either sadovodstvo, fruit gardens, or ogorodnichestvo, vegetable gardens). These plots usually belonged to the town or an area adjoining the town. In some cases, land would be taken from forest funds or agricultural enterprises and assigned for urbanites’ use. These were the smallest of all land allotments, not more than .15 hectares in the RSFSR and often as little as .05 hectares, depending on the norms set by the local government. The land was assigned to an individual, and use rights could not be transferred to another person, even within the same family.∞π Until 1991, use rights for collective vegetable gardens (kollektivnoe ogorodnichestvo) were usually assigned for a five-year period. Thus, it is clear that in Soviet society almost every family that wanted land to use for some form of subsidiary agriculture had access to it through different types of use rights. Although these use rights were not entirely secure, institutional barriers to these rights were low, and use rights were readily accessible to those who wanted them.

The Soviet Period

33

Gorbachev and Agriculture Mikhail Gorbachev received a postgraduate education in agriculture, and his reputation as an agrarian reformer in his native Stavropol krai helped bring him to Moscow in the late 1970s. As First Party Secretary in Stavropol krai (1970), Gorbachev was responsible for introducing the so-called collective contract system to the region. According to this system, a brigade of workers would negotiate with the management of a collective farm to deliver a certain quantity of a crop for a specified payment. If the brigade worked efficiently and kept production costs low, the brigade would benefit by getting to keep the remainder after making the agreed-on payment. This reform, therefore, attempted to introduce incentives to lower production costs and to link remuneration directly to output. By 1976 Gorbachev had attempted to get all farms in Stavropol krai to introduce the contract system. There is disagreement among Western analysts as to the results of the reform. Some argue that it was a success and brought down production costs,∞∫ whereas others argue to the contrary.∞Ω By the early 1980s, this system began to appear elsewhere in Soviet agriculture, and after 1983 this innovation was associated with Gorbachev. In 1978 Gorbachev became Party Secretary of Agriculture, replacing Fyodor Kulakov, who had died rather suddenly. Gorbachev’s experience in agriculture (and his ties to Kulakov and to Iurii Andropov) brought him to Moscow. As agriculture secretary, Gorbachev oversaw one of the worst periods of agricultural performance in Soviet history up to that time. After a record harvest of 237 million tons of grain in 1978, the Soviet harvest did not exceed 192 million tons for the duration of his tenure as secretary (which ended in 1985). The Soviet Union turned to massive grain imports during this time.≤≠ Gorbachev was secretary of agriculture when Brezhnev introduced the USSR’s Food Program in 1982. Although there were veiled signs that Gorbachev wanted to introduce more far-reaching reforms, the most that Brezhnev was willing to consider at that time was liberalizing conditions for operating a private plot. There are reports that Gorbachev favored increasing the maximum size of private plots, but nothing came of this idea. Gorbachev became General Secretary of the Communist Party in March 1985, and at the Twenty-seventh Party Congress in February 1986 he spoke of the need to introduce ‘‘radical economic reform.’’ But there was little that was actually radical about Gorbachev’s reforms in agriculture, which was somewhat surprising given his background. He initiated administrative change in 1985 by creating the super-ministry called Gosagroprom, but this was largely a

34

Policy Design and Legislative Context

matter of bureaucratic reshuffling, and it did not equal the radical reforms being introduced in Hungary at the time.≤∞ Gorbachev allowed state and collective farms to sell some of their surplus produce once their procurement quotas had been met. Procurements were to be stable for the entire period of the FiveYear Plan, whereas before they could be changed on an annual basis (although there were complaints by farms that quotas continued to be changed arbitrarily). Other changes were introduced as well, all of which may be considered tinkering with the system.≤≤ In retrospect, one may conclude that Gorbachev’s agrarian reforms were fundamentally conservative, and one may even argue that he never undertook genuine radical reform. Regarding land reform, he resisted land privatization for the USSR as a whole and continued to defend the state and collective farm system, which was based on collective ownership and production. Therefore, it would be fair to conclude that the reforms Gorbachev advocated were changes in the system, not changes of the system, and this conclusion pertains to his economic program as a whole (for example, the creation of a ‘‘socialist market’’). GORBACHEV AND PROPERTY RIGHTS

Some of Gorbachev’s advisors, as well as Russian academics, felt that Gorbachev should have devoted more attention to agriculture early on, when his authority and political power would have allowed real change to be implemented. For example, Oleg Bogomolov argued that perestroika should have started with agriculture, drawing from the lessons of Hungary and China. But Gorbachev felt that he had to weaken the power of his conservative enemies and vested economic interests, and thus political reform came first. When Gorbachev finally did get around to reforms in agriculture, he resisted breaking up the collective farm sector, even as other states in the Soviet bloc were doing so. Moreover, he never embraced private landownership, though it was being introduced in several states in Eastern Europe. As late as November 1990, Gorbachev spoke out against the private ownership of land; the same month, Yeltsin’s Russian Republic adopted legislation that legalized private landownership.≤≥ For that reason, it is fair to characterize Gorbachev’s agricultural and land reforms as illiberal. He failed to significantly change the Soviet system of property rights that he inherited, as discussed below. At the June 1987 party plenum, Gorbachev for the first time unveiled his conception of economic reform and identified three areas that were particularly problematic: food production, housing, and goods and services.≤∂ In his memoir Gorbachev writes of the need for introducing ‘‘radical’’ economic reform. Yet radical reform was not to be. He admits that ‘‘the plenum’s docu-

The Soviet Period

35

ments were a compromise. Many of them, especially from the vantage point of today, may even appear naïve.’’≤∑ Already Gorbachev felt pressure from conservatives and liberal reformers. The former, he writes, ‘‘saw the plenum’s decisions as an excessive concession to the reformers, as the last line of retreat from a planned centralized system of control. . . . The management nomenklatura put up the most stubborn resistance to organizational restructuring. . . . In a nutshell, there was protracted tactical maneuvering on the issue of reform.’’≤∏ As one Western analyst noted at the time: ‘‘Fundamental agricultural reform would deprive a large share of the party apparatus of the reason for its existence. The conclusion is that not even agricultural reform seems to be possible in the USSR without political reform.’’≤π So perhaps Gorbachev’s conservatism with regard to agrarian reform was a strategy of realpolitik: do something—start some movement—knowing that more radical steps were politically impossible at the time. Whatever his underlying motivation, Gorbachev devoted a considerable portion of his June 1987 speech to agriculture.≤∫ He started by talking about the need to solve the Soviet Union’s food problem, claiming that ‘‘special attention’’ was needed in agriculture. In particular, Gorbachev urged state and collective farms to lease land plots on a contract basis to urban dwellers who wanted them for subsidiary agricultural purposes, particularly in non–black earth areas where rural out-migration had been heavy and empty land was widely available.≤Ω Following the plenum, a decree was issued allowing urbanites to lease empty land that had a small shed (domik), but the maximum size of such a plot was restricted to six hundred square meters, which was not sufficient for any kind of significant farming operation.≥≠ The centerpiece of his reform strategy, however, was the proposal to introduce land leasing, which essentially was a return to the land policy in place prior to collectivization. At the plenum, Gorbachev urged delegates to adopt reform policies that would make the peasant ‘‘master of the land,’’ arguing that ‘‘without fundamental changes in the position of the peasantry in society it is impossible to seriously expect resolutions to production goals and the food problem. Concern about the individual in the countryside is the central focus of our present agrarian policy.’’≥∞ Gorbachev’s proposals for land leasing were discussed and debated for more than a year and a half before the March 1989 plenum officially codified land leasing as the Communist Party’s reform package for land. Leasing reform allowed an individual or a small group of persons to work under contract on a particular plot of land, using a defined quantity of livestock or other productive assets, and to retain any residual profits after paying ‘‘rent’’ to a collective farm for costs incurred during pro-

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Policy Design and Legislative Context

duction.≥≤ In choosing land leasing as the main plank of his land reform, Gorbachev opted for a conservative strategy, arguing that it was scientifically and practically ungrounded to disband state and collective farms in order to hand their land over to leaseholders. The March 1989 plenum approved land leases of up to fifty years and permitted leases to be inherited by family members. Land leases did not, however, entail the transfer ownership of land or any leased object—the state remained the owner.≥≥ The conservative nature of the leasing reform is revealed by the fact that the most common form of leasing was the ‘‘internal lease,’’ which bound the lessee to the parent farm. This meant that the leaseholder remained dependent on the larger farm for inputs, and the types of items produced on the large farm influenced the production decisions of leaseholders. In essence, collective and state farm employees who leased land became sharecroppers. In the end, the leasing reform did not transform property rights, did not lower production costs, and in general did not have the intended economic impact, for a variety of reasons that have been explored elsewhere.≥∂ The conservatism of Gorbachev’s reform strategy also was reflected in the USSR Law on Land, adopted at the end of February 1990 and published in March 1990. Similar to party policy, this federal law provided for the leasing of land and for the creation of independent (nonstate) peasant farms based on leased land.≥∑ But the law did not allow agricultural land to be sold, purchased, or mortgaged. In 1991 Gorbachev continued to resist land privatization. In January 1991—after the RSFSR government had passed laws that allowed for private ownership of land—he issued a presidential decree titled ‘‘On the Priority Tasks for the Realization of Land Reform.’’ By this time, the nation was confronting food rationing and empty shelves, so Gorbachev was concerned with increasing food supplies as soon as possible. He called on republican and local governments to identify three to five million hectares of unused land that could be distributed to the population for subsidiary agriculture. He recommended to republican legislatures that they remove ‘‘baseless limitations . . . that are constraining the expansion of private plots and gardening.’’ Further, he called on republican legislatures to work out programs for regional support of private farmers and to remove obstacles to the distribution of land to private farmers on the basis of lifetime use and leasing. But he also explicitly ruled out reform of large farms, stating that ‘‘forced transformation of collective farms, state farms, and other agricultural enterprises is impermissible.’’≥∏ Nothing was said about private ownership. Yet property rights were evolving in the RSFSR.

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Reform in the RSFSR Under Yeltsin Although Gorbachev’s policies did not introduce land privatization for the USSR as a whole, he was willing to let the republics decide this question for themselves. The Russian Republic and the Baltic states were at the forefront of the legalization of private landownership within the Soviet Union.≥π Under the leadership of Boris Yeltsin, Russian land reform during 1990–91 took three major directions: the creation of a stratum of private farms, the introduction of private ownership of land, and the ending of the monopoly ownership of agricultural land by collective and state farms, leading to the distribution of land shares to farm members. Under the leadership of Boris Yeltsin, property rights in the Russian Republic began to change in significant ways in the late communist period. THE POLITICAL ANIMUS BETWEEN GORBACHEV AND YELTSIN

Land reform policies in the Russian Republic cannot be divorced from their political context. In particular, Yeltsin and Gorbachev were personal and political adversaries, starting with the fallout they had after the November 1987 plenum, at which Yeltsin verbally attacked the leader of the Communist Party and accused him of starting to build a cult of personality and being insincere in pursuing perestroika. Recalling that plenum, in his memoir Yeltsin remarked that ‘‘there can be no doubt that at that moment Gorbachev simply hated me. . . . At subsequent meetings of the Politburo . . . he did his best to avoid shaking my hand, greeting me with a silent nod of the head and never talking to me.’’≥∫ From that point onward the two men became enemies. Yeltsin was removed as First Secretary of Moscow and in early 1988 was removed from the Politburo. He was assigned to oversee construction projects in a state ministry. Yeltsin recalls the days following his removal: ‘‘perhaps the hardest period of my whole life was after my expulsion from the Politburo.’’≥Ω Following Yeltsin’s political comeback—thanks to political reforms instituted by Gorbachev that introduced competitive elections—the personal animus between the two men reemerged in May 1990. After Yeltsin won a seat in the parliament, Gorbachev personally appealed to the deputies in the RSFSR Supreme Soviet not to make Yeltsin the chairman of the RSFSR government. Gorbachev recounts the event: ‘‘I spoke openly to the deputies of the first RSFSR Congress of People’s Deputies and opposed the election of Yeltsin as Chairman of the Russian Supreme Soviet, since I foresaw that his arrival would increase confrontation between Russia and the Union. I already knew that this man was by nature a destroyer.’’∂≠

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Gorbachev did not succeed in blocking Yeltsin’s election. After Yeltsin became chairman of the Russian Supreme Soviet (essentially the leader of the government) in May 1990, he set out to distance himself from Gorbachev and his policies. In June 1990 Russia adopted a declaration of sovereignty for itself, according to which Russian law would supersede national law within Russia’s borders. In July 1990, at the Twenty-eighth Communist Party Congress, Yeltsin ostentatiously quit the Communist Party, and from that point on, he defined his political and economic programs on the basis of anticommunism. This, at least in part, was directed at Gorbachev, who continued to serve as head of the Communist Party of the Soviet Union. In June 1991, after Yeltsin was elected president of the Russian Republic, an acrimonious ‘‘war of laws’’ would ensue between the two leaders, one the president of the USSR and one the president of the largest republic within it. In pursuing policies that contradicted those of Gorbachev, Yeltsin couched his policies and political leadership in terms of anticommunism, the development of democracy, and the creation of a capitalist system. Yeltsin argued that to accompany democracy and capitalism, the Soviet system of land relations had to be reformed and transformed. THE EVOLUTION OF PROPERTY RIGHTS IN THE RSFSR IN ∞ΩΩ≠

The personal and political competition between Gorbachev and Yeltsin spilled over into land reform. While Gorbachev was pursuing a conservative strategy at the federal level, Yeltsin was pushing for a more radical course of action at the republican level. In particular, during November and December 1990, several laws were adopted by the RSFSR Parliament and signed by Yeltsin, laws that went well beyond the provisions of Gorbachev’s lease-based reforms. Gorbachev’s agrarian reform did not challenge the primacy of socialist agriculture or the rural political elite, nor did it introduce processes that would change the class structure of rural society. In contrast, Yeltsin’s reforms would challenge the system and the embedded rural elite directly. That private farming was the central thrust of the Yeltsin government’s attempt to radically change property rights and social relations in the countryside is indicated by the fact that it was the first RSFSR law dealing with private landownership. This law, adopted on November 22 (and amended near the end of December 1990), titled ‘‘On Peasant Farms,’’ had thirty-three articles.∂∞ This law has been analyzed elsewhere, but it is worthwhile to review some of its highlights. The law on peasant farms established the right to create a private farm as an independent enterprise free from state interference. Private peasant farms were given the right to define the direction of their economic activities, including the type of production and the quantity of production.

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The most important part of the law concerned property rights and access to land. Would-be private farmers were allowed to depart a collective or state farm without the agreement of the general collective and to receive a land plot upon exit (a right also stipulated in two other laws, ‘‘On Land Reform’’ and ‘‘On the Social Development of the Countryside’’). The law on peasant farms also allowed able-bodied persons eighteen years of age or older who wished to start a private farm to receive farmland for free from local land funds in an amount established by local governments. Land in addition to the amount allowed by established norms could be purchased or rented, with the latter held either as leased land or land with lifetime use with rights of inheritance. The law stated that land plots were to be allocated as single plots, but in reality this often was not the case. It is important to note that the land that was received through distribution could be privately owned. Property in a private farm, including land, was held in joint ownership, which followed either of two methods: individual shares in the jointly owned property were defined (dolevaia obshchaia sobstvennost’), or, on unanimous consent of the members of the private farm, individual shares were not defined (sovmestnaia obshchaia sobstvennost’).∂≤ In either case, the farm members were to choose a director who was responsible for the farm’s business transactions. If a member left the private farm, the joint property was not subject to division but, rather, the departing member was to be monetarily compensated.∂≥ The law also included various economic rights that do not concern property rights directly but were important to prospects for economic success.∂∂ Overall, the law on peasant farms was important because it introduced private landownership and started a process that, reformers hoped, would lead to a change in the class structure of the countryside. That is, reformers hoped that a ‘‘wager on the strong’’ would create a stratum of productive, efficient, and independent farms that would contribute significantly to the nation’s food supply and begin to transform economic structures and political values in the countryside (private farmers tended to be strongly pro-Yeltsin and held more liberal political values). The most optimistic early estimates expected private farming to become a significant economic and political force, challenging the primacy of the collective sector.∂∑ The actual performance of private farms has been extensively examined by authors in the West (and more so by academics in Russia), so even a cursory summary of those findings would take us far from our primary focus on evolving property rights.∂∏ Suffice it to say that early private farmers faced daunting obstacles and numerous start-up problems.∂π As a result, the number of private farms increased from 231 in January 1990 to only 4,432 on January 1, 1991—a significant increase but hardly sufficient to achieve the political

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and economic goals that reformers had in mind.∂∫ These early private farmers —those who started their farms in 1990—were allowed only to lease land, not to own it. Following a spurt of ‘‘liberal’’ legislation in late 1990 that legalized private ownership of land (see below), the number of private farms increased to 25,159 by July 1, 1991, and totaled 49,015 on January 1, 1992.∂Ω Again, this is impressive growth, but hardly sufficient to transform rural society given that the vice president of the private farmers’ association AKKOR (Association of Peasant Farms and Agricultural Cooperatives in Russia), Iurii Linin, estimated that private farming would only begin to have a significant impact once there were one million or more private farms in existence, a level that he estimated could be achieved by 2000 or a little earlier.∑≠ Once the Russian government introduced the ‘‘Russian Farmer’’ program, which provided subsidized credits and financial support to private farmers over the course of the next two years, 1992–94, almost 10,000 new private farms were registered every month, totaling more than 280,000 private farms by mid-1994. This was the numerical apex of the private farming movement, which never reached the threshold expected by Linin. The second important law, ‘‘On Land Reform,’’ was signed by Yeltsin on November 23 (and also amended in December 1990). Its sixteen articles laid down several broad principles that defined land reform policies and subsequent land distribution for the RSFSR.∑∞ For example, this law stated that the goal of land reform was to ‘‘create conditions for the equal development of different forms of farming.’’∑≤ A system of land taxation would be introduced in October 1991. Foreigners were not allowed to own land. A land bank was created, and the state retained the right to withdraw land and put it into a special land fund for redistribution. Landowners and users were responsible for maintaining the quality and the fertility of land. These principles were repeated in other laws during the Soviet period and the post-Soviet period. Regarding property rights, the law on land reform stipulated that there were three forms of land tenure: temporary use, long-term use, and private ownership. For the first time, according to the law, citizens of Russia were entitled to convert plots that were used for subsidiary agriculture—private plots and gardens—into private property and could do so for free until they reached established local limits.∑≥ Persons were also permitted to convert land used for private farming to private ownership within established size limits. For all types of agricultural land, plots larger than the established maximum sizes could be converted to private property by purchasing the land. Members of collective farms, other collective farming enterprises, state farms, and participants in different forms of collective gardening could convert their land plots into joint ownership, with or without defined shares.∑∂ Taken together, the

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laws ‘‘On Peasant Farms’’ and ‘‘On Land Reform’’ allowed citizens to hold as private property land that was to be used for private plot (household) production, gardening, house construction, and some other small-scale uses. These two laws also envisioned the sharing of land by state and collective farms whereby farm workers could obtain a plot of land as private property for individual farming. However, these laws did not require that large farms grant land for such purposes.∑∑ On December 21 Yeltsin signed the third law, the RSFSR law titled ‘‘On the Social Development of the Countryside.’’ This law had twenty-seven articles and was important because it guaranteed that ‘‘all forms of farming have the equal right to organize production,’’ explicitly putting private farming on an equal footing with state and collective farming. The law also provided for the ‘‘free exit’’ of workers from state and collective farms and the right to receive a land plot for the creation of a private farm.∑∏ Further, the law promised financial support to the agroindustrial sphere, stipulating that ‘‘no less’’ than 15 percent of the Russian Republic’s national income would be devoted to the sector (this pledge was never fulfilled) and promising to finance from the Republic’s budget a program of support for private farming. The fourth law, the RSFSR ‘‘Law on Property,’’ with thirty-two articles, was adopted on December 24. This law explicitly recognized that private property could be used for entrepreneurial activities and that individuals had the right to earn income from economic transactions involving private property, including land.∑π The law recognized three forms of ownership: private, state, and municipal.∑∫ Private citizens, corporations, or state organizations had ownership or use rights for land plots. For private plot operations and gardening, users could choose private ownership (sobstvennost’) or could be an ‘‘owner’’ (vladenie) with lifetime use. Finally, the law permitted owners of private property, including land, to defend their property from unlawful seizures, with the right to use arbitration or courts to adjudicate their case.∑Ω These new laws complemented each other and presented a vision of a significant private sector. As such, they signified the beginning of the radical transformation of property rights in the RSFSR, independent of what was happening legislatively at the federal level.∏≠ Yet this institutional design in land relations was not as liberal as it might appear. The amended RSFSR Constitution forbade the sale of most land plots for a ten-year period. The only plots that could be sold were those that had been inherited, and they could only be sold to the local government where the plots were located (article 12). For all the ‘‘liberal’’ laws adopted by the RSRSR government during November– December 1990, one should not forget that article 9 of ‘‘On Land Reform’’ and the governmental resolution titled ‘‘On the Program for the Revival of the

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Russian Countryside and Development of the Agroindustrial Complex’’ (December 1990) placed a ten-year moratorium on sales of land that had been obtained from local governments, in other words, from the raion land distribution funds.∏∞ In short, the RSFSR government was willing to allow landownership but was much more restrictive toward the rights of land disposal, a fact that not only stifled the development of a land market but also represented a significant deficiency in property rights.

The Evolution of Property Rights in the RSFSR in 1991 By late 1990 Yeltsin and his reform allies in government had exposed Gorbachev’s agrarian reforms as conservative. Moreover, they had directly challenged federal law by introducing land privatization when the USSR Law on Land, which was less than one year old, had opted for leasing and not ownership. The design of reform allowed collective and state farm members to leave large farms in order to create private farms, receiving agricultural land plots in the process. Further, steps began to be taken to remove agricultural land from large farms for redistribution to the population. In contrast, Gorbachev continued to talk about the viability of large farms and how ‘‘impermissible’’ it was to adopt reforms that would lead to the break-up of state and collective farms. With land reform on the ‘‘correct’’ course, the early months of 1991 were characterized by further elaborating on the legislative foundation that was laid in late 1990. In the months following the Second Congress in late 1990, more than forty legislative and normative documents were adopted in Russia concerning agriculture and land reform.∏≤ The discussion below focuses on the most salient legal acts. As 1991 proceeded, land legislation became more radical and challenging to the existing collective agricultural system. In January 1991 Gorbachev issued a decree calling for unused and abandoned collective farmland to be made available to persons wanting to engage in small-scale agriculture.∏≥ At the same time, Yeltsin’s government published guidelines for the procedure for would-be private farmers to exit a state or collective farm with a physical plot of agricultural land for which they would hold ownership rights. These guidelines were important because they specified in more detail how a person wishing to undertake private farming could depart a large farm with land and how the number and value of land shares were to be determined. Thus these guidelines gave specificity to the general principles that had been embodied in the legislation of November–December 1990. According to the recommendations of the Yeltsin government, any farm worker who was at least twenty years old and wished to engage in private

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farming was eligible to leave a large farm on submission of the requisite application (zaiavlenie).∏∂ (Different application forms existed for state and collective farms.) The application was to include the desired size of the land plot, its location, the type of economic activity that the land would be used for, a list of desired property, and the value of existing land shares held by the applicant.∏∑ It is worth repeating that the only persons who were able to receive real land plots from large farms were would-be private farmers. The application to resign and to receive a land plot was to be considered within a month’s time by the parent large farm. (Persons who were not farm members or who had migrated from a different region had a different form to submit, and this form was to be directed to the local raion or city government.) Once the large farm made its decision, the local raion or city government had a month to review the application materials and to make its decision. A resolution passed by the Supreme Court and the RSFSR Council of Ministers in March 1991 shortened the term to one week.∏∏ Failure to abide by this time frame at any level was subject to a fine if the applicant pursued the matter. Although farms could not block a person from departing, they could refuse to allocate a specific plot of land that the application had requested. If a refusal were to occur, or if a specific plot were not assigned, the local government had the right to assign a different land plot with a specific location.∏π If the local government refused to assign a land plot, the applicant could have his claim to land adjudicated in court.∏∫ For would-be private farmers, in particular, the process for receiving land could be onerous, time-consuming, and frustrating because numerous obstacles were erected in some regions by farm managers who felt threatened.∏Ω With the agreement ( pri soglasii) by the raion or city government as to the land plot that was to be allocated, the decision was transmitted to the rural Soviet of People’s Deputies. If the rural Soviet concurred (v sluchae podtverzhdeniia resheniia) with the decision, it was sent to the raion Soviet of People’s Deputies for the withdrawal of land from the farm and the subsequent registration of a private farm. Assuming a positive decision by the large farm, the local land committee,π≠ and the local government, the head of the private farm would receive a document called a ‘‘state act’’ that stipulated a legal right to the land plot. With a moratorium on land sales, the state act was not exactly a land deed, but it served similar purposes. The state act would indicate the form of tenure: lifetime use with right of inheritance, lease, or ownership, as well as the purpose of land use. Land plots were to be assigned as a single contiguous mass, although ‘‘with the agreement of the applicant’’ the land could ‘‘consist of land around the dwelling and other productive land plots’’ (which implies land separated from the dwelling).π∞ In reality, apportionments were often

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scattered, sometimes by tens of kilometers. A farm member starting a private farm had the right to retain the private plot located adjacent to his dwelling. Land distribution was different for farm members and service personnel who did not resign from a large farm or did not intend to register a private farm. People in this group received not real land but land shares. Two methods existed for the distribution of land shares. The first method was a monetary valuation that distributed shares (aktsii) from a general valuation of land held by the larger farm. (How valuations were determined in an economic system that placed no prices on land or land rents is an interesting question.)π≤ The second method proceeded according to the number of permanent members of a farm and how much agricultural land the farm had. This method distributed land shares ( pai) that consisted of a defined size, not to exceed local norms.π≥ Anecdotal and survey evidence suggest that the distribution of pai was the more common method. In March 1991 a resolution passed by the Presidium of the RSFSR Supreme Soviet and Council of Ministers and signed by Yeltsin gave local governments the right to withdraw up to 10 percent of a collective or state farm’s unused land—without the farm’s approval—and to distribute it to citizens for cooperative farming, private farming, or the operation of private plots or collective gardens.π∂ Until this time the number of private farms had not increased quickly but this resolution increased the tempo of private farm creation: by mid-1991 there were more than twenty-five thousand private peasant farms in Russia. In April 1991 a new Land Code was adopted, the first since 1922. It consisted of 15 sections and 127 articles.π∑ This code repeated and codified many of the rights that had been embodied in previous legal acts, including the right to private landownership for various types of agricultural purposes, the right to lease land, the right to use land for entrepreneurial purposes and to earn money from the use of land, and the right to receive free land for private farming. State and collective farmland was to be owned by members of the farm, not held as state property. But in the final analysis, it would be hard to characterize this Land Code as ‘‘radical,’’ or even ‘‘liberal,’’ for that matter, because rights to dispose of privately owned land remained limited. In essence, the Code (and previous legislation) allowed the accumulation of land (whether from free distribution, by purchase, or by lease), but mechanisms for the transfer of land to the most efficient users were either absent or greatly restricted. Despite high-level governmental attention to land legislation in the first part of 1991, problems on the ground remained. A major problem for reformers in Moscow was that the number of private farms was far below the number

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needed to attain the economic and political transformation that was expected. In particular, farm officials sometimes held onto land and made it difficult for prospective private farmers to establish new farms in the rich black earth regions of southern Russia.π∏ Various tricks were used to dispossess farm members of their property rights.ππ Critiques of various problems were wideranging and frequently appeared in specialized agricultural publications. Some arguments blamed the rural population for not accepting the concept of private ownership of land. Other critiques pointed to the fact that officials in local governments—the people responsible for approving exits from large farms and allocating land—were simultaneously leaders of local party organs and so were accustomed to ‘‘commanding’’ economic activities.π∫ A different argument blamed the ‘‘hypocrisy’’ of new laws and the incompetence of parliamentarians.πΩ Another view blamed the lack of implementation of laws, for instance, failure to define size limits for land plots.∫≠ And others said the laws did not go far enough, citing, for instance, the lack of specificity regarding land taxes. Because would-be private farmers made up the main cohort eligible to receive real land on their departure from a large Soviet-era farm, they represented the bulwark of Soviet property rights. For this reason, reformers and advocates of private farming clamored for the creation of hundreds of thousands of private farms. Nonetheless, a significant constraint on the movement was the professional and occupational background of those who were becoming private farmers. Early sociological surveys found that about 25 percent of newly created private farms were started by skilled specialists and leaders from state and collective farms. It was estimated that these farmers had a chance to be economically independent in two to three years. Another 25 percent were begun by agricultural workers from state and collective farms. The third group consisted of urbanites, people who perhaps were born in the countryside but who were unskilled in agriculture. In the areas outside the black earth zone of the Russian Republic, private farms started by urbanites accounted for 70–80 percent of registered private farms.∫∞ Moreover, the leaders of the private farming movement—the leaders of AKKOR—were at this point willing to settle for restrictive reform policies. Often AKKOR is characterized as the most liberal of rural interest groups, with stalwart support for a market economy, land privatization, and the development of a strong private farming stratum. There is clear evidence, however, that early on this ‘‘liberal’’ organization’s leaders held rather conservative views. Consider, for example, an interview with the president of AKKOR, Vladimir Bashmachnikov, in September 1991, in which he warned of the ‘‘serious danger’’ that land would become an object of ‘‘profit and speculation’’ with the introduction of private property. He suggested that land sales be

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conducted through a land bank or land commodity exchanges, but ‘‘in no case should the free sale of land from person to person be permitted.’’∫≤ The report of the Second Congress of AKKOR, held in Moscow in October 1991, also reveals its conservative bent. The organization’s specialists estimated that ‘‘30 percent of state and collective workers were psychologically prepared to undertake new forms of farming.’’ With more than nine million workers employed on state and collective farms in the agricultural sector, their calculation suggested that more than three million private farms could be created. The report further pointed out that the land distribution fund in the Russian Republic already totaled about 13 million hectares. Thus, there was a supply of agricultural land, and there was potential demand. But still there were only about thirty-one thousand private farmers in September 1991. Part of the reason was that the top leadership of AKKOR—which was instrumental in helping to draft the ‘‘liberal’’ laws of November–December 1990—was not pushing the nation’s political leaders hard enough. According to the report of the AKKOR congress, the leadership criticized the lack of a land market and the fact that private farmers were hindered from obtaining more land to increase the size of their farms. Yet the leadership felt that the moratorium on land sales was ‘‘necessary’’ and that the country should not rush toward the sale and purchase of agricultural land. The most the leaders of AKKOR could do at the congress was to call for a reduction in the moratorium from ten to five years.∫≥ Thus, it is fair to conclude that during the first half of 1991 the Russian government’s leadership was moving, albeit slowly, toward liberalizing land reform and elaborating policies to implement the general principles espoused in legislation. Toward the end of 1991, the pace accelerated. At the end of October 1991 Yeltsin gave his ‘‘shock therapy’’ speech, in which he informed the nation of the coming economic reforms.∫∂ Land reform policies changed also. The most radical steps, taken in December 1991, reflected a new approach to land reform and perhaps frustration with the pace of reform to date. On December 27, 1991, Yeltsin signed a decree titled ‘‘On Urgent Measures for the Implementation of Land Reform in the RSFSR.’’∫∑ In addition, a resolution by the Russian government was passed on December 29 titled ‘‘On the Procedure for the Reorganization of Collective Farms and State Farms.’’∫∏ These two acts were intended to correct some of the structural deficiencies in existing land legislation, as well as to jump-start progress in land reform. The ‘‘Urgent Measures’’ decree, which had twenty-one points, went into effect upon Yeltsin’s signature. Although some of the points were repetitive with previous legislation, there was no question that the decree was intended to facilitate land privatization and the development of private farms. This

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decree has often been interpreted as the piece of legislation that came closest to requiring mass decollectivization, and numerous articles in the Russian and Western press stated that this decree was the beginning of the end of collective farming. Point 1 of the decree declared that state-owned and municipal land should be privatized in accordance with existing law. State and collective farms were to re-register their legal status during 1992. During the process, masses of agricultural land were to be available for distribution (points 3, 7). Farm managers were obligated to act within one month on applications for withdrawal from the farm and to apportion land in-kind to prospective private farmers; in addition, land apportionment was to be accompanied by property shares (point 8). In short, the decree assigned specific responsibility for the implementation of the right of farm members to leave the farm with an allocation of land. Failure to fulfill this responsibility could lead to a fine of three months’ salary for the farm director.∫π Various republican and local governmental bodies were called on to determine the norms for the size of the land plots that were to be distributed (point 4). Any land remaining after distributions from large farms had been calculated was to be assigned to local land redistribution funds (point 5). Local governments were urged to sell and lease out land in their land funds, with preferential rights given to agricultural workers who previously leased land plots or who wanted to start a private farm (point 5). The decree also addressed rights of disposal for landowners. Holders of land shares would have the right to exchange their shares with others or to lease out their shares (point 9). Point 13 went even further and stated that workers in agricultural enterprises (large farms) who had land shares (either aksii or pai) would be able to sell their shares to other members of the farm or to the farm at ‘‘free’’ prices, that is, prices dictated by the market. Point 11 stipulated that various ministries would, by February 1, 1992, submit proposals for the procedure for determining land prices. The right to sell agricultural land was liberalized somewhat. According to the decree, after January 1, 1992, owners of land plots (not land shares) would be allowed to sell their land under the following conditions: (a) upon retirement, (b) upon receiving privately owned land as an inheritance, (c) upon stating an intention to resettle in a different locality with the purpose of starting a private farm with free land from the distribution fund, and (d) with the investment of funds from the sale of land in food processing, trade, construction, or services in the countryside (point 12). Finally, point 10 called for the right of private farmers to mortgage their land with banks. Thus, this decree liberalized land relations more than any previous legal act, although the

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right to buy and sell land remained restricted. This issue would prove to be the most contentious policy issue in land reform and among the most contentious of all political issues dividing liberals and conservatives during the remainder of the 1990s. Following Yeltsin’s decree was the governmental resolution titled ‘‘On the Procedure for the Reorganization of Collective Farms and State Farms,’’ which consisted of fifteen points. For our purposes I focus mainly on the points that concern property rights. This resolution was important because it directly instructed large farms to reform themselves (at least juridically), to make land available for distribution, and to distribute land shares to each farm member. It was seen as a direct challenge to the collective and state farm system. The resolution instructed all farms to reorganize by January 1, 1993—a date that subsequently was pushed back to 1994. The resolution was particularly significant in three ways. First, during the process of reorganization, ‘‘every sovkhoz and kolkhoz’’ was to form a committee on land privatization headed by the director of the farm. This rule assigned direct responsibility for the reform process to that farm and to a particular person who would be held accountable.∫∫ These reform commissions were to oversee land distribution on each farm, inventorying land used by the farm and distributing previously state-owned land (either as individual or joint property). On unprofitable farms, these commissions would oversee the liquidation of the farm’s assets. Failure to reorganize, to transfer ownership, or to do so within the time frame indicated by law would lead to the farm director’s being fined (although it should be noted that not all large farms were subject to privatization or the distribution of land). The second way in which the resolution was significant was that it stipulated that all members of a state and collective farm, including pensioners, were eligible to receive land and property shares (point 9). If the members of the farm so decided, personnel who provided various services to the farm were also eligible. Land shares were to be held collectively—as joint property (dolevaia obshchaia sobstvennost’). The sizes of land plots distributed in-kind (actual land) were restricted by raion norms. Farm members were also entitled to property shares from the farm. The value of the property share was to be determined by the length of time the person had worked on the farm. Land and property shares could be combined into a single share with an indicated value, for which the local government would issue a document (aktsiia or svidetel’stvo) attesting to ownership. Finally, unprofitable large farms, those unable to pay off their debts and meet their payrolls, were to be declared bankrupt by February 1, 1992, and to

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be liquidated, their assets sold off during the first quarter of 1992.∫Ω At that time, the percentage of state and collective farms that were unprofitable was only about 10 percent. The government’s preference was that a profitable farming enterprise would take over a bankrupt farm. If another enterprise did not assume responsibility for the debts of the bankrupt farm, any debts were to be settled by the sale of their assets in an auction. If taken literally, this resolution could have led to the mass closure of large farms, the social dislocation of hundreds of thousands of farm employees, and perhaps nationwide hunger. Because of the controversy and confusion over the new reorganization resolution, a number of clarifications were issued in the weeks that followed. These statements made it clear that socialized farming was not being abandoned altogether but merely reformed. Thus there never was any serious attempt at mass decollectivization. This reality was pointed out by Minister of Agriculture Viktor Khlystun at the end of January 1992, when he noted that state and collective farms would continue to have a role in feeding the country. Moreover, in February 1992, President Yeltsin himself stated that ‘‘the Russian government will support profitable collective and state farms, but unprofitable farms should give their land to those who want to work it.’’Ω≠ This clarification—some call it a strategic retreat from reform—meant that large Soviet-era farms would survive and continue to be an important component of the agricultural system in Russia.

Conclusion This chapter surveyed the evolution of property rights under Gorbachev in the USSR and under Yeltsin in the RSFSR. It was argued that Gorbachev’s reforms were conservative, limited, and decidedly illiberal. Gorbachev never embraced private ownership of land and resisted breaking up the state and collective farm structure. Thus his reforms did not really attempt to change the social structure of rural society, nor could his policies yield a new economic elite. Yeltsin’s land reforms were more far-reaching—his policies did allow landownership, and concrete steps were taken to put rural land in the hands of private individuals. By the end of the Soviet period, Yeltsin was assaulting the state and collective farm system directly, or at least that is how his December 1991 decree and subsequent government resolution were perceived at the time. In contrast to Gorbachev’s policies, Yeltsin’s were indeed more radical, and private farmers had the potential to become a new rural elite, though they were restrained by a number of different obstacles. But were the reform policies and property rights as they existed at the end of 1991 actually liberal? In retrospect, it is interesting to note how restrictive Yeltsin’s land reform

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policies were by the end of 1991. Property rights in Yeltsin’s RSFSR remained limited, undercutting the potential for economic and social transformation inherent in land reform. In what ways were the 1990–91 reforms restrictive? First, disposal rights were limited—a landowner faced a ten-year moratorium on land sales, and if he did want to sell privately owned land (that had been inherited), he could sell it only to the local government. Second, land distribution started a process of putting land into the hands of individuals. It is well to remember, however, that plots that were received for free for private farming were limited in size by raion norms and were initially quite small. At this time, the amount of additional land a private farmer could obtain by lease or purchase was likewise limited. And most startup private farmers at this time were starved for capital. Thus enlarging land holdings by a significant amount beyond the free distribution was problematic. Size restrictions remained in place for other types of agricultural land uses as well—private plots, gardening, and dacha plots. Third, if the nature of landownership is viewed carefully, it is clear that there was less being owned than there appeared to be. The overwhelming majority of ownership rights were abstract paper shares that were held as collective property by farm members who were not able to convert the land shares to an effective use of land. Private farmers, who were the only persons to receive land in-kind during distribution, had small amounts of land, tended to lease more than one-half of the land they used, and were both economically insignificant and politically weak.Ω∞ Most salient, unless the private farm was a one-person farm, the land was held in joint ownership. Private plot operators and gardeners were able to convert their use rights in land plots to private ownership, but disposal rights were limited as well. Finally, although the 1991 Land Code and other laws contained articles and clauses about the defense of private landownership, the fact of the matter was that property rights were not entirely secure. A private landowner could be deprived of his land for any number of reasons, ranging from ‘‘state needs’’ to not using the land correctly to not protecting the quality of the land.Ω≤ In short, there were various loopholes and pretexts that could allow opponents of reform to violate property rights. For these and other reasons, it is fair to conclude that as the experiment in Soviet government came to a close at the end of 1991, genuinely liberal property rights remained a goal, not a reality.

3

Politics and Property Rights in the Yeltsin Period, 1992–99

Chapter 2 argued that by the end of the Soviet period, land reform had little real effect in expanding property rights for the bulk of the rural population or in changing either the social structure or the class structure of rural society. The nascent stratum of new producers (private farmers) was economically and politically weak. Thus land reform policies at this time were directed more at tearing down the old system than at building up a new system, similar to the process of ‘‘creation destruction’’ described by Schumpeter.∞ This chapter is structured around the following questions. (1) What was the evolution of land reform legislation and property rights in the postcommunist period, 1992–99? (2) How were politics and the evolution of land reform legislation and property rights intertwined? (3) What were the effects of land reform during the Yeltsin period? To what extent did land reform facilitate a change in the dominant mode of production and dominant producers? (4) How are we to understand resistance to land reform? The answer to the last is set within the contextual question whether Yeltsin’s land reform policies were liberal or illiberal. The chapter presents an analysis of the institutional design of land reform that shaped behavioral responses during 1992–99 and thereafter. The key legislation is analyzed within the political context of the time.≤ The central arguments of this chapter are fourfold. (1) The net effect of Yeltsin’s land

51

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reform contained both illiberal and liberal aspects. The illiberal elements placed significant constraints on the acquisition and disposal of agricultural land. Although Russia was (and is) hardly alone in regulating its land market —there is, indeed, no such thing as a completely unregulated land market— the fact is that reform in the Yeltsin period contained significant restrictions on conditions of landownership and freedom of disposal. The liberal elements meant that those who did obtain land had new opportunities to benefit. (2) During the early privatization period in particular, the institutional design of land reform was not entirely clear; there was a lot of confusion about property rights both in the center and in the regions. This lack of clarity was met by ad hoc regional responses, and shortcomings in the institutional design affected responses to land reform policies. (3) The design of reform and the lack of clarity in legislation affected the impact of land reform. The consequences of that combination led to a belief by some analysts that resistance was a significant aspect of Russia’s land reform. In contrast to the latter point, the chapter argues that rural resistance was neither as significant as often believed nor the primary characteristic of land reform in the 1990s. (4) Despite its elements of illiberalism, land reform introduced economic opportunities that some households were able to utilize to their benefit.

The Gathering Storm: Politics and Property Rights During 1992 The Soviet Union dissolved in late December 1991, replacing the constituent Soviet republics with fifteen independent countries in January 1992. Russia was no longer called the RSFSR but became the Russian Federation, although political structures and political leadership carried over from the past, which meant that Yeltsin remained president of Russia, and the legislative branch consisted of a Supreme Soviet and Congress of People’s Deputies (CPD) that had been elected in March 1990. In the Russian Federation, the foundation of legislation for private ownership of land remained in place from late 1990, as discussed in Chapter 2. Within Russia’s legislature, the composition of the CPD suggested that the deputies were not inherently antireform: the average age was relatively young, 48.5 years, and 93 percent of them had received higher education. Both of these factors were associated with support for market capitalism.≥ During the first quarter of 1992, the coalition of reformers, constructive forces, and independents far outnumbered conservative deputies. Yeltsin failed to build consensus in the CPD, however. As 1992 wore on, political relations between President Yeltsin and Speaker of the House Ruslan Khasbulatov and those between

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Yeltsin and Vice President Alexandr Rutskoi worsened. Throughout 1992 Yeltsin steadily lost the ability to control the political agenda, and by the end of 1992 oppositionists outnumbered reformers in the CPD.∂ As Thomas Remington argued, ‘‘Polarization between parliament and president deepened throughout 1992 and the first half of 1993 as Yeltsin demanded constitutional reforms recognizing his supremacy as president, and parliament adamantly refused to accept any such changes but instead tried to roll back the powers that it had delegated to him. . . . Yeltsin’s use of presidential decree power to enact radical policy reform weakened his already diminishing support base in the legislature, allowing his communist opposition to form a majority against him.’’∑ During the course of 1992 several different nexuses of political conflict developed. One nexus concerned the pace and content of economic reform. The second nexus concerned the distribution of power between the executive and the legislature and the question of who would dominate. The third concerned control over economic reform, a conflict that overlapped with nexus number two. The legislature had granted Yeltsin wide-ranging powers of decree in November 1991 for numerous policy areas, among them foreign trade, banking, employment, customs, price regulation, taxation, property rights, and land reform. The fourth nexus was the political blame game—assigning responsibility for the deepening depression and runaway inflation that had gripped the Russian economy in 1992.∏ Yeltsin blamed a recalcitrant parliament, and legislators blamed reformers for destroying the so-called social contract between the state and the people and for introducing irresponsibly radical economic policies. Land reform and land reform policies were caught up in these political conflicts. LAND REFORM LEGISLATION IN ∞ΩΩ≤

During early 1992 some fine-tuning and defining of procedures within existing land legislation took place. On March 2 Yeltsin signed a decree titled ‘‘On the Procedure for Establishing Norms for the Free Transfer of Land Plots to Citizens.’’π This decree repeated stipulations that farm workers, farm pensioners, and persons who worked in the ‘‘social sphere’’ in the countryside were eligible to receive free plots of land for private farming or land shares if the person remained a member of a large farm. The size of the land allocation was to be determined by the total amount of agricultural land held by the farm, divided by the number of persons who had a right to a land share. The decree gave rural (village) administrations the right to set the norms governing land share size. Norms could vary from area to area within a raion, depending on the density of the population (point 2). Four days later, on March 6, a governmental resolution titled ‘‘On the

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Course and Development of Agrarian Reform in Russia’’ was issued.∫ This resolution began by noting that in a number of localities the reorganization of state and collective farms was not going well and that reform had taken on a ‘‘formal character.’’Ω Much of this short resolution concerned financial support for large farms, but point 6 was significant because it stated that if the workers on a large farm so voted, a large farm could retain its previous form of organization even after farm reorganization. In other words, state and collective farms could remain state and collective farms in form if not in name. The resolution appeared to contravene the spirit of the policies enacted at the end of December 1991, which at the time many observers believed would lead to the forcible breakup of large farms and subsequent mass decollectivization. It is not clear whether the ‘‘liberal’’ minister of agriculture, Viktor Khlystun, supported this resolution, although there was nothing in the Russian press at the time to suggest that he opposed it. Though political differences were emerging between Yeltsin and Vice President Rutskoi, as well as between Yeltsin and some members of his cabinet, Yeltsin did not attempt to counter this resolution using his power of decree. Throughout the remainder of 1992 the level of acrimony between the executive and legislative branches increased. Nonetheless, the legislature pressed on. In September 1992 the government enacted a resolution titled ‘‘On the Procedure for the Privatization and Reorganization of Enterprises and Organizations in the Agroindustrial Complex.’’∞≠ The resolution was intended to specify the process by which state and collective farms were to be reorganized and by which to calculate land and property shares for farm members. The resolution was important for several reasons. First, it expanded the list of people who were eligible to receive land shares to include persons who were absent at the time of distribution, persons who were eligible to return to their job on the farm (for example, people returning from military service), and persons who were fired from the farm after January 1, 1992. As a result of the increase in the list of eligible recipients, the average size of land plots and land shares decreased. As before, persons wishing to depart a large farm to start a private farm were to be given a physical plot of land. Other persons who wished to leave the parent farm were to be compensated monetarily for the value of their land shares but could not depart with physical land plots.∞∞ The resolution also defined the type of land that was to be included when calculating the area to be distributed. Not only arable land but all of the farm’s land was to be included, except for land that had been transferred to the local government, land assigned to the redistribution fund, land used for experimental crops, and land leased by the large farm. Finally, the resolution retained from previous legislation the provision that land en-

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titlements were to be of equal size for all and not dependent on seniority or length of service to the farm (as with property shares). Another significant policy development concerning property rights occurred in the fall of 1992. An earlier law passed by the RSFSR legislature had prohibited the free sale of land. Recall that in November 1990 land reform legislation had legalized private ownership of land but placed a ten-year moratorium on its sale and added the restriction that the land could only be sold back to the local government. Since then, Yeltsin had been trying to get the legislature to allow the free sale of land. Each time he had been rebuffed. He tried to circumvent legislative restrictions through various decrees, although it is not clear that those attempts were effective.∞≤ Fears about land speculation and the potential for a concentration of large tracts of land in the hands of a few had remained strong obstacles to the creation of free land market. In October 1992 an experimental sale of small plots of agricultural land was announced in Moscow oblast.∞≥ The village governments in the raions where the sales occurred offered several dozen land plots ranging in size from 12 to 15 sotki (one sotka equals one hundred square meters), in other words, somewhat smaller than the average size of a household private plot. Village governments also established the opening prices in these auctions.∞∂ The money from the sales was divided among the local administration where the land was sold, Moscow oblast, and the Russian government. Following this experiment, in November 1992 the Russian legislature finally legalized the sale of rural land, but it attached conditions that attenuated the ‘‘liberal’’ aspects.∞∑ These restrictions involved the land’s purpose, its price, and the size of the plot. First, agricultural land could only be sold for purposes of subsidiary agriculture (lichnoe podsobnoe khoziaistvo), gardening, plots surrounding dachas, and plots surrounding individual housing. If the land being sold was used for these purposes, it could be sold without a moratorium, provided that the purpose of the land use was not to change.∞∏ In other cases, if the land was sold for purposes other than those stated above and had been received free in ownership, then the land had to be held for ten years before it could be sold. If the land being sold had been purchased, then a five-year wait was required.∞π The land would be at negotiated at ‘‘market’’ prices; however, market prices would only apply to plots within the size norms established by the local government; any land that exceeded those norms faced regulated prices.∞∫ Further restrictions stipulated that the size of the plot being purchased could not exceed the norms established by local soviets. If the amount of land was above the established norm, then the owner could retain the ‘‘excess’’ in lifetime use with the right of inheritance or, if he wished to sell, could sell to the local government at a negotiated price.∞Ω

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Toward the end of December 1992, Yeltsin went further than the legislature and signed a decree titled ‘‘On the Rights of Citizens of the Russian Federation to Receive Land as Private Property and to Sell Land Plots in Order to Conduct Personal Subsidiary and Dacha Farming, Gardening, and Individual Housing Construction.’’ This decree removed the time moratorium and allowed any citizen who had obtained land in private ownership for uses indicated in the title of the decree to sell the land to any other citizen of the Russian Federation in amounts up to the established land norm sizes. Thus as 1992 came to a close, Russia’s first year as a postcommunist state witnessed property rights that retained several aspects that may be considered illiberal. The right to depart a farm with land had been reaffirmed—for the small number of people who wished to become private farmers. But the issue of free land sales was hotly disputed. The more conservative legislature begrudgingly conceded and permitted limited land sales, but the disposal of agricultural land and a free land market remained elusive. Yeltsin’s December decree was considered a remedy, but it pertained only to small land plots used by the population for subsidiary agriculture. No transactions involving large tracts of agricultural land were permitted, and this inherently limited significant economic transformation in the countryside. Moreover, at the end of 1992 much of the policy environment remained conservative. Minister of Agriculture Viktor Khlystun, although considered moderate, did not advocate the abolition of state and collective farms, but he was a proponent of a bimodal system of production composed of large farms and smaller private farms. Nor was Khlystun disposed to push for liberal property rights. In an interview on Russian television in December 1992 he stated: ‘‘What we are talking about is the establishment of a civilized market in land, regulated by the state, a market in which agricultural land cannot be sold for other purposes. . . . We are talking about a market in which land cannot be sold for the creation of latifundia—very large estates.’’≤≠ Though a moderate reformer, Khlystun was surrounded by a more conservative policymaking apparatus. Khlystun’s power was diluted by political decentralization, the entrenched agricultural bureaucracy, his more conservative superiors in the cabinet, and the constant criticism from below by state and collective farm managers who blamed him for farm reorganization.≤∞ In addition, in the national government there was a backlash against Deputy Prime Minister Yegor Gaidar and his policies of ‘‘shock therapy,’’ which led to his replacement in December 1992 with the more moderate Viktor Chernomyrdin.≤≤ Recounting the replacement of Gaidar, Yeltsin noted that once Chernomyrdin took over, ‘‘a completely different era began, a slow, careful, and rather contradictory era of economic reform. This era cannot be characterized

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as marching in place. The banking and loan systems started to function, privatization began, a market of goods and services emerged, and the first class of Russian entrepreneurs appeared.’’≤≥ Further, Yeltsin writes, ‘‘the economy was hostage to politics. . . . I could not withstand massive pressure from parliamentary factions, parties, political movements, economic schools, agricultural managers, and entrepreneurs. . . . At some point I began to waver.’’≤∂ Thus, by the end of 1992, conflict between Yeltsin and the legislature was increasingly sharp, and compromise had broken down. The political stalemate that affected executive-legislative relations spilled over to property rights as well. History awaited a denouement.

The Breakthrough: Changes in Property Rights During 1993 Russia’s land reform was inherently intertwined with the political events of 1993. As has been described by numerous authors, throughout the first half of 1993 tensions between Yeltsin and the legislature continued to increase and politics became even more polarized and threatening, eventually leading to open confrontation in September.≤∑ A detailed recounting of events is beyond the scope of this chapter, but what is relevant is the central question around which the struggle revolved: Who would have predominant power in the postcommunist political system, the president or the legislature? The political struggle was bitter, destructive, and even childish at times. To take only one example, in March 1993 Yeltsin signed a decree declaring special presidential rule and suspending the work of the legislature. The legislature responded by convening its ninth congress to consider impeaching Yeltsin although the motion fell seventy-two votes short of passage.≤∏ Eventually, Yeltsin and the congress worked out a compromise regarding a nonbinding referendum in April 1993 composed of four questions, two favorable to Yeltsin and two favorable to the legislature, but that referendum failed to solve the leadership conflict or the policy stalemate.≤π Following the referendum, Yeltsin signed a decree titled ‘‘On Supplementary Measures for the Allotment of Land Plots to Citizens.’’≤∫ Among its more important points, the decree instructed executives at every administrative level within the Russian Federation to assess, within a two-month period, the demand for land by citizens for private plots, gardening, individual housing construction, and other uses of small land plots. Preference for land to be allocated from redistribution funds was to be given to decommissioned military personnel and their families for private farming, private plots, gardening, and individual housing construction. Demand for land was to be linked to supply: the decree instructed that an inventory of unused agricultural land ‘‘of

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all categories’’ was to be made in order to determine how much land might be available for distribution to individuals for various small-scale uses; the inventory was to be paid for by the national government. The inventory of land was said to be especially important close to large cities and industrial centers where there was a lot of abandoned land.≤Ω The decree also repeated the requirement that the issuance of documents verifying the right to a land plot, its size, and its location was to take place within a month from the date the application was received. This decree was significant because it pertained to small plots of agricultural land for individual use, not large tracts of land that could transform the face of the countryside. In spite of the continued push for the individualization of landownership, nothing overshadowed the growing political conflict in Moscow. By late summer or early fall it would not have been too much of an exaggeration to characterize the year as one of open political warfare, with economic policy being held hostage to the political struggle for power. Yeltsin writes that ‘‘Russia simply could not go on with a parliament like this one. . . . I was sick of it because this Supreme Soviet had become a powerful, destructive force, a threat to Russia’s security.’’≥≠ He dissolved the Soviet-era legislature on September 21, 1993 (in violation of the Constitution).≥∞ The legislature responded by impeaching Yeltsin the following day and naming Rutskoi as president. The White House, where the legislature met, was placed under siege, its gas and electricity cut off. A standoff ensued during which Russia had either two presidents or no parliament, depending on who was talking. But the perceived blame for the crisis was clear, as summarized by one of Yeltsin’s spokesmen: ‘‘no concessions to Red Soviets, no concessions to Stalinists and fascists.’’≥≤ The country was on the brink of civil war. In early October 1993, the political standoff was ‘‘resolved’’ with force, as Yeltsin ordered the shelling of the parliament building. Many of Yeltsin’s opponents were arrested and imprisoned (but subsequently acquitted). Thus by the fall of 1993, the stalemate between the executive and legislative branches was broken, with the executive emerging victorious on the back of military force. The October crisis led to a fundamental change in Russia’s postcommunist political system, defining the characteristics that continue to exist today. The crisis also represented a watershed event in Russia’s land reform. On October 27, 1993, Yeltsin signed a decree titled ‘‘On the Regulation of Land Relations and the Development of Agrarian Reform in Russia.’’≥≥ The decree should be understood in its proper political context. Although the decree has been called ‘‘the most liberal land legislation in Russia,’’ it should be remembered that the decree was issued in the wake of the destruction of Yeltsin’s political opposition.≥∂ At the time the decree was signed, Russia had no operational legislature

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—there was merely presidential rule. Yeltsin’s two main rivals, Khasbulatov and Rutskoi, were in prison. The Constitutional Court was suspended, and its chairman, Valeri Zorkin, allegedly a Yeltsin opponent, was removed.≥∑ Recalcitrant local government bodies were disbanded. Opposition media were suspended.≥∏ In the wake of all of that, the October decree on land relations fundamentally attempted to undercut the power of the old Soviet rural elite, that is, state and collective farm managers. The decree was characterized thus in the Western press: ‘‘Though the reforms still envision restrictions on the ownership and use of farmland, they marked a major breakthrough in efforts to dismantle the Soviet legacy of tightly controlled collectives, which were formed by Stalin out of farmlands brutally expropriated from peasants in the infamous collectivization campaigns of the 1930s.’’≥π Although in many respects the October 1993 decree duplicated existing legislation, the new decree went beyond it in significant ways. It was intended to address several shortcomings in land legislation and policy. The most important factor acting as a freeze on land reform until that time was the inability to sell land shares or to lease shares to private farmers unless agreement was reached with the large farm holding the shares.≥∫ Moreover, there was no land market to speak of—land could only be left to relatives or sold to the local government. For these reasons, point 2 of the October 1993 decree gave landowners ‘‘the right to sell, bequeath, mortgage, lease, and exchange land,’’ as well as to transfer land or part of it as an investment to other entities such as joint stock farms. Citizens and corporations were also allowed to form joint property or joint share property by combining land or land shares. Point 3 of the decree stipulated that all landowners were to be issued a certificate called a svidetel’stvo, a legal document that certified the right of ownership to the holder and served as the basis for land transactions such as purchases, sales, leases, or mortgages. Thus the certificate was to be the individual’s guarantee of landownership and the documentary basis for land transactions. Point 5 of the decree stated that all members of state and collective farms were to receive a svidetel’stvo for a share of the farm’s land, and the certificate was to indicate ‘‘the area of the land share.’’≥Ω The decree placed special emphasis on the receipt of a certificate.∂≠ This was because until that time, only about 30 percent of persons who had privatized land possessed the legal title to their land, according to Nikolai Komov, the chairman of the Russian Committee on Land Reserves and Land Tenure (Roskomzem).∂∞ Under the terms of the October decree, as Komov explained, there were several different scenarios, depending on the specific situation of the individual.

60

Policy Design and Legislative Context ∞ Persons who were presently owners of land but lacked a certificate could proceed directly to their local organ of the Roskomzem in order to receive a certificate. ∞ Individuals who already possessed some form of certificate (svidetel’stvo or state act) need do nothing.∂≤ ∞ Individuals needing to receive a certificate were to submit an application to their local administration and await its decision. ∞ Individuals who already had received a decision from the local government could go to the local Roskomzem to receive their certificate. ∞ For individuals needing to start from the beginning, the whole process of receiving a certificate was to take no more than forty-seven days: one month for processing the application by the local administration, one week to issue the decision, and ten days to issue the certificate.∂≥

The certificate each farm member was to receive indicated the area of a land share but did not confer physical apportionment. In other words, a farm member received ‘‘ownership’’ of a specified quantity of land, but the allocation of real land was made only if the person resigned from the farm to undertake private farming. Thus, in reality, property rights remained abstract for the vast majority of farm members. Nonetheless, taken literally, the decree suggested the potential for dismemberment of large farms: they would be divided into hundreds of small parcels, each working independently, if many individuals and families decided to leave the parent farm. At the same time, owners of land shares were free to combine land and land shares on a voluntary basis. This stipulation permitted the creation of farms among unrelated people, thus annulling restrictions that allowed only the creation of private farms based on family relations. Perhaps most important, the October decree annulled previous restrictions on land sales and allowed the owner of land shares to sell his allotment to ‘‘other members of the collective, or to other citizens and juridical persons’’ so long as the land would be used for agricultural production. If a person decided to sell his land shares, other members of the collective would have preference in obtaining those shares. Point 8 of the decree stipulated that land sales could take place either through competitive bidding or at an auction.∂∂ Following the signing of the October 1993 decree, the Yeltsin government, working in cooperation with the International Financial Corporation (IFC), held an experimental land auction in Nizhnii Novgorod oblast in November 1993.∂∑ This privatization program represented the first attempt to translate the principles underlying Yeltsin’s reform program into concrete action. It was an intrafarm auction, open only to members of the association Pravdinskaia, as would be subsequent auctions in this privatization program. The land sold

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at the auction could only be obtained by persons who had the right to a land share in the oblast. Farm property was sold off as well, although land and property were valued by different methods.∂∏ Subsequently, an IFC-sponsored farm privatization program was adopted by the Russian government in July 1994 and eventually spread to eleven oblasts and several hundred large farms by the end of the Yeltsin period.∂π The October decree created the conditions for a land market, but it is important to note that it was not an unrestricted market. The decree was actually considered something of a compromise, and it reflected conservative political views. For example, at the time of the decree, the details of the fee and tax system associated with land sales had yet to be worked out, but comments made by Komov suggested that fees associated with land sales would be high in order to prevent land speculation. In an interview published shortly after the decree was released, Komov suggested that the seller should pay a hefty tax of 95 percent of the average market price to the local government for the piece of land being sold (‘‘market price’’ was established by either an auction or competitive bidding for that land plot).∂∫ Obviously, if such a prohibitive tax had been introduced, it would have greatly affected incentives to sell. Eventually, a 3 percent administrative fee, based on the stated value of the land sale, was levied on land transactions, in addition to land taxes.∂Ω Another restriction intended to prevent speculation stipulated that even after the sale, exchange, or lease of agricultural land from its owner, the purpose for which it was used was not to change without permission from local authorities; such permission apparently was to be granted only ‘‘in special cases.’’ (In reality, interviews with land committee officials in Kostroma oblast during the mid-1990s suggested that this was an arena that was ripe with possibilities for corruption and payoffs.) The intent was to allow local governments to keep agricultural land in agricultural use, in effect enabling local officials to restrict zoning rights. The final restriction was that a landowner had to use his land sensibly—a subjective assessment—or else the state had the right to confiscate the land or to compel the owner to sell it.∑≠ In fact, there was quite a long list of reasons how and why an owner could lose his land, and this also could be abused. One way to lose land rights was to not use the land for the purpose that had been indicated on registration. Another was to allow degradation of the soil or a worsening of ecological conditions. Land expropriation was not automatic on violation. The deputy chairman of Roskomzem, Sergei Gromov, explained that a fine and a warning to alleviate the violations could be assessed first. If the violations were not remedied, the owner was taken to court and deprived of his right to land. Gromov revealed that in 1993, for example, eighteen

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thousand private farmers lost their rights to landownership owing to violations of the restrictions.∑∞ The events of October and December 1993 marked the end of one period in Russian history and the beginning of another. Following the October crisis, a new post-Soviet political system was established, along with a new constitution. Yeltsin’s October 1993 decree on land relations extended property rights in significant ways. In addition, the constitution that was ratified on December 12, 1993, by a popular referendum contained several articles that spoke directly to land relations and codified private ownership of land (articles 9, 27, 36, and 72). By the end of 1993, the liberal part of land reform meant that tens of millions of Russian citizens had become owners of more than one hundred million hectares of agricultural land—as one article put it, ‘‘practically every family in Russia owns land.’’∑≤ On the other hand, the illiberal aspects of land reform meant that property rights and landownership were much less secure and tenuous than reformers would acknowledge. As one Western observer noted, landownership rights resembled a ‘‘post-Soviet Potemkin village.’’∑≥

Property Rights After 1993 The years 1991–93 defined much of Russia’s institutional design for land reform, with the October 1993 decree occupying the central place for several years. But that decree was meant to be in effect only until replaced by a new Land Code and supporting laws. Moreover, the 1993 Constitution, the 1994 Civil Code, and Yeltsin’s various decrees only established rights of landownership and disposal in principle. Specificity and procedures were often lacking or left to regional governments. As a result, property rights were highly variable from one region to another and from one city to another. The absence of a national Land Code meant that there was a tremendous amount of regional variation in land legislation and rights concerning private ownership of agricultural land. For example, after the adoption of the 1993 Constitution which permitted private ownership of land, during the mid-1990s as many as ten republics within the Russian Federation did not recognize private ownership of land within their borders.∑∂ By 1999 only fifty of Russia’s eightynine regions had explicitly adopted legislation that confirmed the right to private landownership. Another twenty-six regions did not forbid private ownership, but they also did not allow it: relevant legislation was absent. Another group consisting of thirteen regions forbade the private ownership of land as well as its purchase or sale, contrary to the federal constitution. These regions were located mostly in the far north or in Muslim-dominated regions.∑∑ It was not until late 1997 that the first regional land law (in Saratov

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oblast) entered into force, establishing the right of agricultural landownership and legalizing the sale of agricultural land.∑∏ Thus a national land law was necessary to standardize land laws and to bring the regional laws into conformity with the Constitution. From 1994 to the end of Yeltsin’s rule, a prolonged and bitter political struggle over the post-Soviet Land Code ensued that would not be resolved until 2001 under the leadership of Vladimir Putin. Although such a code held political and economic significance for Russia, as a result of political compromises it turned out to be rather peripheral to agricultural land, and therefore a detailed analysis is presented in appendix C for the interested reader. Beyond discussions about a new Land Code, the period 1996–99 was marked by long stretches of political inactivity due to Yeltsin’s recurrent illnesses and absences from work. As a result, much of the momentum that had been achieved during 1993–94 was lost. Yeltsin’s second term recalled the days of stagnation (zastoi) under General Secretary Leonid Brezhnev, and land reform policy was no exception. When Yeltsin was active it was clear that an increasing gap existed between a president who continued to push for radical reform by decree and a legislature that passed more conservative laws. For example, in early March 1996 Yeltsin signed a decree titled ‘‘On the Realization of the Constitutional Rights of Citizens Concerning Land.’’∑π This decree should be understood as a reaction to the conservative version of the Land Code that was being discussed in the Duma at the time. The decree repeated much of what had been contained in previous decrees and resolutions regarding transactions involving land shares (point 4), but it was important for several reasons. First, it allowed land held in lifetime use that had been obtained prior to January 1, 1991, and being used for private plots, gardening, or dacha construction to be retained by citizens even if the plots were larger than local size norms allowed. The owner was not obligated to buy the plot or to lease it. Second, it removed restrictions on the amount of land that could be leased for private farming. Third, it established that the leasing out of land shares should not be for less than a three-year period, which was intended to lend stability to land tenure. On the whole, however, Yeltsin’s second term did little to alter the institutional design of land reform that had been established in his first term.

The Question of Resistance; or, The End of History? The institutional design discussed above did not unfold neatly or easily. In fact, there was a good deal of political messiness, as one might expect when systemic changes are being attempted. Vested interests are prone to resist encroachments on existing privileges and powers. Similar ‘‘resistance’’ in the

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form of dirty tricks and manipulation of the institutional rules occurred in industry as well, so it is hardly surprising that related instances occurred in agriculture.∑∫ Resistance to Russia’s land reform is important for three main reasons. (1) Resistance is central to an overall assessment of the success of reform. (2) Successful resistance at the onset of privatization would, in effect, bring an end to historical development and have significant ramifications for today.∑Ω (3) It is important to consider whether resistance was the primary characteristic of land reform during the 1990s. In addition, this discussion cross-cuts several different issues: the strength of the state to implement its policies, the receptivity of rural society to privatization of land, the potential economic and political strength of the ‘‘winners’’ during land distribution, the nature of land relations that would be created by a new set of institutions, and ultimately, the impact of formal institutions and how those ‘‘rules of the game’’ affected household behavior. The issue of land reform resisters, their motivations, and their resources has been researched by only a few Western analysts, mostly without consensus.∏≠ Among those who view local resistance as strong and significant in Russia is Carol Leonard, who argues that land privatization was resisted by the rural population.∏∞ In addition, Allina-Pisano uses copious antireform quotes from local newspapers to suggest the presence of an innate rural conservatism.∏≤ In contrast, Eugenia Serova notes support for reform among officials and the rural population.∏≥ Allina-Pisano’s argument about ‘‘Potemkin villages,’’ by which she means that property rights were shallower and less meaningful than might be assumed, is reminiscent of Cliff Gaddy’s and Barry Ickles’s ‘‘virtual economy’’ argument.∏∂ Whereas Gaddy and Ickles argue that Russia’s virtual economy existed because of outmoded production capital, a lack of market competence by managers, and pervasive rent-seeking behavior in the energy sector, Allina-Pisano’s resistance thesis, because it lacks sensitivity to the temporal dimension, implies an end to historical development—resistance was not only pervasive, but successful, and it shaped not only responses but also outcomes. Gaddy’s and Ickles’s analysis, however, allows for historical development—sectors of the economy and enterprises, once subjected to international competition, may emerge from the virtual economy.∏∑ In particular, Allina-Pisano argues that the basis of officials’ ‘‘objection was not rooted in opposition to private property as such but to proposed radical shifts in the scale of production.’’∏∏ This interpretation is directly contradicted by Caroline Humphrey, who argues that ‘‘the reason people want collective farms to continue is not just economies of scale . . . but [because] the Russian state has failed so catastrophically. It has failed to do one of the few things a state must do, which is to ensure that its money functions throughout the

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economy.’’∏π Allina-Pisano further writes that ‘‘foot dragging and other covert attempts to forestall large-scale transformation occurred at all levels of local bureaucracy: among leaders of district administrations; in the offices of state economists, land tenure specialists, and land committee members; and within village councils.’’∏∫ It is hard to discern the institutional interests of some of the aforementioned actors, however, in potential changes in the scale of production.∏Ω The main threat to the existing scale of production was the rise of private farming. But private farming is not a useful proxy for resistance because many other intervening variables affected the start-up costs and the economic success of private farmers. Further, they made up a very small subcategory of the rural population. Though the problems of private farmers have been well studied, it is important to recognize that they were few in number and had unique problems that for the most part did not pertain to ordinary rural households. Surveys of private farmers during the 1990s show that financial, credit, and tax issues, and not the receipt of land, were their greatest concern.π≠ Other recipients of land shares, mostly ordinary farm workers, did not threaten the scale of production because they did not receive real land. Moreover, when thinking about motivations for resistance, one should recall the substantial popular disenchantment with the Soviet economy, its performance (or lack thereof), and disgust with the half-hearted economic reforms of the Gorbachev period. With Yeltsin’s promise that the economic hardships of the transition would only last about six months, the degree of optimism in the regions regarding expected improvements in the economy should not be underestimated. Disappointment and disillusionment would come later, after the effects of the transition became clearer, but in 1991 there was a good deal of hope that market reform would pull the economy out of its doldrums. Allina-Pisano and Barnes also identify farm managers as significant resisters, with Barnes arguing that ‘‘farm managers and their allies in local government’’ formed the ‘‘main resistance.’’π∞ Allina-Pisano invokes the argument of Joel Hellman and argues that managers could use their position to block market entry by recipients of land.π≤ Applying his analysis to industry, Hellman argues that managers and others in an advantaged position were the first to benefit from new opportunities offered by privatization and thereafter created obstacles for others wishing to join, thereby protecting their privileged position.π≥ Agriculture was completely different from industry, however. Farm managers may have had incentives to block private farmers from entering the market (although until the end of the 1990s the market threat posed by private farmers was insignificant), but there was little threat to large farms from the entry of households into the food production cycle. Throughout the 1990s, private farmers produced only 2–4 percent of the nation’s food. More impor-

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tant, it is not clear what market entry would mean as it applied to land reform. Wholesale food and input markets remained either under state control or dominated by private monopolies until the late 1990s. Presumably, the grand alliance of local bureaucrats and farm officials who ‘‘coordinated’’ their resistance efforts would extend to wholesalers, who would also (one assumes) have an interest in maintaining customers represented by large farms. Farm managers may not have been different from other managers in the economy who used privatization for their own benefit, but almost assuredly their means were different.π∂ Instead of resisting the new economic order, the view emerges that managers integrated themselves rather nicely. As Richard Ericson notes, ‘‘the old political elites, and enterprise and farm managements, have largely succeeded in entrenching themselves in both new and surviving economic and political organizations, albeit with substantial turnover toward younger cadre[s].’’π∑ In short, one body of literature suggests that there was rural resistance to land privatization and that it was multidimensional, multilayered, and virtually omnipresent, thereby making the concept of resistance quite slippery, even amorphous.π∏ With literally every conceivable rural interest having an incentive to resist, it is a wonder that there was any change at all. By focusing solely on ‘‘covert’’ resistance, Allina-Pisano seems to have missed the bigger picture in two important ways. First, resistance was not the primary characteristic of Russia’s land reform, and second, it is a giving reform—providing opportunity to benefit from the allocation of land shares in addition to existing plots in the form of private plots—not a taking reform, as was the case with Stalin’s collectivization. Although the early reform process was chaotic and yielded more losers than winners because of macroeconomic factors, privatization and the ‘‘hidden hand of the market’’ create potential over the longer term for the clever and the opportunistic. In contrast to the thesis that covert resistance to land privatization occurred at the local and farm levels, overt resistance by elites was readily apparent in Moscow and at the federal level, in particular, in the sale of agricultural land. Regarding resistance on large farms, Andrew Barnes is exactly right when he argues that a ‘‘major incentive drove economic actors in Russia to acquire property: it was a source of political power.’’ππ Yet the Agrarians, the Communists, and other conservatives who fought Yeltsin’s land legislation in Moscow were not necessarily fighting for the political power of farm managers or farm workers (although that was their stated intent); rather, they were fighting to save their own political power, to save their position as ‘‘the voice’’ of the rural worker and farm manager. Thus, conservatives in the legislative and executive branches had strong motivations to resist and had the resources to do so until late in the 1990s.

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In addition, despite incentives and resources, the efforts to resist or block reform were not very unsuccessful. Consider, for example, the fact that during the height of conservatives’ power in the Duma, the Nizhnii Novgorod model of farm and land privatization spread and was adopted as the national model, leading to the privatization and downsizing of large farms in several oblasts;π∫ the Duma’s version of the Land Code was rejected; a law on the regulation of the agroindustrial complex (which was designed to provide financial relief for large farms) was vetoed by the president; food imports from abroad, which conservatives opposed, increased substantially; state subsidies for large farms were drastically reduced; a federal program of financial assistance to private farms was begun, then stopped; and a market for agricultural land sprang up, again against the wishes of conservatives. In short, at the federal level, conservatives lost battle after battle against state-led reform and the executive branch. They emerged in a weakened position that in turn was reflected in national results of the December 1999 Duma election, when Agrarians did not have enough political power to run as an independent party and won only two seats in total. One may suspect that part of the reason for the decrease in support for Agrarians was their ineffectiveness in protecting rural interests. A counterargument to the resistance schools of thought is that rural resistance was not the primary characteristic of Russia’s land reform, and where it did occur, it was not particularly effective in stopping the main aspects of reform from being implemented. It is well to remember that in the early 1990s land laws in most regions were still ten years away. Regions that did pass oblast-level resolutions tended to mirror federal guidance, with all its shortcomings. This alternative view sees the set of reform policies that was emanating from the center as fluid and not very detailed in terms of procedures. I vividly remember several interviews with the deputy head of the land reform committee in Kostroma oblast, S. Tutun, during 1992–94. I would ask a question and he would, without exception, pull out his folder of clippings of federal laws or official documents in which he had dutifully underlined and highlighted the key points. If I asked a follow-up question for which there was no guidance in the federal law, he would simply shrug or say, ‘‘We don’t know.’’ Thus the vertical chain of communication was less than optimal in 1992 and for several years thereafter. Theories of organizational behavior make clear that when environmental confusion exists, organizations will try to maintain the status quo in order to continue operations.πΩ Furthermore, it is important to recognize that the design of reform gave farm managers the ability to implement reform and still retain their power.∫≠ Consider, first, that farm managers decided which land would be ‘‘lost’’ to the farm—which land would be distributed to private farmers and which land

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would be allocated to raion redistribution funds. Farm managers could implement the directions from above by ridding the farm of its least productive land (for which a land tax was levied) and retain its most productive land. To some analysts this type of behavior might be considered ‘‘resistance,’’ but mostly it appears to be perfectly rational from an economic standpoint and in line with ‘‘capitalist’’ ways of thinking about resources and cost structures. Second, most farmland that was distributed as land share entitlements was leased back to the large farm by land shareholders. Consequently, farm managers ‘‘lost’’ relatively little land.∫∞ As a result, by the last year of Yeltsin’s rule (1999), large farms still used 87 percent of all arable agricultural land, and private farms used only 8 percent.∫≤ Thus significant change in the scale of production did not occur.∫≥ Third, farm managers lost relatively few employees, and so their power base remained intact. According to World Bank data, on two-thirds of reorganized large farms fewer than nine employees departed, which means that the average large farm continued to have hundreds of employed and retired members.∫∂ The lack of mass decollectivization is perfectly understandable and need not be part of a sinister plot by farm managers. As noted by Humphrey, ‘‘to want the dissolution of collectives would be to vote for anarchy.’’∫∑ Although Allina-Pisano argues that farm managers used various tricks to keep control over both land and labor during privatization, market reform made employment on a large farm voluntary and desirable, especially considering the lack of viable employment alternatives for most who lived in the countryside.∫∏ Many persons wanted to remain employed by a large farm in order to continue to receive various types of assistance with the operation of their private plot. Moreover, Allina-Pisano’s argument that farm managers used tricks to retain land and labor contrasts with the fact that large farms were abandoning land because they could not work it, and the demographic structure of the rural workforce was quite weak in many regions of Russia. The question naturally arises why farm managers would want to restrict the departure of the old, the sick, the lazy, and the drunk. In any event, for a variety of reasons, most farm managers lost little, and most farms stayed intact with respect to both land and labor. Thus, in real terms the farm manager lost little and most large farms stayed intact with respect to both land and labor. Needless to say, some large farms and their managers adapted better to new economic conditions than others.∫π

The Economic Effects of Yeltsin’s Land Reform Policies Ultimately, the line of argumentation offered by the resistance school of thought has two fundamental flaws: (1) there is a numbers problem, by which

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I mean that although official statistics may have been inflated and reform outcomes may have elements of ‘‘Potemkinism,’’ even a grand conspiracy of local rural actors cannot conceal (or explain) the degree of structural change in the Russian countryside; and (2) history did not come to an end in terms of the continuation of developmental trends. The numbers problem is seen not only by the development of private farms —which actually was the least significant new occurrence during the 1990s— but also by the considerable increase in the use and ownership of agricultural land by households in a variety of different tenure modes, by the appearance of a robust land-leasing market, and by the emergence of a stratum of opportunistic households that utilized new possibilities within the design of reform to their material benefit. The continuation of historical processes was noted by prominent analysts who, while recognizing that land and agrarian reforms were incomplete during the 1990s, also discerned support for reform of Soviet-era land tenure rights and ‘‘drastic changes’’ in Russia’s land rights scheme.∫∫ In this regard, in looking back one can see that even Yeltsin’s illiberal land reform design created opportunities for capitalist entrepreneurship, that, as demonstrated in Part 2, were utilized by a certain portion of rural households. Moreover, it is well to remember that the post-Soviet state was not coercive in the implementation of reform and that the ‘‘hidden hand of the market’’ supported both private property and a system of property rights. That the seeds of capitalism may be planted within an illiberal regime should not necessarily be surprising. Many examples of such development exist, for example, in Mexico under the leadership of the PRI from 1929 to 2000, throughout Latin America during the 1980s and 1990s, or in the Philippines under Ferdinand Marcos. Such was the case in Russia historically as well: an entrepreneurial class began to develop from the Stolypin reforms of the early twentieth century under the last tsar. During the Bolsheviks’ New Economic Policy, an upper middle class, the so-called kulaks, likewise developed. Few would characterize the regime of Tsar Nicholas II or the USSR in the 1920s as ‘‘liberal,’’ but few would also deny the emergence of some form of capitalism. The numbers problem is illustrated by certain trends that occurred during the 1990s. Even if one assumes that a grand conspiracy of bureaucratic and economic actors existed at the local level, it would stretch credibility to believe that this conspiracy spread to bureaucrats, economists, and land officials in Moscow, especially because, Allina-Pisano asserts, resistance was mainly covert and unspoken. Thus, though some of the numerical trends reported by governmental agencies in Moscow that appeared to reflect ‘‘progress’’ may have less significance than might first appear, the data were not completely

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fictitious.∫Ω Bureaucrats in reporting agencies had little stake in maintaining existing scales of production and would appear to have had few inherent interests in resisting reform. Instead, formal institutions governing landownership and use appear to have had an impact on several levels. ∞ Household and individual producers: By the end of the Yeltsin era, 130 million hectares of agricultural land was privately owned, and there were more than 40 million landowners throughout Russia. There was significant progress in turning land users into landowners: 63 percent of land used for private plots and gardens and 48 percent of land used by private farmers became privately owned.Ω≠ Land privatization was attended by a significant increase in food production among households, so much so that by 1997 households accounted for more than 50 percent of the ruble value of Russia’s agricultural production.Ω∞ ∞ Farm workers: During the reorganization and restructuring of large farms, 12 million families received land shares encompassing more than 117 million hectares of agricultural land. By the beginning of 2000, 97 percent of these families had received documents that certified their right to use or own land, with the remaining 3 percent including unclaimed inheritance, change of residence, or departure for military service or schooling.Ω≤ ∞ Private farmers: During Yeltsin’s terms the stratum of private farmers grew numerically, increasing from 49,000 at the end of 1992 to about 265,000 farms at the end of 1999. In 1999 these rural entrepreneurs used 14 million hectares of agricultural land. ∞ Other groups: More than 6.5 million citizens had received a total of 638,000 hectares of land for individual housing construction. A special redistribution fund had been created for decommissioned military personnel. By January 1, 2000, thirty thousand military families had received more than 48,000 hectares of land. Finally, a special land fund had been created for refugees and forced migrants, and by January 1, 2000, they had received more than 48,000 hectares of land.Ω≥ THE LAND MARKET

The development of a land market may be considered an outcome of Yeltsin’s reforms, but it is a complex matter that illustrates both the illiberal aspects of land reform and the creation of new opportunities. On one hand, a rudimentary land market did arise that led to turnover of land. On the other, as we will see below, the nature of the land market did not carry the transformative power that reformers had hoped it would. The market started from scratch as an outgrowth of Yeltsin’s push for property rights and his October 1993 decree. That said, the land market had several distinctive characteristics, and three main issues arose that defined the nature of the land market: what

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type of market it was, what type of transactions occurred, and whether it was a land-leasing or land-purchasing market. In Yeltsin’s Russia, two types of land markets developed: a private land market, consisting of transactions between individuals (and between companies or farms), and a municipal land market, consisting of transactions between the local government and individuals or between local government and companies or farms (the latter are referred to as ‘‘juridical persons’’ in Russian texts). During the 1990s, the municipal market had the larger number of transactions, although the quantity of purchases from municipalities declined during 1993–99. Within these two types of markets there were monetary and nonmonetary transactions. A nonmonetary transaction would include, for example, the transfer of land as a gift or by inheritance. During the 1990s monetary transactions were much more numerous than nonmonetary land transfers. During the 1990s the number of land transactions increased steadily, so that in the last year of Yeltsin’s presidency the total number of land transactions, including leasing, purchases, and nonmonetary transactions, numbered 5.27 million and encompassed more than 132 million hectares (about 8 percent of Russia’s total land).Ω∂ Local land officials recorded land transactions and had little vested interest in blocking actions; in fact, it might be argued that their jobs came about as a result of the land market. My experience among the city and oblast land committees in Kostroma suggested that they were individuals trying to do a professional job in an environment in which land plots had not been surveyed, there were no computers, and if there had been, there was no software to automate land transactions. In that context, the increase in registered land purchases during 1993–99 according to official data, as presented in table 3.1, is impressive. At first sight, the data presented in the table appear to show that reform policies were efficacious: the number of purchases from local governments declined over time, concomitant with an increase in the number of transactions in the private market.Ω∑ Furthermore, in 1999 land purchases by companies (‘‘juridical persons’’) were almost triple the level in 1995. On closer inspection, however, the impact of land purchases on transforming the rural economy was quite limited. The table shows that land purchases transacted between individuals were the most popular type, rising to more than 290,000 in 1999. But given that there were 39 million rural residents, the number of transactions means that less than 1 percent of the rural population participated in a land purchase. The uses of land purchased by individuals fell into four categories: individual housing construction (a transaction preferred by urbanites), operation of a private plot (preferred by rural dwellers), collective or individual gardening (preferred by urbanites), and dacha construction

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Table 3.1. Effects of land reform policies: Land purchases, 1993–99 (number of transactions)

Purchases from municipal governments Purchase transactions between individuals Purchase transactions by companies Total amount of land purchased (ha.)

1993

1994

1995

1996

1997

1998

1999

137,263

112,299

65,509

43,907

20,897

11,467

22,191

9,990

100,133

230,888

218,052

263,470

233,898

290,268

NA

NA

566

707

2,219

692

1,503

58,378

35,748

63,743

42,611

66,351

48,430

61,181

Sources: Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii za 1995 god (Moscow: Committee on Land Resources and Land Surveying, 1996), 76, 78, 79; Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii za 1996 god (Moscow: Committee on Land Resources and Land Surveying, 1997), 53, 55; Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 1998 godu (Moscow: Roskomzem, 1999), 58, 60; Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2000 godu (Moscow: Federal Land Cadastre Service, 2001), 116, 121; author’s calculations. Note: NA=Not applicable

and farming (preferred by urbanites). The primary uses of land in the privatepurchase market, therefore, were for small-scale individual or family subsidiary agriculture, a pattern not unlike that found during the Soviet period. Moreover, because the size of these plots remained regulated by local norms, the amount of land involved in transactions of these types was likewise quite small. In 1999, for example, the average size of a purchased land plot for individual housing construction was .12 hectares; for private plots, it was .20 hectares; for garden plots, .07 hectares; and for dacha farming, .12 hectares.Ω∏ Not only were plots small, but the overall quantity of land being traded was insignificant. Assuming a mean of 200 million hectares of agricultural land available during the 1990s (for all types of users), less than one-half of 1 percent of agricultural land was involved in purchase transactions annually. Furthermore, land transactions conducted by companies averaged only 2.1 hectares in size and totaled only 3,296 hectares in the entire country in 1999. Although in that year the number of land purchases by companies reached its peak (1,503), this number was minuscule when compared to the number of agricultural enterprises in existence (about 27,600 at the beginning of 2000) and the number of enterprises that had been privatized (129,500 during 1992– 97).Ωπ The weakness of the rural economy depressed the land market during

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the 1990s, and incentives to obtain agricultural land were low because agriculture was so unprofitable. What the land transaction data suggest, therefore, is that the bitter, prolonged political wrangling over agricultural land purchases in Moscow was extraneous to the reality on the ground. The types of land purchases that were occurring during the 1990s were not transforming socialist-era patterns of land use, and in any event, land users were ‘‘voting with their ruble’’ by preferring leasing to purchasing. Thus the question whether Russia’s land market would be a leasing or a purchase market was decided outside Moscow. Official land transaction data clearly demonstrate that during the 1990s Russia’s land market was primarily a leasing market accounting for several million transactions annually.Ω∫ Roughly speaking, by the end of the decade, leases accounted for a little more than 90 percent of all land transactions, nonmonetary transactions accounted for approximately 3.5 percent, and purchases accounted for about 6.5 percent.ΩΩ The effects of the land market in the 1990s were, therefore, mixed. Ownership of agricultural land conveyed secure use rights, within limits, but this was only a small portion of total agricultural land and comprised a small percentage of land traded on the market. The leasing market did not convey entirely secure property rights. This was because land privatization did not entail the receipt of real land for the vast majority of farm members. Instead, they received paper entitlements to land. These land shares were overwhelmingly leased back to large farms as use rights. The insecurity of land shares was manifest in two ways. First, in the 1990s deeds to land often were kept by farm managers for safekeeping. But sometimes the owner experienced difficulty in retrieving his documents from the manager.∞≠≠ Second, during the Putin administration, as agricultural performance improved and the sector became profitable, agricultural land became a valuable investment for the wealthy. When a buyer purchased an entire large farm, he also obtained land shares that were being leased to the farm. The new farm owner in effect became the new owner of the land shares, and ordinary people were dispossessed. But in contrast to Allina-Pisano, this study sees the dispossession as a postprivatization process not inherent in the land privatization process. After all, if rural dwellers were dispossessed during land privatization, as Allina-Pisano claims, there would be no basis for the land wars that are presently taking place throughout rural Russia. This occurrence is discussed in subsequent chapters. Moreover, the lease market did not radically transform the socialist property rights that existed in the late Soviet period, nor did it significantly alter the rural social structure. Although the lease market allowed a few private farmers

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to accumulate several hundred hectares of land, overall, it did not fundamentally change the social structure of the countryside. For example, by the end of the 1990s, 76 percent of all private farms were less than fifty hectares in area, and only 4.5 percent were two hundred hectares or more, showing that the farm privatization movement and the lease market did not move large quantities of land from one user to another.∞≠∞

Conclusion: Yeltsin’s Land Reform in Retrospect Yeltsin faced numerous constraints in his attempts to introduce postcommunist land reform. He was constrained by conservative forces in the legislative and executive branches of the government in Moscow. He was constrained by local obstructionism, though in magnitude and extent it was not the primary characteristic of land reform. He was further constrained by the fact that he did not want to completely alienate the rural voter although rural electoral support gravitated to conservative parties and candidates who largely opposed the sale of agricultural land.∞≠≤ And he was constrained by the fact that Russia had to eat, so he was limited in how far he could push decollectivization. This chapter has argued that (1) although Yeltsin’s land reform contained both liberal and illiberal elements, on the whole his program was a good deal less liberal than is usually understood;∞≠≥ (2) the way land reform was designed, more so than resistance, shaped outcomes of and responses to reform; and (3) the liberal aspect of reform was seen in the fact that seeds of agrarian capitalism were planted. Rights to additional land were widely distributed— land in excess of the norms for private plot holdings—and based on that distribution some households utilized new opportunities as a base for entrepreneurship. This third theme is explored in much greater detail in Part 2 of this book. For now, it would be justifiable to conclude that the effects of Yeltsin’s land reform policies were neither as economically nor politically significant as reformers had originally hoped. The limited impact of the land market, in particular, the level of purchases among private individuals, testifies to the restrictions inherent in the design of Yeltsin’s reform. Yeltsin’s land reform policies were illiberal in several respects. First, ordinary rural dwellers, most of whom were employees on large farms, actually received very little real agricultural land on a per capita basis. The most common form of distribution to workers was land shares, not real land. As a result, in Russia the private ownership of real land is estimated to not exceed 5 percent of all agricultural land.∞≠∂ In contrast, in former communist countries in Eastern and Central Europe, many of which adopted land restitution pol-

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icies, much higher percentages of real agricultural land were in the hands of private individuals.∞≠∑ Second, the disposal of agricultural land remained restricted. A liberal reformer who was a major actor in drafting land reform legislation and leading the private farming movement, Vladimir Bashmachnikov (the former president of AKKOR), was quite frank in explaining Yeltsin’s position with regard to the land market: ‘‘I do not understand why the president’s team is not explaining to the people that the president is for regulated turnover of land. Sometimes the impression is created that the president’s team, and it is true, precisely the president himself, is for a free land market. This is not so.’’∞≠∏ Third, property ownership was secured through deeds, but land use, including use of privately owned land, could be tenuous because land was subject to confiscation for any number of reasons such as using it improperly or not protecting it from ecological damage. In various specialized Russian papers there is abundant anecdotal evidence of manufactured reasons used to deprive owners of their land. Moreover, legitimate questions arise about the efficacy of land entitlements. Paper entitlements to land were abstract, which meant that ownership was nebulous. Distributions of real property transferred ownership to land that was isolated, often scattered, and limited in size and therefore they could hardly have been expected to transform the rural economy. Vladimir Bagdanovsky argued that, aside from private farms, ‘‘land reform has been reduced to official ‘distribution of land shares.’ There is abundant evidence that the process fails to transform new landowners into full-fledged agents of land relations because it leaves the economic mechanism of land relations virtually intact.’’∞≠π Surely someone in the government or on the president’s analytical staff was aware of the socioeconomic and sociodemographic situation in the countryside and told the president (or his analytical staff) that the likelihood of mass decollectivization by an elderly rural population was small. And how many actual rights did the rural population have with regard to their land shares? According to the president’s own decree, land shares had to be offered first to other members of the large farm, and agricultural land had to remain in agricultural use. In other words, the rights of disposal were restricted. Perhaps most important, the illiberal nature of Yeltsin’s land reform was seen in the fact that access to real agricultural land remained restricted. The only cohort to receive actual land plots was made up of persons who registered as private farmers. In addition, foreigners were not allowed to purchase land, and members of former state and collective farms received only land shares unless they decided to begin the high-risk venture of private farming. If employees subsequently left a large farm, they were compensated monetarily for

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the value of their land shares but could not take real land with them. In essence, not only did reform policies allow large farms to continue to exist (unlike the case in Eastern European nations such as Albania), but the rules governing land distribution facilitated the continued territorial integrity of large farms. In the end, Yeltsin’s land reform seems muddled. An original intent of land reform was to remove land from the control of the Soviet-era rural nomenklatura and to construct a private farming stratum that would be independent of Soviet-era bosses but loyal to the Kremlin. Although Yeltsin deserves credit for policies that were significantly different from those of the Soviet era and for ending the state monopoly on landownership, neither of these original intents was fully realized. Bogdanovsky notes the ‘‘destructive effect of forcing agricultural production into the private mode.’’∞≠∫ Private farmers formed the vanguard of land reform. But as has been noted by a number of authors, not only were private farmers numerically insignificant, they experienced myriad problems that kept them economically and politically weak during the 1990s.∞≠Ω Other authors have described the various forms of ‘‘resistance’’ by collective farm managers vis-à-vis private farmers, and this is undoubtedly one of the reasons why the ‘‘farmer threat’’ never materialized.∞∞≠ Yeltsin’s ‘‘destructive creation’’ reduced the importance of the former collective sector but did not, in the end, create a strong stratum of private farms. The economic effect was that there was no large-scale transformation of the rural economy. Instead, Russian agriculture became individualized and downsized, though not as much as in other post-Soviet states such as the Caucuses.∞∞∞ As an indirect consequence of land privatization, individualization occurred such that food production on small personal or family plots took on renewed importance.∞∞≤ But that outcome was neither a goal of reform nor a result that would make Russian agriculture competitive in the twenty-first century. If we want to understand why the original goals of reform were not realized and perhaps why land reform went awry, it is necessary to consider the institutional constraints that flowed from the design of land reform during the Yeltsin period.

4

Politics and Property Rights in the Putin Period and Beyond

By the time Boris Yeltsin left the political scene at the end of 1999, myriad social and economic problems plagued the nation: widespread corruption, administrative fragmentation and a weak center, criminalization of the economy, an inability to collect tax revenues, significant economic contraction in both industry and agriculture, a deformed internal market and the rise of a feudal economic system, insecure property rights, chronic wage arrears and rising internal debt, and the lack of sufficient restructuring to make Russian industry competitive in the global market.∞ Some have argued that the economic recovery that began in the last year of Yeltsin’s rule was based on a ‘‘virtual economy’’—growth that stemmed from the devaluation of the ruble in 1998, a rise in the price of raw materials and, in particular, oil that filled state coffers, and value-destroying activity by enterprise managers that inflated growth rates.≤ When Vladimir Putin assumed the presidency in 2000, the domestic economic situation was grave, and agricultural conditions bordered on the catastrophic.≥ This chapter, similar to the others in Part 1, addresses the questions of formal institutions and property rights. In order to analyze property rights and land reform in the post-Yeltsin period, it deals with a number of subsidiary questions. (1) How did Putin’s policies affect agriculture and the value of agricultural land? (2) How did land reform legislation and property rights

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continue to evolve during the Putin period? (3) What was the mix of liberal and illiberal land reform policies during the Putin period, and how did they affect the land market? (4) What were some positive and negative developments in the Russian land market, including continuing impediments, during Putin’s term? (5) What is the trajectory of land reform and property rights as Russia moves from the Putin to the post-Putin era? The broad arguments of this chapter are threefold. First, despite a rebound in economic performance that included the agricultural sector, reform institutions retained several limitations on property rights that suggested that the design did not shed its illiberalism. In the end, both Yeltsin’s and Putin’s land reform policies contained significant restrictions on ownership and disposal of land. The second argument is that the reform legislation added by Putin to the base he inherited from Yeltsin directly reflected leadership priorities. Under Putin, political developments—a strengthening of the center, improved executive-legislative relations, a new distribution of power in the Duma attendant with the rise of a ‘‘party of power,’’ and a significant change in the balance of power between the president and the legislature—meant that Putin did not face the constraints that Yeltsin had faced and therefore was able to pass the land legislation that he wanted. Thus, whereas Yeltsin had to use his veto power to block unwanted versions of legislation, Putin was not encumbered in this manner, and instead the legislation that was adopted reflected the desires of the leadership. The third argument is that with greater clarity and specificity in property rights, Putin’s land reform legislation was a mix of liberal and illiberal policy initiatives.

A New Approach to Agriculture Under Putin Not only did Russia’s first two presidents operate in very different economic environments, but their approaches to agrarian and land reform differed considerably. Whereas Yeltsin’s approach to economic reform may be characterized as ‘‘creative destruction,’’ by the end of the 1990s the push for deconstructing Soviet-era institutions and policies was over. Putin instead pursued a strategy of ‘‘creative construction.’’ Putin’s priorities were to rebuild the nation’s economic strength and to create a stable base for continued growth that would make Russia economically competitive. Thus, Putin was interested in creating favorable conditions for economic actors to operate—witness the passage of a new tax code, banking reform, reform of bankruptcy laws, reform of customs laws, improved labor relations, and more secure property rights early in his first term as president. The ‘‘loud revolution’’ of the Yeltsin years, which pursued privatization as a

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mobilization campaign, was replaced by Putin’s ‘‘quiet revolution.’’∂ Although Putin’s revolution was quiet, the policies pursued since 2000 will shape domestic and international agrarian relations for the foreseeable future because the leadership of Dmitri Medvedev, first as deputy prime minister and then as president, suggests no significant departure from Putin’s economic strategies.∑ Putin’s quiet revolution in agriculture signaled that the politics of confrontation with the legislature had ended (a result of the rise of ‘‘managed democracy’’). But in addition to augmenting the strength of the political center, Putin significantly moderated agrarian policies by deradicalizing them in a way that Yeltsin never did. Thus, Putin’s historical role was very different from Yeltsin’s. Putin’s role was to bring stability to the nascent reform institutions that were begun during the era of creative destruction. The roots of the new approach to the agricultural sector may be traced to policies advocated by former Minister of Agriculture Viktor Semenov (March 1998–May 1999), who was not in office long enough to bring those policies to fruition.∏ The essence of Semenov’s ‘‘new course’’ was greater state support for agriculture and strategic intervention by the state in the agrarian sector when necessary. It has been Aleksei Gordeev—the longest-serving minister of agriculture in the short history of post-Soviet Russia (August 1999 to 2009)— who has led agriculture from its abyss and fulfilled many of Semenov’s ideas.π Overall, a broad-based strategy of state support for Russia’s agriculture was evident under Putin, who remained committed to improving agricultural performance throughout both of his terms. The first priority of the Putin administration was to improve the productive capacity of large farms, and early attention was paid to creating more favorable financial conditions for meeting that goal. To this end, in 2001 a state-owned and -operated agricultural bank (Rossel’khozbank) with many regional branches was opened to channel state credits and loans to agricultural producers. Other policies were adopted to help large farms: a state-backed crop insurance program was implemented, a consolidated agricultural tax was introduced that simplified the tax system and lowered the amount of tax paid by large farms, and a policy of state price supports for grain crops was enacted that helped stabilize wholesale prices in years of grain surplus.∫ In 2002 a program of financial renewal was introduced that helped large farms by restructuring their debt and writing off some penalties and fines. By April 2006 about 12,600 large farms had participated in the program, with R81 billion in farm debt restructured and R42.2 billion in penalties and fines written off.Ω As a result of this program and an increase in domestic food production, the percentage of unprofitable large farms declined from about 89 percent in 1998 to 42 percent in 2005, to 32 percent during 2006, and to 25 percent in 2007.∞≠

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In December 2006 a law titled ‘‘On the Development of Agriculture’’ was passed in the legislature and signed by Putin.∞∞ This law, which had been debated and discussed in the government for several years, was important because it specified the goals and conception of the state’s agrarian policies (article 5), as well as the measures the government would use to implement its goals (article 6). The only other similar legislation was the 1997 law titled ‘‘On the Regulation of the Agroindustrial Complex,’’ which passed in the Duma but was subsequently vetoed by President Yeltsin. The 2006 law defines the role of the state in agriculture and specifies the types of support that will be forthcoming in the years ahead. The law contains articles that envision state regulation of the domestic food market (article 8), state financial support in the form of credit and subsidies (article 11), state support in the form of crop insurance (article 12), state support for improving soil fertility (article 13), state intervention in the grain market through purchases and the use of price supports (article 14), and the participation of different food and agricultural unions in the formation of programs, legislation, and national reports (article 16). According to the law, by May 15 of each year the Ministry of Agriculture is to present a national report to the government and Parliament that details the implementation of the various programs during the previous year. In the 1990s, governmental resolutions regarding state support to agriculture were adopted but never implemented owing to revenue shortages; the 2006 law, however, envisaged a significant (50 percent) increase in budget support to agriculture starting in 2008 and increasing every year thereafter through 2012.∞≤ Furthermore, Putin’s concern for the agricultural sector was evidenced by front-page coverage of meetings between Putin and Gordeev in specialized agricultural papers,∞≥ by instructions from the presidential apparatus not to make concessions that would harm agriculture during negotiations with the WTO,∞∂ by the inclusion of agriculture in the National Project, with Putin suggesting that the agricultural program be extended beyond its original end date by three years,∞∑ by the significant increase in budgetary allotments to agriculture, and by Putin’s verbal promise in early 2007 that state resources would continue to be used to stimulate development in the agricultural sector.∞∏ In late 2007 the National Project in agriculture (called ‘‘The Development of the Agroindustrial Complex’’), was extended to encompass the years 2008–12 and envisioned state expenditures of several hundreds of billions of rubles. Moreover, note that agriculture will remain a priority and will continue to receive funding despite the financial crisis affecting Russia. At the end of December 2008 Putin said that it is necessary to retain credit and funding levels for agriculture, noting that though the entire economy was under stress,

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‘‘we will make an exception for agriculture and proceed so that the pressure will lessen on the agricultural sector.’’∞π Finally, under Putin state programs were introduced that were designed to assist the private sector (private farms and households). In order to assist private farmers, in 2004 a new program allowed private farmers to lease agricultural machinery at state-subsidized rates (large farms could participate also). This law was important because private farms were undermechanized, and often farmers could not afford to purchase agricultural machinery on their own due to the shortage of available private credit. In 2004 a new law on land mortgaging was adopted that allowed private farmers to mortgage privately owned land in order to raise capital to invest in production. In 2007, thirtyfive of Russia’s eighty-six regions had implemented pilot projects that provided financial credit based on land mortgaging.∞∫ Furthermore, in early 2007 a series of government resolutions was announced that would subsidize private farmers who raise different types of pedigreed livestock.∞Ω State assistance was also directed toward households, specifically private plot operators. The 2003 law on subsidiary agriculture freed them from taxation on the income earned from the sale of the food they produced. The program, called ‘‘Development of the Agroindustrial Complex,’’ contained provisions for granting credits to private plot operators for the purchase of farm animals.≤≠ In addition, at the end of 2006, a government program to help private plot operators was introduced that subsidized interest rates for twoand five-year loans from credit organizations.≤∞ In early 2007 Rossel’khozbank announced a policy that allowed private plot owners to mortgage land they owned in order to raise capital.≤≤ Thus, broad-based initiatives were intended to strengthen each of the main food-producing sectors and to increase the nation’s food output. With renewed attention to agriculture after Putin became president in 2000, agricultural production rebounded from its deep depression of the 1990s, so much so that Russia has become a significant exporter of grain.≤≥ The improvement in food production is shown in table 4.1, which indicates trends in the physical output of different food products from 1998 to 2007, and table 4.2, which illustrates sectoral growth in the value of output for the three major food producers. The growth rate within the private farm sector has been particularly impressive since 2000, suggesting that the sector may finally start to fulfill the hopes that reformers had in the early 1990s.≤∂ With state support, private farmers have become significant producers of several different food products—grain, sunflower seeds, and sugar beets.≤∑ The private farming sector remains weak in terms of animal husbandry, however. The 2006 census of agriculture found

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Table 4.1. Annual agricultural production, 1998–2007 (all categories of farms)

Grains (mil. tons) Sugar beets (mil. tons) Sunflower seeds (mil. tons) Potatoes (mil. tons) Vegetables (mil. tons) Meat and poultry (mil. tons, carcass weight) Milk (mil. tons) Eggs (billion)

1998– 1999

2000– 2001

2002– 2003

2004

2005

2006

2007

51.2 13.0 3.6

75.3 14.3 3.3

76.9 17.5 4.3

78.0 21.8 4.8

78.2 21.4 6.4

78.6 30.9 6.8

81.8 29.0 5.7

31.2 11.4 4.5

34.5 12.7 4.4

34.7 14.0 4.8

35.9 14.5 4.9

37.3 15.2 4.9

38.6 15.6 5.2

36.8 15.5 5.6

32.4 32.8

32.4 34.4

33.4 36.3

31.9 35.7

32.2 35.8

31.0 37.9

32.2 37.8

Sources: Rossiiskii statisticheskii ezhegodnik (Moscow: Goskomstat, 1999), 363–71; Agropromyshlennyi kompleks Rossii (Moscow: Goskomstat, 2001), 61–81; Rossiia v tsifrakh (Moscow: Goskomstat, 2004), 209–11; www.mcx.ru; www.gks.ru/free; A. I. Manellia, ‘‘Sel’skoe khoziaistvo Rossii v 2006 godu,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 4 (April 2007): 59–62. Note: Data for 1998–1999, 2000–2001, and 2002–2003 are averages for the two years. Grain totals are for amounts after cleaning.

that 76 percent of private farms had no beef cattle, and another 10 percent had fewer than five head of cattle. Only 2.7 percent of private farms had fifty-one or more head of cattle.≤∏ The effects of state assistance programs and improved agricultural performance on land reform and property rights, though indirect, were significant. Both positive and negative implications are evident. On the positive side, as agriculture became profitable, agricultural land was increasingly perceived as valuable, in contrast to the Yeltsin period, when, for most households and large farms, agricultural land held little value and may have been a burden (although on an aggregate basis land tax revenues were important for the local and federal budgets). The increase in the value of agricultural land is seen in the increase in the land tax and revenues from it. Reflecting national trends, the land tax more than tripled in Rostov oblast, for example, from an average of 10.3 rubles per hectare of agricultural land in 2000 to 37.1 rubles in 2005.≤π Where regional agricultural land values are highest—on land with proximity to a large urban center—the land tax constitutes a significant percentage of farm expenses and also influences rental rates for agricultural land. As a result of increasing land values, R30.6 billion in land tax revenue was received by the

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Table 4.2. Growth rate in value of agricultural production by sector, 2000–2007 (in percent)

Growth rate for all producers within agricultural sector Growth rate for large agricultural enterprises Growth rate for private farms Growth rate for households

2000

2001

2002

2003

2004

2005

2006

2007

7.7

7.5

1.5

1.3

3.0

2.3

3.6

3.3

6.5

11.1

1.9

–3.9

4.8

3.1

4.3

4.9

21.5

36.1

16.6

11.4

30.7

10.6

18.0

4.1

8.0

3.0

.1

4.2

–.4

.7

1.6

2.0

Sources: Rossiia v tsifrakh (Moscow: Rosstat, 2005), 211; Rossiia v tsifrakh (Moscow: Rosstat, 2006), 223; Agropromyshlennyi kompleks Rossii v 2005 godu (Moscow: Rosstat, 2006), 46; A. I. Manellia, ‘‘Sel’skoe khoziaistvo Rossii v 2006 godu,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 4 (April 2007): 59–62; Rossiia v tsifrakh (Moscow: Rosstat, 2007), 232; and www.gks.ru. Note: Growth is expressed as change in the value of output from the previous year, measured in rubles. Private farms include individual enterprises.

government in the first half of 2007, 2.4 times the amount received in 2006.≤∫ The increase in land values brought the economic benefit of allowing food producers to raise capital by mortgaging their land. A negative aspect of increased land values is that ‘‘land wars’’ have broken out between so-called raiders and land shareholders in which the latter are dispossessed of their ‘‘rights’’ to land and land use. This postprivatization occurrence is discussed in more detail below.

The Law on Agricultural Land Transactions Beyond a new approach to the agricultural economy, the institutional design of land reform was modified during Putin’s term. The major additions to land legislation during the Putin period were the 2001 Land Code, which is discussed in detail in appendix C, and the Law on Agricultural Land Transactions. Because the 2001 Land Code dealt mainly with urban land and did not specify the procedure for agricultural land transactions, a separate law regulating such transactions was necessary. Therefore, among the legislative acts that followed adoption of the Land Code, none was more important to the overall design of land reform than the law regulating turnover of agricultural land. Disagreement about agricultural land sales was the central political issue

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that prevented the adoption of a new Land Code during the 1990s. By 2002, only interests located on the far left of the political spectrum favored a complete ban on agricultural land sales, and only the far right favored a completely unregulated land market. Both were either politically weak (the far Right) or were in the process of being weakened (the far Left). Early in the first Putin term, a centrist position was emerging among deputies in the Duma, a position that favored land sales with some restrictions. This development was characterized by the statement of Boris Nemtsov, former governor of Nizhnii Novgorod oblast and leader of the liberal Duma faction called the Union of Right Forces, when he said that ‘‘we are for a law on land, but we are for strict state regulation in two aspects. The goal of land use: land should be used for its purpose. And we are against monopolization and reselling, against latifundia. . . . We insist that the government introduce a law on turnover of agricultural land with strict state regulation. I want to emphasize this another time.’’≤Ω Moreover, there is evidence that a regulated rural land market was preferred by the populace as well. A large survey conducted in 1997–98 by the Institute of Sociology in Kaluga and the Institute on Land Relations and Tenure in Moscow interviewed a total of 5,608 persons.≥≠ Respondents showed very little support for an unregulated rural land market and an overwhelming preference for a rural land market with restrictions (76 percent). Only about one in five (17.5 percent) answered that a rural land market was not needed at all. Elite preferences reflected the entrenched feeling that land should belong to those who work it and that farmland should remain in agricultural use. These popular views ‘‘percolated up’’ so by 2002 there was an emerging consensus among parties, elites, and the population in favor of a land market, and in the case of farmland, a regulated one. With this political and social environment in mind, the final content of the Law on Agricultural Land Transactions becomes easier to understand. The Law on Agricultural Land Transactions, which was adopted in 2002 and entered into force in January 2003, consists of four chapters and twenty articles and regulates transactions involving both real agricultural land and land shares. Other types of land transactions are regulated by the Land Code or other federal legislation. For all of the extended controversy surrounding agricultural land sales, the law was hardly a revolutionary piece of legislation, as noted by Eugenia Serova, who argued that ‘‘the new land law does not herald a revolutionary change either in Russia’s agricultural or agrarian structure.’’≥∞ In fact, certain aspects were decidedly conservative. For example, the law maintained that land shares were common property, which meant that ownership was collective, a fact that complicated the process of withdrawal when one of the owners wanted to convert his land shares to real land to start

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a private farm.≥≤ Land shareholders who invested their shares in the equity of a large farm lost their property rights to land.≥≥ Moreover, regarding transactions, the law may be understood as a restrictive piece of legislation that substituted government involvement for market-based processes, created the possibility of bureaucratic inconsistencies, produced government intervention that removed direct contact between buyer and seller, and diminished the role of supply and demand. Rather than analyze each article of the law, the discussion below is thematic and concentrates on important aspects of the law that directly concern property rights. Note at the outset that the law does not regulate land transactions involving small plots. In Russia, every type of plot has to be registered for a specific use. Certain types of usage are regulated by the Land Code, not the 2002 law. Specifically, article 1, point 1, indicates that land plots used by individuals for collective or individual vegetable or fruit gardening—sadovodstvo or ogorodnichstvo—dacha plots, individual housing construction, operation of a private plot, or the construction of rural buildings are not governed by the Law on Agricultural Land Transactions. These types of uses generally involve very small areas.≥∂ The law does regulate transactions involving agricultural land owned by private farmers and by large farms, in other words, agricultural land that is not registered for one of the individual uses indicated above. Thus, this law was directed primarily at transactions involving large tracts of land, the kind most likely to lead to significant economic transformation or the creation of oligarchic capitalism in the countryside. Perhaps the law was intended to reflect Putin’s attitude concerning oligarchs, toward whom Putin can hardly be said to have been favorably inclined. Just before he was elected president in March 2000, he was quoted as saying, ‘‘These people who fuse power and capital: there will be no oligarchs of this kind as a class.’’≥∑ PASSAGE OF THE LAW

Putin’s ability to address the design of land reform was strengthened by changes in the political balance after the 1999 Duma election. The shift in favor of Putin allowed adoption of the Land Code, although in the end it was a rather mundane document. Working with United Russia in the Duma, Putin could be assured of passing the legislation he wanted, and this advantage was strengthened by his adopting a centrist position in agricultural policy that successfully co-opted some of the policy positions of the Left. Once the Land Code was adopted in 2001, political attention turned to regulating agricultural land sales.≥∏ The Putin government was able to pass in a few short months a bill that had held up adoption of the Land Code for several years, reflecting the growing strength of the Kremlin vis-à-vis the legislature, Putin’s

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popularity as president, and the weakening of the Leftist opposition.≥π Therefore, Putin had both political support in the Duma and a public mandate. In other words, the political environment was conducive for Putin to obtain whatever type of land reform legislation he wanted.≥∫ In February 2002 a draft law was submitted by the government to the Duma, and in March 2002 a draft was published and began to be debated.≥Ω The bill was sent to the regions for comment, and during April 2002, a sharp debate occurred about whether foreigners should be allowed to buy agricultural land, and if so, how much. Numerous articles appeared in the agricultural press by regional leaders, academics, and ordinary people about sales to foreigners, as well as the maximum size of land holdings and the reasons why land might be taken from its owner. Reflecting both conservatism and a nationalist tint that would subsequently grow stronger, on more than one occasion in April 2002 Putin voiced his opinion that sale of land to foreigners was not something that should be rushed into, and he urged a cautious approach.∂≠ After a few weeks of discussion and debate, on May 16, 2002, the Duma considered seven different bills concerning agricultural land transactions. The government’s version of the law prohibited foreign ownership in border regions, according to a list established by the president.∂∞ The government’s bill, with 256 yes votes, was the only one that received the necessary number of votes. In second place, but falling short of the 226 votes required for passsage, was the version backed by the Duma deputies in the Agroindustrial group, which received 146 votes.∂≤ The Duma, not wanting a conflict with the Kremlin, passed the first reading of the government’s version. Prior to a plenary meeting scheduled for June 19, 2002, a working group of Duma deputies from the agrarian committee was successful in convincing the government to revise its position concerning the maximum amount of land that could be owned by an individual. The compromise reduced the amount of land that could be owned by one person, his family, or his company (if he owned a controlling share) from 35 percent of a raion’s agricultural land to 10 percent.∂≥ On the eve of the plenary meeting, the Duma faction known as the ‘‘People’s Deputy’’ announced that it would only support the draft law if the sale of land to foreigners was forbidden.∂∂ On June 19 the Duma plenary meeting was held in order to finalize the amendments suggested by Duma deputies, Duma factions, and regional governments. Special attention was paid to the right of foreigners to purchase agricultural land. Two ideas were considered. The first would allow regions to decide whether to allow sales to foreigners. The second was to allow foreigners only to lease agricultural land. On June 21 the second reading of the government’s bill passed by a vote of 245 to 150, with three abstentions. This version banned sale of agricultural

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land to foreigners and to firms in which foreigners hold a majority stake, instead allowing foreigners to lease land for up to forty-nine years.∂∑ A few days later, on June 26, the government’s bill passed its third and final reading by a vote of 258–149, with five abstentions.∂∏ The final version approved by the Duma was sent to the Federation Council, where it passed on July 10. President Putin signed the bill on July 24, and the law entered into force six months later, in January 2003.∂π The law was subsequently amended numerous times. The discussion below is based on the amended law as it existed in early 2007.∂∫ LANDOWNERSHIP

Only Russian citizens and juridical persons may own agricultural land as private property. As stipulated in the Land Code, some types of nonurban land, for example, national parks and nature reserves, may not be privatized. The Law on Agricultural Land Transactions also stipulates that state and municipal land used as pasture for reindeer and other pastureland in the far north may only be leased, not purchased or privatized (article 1). The 2001 Land Code permitted foreigners and persons without citizenship to own and use urban land in Russia with restrictions. Article 3 of the Law on Agricultural Land Transactions, however, established that foreigners, foreign firms, persons without citizenship, and Russian agricultural firms in which foreigners own more than 50 percent of the capital stock may only lease agricultural land. THE SALE OF PRIVATELY OWNED AGRICULTURAL LAND

The sale of privately owned agricultural land is governed by article 8 of the law. Note, however, that the sales process described below does not apply to agricultural land used for individual housing, for construction of garages, for subsidiary and dacha agricultural production, for collective gardens and orchards, and for assorted buildings. Moreover, these types of land plots— which tend to be very small—make up the bulk of purchase transactions concluded between individuals, so this component of the land market remains outside the scope of the law. In order for a land transaction to be completed, the land plot needs to be registered in the local State Cadastre office.∂Ω The law states that organs of local government (raion or village administrations) have preferential rights to buy agricultural land—in essence, the right of first refusal. The seller is required to submit a written letter, or notification (izveshchenie), to the executive organ of power of the region or to the local government stating his intent to sell his land. This notification should indicate the price, size, and location of the plot. The izveshchenie should be delivered with a return receipt or by

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registered mail. The regional government has one month to exercise its right to purchase the land. If it does not do so or if it fails to inform the seller of its intent to acquire the land plot, then the seller has one year to sell the land to a third party at a price not lower than that which was indicated in the letter of intent submitted to the regional government. The one-year term starts with the submission of the letter of intent to the regional government. Land that is not purchased by a regional government may be sold to another party as a personto-person transaction, at auction, or competitive bidding. A transaction that violates the process will be nullified. In essence, the selling process contains only indirect negotiation concerning price. If the seller decides to sell the plot at a price lower than that which was indicated in the original notification, the seller is obligated to submit a new izveshchenie, and again the regional administration has a month to exercise its right of first refusal. To illustrate, say a person wanted to sell his land plot for price A. The regional government has one month to exercise its right of first refusal at the stated price. If it does not want the land at that price, then the seller may try to sell it for up to a year, but not at a price lower than the one indicated in the notification. If the land does not sell, the seller can lower the original price to new price B, and again the regional government has one month to exercise its right of first refusal at the lower price. LEASED LAND

Article 9 regulates the leasing of agricultural land. The amount of agricultural land that may be leased is not limited in size, but the term of the lease may not exceed forty-nine years. Article 10 allows municipal land that has been leased to be converted to private ownership on the expiration of the lease, according to the purchase process described below. Article 10, point 4 allows the lessee (whether an individual or a company) to purchase municipal land after a three-year period dating from the conclusion of the lease agreement. The lessee submits an application to the regional government or local administration, which decides within thirty days whether to grant the request. If the decision is positive, the leased land may be purchased at the current market value. Article 16 states that lease agreements that were concluded prior to the introduction of the law should be brought into compliance with article 9, point 2 by January 2009. Article 9, point 2 states that lease agreements for land held in joint ownership have to be certified by the local government or notary, or in other words, reregistered. The reregistration process has caused considerable confusion among owners due to myriad complications. In 2008 the deadline for reregistration of land shares was extended again, this time to

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January 1, 2010. Land share holders—including large farms, small individual land share holders, and private farms—must reregister their land shares by this date or lose their legal rights to this land.∑≠ THE DIVISION OF JOINTLY OWNED LAND SHARES

Article 12 regulates various transactions involving land shares that have not been distributed as real land and are held as joint property. If the number of joint owners is five or less, the transaction process is governed by the Civil Code. If the number of joint owners is more than five, the Civil Code and articles 13 and 14 of this law apply. Certain transactions are permitted without the need to divide the jointly owned land share among the respective owners. For example, if it is being used by an agricultural enterprise or private farmer, the owner has the right to dispose of his portion of the total land share by bequeathing it, selling it, giving it as a gift to the other joint owners, investing it in the capital stock of a large farm, placing it in a trust (doveritel’noe upravlenie), or selling it to the agricultural enterprise or to the private farmer that is using the land plot. If jointly owned land shares were invested in a large farm or in a trust, the shares do not need to be registered with the state. Other types of transactions—for instance, sale of a portion to an outsider who is not using the land—is permitted only after the jointly owned land share has been apportioned among its owners or if all the joint owners agree and sell the land share as a whole. If a joint owner of a share sells his portion to another of its owners, to the agricultural enterprise, or to the private farmer that is using the land plot, the other owners need not be informed of the intent to sell his portion of an undivided land share. Article 13 regulates the division of jointly owned land shares that have been distributed as real land for the purpose of increasing the size of a private plot or for private farming. An owner wishing to divide the jointly owned land share is obligated to inform other owners of his intent. The location and borders of the land are decided by a general meeting of the owners. If the owners do not agree with the proposal, the person wishing to receive a land allotment must submit a written notification to the owners or publish his intent to divide the land share in a source of mass communication. The notification should indicate the location and size of the share division and the compensation due to the other owners. Other share owners have one month to object to the proposed location and compensation. If no objections are raised within thirty days, then the proposal to divide the land is considered accepted. Disagreements about the location of the land to be allocated or amount of compensation are to be resolved through mediation, procedures for which are being established by the Russian govern-

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ment. In the case that mediation is unsuccessful, the issue will be resolved in court. If the court decides against the petitioner, then he will not receive the land he desired. One constraint on the division of land shares is the size of the plot. Article 4 states that land transactions (including division of land shares) will not be permitted if the resulting land plot is below the established regional minimum size. In addition, land allocations resulting from conversion of land shares will not be permitted for irrigated and reclaimed land if the size of the plot falls below the regional minimum. This provision of the law is clearly intended to keep large farms from being fractured into hundreds of small plots.

Putin and Property Rights: Liberal or Illiberal? In addition to the Land Code and the Law on Agricultural Land Transactions, other legislative acts were adopted that, when taken together, represent the corpus of land legislation passed during Putin’s term and on the basis of which an assessment of his land policies is possible. Early on, a special area of concern was the specification of which land could be owned, or the demarcation of state and private land. One of the first pieces of legislation that Putin signed as acting president was the Law on State Cadastre of January 2, 2000. More generally, throughout 2000 various governmental resolutions concerning cadastering were adopted, culminating in a June 2001 law on surveying, a July 2001 law that demarcated state, municipal, and private lands, and several additional government resolutions on land cadastering passed during 2002. Once the Land Code was adopted, other pieces of federal legislation followed in subsequent years (see appendix B). New laws on private farming and private plots were signed and entered into force in 2003 that replaced existing laws from the Soviet period. The two laws clarified the tax implications of these categories of land use, specified property rights and ownership in these categories of land use, and in the case of private plots, established maximum size limits.∑∞ A 2004 law on land mortgaging replaced the original 1998 law. Another law established the procedure for converting land from one type of use to another was adopted in late 2004—in essence a law on changes in land zoning. It specified the documents needed and the procedure used to convert different types of land to a new category (for example, how to convert protected lands, land held in reserve, forest land, and land used for industry, defense, transportation, communications, or energy).∑≤ In 2006 a flurry of legislative activity occurred that was relevant to agricultural land. In April a government resolution amended an April 2000 resolution concerning the state cadastre valuation of land. In that same month,

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another government resolution was issued that allowed the leasing or lifetime use of land that had been zoned for military use by individuals or companies.∑≥ Also in April a new organization called the Russian Land Union was formed in order to lobby for the interests and legal rights of land shareholders, although the impact of this new union was considered minuscule.∑∂ In June, a government resolution amended article 30 of the law titled ‘‘On State Registration of Rights of Real Estate and Real Estate Transactions’’ by clarifying which documents are necessary for registration and under what circumstances.∑∑ In November 2006 Putin signed an amended version of the law titled ‘‘On Agricultural Cooperatives’’ that prohibited the sale of land shares to persons who were not members of the cooperative.∑∏ In December 2006 the Duma passed the first reading of an amended law titled ‘‘On Agricultural Land Transactions’’ that would extend for two years the amount of time land shareholders would have to convert land shares to specific pieces of land.∑π This bill was important because there had been numerous complaints and protests by land shareholders who had experienced difficulty making the conversion as the original law required, and they were concerned that they would lose their land rights.∑∫ In 2007 the chairman of the Duma’s Committee on Agrarian Policy, Gennadi Kulik, indicated that the legislature’s priorities were to define a procedure for voluntarily ending land use by individuals, to amend legislation that would reduce the size of the required quorum for the distribution of land in ownership in case of farm bankruptcy, and to define the rights of land shareholders.∑Ω Thus the base of land legislation was expanded in important ways, although these legislative acts flew under the radar of most Western analysts. Nonetheless, they clarified rules and procedures for land use, that is, they specified in greater detail the design of land reform. The question is, on the whole, may the legislative changes introduced under Putin be considered liberal or illiberal? The answer is a mixture: a strong dose of illiberalism with small portions of liberalism. On one hand, Putin oversaw legislation that added clarity to existing legislation and specificity to various procedures involving land transactions. The legislation adopted was not completely illiberal because it did not deprive rural dwellers of their property rights and in some ways actually strengthened them. It is only fair to acknowledge also that some liberalizing steps were adopted that benefited small landowners. For example, private plot users were allowed to mortgage their land in order to raise capital for investment or production. The law on land mortgaging was extended and took on real meaning under Putin—in particular, the state bank, Rossel’khozbank, extended millions of rubles of credit with land used as collateral. Private plot holders were included in the National Project and were eligible to receive

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subsidized credits, thereby facilitating increased agricultural production, which in turn increased land values and improved rural households’ incomes. Further, there is little evidence of state incursions on private landownership, in contrast to the energy sector, where private and state interests clashed. Moreover, Putin acted to lessen the economic impact of excessive land fragmentation: article 4 of the Law on Agricultural Transactions stipulates that regions will define minimum sizes of plots of agricultural land involved in a transaction. Land transactions will not be permitted if the size of the plot is below the established regional minimum size, the purpose of which is to prevent excessive fragmentation. Because the law does not apply to most individuals’ use of land plots, however, the size requirement does not apply to small-scale agriculture— private plots or collective gardening—and thus a significant sector of the rural land market falls outside the purview of this legislation. Finally, the Law on Agricultural Transactions requires that leases of land shares be converted to leases of real land, which implies the conversion of shares to land (the deadline for implementation was continually pushed back during Putin’s two terms). On the other hand, it would be fair to conclude that, similar to Yeltsin’s, Putin’s land reform legislation was more illiberal than liberal. And this conclusion should not be a surprise because the general line of political development was perceived by many to be a retreat from democracy and a move toward a more authoritarian system of governance—a system of managed democracy in which political competition is controlled and emasculated. In short, an increasingly illiberal regime pursued illiberal land legislation. Although the Law on Agricultural Land Transactions was modified so that by 2007 it was a bit less restrictive than the original 2002 version, it still represented a conservative approach to land reform.∏≠ Putin’s land legislation may be considered more illiberal than not because significant restrictions and limitations were placed on users, sellers, and buyers of land. These limitations may be summarized as follows: ∞ a minimum was placed on the size of a plot involved in a land transaction ∞ a limit was placed on the time in which to conclude a transaction based on the original asking price ∞ a limit was placed on the time for which land could be offered for sale ∞ a restriction was placed on who will be the starting buyer of land plots ∞ no direct negotiation between a seller and a buyer was allowed ∞ foreign ownership of agricultural land was prohibited ∞ involvement of local governments was made mandatory ∞ disposal rights for land shares within a cooperative were limited ∞ disposal rights for divided and undivided land shares were constrained (joint agreement is necessary)

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∞ land shares within cooperatives had to be sold to other members of the cooperative

In sum, land disposal rights remained limited in ways that do not befit a market economy. Moreover, Minister of Agriculture Gordeev explicitly advocated tighter restrictions on agricultural land usage and land markets.∏∞ If one keeps in mind the demographic structure of the rural population and its impact on the rural economy, it is not clear that even the conversion of land shares to real land will fundamentally change the primary incentive to lease land back to a large farm. Considering that a central political battle for many years involved property rights in agricultural land, the emergent design, as reflected in laws and policies, is disappointing if one expected market economics to be the guiding principle.

Is Illiberalism the Only Problem? The Status of the Contemporary Land Market If the intent was to create a land reform regime that included a transparent market that would easily transfer land to the most effective users, then the illiberal nature of land legislation enacted under Putin frustrated those goals. The revolutionary impulses of the Yeltsin era were replaced by impulses for stability, which in turn led predictably to more bureaucratism. The Law on Agricultural Land Transactions stultifies market forces by making local government the intermediary during the land sale process. The obligatory involvement of local governments brings the inherent complexities and inefficiencies of bureaucracies and exposes the entire process to abuse and corruption. The core issue surrounding land legislation from the beginning of the reform period was to create conditions for turnover of land through the introduction of a land market. From an economic standpoint, turnover was important so that land could be obtained by the most efficient and productive users, based on the premise that growth in the agricultural sector would contribute to broader economic growth in the nation. From a political standpoint, turnover was important for reforming the Soviet-era social structure of the countryside. Those two aspects are examined in detail in Part 2. This section examines the status of the land market at the macro-level. During the 1990s Russia developed a rural land market, but it was a limited market. It was dominated by transactions involving plots of very small mean sizes, which meant that the land market did not bring significant economic and social transformation. It was hoped that a Land Code and other supporting legislation would facilitate the turnover of larger land tracts and lead to social

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transformation. This has occurred to an extent, but not exactly in the way that reformers originally expected. It was hoped that once Russia had a law that governed the procedure for land transactions, agriculture would benefit from higher growth, and buyers and sellers would benefit from greater transparency and reduced transaction costs.∏≤ What, then, may be concluded as to the effects of the Law on Agricultural Land Transactions—did it yield the hopedfor effects? The answer is mixed, for the law has brought both positive and negative developments. POSITIVE DEVELOPMENTS IN THE AGRICULTURAL LAND MARKET

Three main positive developments appeared in the agricultural land market during the Putin period.∏≥ First was an increase in registered purchase transactions, reflecting both a growing economy and increased procedural clarity. This increase may be measured from either the end of the Yeltsin period in 1999 (see table 3.1) or from 2003, when the Law on Agricultural Land Transactions took effect (see table 4.3). Official data for land transactions show that the total number of purchases by individuals and companies increased from 219,771 in 1999 to 405,670. Comparing 1999 to 2007 (the last year for which data were available as this book was completed), one sees that the number of purchases by individuals increased from 290,268 to 383,818. The amount of land involved in an average purchase, however, remained small— .45 hectares for purchases made by individuals. The data also suggest a positive impact of the 2001 Land Code and Law on Agricultural Transactions. Purchases by individuals increased by 66,000 during 2003–7, and the number of transactions by companies grew by more than 16,000 during the same period. The data given in the table do not include transactions involving nonmonetary transfers such as gift, inheritance, or barter transactions. The second positive development was an increase in land purchases by companies and banks, reflecting the perception that land is a good investment and has value, particularly in regions with favorable agricultural conditions such as Stavropol krai.∏∂ The number of purchase transactions by ‘‘juridical persons’’ (companies) increased from 1,503 in 1999 to 21,852 in 2007, and the average size of a transaction was almost 18 hectares.∏∑ The increase in land purchases by companies may be considered positive because these large farms have higher levels of mechanization, produce more food per unit of labor, and are better able to produce surplus for export. These are the types of transactions that bring economic transformation because presumably strong farms buy land and weak farms shed land. Some agricultural enterprises were reported to be buying up land shares and creating one large farm,∏∏ and as a result, so-called

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Table 4.3. Effects of land reform policies: Land purchases, 2000–2007 (number of transactions)

Purchases of land from municipal governments Purchases by individuals Purchases by companies

2000

2001

2002

2003

2004

2005

2007

23,969

24,465

45,321

96,876

150,793

154,702

233,706

313,367

304,674

319,850

317,997

349,043

360,894

383,818

2,141

1,018

1,658

5,535

8,894

17,321

21,852

Sources: Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2001 godu (Moscow: Federal Land Cadastre Service, 2002), 105, 111; Svedeniia o sdelkakh s zemlei i platezhakh za zemliu (Moscow: Federal Land Cadastre Service, 2003), 25, 28; Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2005 godu (Moscow: Federal’noe agentstvo kadastra ob’ektov nedvizhimosti, 2006), 147, 150; Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2007 godu (Moscow: Federal’noe agentstvo kadastra ob’ektov nedvizhimosti, 2008), 175, 184; author’s calculations.

new agricultural operators (NAOs) are emerging in the countryside.∏π In Russian-language agricultural journals these farms are referred to as ‘‘holding companies’’; they came into existence early in the Putin administration as part of a process of merging large farms that were weak with large farms that were financially strong. So these ‘‘super-large farms’’ are essentially outgrowths of large farming enterprises that existed in the Soviet period but are far fewer in number. Thus, whereas some large enterprises were divided into smaller farms based on the Nizhnii Novgorod model of farm privatization during the 1990s, a contrary trend, particularly since 2001, is the emergence of super-large farms.∏∫ These farms are notable for the amount of land they control (fifty thousand hectares or more, both leased and owned) and for the replacement of equity ownership by farm members with equity ownership by outside investors and companies.∏Ω According to one set of researchers, in some oblasts there are raions where almost all large farms are controlled by a single holding company. In other oblasts, the concentration of land under control of outside investors and NAOs is very high—72 percent in Belgorod oblast, 56 percent in Orel oblast—leading the authors to conclude that ‘‘Russia may re-establish latifundia owned, not by the nobility, but by corporations that may or may not have a direct relationship to food and fiber production.’’π≠ The third positive development has been the willingness of banks to accept land as collateral for loans, that is, to implement the law that permits the

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mortgaging of privately owned land. In 2006 Rossel’khozbank distributed twenty times more land-backed loans than it did in 2005, and in 2007 the bank distributed more than R5.4 billion in credits for 270,000 land plots.π∞ This development is important because it opens up new means of generating capital for investment in agricultural production, particularly for private farmers. NEGATIVE DEVELOPMENTS IN THE AGRICULTURAL LAND MARKET

There have also been negative developments in the evolution of the Russian land market. One of them has been a process whereby agricultural workers are becoming dispossessed of their land shares in recent years. At the end of 2006, agricultural land accounted for 97 percent of all privatized land in the Russian Federation; and of privately owned agricultural land, land shares accounted for 89 percent.π≤ In other words, most privatization of rural land has occurred through the distribution of land shares. But the ownership of land by rural dwellers, even in the form of land shares, has been under assault in recent years. Allina-Pisano argues that dispossession was inherent in the land distribution process and was not a postdistribution phenomenon as most analysts believe. She asserts that ‘‘land privatization in the Black Earth was a mechanism by which rural people were dispossessed of property they had built or maintained under socialism.’’π≥ In essence, she appears to reject the notion of contemporary land reform as a ‘‘giving reform’’ and instead views it as ‘‘taking reform,’’ perhaps similar to collectivization but without the use of force and violence. Her view is not really accurate, since land reform for most households led to two occurrences: (1) the conversion to private ownership of the household private plot that was a holdover from the Soviet period (this land is not commonly dispossessed) and (2) the receipt of land shares, that is, additional rights to land usage. As we have seen, these are commonly leased out, but in other cases households used this land to increase their well-being. Thus, of the two categories of agricultural land available to rural households, only land shares were subject to dispossession. Therefore, the ‘‘giving’’ aspect of land reform provided opportunities to acquire new land and land rights while privatizing small plots that had been assigned during Soviet socialism. As agricultural land has become more valuable, particularly near large cities, reform has had unintended consequences. One newspaper described a ‘‘war’’ being played out over agricultural land, with well-heeled investors holding the advantage. They are able to buy up whole farms, thereby becoming owners of land shares, from which point the common person is dispossessed of his land; if an individual takes the case to court an investor has the financial means to ‘‘influence’’ the decision in his favor.π∂ In short, ordinary

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households do not have the financial, legal, or political resources to win the war over land with wealthy urbanites. Today, urban ‘‘raiders’’ with money are buying up land shares and agricultural land, thereby dispossessing ordinary rural dwellers of their rights to land. As Minister of Agriculture Gordeev describes it, ‘‘A new type of raiding has appeared. People with money arrive, with lawyers, and together with all the share owners they sit in a bus, conducting registration. The shares are entered into some kind of auction and are bought. The new ‘owners’ summon the director of the farm and say—goodbye, this land is no longer yours, and we have other plans for it.’’π∑ One specific example of this type of occurrence comes from Shyolkovskii raion, located thirty kilometers outside of Moscow, where residents from the city of Moscow were buying up land shares. One resident of the raion recounted the situation: ‘‘In 2004 in our village such people began to buy up land shares. For one share they gave $2,500, a share is .83 hectares. For three years I did not see my salary. And here a cashier appears, gives money, dollars. I would be able to get 500 dollars for 83 sotki.’’π∏ A farm manager in the same raion told a similar story: ‘‘Two years ago a majority of land shares were bought up, and these companies are very far removed from production, they took the land to build resorts, leaving the farm enterprise without any land.’’ππ Although ordinary rural dwellers are dispossessed of their land shares by these processes, they also benefit from the prices being offered by ‘‘raiders.’’ Sel’skaia zhizn’ reported that a Moscow company approached land shareholders employed in a large farm on the outskirts of the city of Yaroslavl’. In 2006 they offered R10,000 for each land share. Subsequently the price was increased to R30,000, but when the company was still unable to gain a majority share of the farm’s land, the price was increased to R200,000 per share. At this price more than two hundred of the farm’s land shareholders agreed to lease their rights to the company, but it was not enough, and so the price was increased to R600,000 for land shares held by workers and R350,000 for those held by pensioners.π∫ This anecdote illustrates the transitional nature of the land market and its psychological effects. The prices offered by ‘‘raiders’’ to land shareholders far exceed the value of the money (or income in-kind, which is more common) they would receive from renting out their land to a large farm. This is particularly true outside the black earth zone of Russia or where abandoned agricultural land is prevalent. Nonetheless, people often feel that their sense of justice has been violated. Although the transfer of land to different owners and different users is inherent in economic development, those dispossessed of their land shares are left psychologically dissatisfied, even if the benefit to their bottom line brings a degree of economic security.πΩ

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Thus, once agricultural land was perceived to have economic value—an indirect result of Putin’s policy approach to agriculture—incentives to obtain it increased. Minister of Agriculture Gordeev has indicated that steps need to be taken to protect property rights of land shareholders and implied that greater regulation of the land market by the state is required. CONTINUING IMPEDIMENTS

Although millions of land transactions occur annually, there are several continuing impediments to the agricultural land market that warrant discussion. During the 1990s a major obstacle was the lack of a national Land Code and supporting legislation that spelled out the procedures for land transactions. As a consequence, there was considerable confusion among the populace (and officials) as to what was permissible, giving rise to a popular section in some agricultural newspapers devoted to answering legal questions regarding land. Today, some of the old impediments remain and new ones have emerged during the Putin period. In addition to a reform design that placed restrictions on the freedom of land disposal, other factors affect the Russian land market. The discussion below focuses on several important factors that have hindered and continue to hinder the development of the agricultural land market. 1. Financial wherewithal. One of the factors that has limited the agricultural land market is the financial ability of rural dwellers to buy plots of land of substantial size. It is important to remember that in the 1990s the Russian land market was not defined by land speculation or by land as a tradable commodity but rather was primarily a market of land users.∫≠ Contemporary survey data gathered by Russian scholars show that the primary motivation for individuals to obtain agricultural land continues to be food production.∫∞ When a person wants to dispose of his land shares, reform legislation requires that the first opportunity to obtain them be given to other members of the large farm or cooperative. Yet the farm workforce as a whole was and remains quite poor as average agricultural workers’ incomes declined to 30–40 percent of average urban incomes in the 1990s. Under Putin agricultural workers remained among the least well compensated compared to other sectors of the economy. In the 1990s in particular, because land share owners tended to be poor and demand for rural land was often low owing to the unprofitability of agriculture, there was actually a disincentive to accept and register land shares because the net result could be harmful economically—the recipient would have to pay the land tax, but the land would not necessarily lead to an increase in income.∫≤ In other cases, land shares were sold or given away due to the lack of money to meet expenses. Under Putin there was a significant increase in the nominal and real prices of agricultural land, especially in areas close to large

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cities, thereby preventing many rural dwellers from being able to purchase land. 2. Demand for land by individuals. Although agricultural land has become more valuable and is a target of opportunity for investors, a second impediment concerns demand for agricultural land by individuals. One Russian expert estimates that no more than 5 percent of Russia’s agricultural land is involved in a transaction annually.∫≥ There are several reasons why demand for rural land was depressed in the 1990s and remains so today. Rural dwellers already have access to land: they can convert their own private or garden plot to private property, obtain free use of land from a large farm, or obtain it from raion land distribution funds. The question, therefore, is, Why buy or lease land when free land is available? Given the constraints on household human capital, even with modest land holdings the average household has sufficient land for subsistence. Thus, demand for land from rural dwellers has been low. 3. Rural infrastructure. The agricultural land market is still hindered by the absence of adequate rural infrastructure. Roads, electricity, running water, central heat, and indoor plumbing were (and are) often absent in rural localities.∫∂ This is important because land buyers have an acute sensitivity to location and access to ‘‘amenities’’ such as electricity, roads, and sewage. Land that is well-located and has more amenities is in higher demand. Surveys have shown that land buyers are acutely aware of the quality of land, of its proximity to transportation and urban centers, whether it has water and electric service and other amenities. Better-serviced and higherquality land, whether leased or purchased, experiences more demand than supply in rural areas. Less well-serviced land is not desired and has few buyers.∫∑ During the 1990s, rural infrastructure as a whole deteriorated, rural road construction and repair virtually came to a halt, and the provision of services and recreational opportunities declined.∫∏ The government adopted a special federal program for rural social development in 2002, but most funding was to come from regional budgets, and therefore many analysts conclude that the program’s effects were minimal and benefits hard to discern.∫π The National Project in agriculture was intended to address rural infrastructure problems, but these are long-standing issues that will take many years to adequately address. 4. The absence of market information. According to one survey, this problem was cited as the most common reason for not purchasing land.∫∫ According to different survey results, reported by Lerman and Shagaida, about one-quarter to one-third of respondents in different regions did not know prevailing market prices of agricultural land.∫Ω The lack of information affects sellers as well. On what basis, for example, will a landowner define the starting selling price for land? This shortcoming is important for the obvious reason that the lack of information constrains the sale of land and

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Policy Design and Legislative Context the transfer to other users. Absent ‘‘market’’ information or information services, it is difficult for the list price to reflect a market clearing price (which is to say, it is likely to be either too high or too low). Equally important, and not as obvious, is that the lack of knowledge about land prices hinders the withdrawal of land from joint ownership for individual private farming. The Law on Agricultural Land Transactions states that a person wishing to withdraw land from a plot held in joint ownership must compensate the remaining owners at the market price for the land parcel being withdrawn. Without knowledge of what constitutes fair compensation, it is not clear how a person wishing to withdraw could obtain approval from the other owners. 5. A cumbersome and nontransparent sales process. The process of selling land is cumbersome and makes the ways in which the system can be manipulated and abused too numerous to list. There is enormous potential for bribery and corruption inherent in the transaction process. It is not hard to imagine a local governmental official, who is not well paid, working in concert with a hidden investor to exercise the right of refusal with an unusually low selling price and then receiving a kickback from the investor, who sells it for a handsome profit. Evidence of precisely this type of behavior was revealed at the end of February 2007 when the mayor of Vladivostok was ‘‘temporarily’’ removed from office after prosecutors identified at least eleven cases in which land was sold for less than its market value.Ω≠ Thus, the placement of land officials in an intermediary position between buyers and sellers is a recipe for manipulation and abuse, and is difficult to justify in terms of market economics. 6. High transaction costs. Registration costs, in particular, are high. Based on survey data gathered in three oblasts, Shagaida reports that in theory, land or land shares that were distributed during the 1990s have been cadastered and registered. Thus the private owner should, in principle, only have to pay a small fee in order to obtain the cadastral extract (the part of the cadaster report concerning only his portion) for his land or land share (which is required for a land transaction). In reality, however, land officials often require a full survey of the land, and this may cost five hundred rubles per hectare. For larger landowners, this expense acts as a brake on land transactions. In Rostov oblast, for example, 84 percent of private farmers considered high registration costs and complex procedures to be significant problems.Ω∞ Or consider the effect on a household wanting to sell its land shares. For instance, take a household of three persons, each of whom received a land share of two to ten hectares (the usual range in European Russia), for a total of six to thirty hectares that may be sold. If a full survey were required, this would equal a monetary expenditure of 3,000 to 15,000 rubles, whereas the average monthly monetary income for a rural household was 3,302 rubles per capita in the fourth quarter of 2005.Ω≤

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7. Increased bureaucratism. Not only are registration procedures expensive, but the entire procedure has become more bureaucratic and complex since 1998, when the registration procedure was changed. Prior to 1998, districtlevel land committees were responsible for keeping land distribution maps, the lists of landowners, copies of land certificates, and other documents that confirmed land rights. A person needing documentation or wishing to register could do everything in one location. Starting in 1998, three organizations shared these responsibilities: district land committees, district registration chambers, and district cadastral chambers. Shagaida describes how each new land transaction requires full registration of the previous rights, which means that the full set of original documents must be presented, including old cadastral plans. As long as there are no post-1998 transactions (buying or leasing) involving a plot of land, this process may be avoided. But with the first transaction (buying or leasing), the owner needs to go through the full procedure of reregistering his land rights.Ω≥ 8. A time-consuming sales process. Shagaida reports that the sales process is not only expensive (in cases where a lot of land or many land shares are involved), but also time-consuming. Simply having the land cadastered can take up to two months, and to complete the entire multistep process can take six months.Ω∂ To complicate matters, the list of documents needed to register land is not strictly defined by law, making necessary multiple trips to the various offices and rendering the process essentially ad hoc, since local officials set their own requirements about which documents are needed.Ω∑ In Moscow oblast, for example, nine of the ten steps that are required by the applicant are not prescribed by law.Ω∏ As a result of these complexities, corporations and companies hire advisors, giving them an advantage over individuals, who must bear the burden of the process themselves. 9. A differentiated land market. A highly differentiated land market already exists, with vast inter- and intraregional differences between those with good-quality land and those without; and between regions that are better off economically and those that are poorer. In either case, regional governmental officials need an accurate assessment of a land plot’s value before deciding to exercise their right of first refusal. Two problems arise from a highly differentiated land market: (1) it is not clear whether the differentiation in the land market will correspond to the inherent value of land or will be distorted by extraneous factors such as corruption; and (2) although such a market should reflect economic reality, politically it could be regionally polarizing and allow conservative forces to build support in ‘‘losing’’ regions. Alternatively, local governments simply may not get involved in land purchases, and this possibility raises questions about why the law was configured in such a way. Some land that regional governments purchase will be able to be resold or leased. Other land may become ‘‘dead weight’’ on regional budgets, and the law does not indicate what happens to this type of land.

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Policy Design and Legislative Context 10. Efficacy of legislation. The final impediment concerns the efficacy of land legislation, specifically, the Law on Agricultural Land Transactions. If the goal of a land market is to facilitate the transfer of land to the most productive users, it is not clear that this law is the appropriate approach. Even NAOs, which arose as beneficiaries of the law and may be Russia’s answer to long-term efficiency and competitiveness challenges, are facing management problems and are searching for appropriate farming methods. The law regulates the land market but is, in essence, anti-market in that it inserts bureaucrats into the transaction process. The law strictly regulates large users and large land tracts, those that carry the greatest force for economic transformation, but does not allow market forces to work in an unencumbered manner.

Conclusion: Russian Land Reform in the Post-Putin Years Vladimir Putin operated in a much more favorable economic and political environment than did Boris Yeltsin. As a result, Putin’s approach to agricultural and land issues differed considerably. Putin pursued ‘‘creative creation’’ by lending stability to legislation and strengthening the agricultural sector through economic growth. Thanks to improved economic performance and revenue flows, Putin’s agrarian policies were more supportive of agricultural production and producers. State programs and policies have been at the center of the revival in the agricultural sector. In the political realm, the rise of managed democracy and a party of power have fundamentally altered the balance of power between the executive and the legislative branches. Because of a more compliant legislature, Putin was able to deal with land reform directly through the passage of the Land Code, the Law on Agricultural Land Transactions, and a host of other legislative acts. The fact that Putin was minimally constrained in the political arena means that the content of legislation reflects elite conceptions of what land reform should look like and how rural market economics should operate. This chapter has argued that although land legislation and policies during the Putin years were a mixture of illiberal and liberal elements, the primary thrust of reform was illiberal, characterized by restrictions on both acquisition and disposal of land. It is worth repeating that the design of reform under Putin was much less constrained and influenced by opponents, and thus outcomes reflected the priorities of the leadership to a greater degree. In addition, although the rural land market continues to evolve, several notable deficiencies remain. The continuation of certain trends—especially the expansion of the state—is likely to continue. The continuation of an illiberal land reform is the most likely scenario for

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the post-Putin years. State intervention has been growing steadily since 2000 throughout the entire economy, including agriculture.Ωπ Although agricultural land was not directly affected by expanding state ownership in the way oil and gas companies were, the increase in state intervention and regulation could threaten the security of property rights in the future. Late in Putin’s second term governmental elites expressed the need for more state regulation, for instance of domestic retail channels for food.Ω∫ With regard to agricultural land, the emergence of ‘‘raiders’’ threatens property rights that were established during the 1990s for many rural dwellers. The government is likely to react to this development, although it is too early to specify exactly which policy levers will be used because high-level discussions continue in governmental circles. Thus, the drift toward an illiberal land regime may be expected to continue, as suggested by Deputy Prime Minister Medvedev in May 2007 when he argued that land being used for ‘‘normal agricultural business’’ should not be allowed to be converted to nonagricultural uses such as housing construction.ΩΩ The policy trends at the start of Dmitri Medvedev’s term as president in 2008 suggest continuity within the parameters defined under Putin. Before being elected in March 2008 and immediately thereafter, Medvedev publicly supported the broad range of policy initiatives begun by Putin, including agriculture as a priority for development. Medvedev favored a continuation of state financial support for the rural economy, in particular, the revival of the animal husbandry sector. He supported the concept of increased state and private investment in agriculture, indicating that as much as R500 billion in federal monies would be directed to agriculture during 2008–12. He backed social and economic development of rural areas and the rebuilding of rural infrastructure. He confirmed the goal of making Russian food producers internationally competitive. And he spoke in favor of regulating domestic food markets and agricultural land usage to avoid speculation. In other words, the nature of agrarian and land policies would appear to be set for the foreseeable future and is unlikely to diverge significantly from the course defined by Putin.

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P A R T

Behavioral Responses

II

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5

Rural Households’ Land Holdings, Enlargement, and Rental

The three preceding chapters analyzed the policy context and evolution of land legislation in the late communist and postcommunist periods, concluding that although property rights became ‘‘liberalized’’ in comparison to the communist period, they remained more restricted and limited in Russia than in most Western nations or even in comparison to several other postcommunist states in Europe.∞ Those chapters suggested that the irony of Russian land reform is found in the fact that the original goals were not attained. Not only were Soviet-era state and collective farms not broken up, but the new corporate farms are larger than the previous Soviet-era collective farms. Furthermore, private individuals own very little actual agricultural land, and the distribution of land is impressive only if paper entitlements are considered private property. This chapter initiates a change in the level of analysis from the macro-level to the micro-level of household behaviors. The type of evidence also changes: legislation and state policy are replaced by survey data. Survey data impart unique advantages that national-level data do not. According to national data, Russia’s agricultural sector has shown positive growth since 1999. But this occurrence does not mean that all households fared equally. Survey data are especially useful for identifying which households benefited the most, which benefited the least, and why. Thus, this chapter moves beyond the design of

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reform institutions and shifts the focus to households, as do subsequent chapters in Part 2. Therefore, the purpose of this chapter is twofold: (1) to analyze the impact of formal institutions on household behavior and (2) to examine in detail households’ land holdings and to analyze the factors that influence the enlargement of those holdings. Why focus on households? This focus is important for several reasons. First, an analysis of household responses allows us to understand the types of land transactions that households conduct and the obstacles that they confront. Households were the intended recipients of land, and thus a household-level analysis allows us to ascertain the effectiveness of reform. Second, as shown in Chapters 3 and 4, the number of land purchases and leases made by individuals far exceeds the quantity of land transactions made by companies and corporate farms, and therefore households are more central to the land market. Third, although corporate farms have vast land holdings and in some ways continue to dominate the physical geography of the countryside, their land is held in joint ownership. The real privatization of land is seen only at the household and individual level. Finally, an analysis at the household level allows us to understand patterns of adaptive behavior and the factors that influence responses. For example, since 1991 a significant change in the structure of rural employment has occurred in which a smaller percentage of individuals are employed by a large farm and a higher percentage of rural dwellers are self-employed or employed in nonagricultural activity.≤ Therefore, the analytical focus has to shift from large farms to individuals and households in order to show adaptation to new opportunities engendered by reform. The two central questions posed by this chapter concern the impact of the design of reform on households. (1) How did households maneuver within an illiberal framework? (2) How efficacious was land reform in engendering private landownership, distributing land to a broad spectrum of households, and facilitating a land market? These core questions are addressed by examining a series of subsidiary questions: (a) What types of land holdings do rural households have, what types of transactions do they engage in, and what types of obstacles are perceived to exist in the land market? (b) Are there distinct behavioral responses according to income level that affect households’ land holdings and enlargement? (c) Are there patterns in the renting out of land? In short, the chapter analyzes rural households’ responses to the opportunities presented by land reform. The central theme of this chapter is that the inherent dualism within Russia’s land reform had different effects. The illiberalism of the policy design meant that the great majority of households received very little real agricultural land. In the case of land shares, property rights were less than secure

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because of postprivatization processes. The liberal aspects of Russia’s land reform also meant that new economic opportunities were created, but these were utilized by a only a narrow segment of rural households. This chapter examines the ways households with certain types of advantages utilized opportunities offered by reform and have benefited. For those households, a confluence of socioeconomic factors has affected the impact of land reform. Running through the analysis is the enduring impact of the design of reform. The resulting analysis is a mix of positive and negative developments in Russia’s land reform. In terms of household land holdings, the chapter shows that households do not have much real land on a per capita basis and did not receive much real land as a result of reform. The possession of land shares is the primary form of ‘‘landownership.’’ These two occurrences have led to land fragmentation, which has economic consequences. In terms of the land market, the chapter shows that formal leasing transactions dominate, in large part because most rural households have low monetary incomes. Household incomes and savings, low before market reforms, were further eroded during the 1990s by inflation, which prevented many households from obtaining additional land. Finally, a series of variables and factors are explored for the purpose of examining which households responded to land reform and why. The analysis shows that upper-income households responded the most to new opportunities by enlarging land holdings (mostly by renting) and that households with more business income were most likely to expand land holdings. Thus, some households were in a position to take advantage of opportunities presented by reform, but the overall impact has been limited because most households did not benefit. This chapter utilizes various survey data in order to illuminate behavioral responses to Russia’s land reform. Both panel and cross-sectional data that span more than a decade are used. Much of the analysis draws on large crosssectional surveys conducted in 2001 and 2006. The 2006 survey, in particular, was designed specifically to obtain information about land reform, supported by a grant from NCEEER. In the aggregate, the various surveys were conducted in sixteen regions and fifty-nine villages and involved more than twenty-one hundred respondents. The survey data are of great benefit because they allow a level of detail that heretofore has been lacking and allow us to test hypotheses in a systematic manner. Therefore, the data presented herein are invaluable for addressing the question, What do we know about Russian land reform at the household level? A detailed description of the survey methodology and villages where the surveys were conducted is found in appendix D.

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The Analytical Context It has been argued elsewhere that in large part the agrarian reform movement in postcommunist Russia is best characterized by adaptation to new opportunities at the household and enterprise level, although it should be noted that: (a) incentive structures are crucially important for understanding the responses to reform policies, (b) not all households adapted, but it can be shown empirically that a defined segment of the rural population showed more adaptive ability and desire than did others, and (c) this interpretation is not universally shared and other analysts emphasize resistant behaviors.≥ In applying the question of adaptation to Russia’s land reform this chapter shows that only a small percentage of households responded robustly to the opportunities presented by reform policies. The chapter explores the characteristics of those households and shows how the design of reform affected their responses. The context for households’ behavioral responses to land reform is within peasants’ moral economy, that is, the security of their subsistence.∂ The idea behind peasants’ moral economy is that peasants are motivated to protect their subsistence and may be predisposed to resist change that threatens their sense of collective security—change that may include commercialization of production relations and village stratification. As a consequence, private property, to the extent that it threatens collective security, may be resisted. It has been argued elsewhere that certain aspects of rural Soviet society—commercial relations established by the selling of food raised on the private plot, surrogate ‘‘private property’’ through the granting of lifetime use of private plots, and relative intravillage stratification as a result of the sale of private plot production—suggest that core issues of peasants’ moral economy were not sources of resistance to contemporary reform.∑ The hypothesis regarding Russian land reform that flows from the subsistence security theory is that households (and individuals) whose economic security is assured are likely to be more active in land transactions and in enlarging land holdings. Therefore, we start with the question whether subsistence security increased or decreased after the introduction of Russia’s contemporary land reform. Political stability in the countryside during the 1990s —the lack of large-scale rebellion or revolution in the face of precipitous economic decline—was in large part due to the fact that rural households were able to ensure their subsistence, even survival, with the food raised on their various types of small land plots (private plots or collective garden or orchard plots).∏ The importance of personal and family gardening to the survival and welfare of the household increased with the introduction of ‘‘shock therapy’’

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and the abrupt ending of the Soviet-era ‘‘social contract’’ in the early 1990s. At that time most macroeconomic trends turned sharply negative for the country as a whole, leading one prominent analyst to speak of ‘‘Russia’s collapse.’’π If the country suffered from shock therapy and the consequences of market reform, the effects on the rural population appeared even worse: real incomes declined, wage arrears were widespread, rural poverty increased, rural unemployment rose substantially, rural infrastructure deteriorated, rural services declined, and rural demographic trends turned sharply negative, affecting households’ human capital and production potential.∫ In contrast to the negative economic trends, one of the main positive developments in rural Russia during the 1990s was an increase in agricultural land used by households, which in turn led to increased food production by the household sector.Ω While official statistics show a significant decline in national per capita food consumption,∞≠ some survey data suggest that this may have not been the case among rural households,∞∞ or, as other data suggest, the decline was much smaller among rural households than urban ones.∞≤ By the late 1990s, households emerged as the most important producers of food in Russia, as measured by ruble value, and continued to play a leading role through 2008.∞≥ Although some household food production was sold (depending on certain socioeconomic and demographic characteristics), generally speaking, most household food production was consumed. In this way, rural households were at least partly able to shelter themselves from the full negative impact of market reform and ensured their survival during the tumultuous early years of the transition.∞∂ Thus, interesting links developed among various indicators: declining macroeconomic conditions, household survival strategies, and new economic opportunities, bringing to the forefront the issue of how rural households in Russia responded to land privatization. A much more detailed analysis of household responses appears below, but it is well to remember that contemporary reforms presented economic opportunities and entrepreneurial possibilities that did not exist previously. As a result, the burden and responsibility of security shifted from the collective security regime that had been offered by a large farm during the Soviet period to the individual or to the household in the postcommunist period. The analysis that follows shows that households that were better off economically—had assured their security—were better able to take advantage of land reform opportunities, although the extent to which they were able to do so was limited by restrictive property rights and other factors.∞∑

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Rural Households and Land Holdings Based on survey data from rural Russia, this section investigates the way land reform played out in reality among rural households. First it considers attitudes toward land privatization and a land market. With the household as the unit of analysis, it then provides an overview of the types of land holdings that households have. Finally it investigates the question of how much land is controlled. ATTITUDES TOWARD LAND

Attitudes toward land changed considerably during the 1990s and were highly differentiated, depending on whether the subject was landownership or a land market that included the right to buy and sell agricultural land. In the early 1990s, attitudes toward landownership and a land market were highly polarized. Private farmers, who would be the primary beneficiaries of landownership and a land market, had significantly higher rates of approval of ownership and a land market than did farm employees and farm managers.∞∏ By the late 1990s, there was evidence of a high level of support for private landownership by land buyers, sellers, and agricultural experts, although most respondents thought that landownership should have some restrictions, primarily in order to prevent the development of latifundia.∞π Particularly high support for landownership was found among persons aged thirty-five or younger.∞∫ In the early 1990s there was a great deal of suspicion toward a rural land market, but by the late 1990s there was evidence of support for a land market among various cohorts even as political battles were being waged in Moscow over the right to buy and sell agricultural land. Survey data show that a land market with restrictions received the most support, and very little support was evident for an unregulated land market.∞Ω On the basis of survey data gathered at the village level, there is little evidence that attitudinal opposition to land privatization or to a land market was significant during the Putin period.≤≠ To the extent that the rural land market was less than robust, this is explained more by economic and sociological factors than by an inherent philosophical resistance to private property. Indeed, survey data show that land expansion is viewed as a legitimate means to increase production and household income. Clearly, households obtain land for different purposes. Whereas some households obtain additional land for subsistence purposes, others show more entrepreneurial intentions and are commercially driven. Surveys conducted in the mid-1990s indicated that the primary reason for obtaining land was to grow food, and land was still an important mechanism for increasing production ten years later.≤∞ The 2006

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survey asked whether households intended to increase their food production in 2007, and if so, by what means. Among households that answered yes (33 percent in 2006), land expansion was the second most popular answer, following the acquisition of livestock or poultry.≤≤ Attitudes about landownership and land expansion are important because there is a positive association between land holdings and household income. Two-tailed Pearson correlations yield a coefficient of .27 between a household’s total land holdings and total monetary household income (when total land holdings include land shares distributed as actual land). The effect of land holdings on income is somewhat less when total holdings include shares that are held as paper entitlements, because some land shares are not rented out, and lessors of those that are rented out often receive remuneration in-kind rather than monetary payment. In the latter case, a statistically significant correlation coefficient of .17 exists between land holdings and total monetary household income. Thus, at first glance, it is clear that land holdings have some impact on household income, and there is strong evidence that this impact has increased over time.≤≥ TYPES OF HOUSEHOLD LAND HOLDINGS

This section addresses two questions: Which households own land, and what type of land holdings are they? Panel and cross-sectional survey data show that private plots are operated by nearly all rural households, a carryover from the Soviet period, during which about 98 percent of collective farm families had a private plot. Contemporary survey data show that most households privatized their land plot, with 1993–95 being the years of peak activity, followed by 2004–5. Thus nearly all rural households are owners of at least a small plot of land, and there is little reason to believe that households in the surveys are exceptions. Households have four main sources of agricultural land that may comprise their holdings: (1) the private plot, (2) land shares, (3) rental land, and (4) other land used by the household through formal or informal arrangements. The first source, the private plot, is real land that is a holdover from the Soviet period. This land usually surrounds the dwelling. Private plots are the most common form of landownership—more than 90 percent of land used as private plots is owned according to an estimate by a prominent Russian scholar.≤∂ Land shares constitute the largest land holding for most households. Most often land shares have not been distributed as real land. As noted above, for most households land shares are paper entitlements to land, a privatization method used by about one-half of former communist states in Eastern and Central Europe.≤∑ Only a person who intended to register a private farm

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received real agricultural land during land distribution. Therefore, a distinction must be drawn between legal entitlements to land use and agricultural land that is physically demarcated and possessed.≤∏ On any given farm, all eligible persons received land shares that were equal in size. The numerical value of land shares, expressed in hectares, was determined by the number of claimants who had a right to land, and this list of persons was decided on by a general meeting of the farm collective. Usually this list included workers on state and collective farms and other agricultural enterprises, pensioners who resided on the farm or on the territory of the agricultural enterprise, and persons who provided various social services to the farm. In addition, members who were temporarily away from the farm, for instance, for military service, those who were temporarily living or working in a city, and persons who were fired or released from the enterprise after January 1, 1992, also had a right to a land share. Significant differences exist in the size of land shares across regions, depending on the availability of land and the population density in that area. The 2001 survey, conducted in five different regions, found, for example, that the size of a land share was 2 hectares in the Chuvash Republic, more than 6 hectares in Krasnodar krai, and more than 10 hectares in Volgograd oblast.≤π The 2006 nine-region survey also found considerable variance: in Krasnodar krai a land share was 4.3 hectares, in Voronezh oblast 4.9 hectares, in Moscow oblast 3.7 hectares, in Leningrad oblast 3.8 hectares, in Kurgan oblast 9.2 hectares, in Altai krai 7.5 hectares, in Krasnoyarsk krai 13.1 hectares, in Amur oblast 13.7 hectares, and in the Republic of Tatarstan 4.8 hectares. Once farm members had received their land shares, they had a variety of choices about how to use them. During the reorganization of large farms, persons who remained farm members did so voluntarily, and a person or his family was free to terminate membership in the farm enterprise without the permission of the rest of the membership. Once a person chose to remain associated with a large farm, several options existed for what to do with land shares: (1) use the land shares to start or expand a household’s private plot; (2) lease them to a third party; (3) invest them in the equity of the large farm; (4) sell the shares in totality; or (5) sell the rights to a defined quantity of land, that is, a portion of the household’s land shares. If a person remained employed by the large farm and wanted to sell ‘‘his land,’’ it was the entitlement to land that was sold, not a physical plot of land. Thus, unless a person found employment elsewhere than on a large farm, his land remained in the large farm in one form or another. More recently, another option has emerged: a kind of trust (doveritel’noe upravlenie) whereby land shares are managed by a third party and any profits are distributed to owners.≤∫

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According to NCEEER survey data, the percentage of households that continued to own their land shares varies from survey to survey: in 2001, 59 percent still had their land shares; in 2006, the figure was 52 percent, with both surveys reflecting the fact that land shares had been sold, rented out, or bequeathed. The leasing of land shares—the rental of use rights—has been the most common option. This meant that the right to use the land was rented to a third party by the original land share owners. The owner could rent the rights to all or part of the land to which he was entitled. The land could be leased to the large farm or to private individuals, with private farmers comprising the bulk of private demand. Most of the households surveyed said that they invested their shares or leased them to a large farm. The third source of land for households, rental land, is important for enlarging a household’s land holdings and is often used for grazing livestock or increasing food production. The primary sources of rental land are raion or municipal governments, and therefore rental land is not owned by the users and does not represent a property right that is unique to the post-Soviet period. As noted in previous chapters, the right to lease land existed during the 1920s and again starting in the late 1980s. The extent to which rental land was obtained by households varies by survey. In the 2001 and 2006 surveys, about 34 percent of households had rented additional land. Of those, about onethird expressed regret that they had not leased more land. Rental land is important for two reasons. First, because almost all households had land in the form of private plots, the acquisition or enlargement of rental plots represented participation in the land market. Second, rental land is associated with commercial farming and leads to income stratification. A fourth source of land for households is formal or informal arrangements, which only convey use rights, not ownership, and are less common. Only 18 percent of households participating in the 2001 survey used land through a formal arrangement—usually an allotment of land from a large farm for household use, for which ‘‘rent’’ would be repayment in produce. Only 7 percent of households participating in the 2006 survey had an informal arrangement, that is, an agreement with parents, relatives, or friends to use a land plot for which ‘‘rent’’ is paid with produce. HOW MUCH REAL LAND DO HOUSEHOLDS HAVE?

In Chapter 1 it was shown that about 11–13 percent of all agricultural land was being used by private individuals in Russia, which in comparison to other former communist states was at the low end of the spectrum. In terms of ownership, it was estimated that nationally, only about 5 percent of all real agricultural land is privately owned, although this figure changes annually.

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This statistic stands in contrast to original goals of reform, which intended to transfer agricultural land to private ownership. We now turn our attention to households. The discussion above indicated that rural households have access to a variety of sources of agricultural land, although some are more commonly used than others. The next question is: How much real land do households have? Households’ private plots are very small—in 2006 the mean size was .18 hectares among the 900 households that were sampled, which is somewhat less than the national mean of .44 hectares at the beginning of 2008, but even this is not a lot of land.≤Ω The 2006 survey data also show that the mean size of a rental plot was .71 hectares, and plots that came from informal arrangements had a mean of .01 hectares. Thus, in terms of actual land households have, on average, less than one hectare. The bulk of ‘‘landownership’’ is in the form of land shares. The mean size of a household’s land shares was 6.7 hectares in the 2006 survey (with significant regional differences). From the 2006 data, a variable called ‘‘total land’’ was created that summed all the different sources of land to which a household had access. This variable yielded a mean of 7.6 hectares of land that was theoretically controlled by households.≥≠ Recall, however, that land shares existed mainly as paper entitlements and not as actual land plots. In the 2006 survey, only 1 percent of respondents indicated that they had received land in-kind from their land shares, that is, actual land. In reality, therefore, a significant difference in total land holdings exists, depending on how the calculation is made. For that reason, a second ‘‘total land’’ variable was created that includes only real land used by the household. This variable included the size of the household private plot, the amount of rental land, the size of the plot actually distributed from the share entitlement, and any other land from formal or informal arrangements. This variable yielded a mean of 1.09 hectares of actual land. Therefore, if one considers the land entitlements represented by paper land shares as ownership, a household either had access to or owned a considerable amount of land, suggesting significant change from the Soviet period. If, however, one considers how much actual land is used by a household, it is clear that households do not have much more land than they did in the Soviet era, and in that respect there has been a much smaller transformation of the socialist property regime than is often realized. Thus, it is clear that rural households have different sources of land, but overall their total holdings of real land are quite small. A further problem with land shares is that white-collar farm employees and service personnel were given shares. O’Brien and Patsiorkovski estimate that as much as 50 percent of land share ‘‘owners’’ are not involved in agriculture,

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including pensioners, teachers, medical personnel, and people who inherited land shares from parents or grandparents but who do not live in the countryside.≥∞ This consideration is important because it suggests that the land share distribution system may not affect agricultural production positively. It also means that land shares were distributed to persons who did not have a stake in keeping agricultural land in the hands of those who work it, thereby weakening collective efforts to protect property rights in the face of land ‘‘raiders.’’ A consequence of rural households’ land holdings is physical fragmentation. Rachel Sabates-Wheeler defined physical land fragmentation as ownership of noncontiguous plots by a single owner, parcels that are distant from the owner’s home, or ownership of very small parcels.≥≤ The 2003 survey included a question about how far a household’s additional land was located from the dwelling, that is, land other than the private plot.≥≥ The results showed that 57 percent of respondents had additional land located .01–2.0 kilometers from the household dwelling, and another 30 percent had additional land located 3.1 or more kilometers from their dwelling. In other words, except for private plots that were inherited from the Soviet period and surround the household, a very high percentage of a household’s additional agricultural land was located some distance from the dwelling, a crucial factor when one considers the poor condition of most rural roads and the infrequency of bus service. Land fragmentation has an impact on economic activity and household income. In Moldova, for example, a team of researchers found that ‘‘larger farms produce higher family incomes and thus farm augmentation makes a positive contribution to the well-being of the rural population. . . . [C]onsolidation affects not only farm productivity, but also the standard of living of rural families.’’≥∂ For Russian households in the 2006 survey, the effects of land fragmentation may be illustrated by considering hypothetical households using the mean sizes for land plots, as stipulated above. Household A has a private plot, land share entitlements, rental land, and informal land arrangements for a total of 7.6 hectares. Of this total, 88 percent is in the form of land entitlements that only exist in theory and is nonadjacent to the dwelling. Another 10 percent, in the form of rental land, also is distant from the household dwelling. The remaining 2–2.5 percent, representing the household private plot, is contiguous to the primary dwelling. In the case of hypothetical household B, with a private plot and land shares distributed as land (a total of .35 hectares), 51 percent of the land surrounds the dwelling, but the amount of land is very small and not suitable for commercial farming. Only 17 percent of the land of hypothetical household C,

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with a private plot, land shares distributed as land, and rental land (a total of 1.06 hectares), surrounds the dwelling. For all households with land located away from the primary dwelling, or for households considering whether to acquire additional land, the age structure of the household and access to transportation (or ownership of a car) become important calculations that must be taken into account. Physical land fragmentation leads to ‘‘activity fragmentation,’’ which Sabates-Wheeler defines as a mismatch between small land plots and largescale machinery, as well as restricted access to equipment suitable for smallscale farming.≥∑ The relevance of activity fragmentation to rural Russia is evidenced by the fact that in the 2006 survey the average household owned a mean of .28 mechanical agricultural tools, .11 trucks, and .13 tractors, statistics that attest to the necessity for the household to have adequate manual labor. Chapter 7 explores the relationship between household labor and land holdings, but for now it suffices to note that households that are labor-poor also tend to be land-poor. Thus, although households had access to different types of land plots, the mean sizes were small and the plots were not contiguous. Both factors have implications for economic efficiency, food production, and competitiveness in a regional or global marketplace.

Rural Households and Land Transactions Since 1994 there has been an active land market in Russia, even before the adoption of the 2002 Law on Agricultural Land Transactions. This section addresses several questions: What types of land transactions have been most common? Do land transactions tend to be formal or informal? What are the main obstacles to acquiring land? As shown below, some rural households’ land holdings have changed over time, and the section explores the characteristics of those households. TYPES OF TRANSACTIONS

The 2006 survey asked respondents whether different types of their households’ land plots had been increased or decreased, and by what means, during the period 1991–2006. Similar questions were asked in the 2001 survey as well, but for this discussion the 2006 survey is used because it was larger and is more recent, reflecting the economic growth that occurred during the Putin period. According to the 2006 survey, since 1991 about 17 percent of households had increased the size of their private plot, with a mean increase of .03 hectares; 36 percent increased the size of their rental land, with a mean increase of .73 hectares. One constant over time is that the land market has been and

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continues to be a leasing market. Households’ purchases of agricultural land trailed lease transactions by a significant degree. Having obtained additional land as a gift or inheritance was indicated by less than 10 percent of the respondents.≥∏ The relative unimportance of the purchase market was reflected in the 2006 survey in another way. Different questions asked whether the respondent (or his or her household) was planning on buying or selling agricultural land in the next year, renting land in the next year, or renting out land to someone else in the next year. Only 2 percent of households were planning to buy land, and 6 percent were planning to sell land. But 38 percent planned to rent more land, and 39 percent were planning to rent land to someone else. These patterns are interesting because: (a) they are not substantially different from the dominant type of transactions carried out during the late Soviet period; (b) they show that the leasing market continues to be most active; and (c) they reflect some of the obstacles in the land market concerning buying and selling that were discussed in Chapter 4. FORMAL AND INFORMAL TRANSACTIONS

An interesting question about land transactions concerns whether they tend to be formal or informal. This question speaks to the degree to which market relations may supplant established social networks based on personal ties. Formal transactions are impersonal and are legally enforceable. They typically occur between parties who are not related. Formal transactions are what Richard Rose terms ‘‘modern’’ transactions. Informal transactions are personal and may be unwritten agreements; they are more difficult to enforce in court. Such transactions usually occur between individuals who are related or otherwise have close relations. Rose terms them ‘‘non-modern transactions.’’ During the 1990s, Rose argues, most economic transactions in Russia were nonmodern.≥π Data from the 2003 survey suggest, however, that land transactions may present an exception to the patterns found by Rose. That survey showed that ‘‘non-modern transactions’’—personal land transactions between friends, neighbors, and relatives—are much less common than formal transactions. Respondents answered that the most common source for either use rights of land or its disposal was the local government (76 percent). In contrast, land transactions with people known to respondents were infrequent: 2 percent made deals with relatives, 5 percent with friends or neighbors, and 3 percent with other residents of the village. These latter statistics also reflect the fact that most households are not ‘‘land rich’’ and lack surplus land to lend even to people in their social network. Data from the 2006 survey support the findings from 2003 and show that

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Table 5.1. Sources for household land transactions, 2006 (in percent)

Source of transaction

Increase (from whom land was acquired)

Decrease (to whom land was disposed)

10 4 50 8 62 [1

[1 2 37 4 3 [1

Relatives Friends, neighbors Large farm enterprise Purchase as an investment Village administration Raion land fund Source: Author’s 2006 survey data (n=900).

Note: Percentages have been rounded. The percentages do not add to 100 percent in the first data column because different types of land increases are included. The response about farm enterprises includes the acquisition of land shares, whereas village administrations leased or sold real land.

households obtain land via formal transactions. To illustrate, table 5.1 presents land transactions by source, showing that increases of land plots are most commonly from village administrations and large farms. In particular, increases from the village administration are based on land leases, and the transactions are impersonal and formal. The data in the table reflect the institutional design of reform: the land privatization process of the 1990s made households dependent on local governments and large farms for land. Further, small land plots tend to be used for household food production and may not be seen as a tradable commodity by potential personal sources of land (friends, neighbors, relatives). At the same time, we should note that in a village setting it is likely that residents know managers on large farms and are at least familiar with local government officials, so a ‘‘formal’’ transaction may be more informal there than in a ‘‘modern’’ society. Even in this situation, however, the land transaction must be registered and is legally enforceable and therefore is considered a formal transaction. Thus, while it is safe to conclude that most land transactions are formal, the data used herein may overstate the degree of formality somewhat.≥∫ OBSTACLES TO ACQUIRING LAND

The last question in this section concerns obstacles to land acquisition, that is, constraints on the land market, building on the discussion in Chapter 4. The 2006 survey posed questions about obstacles in the land market for both ownership and rental. The results are presented in table 5.2.

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Table 5.2. Perceptions of obstacles in the land market, 2006 (in percent)

Type of obstacle Administration/bureaucracy Local authorities Difficulty in locating boundaries Difficulty in registration Price of land/lack of money High land taxes Low quality of land Poor location of land

Obstacle to landownership 11 9 6.5 21 18 13 4 3

Obstacle to land rental 4 4 4 5 5 4 3 3

Source: Author’s 2006 survey data (n=900). Note: Percentages have been rounded. The question was scaled 1–5, with 1=the biggest obstacle, 5=no obstacle. The percentage indicated is the sum of 1 and 2.

The table shows that obstacles to landownership are more significant than obstacles to land leasing. Because land leasing is more common, this finding suggests that most individuals or households who desire to add (or subtract) land through a lease transaction may do so relatively easily. For landownership, the situation is somewhat different and the primary obstacles are twofold: institutional constraints and economic constraints. Institutional constraints include problems with local authorities, registration, and bureaucratism. These constraints account for more than 40 percent of responses. Economic constraints include the combination of high land prices and high taxes. These constraints account for 31 percent of responses. Low land quality and poor location are not particularly significant; they are mentioned by only 7 percent of respondents, even though this analysis has identified land fragmentation as a problem affecting economic efficiency. Despite low barriers to land rental, households’ real land holdings remain small. How is the discrepancy between accessible rental land and small land plots explained? Here the discussion focuses on social and economic aspects. Leo Granberg argues that the preference for small plots of land is due to paternalism and symbiotic relationships between large farms and rural households. He posits that path-dependencies help maintain Soviet-era practices, especially with regard to the types (and sizes) of land plots that most households prefer. Noting that ‘‘Russian collective farms continue to provide help for the workers and shareholders,’’ Granberg asserts that ‘‘maintaining a symbiotic relationship has strengthened the path dependence, ensuring that the combination of mass production and private plots remains a fundamental

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element of the structure of agriculture.’’≥Ω In other words, households continue to depend on assistance from large farms, and as a consequence, ‘‘private plot holders are in no great hurry to change their modus operandi and become fermery’’ (private farmers).∂≠ Reasons for this occurrence are that larger land plots may not be manageable within the parameters of assistance that large farms are able to provide and that large farms have little incentive to help their competitors (in the form of private farms) grow stronger. Thus, not only are there institutional constraints on private plots (regional land laws define the maximum size a private plot may be before being considered an entrepreneurial endeavor and subject to taxation) but there are also structural constraints in terms of household demographics and levels of assistance. Survey data shed further light on Granberg’s postulations. First, both the 2001 and the 2006 surveys show clearly that family assistance is much more important in operating the private plot than assistance from a large farm. In the 2001 survey, less than 4 percent of respondents indicated that they received ‘‘a lot’’ of or ‘‘very much’’ assistance from a large farm, whereas 41 percent said they received ‘‘a lot’’ of or ‘‘very much’’ assistance from the family. In that survey, 52 percent (414 of 800 respondents) said they received no assistance from a large farm. In the 2006 survey, the percentage of respondents who indicated that they received no assistance from large farms rose to 73 percent (657 of 900 respondents), and another 10 percent answered that they received ‘‘very little’’ or ‘‘little’’ assistance; only 9.5 percent received ‘‘a lot’’ or ‘‘very much’’ from a large farm. In contrast, 46 percent said that they received ‘‘a lot’’ or ‘‘very much’’ from family and relatives.∂∞ Given that assistance from large farms has declined markedly and does not vary significantly according to whether land holdings were enlarged or not, it is not clear that path-dependencies and assistance from large farms are decisive factors in whether households increase land holdings. But reliance on family assistance would suggest that households with low human capital or low labor capacity would be less inclined to expand land holdings. Moving beyond considerations of path-dependencies and paternalist assistance, economic constraints on the land market have also been especially important. Rural poverty increased substantially during the 1990s and remains high today.∂≤ Rural households are frequently caught in the ‘‘poverty trap.’’ The concept of a poverty trap is often applied to poor Third World nations, but it also applies to rural Russia.∂≥ The poverty trap exists when a person or household farms a small plot of land but does not have enough capital stock (land, animals, or machinery) to make a profit or significantly increase the standard of living. Over time, the household grows poorer, both relatively and in real terms as inputs and the cost of living increase. A similar situation exists in rural Russia: small private plots are used mainly for produc-

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tion that is consumed, and the family remains trapped by limited production and low household income. In the 2006 sample, about 32 percent of respondents lived below the officially defined subsistence minimum, based on total monetary income (although in reality a person just above the poverty line is not better off than a person at or just below the poverty line, so perhaps as many as one-half of the respondents would be economically pressed to afford rental land or to purchase land). As with the monetization of rural incomes, the 2006 statistic on poverty rates is an improvement on the figures from the 1990s and the 2001 survey.∂∂ The relationship between monetary income and land acquisition is discussed in more detail below. The problem of a high expense-to-income ratio could, in principle, be addressed by mortgaging privately owned land to raise capital (as permitted by law). Land mortgaging has become a reality since 2004, and in 2007 about 35 regions had banks participating (to varying degrees) in land mortgaging.∂∑ A landowner or household might want to mortgage present land holdings in order to raise capital to obtain more land or to acquire machinery to increase output. But that financial strategy is limited by the structure of land holdings: land that is held in joint ownership—including land shares, private farms, or collective gardens—would require the permission of the other owners before the land could be mortgaged, and obtaining consent from all involved is often difficult for psychological and other reasons.∂∏ Thus, the nature of landownership exacerbates financial constraints and poses an obstacle in the land market, especially considering that most household land is held in joint ownership. Household land expansion is further limited by household demographics. Chapter 7 analyzes the relationship between households’ human capital and land enlargement, but for now suffice it to say that many rural households have limited human capital that is exacerbated by low levels of mechanized equipment. Thus, acquiring more land through purchase or rental may not make economic sense because the land could not be worked profitably. In many cases, the modest land holdings indicated above are probably sufficient to supplement the household diet, and therefore the incentive to acquire land would be low. Clearly, then, rural households face financial limitations as well as demographic and land use restrictions on the ability or desire to increase land holdings. These issues are discussed in more detail in the next section, which presents an analysis of those who responded and the factors that affect the accumulation of land.

Household Responses and Factors That Affect Land Rental This section uses survey data from 2006 to analyze behavioral responses to land reform using different socioeconomic variables. While not all house-

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holds utilized new opportunities to expand land holdings and increase household income, those with certain characteristics did. The following questions are addressed: Which households have more land, which households increased their land holdings the most, what factors affect the renting in of land plots, and what factors affect the renting out of land shares? WHICH HOUSEHOLDS HAVE MORE LAND?

Are there patterns whereby some families or households with certain professions tend to have larger land holdings? From the 2006 survey data a variable called ‘‘total land holdings’’ was created and used for analysis. This variable includes only real land, that is, land shares distributed in-kind, as well as other types of real land. The rationale is that if a total land variable included land shares held as paper allotments we would be measuring, in effect, the size of the family and the number of household members who worked for a large farm. We are interested in holdings of real land, not paper entitlements to land use. As noted above, households surveyed in 2006 have a small mean of actual land (1.09 hectares), and the overwhelming number of households (95 percent) have holdings of between .01 and 1.0 hectares of land. Only a few households have substantial amounts of land. That said, there are some discernible patterns to note. There are several broad patterns in terms of broad socioeconomic and sociodemographic characteristics. First, there is a positive (.23) and statistically significant correlation (p].01) between total household monetary income and total land holdings (the direction of causality between these two variables is discussed below). Second, male respondents have mean land holdings about three times the size of holdings of female respondents, 1.6 hectares to .57 hectares. Third, the level of education has an effect. Respondents with zero to six years of education have mean land holdings of .47 hectares, while respondents with ten to eleven years have .93 hectares, and persons with twelve or more years of education have a mean of 1.57 hectares. Fourth, the number of members in the household has an effect—larger households have more land. A household with one or two members has a mean of .25 hectares of real land, one with four members has a mean of 2.9 hectares, and one with eight members has a mean of 5.4 hectares (the increase from a four-person household to an eightperson household is not linear). Fifth, among different demographic types of households, single persons, single parents, and retired couples have the lowest mean land holdings, .25–.26 hectares. An employed couple has slightly more land, with a mean of .32 hectares, and an employed couple with children and at least one other adult in the house has a mean of .83 hectares. The largest mean land holding, 2.9 hectares, belongs to an employed couple with children, reflecting the importance of land for growing food to supplement the household’s diet.

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Table 5.3. Mean holdings of real land by social classification of family, 2006

Type of family

Mean land holding (ha.)

Standard deviation

N

3.7 .69 .48 .61 66.5 .22 .56 1.09 .65

16.4 3.4 2.0 2.0 115.7 .37 1.0 10.9 3.9

39 107 137 351 6 209 51 900 894

Farm leadership/manager Farm specialist Clerical worker Worker on large farm Private farmer Unemployed Other Total mean Total mean without private farmers Source: Author’s 2006 survey data (n=900).

Note: Classification of a family is defined by the household’s having at least one member in that profession or category.

In terms of occupational status, there are also distinct differences. These are illustrated in table 5.3. The table shows that private farmers have by far the largest land holdings, as would be expected. Their livelihood depends on commercial farming, and viable farms require larger land holdings.∂π Furthermore, farm managers and farm leaders, with a mean of 3.7 hectares of real land, have more than three times the mean land holdings of the sample as a whole and more than five times the mean land holdings of farm workers. These 2006 results support a study based on 2001 survey data that argued that farm managers were among the ‘‘winners’’ during Russia’s agrarian reform. That analysis found that the managerial class has not been displaced from its position of economic power as liberal reformers had originally hoped. The 2001 data showed that compared to other occupational groups on large farms, managerial households were most likely to identify themselves as winners, had higher household income, and fewer managerial households were living in poverty. Farm managers—who oversaw the distribution of land and property and who controlled the allocation of financial resources—were able to ensure that they ‘‘lost’’ less than other social groups within a large farm setting. Equally important, managers also showed evidence of an ability to adapt and win in a new economic environment by deriving a high percentage of their income from private business.∂∫ The adaptive ability of farm managers was noted by Lampland, who argued that ‘‘former cooperative farm managers wielded significant advantages over other villagers adjusting to the new eco-

126

Behavioral Responses

nomic environment in the first half of the 1990s[;] . . . however, those advantages are not necessarily long lasting . . . they must be sustained and enhanced over time. Otherwise, their strength and value lessen.’’∂Ω In contrast, the table suggests that farm workers fared poorly during land reform. One of the goals of reform was the economic empowerment of ordinary rural dwellers, which could include farm workers, but survey data suggest that that goal was not met. In the 1995, 1997, 1999, 2001, 2003, and 2006 surveys, farm workers’ households had among the lowest mean land holdings except for clerical workers (who are nonagricultural workers) and persons who were not employed (unemployed and pensioners). WHICH HOUSEHOLDS INCREASED THEIR LAND HOLDINGS THE MOST?

The 2006 survey asked respondents to indicate the amount by which their household had increased holdings of different types of land plots since 1991. Survey data present a nuanced view and show that while many households did not utilize opportunities by reform, some did, and the characteristics of those households may be identified. Eighty-three percent of households did not increase the size of their private plot, owing mainly to structural constraints: private plot land surrounds or is part of the area on which the dwelling is located. For the 17 percent that did increase their private plot, the mean increase was .03 hectares. With regard to rental plots, 64 percent of households indicated that they had no rental land or had no increase. Of the 36 percent of households that had a rental plot, the mean size was .73 hectares. For an increase in land through land shares the mean increase was 5.9 hectares. Thus, of the three types of land holdings that had been enlarged since 1991, the increase in privatized land via paper entitlements was the largest. Regarding increases of real land, the enlargement of rental plots was more significant, however. Rental land is often used for pasture or for grazing and thus supports animal husbandry.∑≠ The same socioeconomic and sociodemographic characteristics that were used for land holdings are used for rental land. First, a statistically significant correlation (.26) was found between total household monetary income and rental land, suggesting that rental land may be used for purposes that add to household income. Households in the top decile in terms of monetary income increased their rental plots by a mean of 6.1 hectares, while households in the lowest decile increased rental land by only .11 hectares. Second, in terms of gender differences, men increased the size of their rental plot by a mean size of 1.2 hectares, and women increased theirs by only .26 hectares. Third, respondents with more education increased their rental plots by larger amounts.

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Table 5.4. Mean rental plot increases by social classification of family, 1991–2006

Type of family Farm leadership/manager Farm specialist Clerical worker Worker on large farm Private farmer Unemployed Other Total mean Total mean increase without private farmers

Mean land increase (ha.)

Standard deviation

N

2.9 .12 .10 .34 61.77 .03 .36 .73 .32

16.0 .17 .29 1.7 118.0 .11 1.0 10.7 3.5

39 107 137 351 6 209 51 900 894

Source: Author’s 2006 survey data (n=900). Note: Type of family is defined by the household’s having at least one member in that profession or category.

Respondents with zero to six years of education increased their rental plot by .17 hectares, those with ten to eleven years of education increased theirs by .58 hectares, and those with twelve or more years of education increased their rental land by 1.1 hectares. Fourth, the amount of human capital possessed by a household matters. Households with the lowest level of human capital, one or two persons, increased rental land by the smallest amounts, .03 and .09 hectares, respectively. A four-person household increased its rental land by 2.4 hectares, and an eight-person household increased its rental land by 3.0 hectares. Similarly, among different demographic types of households, single persons, single parents, and retired couples had the lowest mean rental plot increases, .03, .03, and .10 hectares, respectively. An employed couple had slightly higher increases, with a mean of .08, and an employed couple with children and at least one other adult had a mean increase of .23 hectares. The largest mean increase belonged to an employed couple with children, 2.6 hectares. Those socioeconomic and sociodemographic characteristics intersect with profession and occupation. Increases in rental plots by family type are shown in table 5.4. The table shows that, as with land holdings, private farmers and farm managers experienced the greatest increases in rental plot size. Private farmers lease additional land for the production of food and commercial sale. For private farmers, who on average lease 40–50 percent of the land they cultivate, this finding is normal and fits the national pattern, which witnessed

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Table 5.5. Percentage of food production that is consumed by managerial and farm worker households, 1995 and 2006

Commodity Meat Milk Potatoes Vegetables Fruit

Farm managers, 1995

Farm managers, 2006

Farm workers, 1995

Farm workers, 2006

65 52 79 94 100

24 15 67 54.5 94

56 54 89.5 96.5 100

32 30.5 56 43 98

Source: Author’s 1995 survey data (n=382); 2006 survey data (n=900). Note: The amount consumed was derived by subtracting the mean amount sold from the mean amount produced, for each food commodity. The term ‘‘consumed’’ is used broadly, indicating that the household has a variety of uses for food that is not sold.

an increase in the average size of a private farm from 43 hectares in 1992 to 81 hectares in 2006.∑∞ For farm managers, the situation is a bit more complex and deserves closer examination. A Pearson correlation (two-tailed test) between the increase in rental plot size and monetary income from food sales showed a positive relationship, although that coefficient was reliable only at the 74 percent degree of confidence, which is below the accepted standard of 95 percent. To address the entrepreneurial issue from a different angle, another calculation was made to show the percentage of food output that was consumed by managerial households (land winners during reform) and to compare that to the output consumed by farm workers’ households (land losers during reform).∑≤ Both cohorts are compared in two distinct time periods. The results are found in table 5.5. The table shows that both occupational groups consumed less in 2006 than in 1995. In other words, both managers and workers were selling more of their production in 2006, which in turn suggested that household food sustenance was secure and reflected a shift in sources of household of income.∑≥ The data are interesting because while both groups decreased consumption and increased the sale of high-value food goods (defined as meat and milk), managerial households reduced their consumption to a greater extent and sold higher volumes of high-value products, a function of significant increases in meat and milk production. Because meat and milk are high-value, the sale of animal husbandry products results in higher income flows from food sales,

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which in turn contributes to income differentiation between managers and workers.∑∂ Conversely, workers’ households reduced consumption and sold more low-value food products such as potatoes and vegetables. Thus, rental land, livestock production, and household monetary income are all related. FACTORS THAT AFFECT THE RENTAL OF LAND

The key question in this section is the relationship between the economic status of the household and the propensity to increase the size of a plot of rental land (rent land in). Recall that households’ basic survival was ensured by their private plot. Rental land is additional land obtained by the household after its survival is ensured. Therefore, an increase in rental land represents adaptation to new opportunities and a degree of entrepreneurship, even if the form of land tenure (leasing) was not unique to the post-Soviet period. Whereas private plots are used by most households to grow food for consumption, rental land contributes more directly to income stratification among households. The 2006 survey data yield several insights into the rental land market. The survey asked respondents why they increased the size of their rental land. Among households that increased their rental land holdings, just over one-half did so to increase their own food production and about one-third increased rental land for commercial reasons. Almost all households that increased rental land did so one time only. In contrast to the purchase market, where we saw a very small percentage of respondents intend to purchase land, the rental market is gaining strength: the 2006 survey revealed that 90 percent of rental land increases occurred during 2005 or 2006, reflecting growing optimism in the economy as a whole and the ability to profit from agricultural labor. But what factors explain which households increase rental land plots? Using the survey data from 2006, a first cut at an answer is suggested in table 5.6. The table divides the entire sample into income deciles. Those in the top income decile, the upper 10 percent of households, increased rental land much more than lower-income households. While households in all income brackets increased their rental land mean by less than .5 hectares, the upper 10 percent increased its rental holdings by a mean of 6.1 hectares (the six households with private farmers are included in this upper-income group, so there is some impact on the mean increase, but not an excessive one). Moreover, the table shows that once rental land is obtained, upper-income households are much more likely to sell their production, as indicated by the linear increase in income derived from food sales from lowest to highest income group. As the income scale is ascended, the percentage that food sales contribute to total household monetary income increases. Another approach to the question of which households increase rental land

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Behavioral Responses

Table 5.6. Mean increase in households’ rental land and agricultural food sales by income deciles, 2006

Monetary income deciles 0–9% (lowest decile) 10–19% 20–29% 30–39% 40–49% 50–59% 60–69% 70–79% 80–89% 90+% (highest decile) Mean for the sample

Mean monthly Standard Total monetary deviation for income from Mean rental income derived from food sales in rental land land increase food sales (%) 2006 (rubles) increase since 1991 (ha.) .11 .03 .04 .05 .09 .11 .45 .20 .16 6.1 .73

.84 .12 .09 .10 .24 .11 2.85 .69 .40 33.6 10.7

308 766 1,480 2,028 2,931 3,802 4,614 5,546 6,002 11,588 3,902

0–6 16–11 22–17 23–19 28–24 31–26 32–27 33–27 29–23 44 26

Source: Author’s 2006 survey data (n=900); author’s calculations. Note: In the last column, the range represents the range of income derived from household food sales, corresponding to the income range in that income category.

plots uses regression analysis and allows a test for causality. The intent is to construct a model that will have explanatory and predictive abilities. For this discussion, the dependent variable is the increase in rental plots since 1991, measured in hectares. The analysis combines three sets of independent variables: structural factors, livestock holdings, and different types of income, each of which is included in a regression model. Structural household factors. Structural factors are household characteristics that are not easily changed and are defined to include the size of the household (the number of members), age of the respondent, gender of the respondent, education of the respondent, and the number of pensioners in the household. The idea behind the testing for causal properties of structural factors is to discover whether innate household characteristics are driving land rental. Structural factors are the logical variables to include because there is a demonstrated relationship between age and education and support for market reform in general.∑∑ Therefore, it is reasonable to expect that structural factors are efficacious in influencing participation in the land market. Livestock holdings. The next set of independent variables concerns the pos-

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session of livestock. Separate questions asked the respondent how many cows, pigs, horses, and sheep the household had in 2006. The essential idea of this variable is to explore whether rental land plots are increased owing to the presence of livestock. Types of household income. The last set of independent variables concerns household income. The 2006 survey (as did all previous surveys) collected data about many different types of income for all members of the household— salaries from first and second jobs, pensions and transfer payments, alimony, food sales, dividends, business income, and other sources. Except for private farmers, business income is defined as nonagricultural income, that is, income derived from nonagricultural activities.∑∏ Previous analysis showed that some sources of income are more important than others, and so this analysis uses the three sources that typically are the largest: income from household food sales, the husband’s business income, and income from the husband’s primary job. The basic idea behind this variable is to examine the impact of different types of income on land rental. The regression model is presented in table 5.7. The model as a whole is statistically significant and has reasonably strong explanatory power with an R-squared of .44, which means that the model accounts for 44 percent of the variance. The table shows that among structural factors, only the size of the family is statistically significant, but its causal strength (beta) is very weak and is signed negatively, suggesting that this is not a determining factor in whether a household increases its rental land. All of the livestock holding variables are statistically significant, but among the four variables, only the number of cows and number of horses have moderate explanatory power, with a beta of .17 and .24, respectively, suggesting that the presence of livestock does motivate a household to acquire use rights for more land, thus confirming the finding by Pallott and Nefedova.∑π Finally, among the income variables, only the husband’s business income is statistically significant, and in fact, it has the strongest causal property of any of the variables in the model with a beta of .46. This finding suggests that households which depend on basic salary and income from the sale of produce (as well as other sources of income) do not have the monetary resources to increase rental land. Instead, households that are more entrepreneurial and have additional monetary resources are more likely to expand their rental plot (and to do so by larger sizes). In short, households that have at least one entrepreneurial member are able to reinvest in their productive capacity by expanding their rental plots, thus further adding to their productive potential and making it likely they will have either higher incomes or higher consumption in the future. Who, then, increases rental land plots? The regression model above strongly

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Table 5.7. Linear regression on increases in rented land

Variable

Standard error

Beta

T

3.310 –.536 .064

2.859 .267 .473

— –.064 .005

1.158 –2.009 .134

.247 .045 .893

–1.025 –.018 –.051

.681 .032 .131

–.043 –.021 –.012

–1.505 –.558 –.386

.133 .577 .700

.977 6.781 –.660 .118 3.6E-005

.199 .898 .132 .034 .000

.175 .246 –.168 .099 .010

4.901 7.553 –5.014 3.464 .313

[.001 [.001 [.001 .001 .755

.001

.000

.466

15.209

[.001

.000

.000

.052

1.634

.103

Coefficient

Constant Size of family Number of pensioners in household Respondent’s gender Respondent’s age Respondent’s educational level Number of cows Number of horses Number of pigs Number of sheep Income from ag sales— husband Business income— husband Primary salary of husband F=47.319 R-Squared=.44 Sig. [.001

Significance

Source: Author’s 2006 survey data (n=900).

suggests that: (1) structural household factors are less important than other factors in causing households to increase rental land plots; (2) lower-income households are less likely to increase their rental plots, suggesting that economic ability is more important than economic need; (3) households that depend on salaries, dividends, income from sale of produce, and pensions are less likely to increase rental land; and (4) business income earned by the husband is a fairly strong predictor of the likelihood that the household will increase rental land. Business income is an indicator of entrepreneurship, and entrepreneurs expand land holdings, thereby suggesting an increase in rural social stratification as the land market evolves and matures in the future. FACTORS THAT AFFECT THE RENTING OUT OF LAND

Just as some households rented in agricultural land, other households disposed of their land rights by renting out land. This behavior also reflects the

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use of opportunities presented by reform. In order to analyze the disposal of land, the analysis shifts to a focus on land shares and not real land. Why? First, very few households reduced holdings of real land—of 900 households in the sample, only six reduced the size of their private plots, and 29 households reduced the size of their rental plots. The second reason is that land shares are likely to be rented out to a large farm or private farmer.∑∫ For households that still owned their land shares, the most popular option for the survey sample as a whole and in each region was to rent their land shares. During the period 1991–2006, 422 households, or 47 percent of the total sample, had rented out their land shares, most commonly to a large farm (379 households) or to a private farmer (50). In other words, these rentals involved formal agreements, as discussed above. The rental of land shares to friends, neighbors, or relatives, that is, informal land agreements, account for less than 1 percent of responses. These patterns fit national trends as well. Households rent out their land shares in large part because land legislation only permitted the conversion of land shares to actual land if a family or individual wanted to start a private farm (or, starting in 1996, to expand a private plot). Private farming, of course, was difficult and risky, and the rate of private farm creation was very low (less than two farms per thousand rural residents) across most regions of Russia during the 1990s.∑Ω In fact, the ‘‘saturation’’ of private farming remained low through 2007; the number of private farms at the end of 2007 was lower than in mid-1994 (though the average size of private farms increased substantially during the same period). Thus, for most households that were unwilling to take the entrepreneurial risk represented by private farming, the renting of land to a former collective farm was the next best option and has been the most common practice since reform began, with 1993 and 1994 having the greatest volume of lease-out transactions among households participating in the 2006 survey.∏≠ Rental payments for land shares may be monetary or in-kind, the latter being the most common form of payment from large farms. We start by examining the relationship between household monetary income and the renting out of land shares. It has already been established that upper-income households have larger total land holdings, have larger rental plots for their own use, and expanded their total real land holdings more than did lower-income households. The question is whether upper-income households rent out more land than do lower-income households. The results are presented in table 5.8. The table shows that for all the regions in the sample (first data column), there is a linear increase in the amount of land rented out as household income

134 Table 5.8. Mean size of land rights rented out by selected monetary income deciles and regions, 2006 (in hectares)

Lowest decile Second-lowest decile Second-highest decile Highest decile Total mean

All regions in sample

Moscow oblast

Leningrad oblast

Kurgan oblast

Amur oblast

Voronezh oblast

Krasnodar krai

Altai krai

Krasnoyarsk krai

Republic of Tatarstan

7.19 9.08 12.12

4.04 6.67 3.78

3.58 6.50 5.21

13.80 16.65 22.50

13.60 NA 19.47

5.90 6.89 NA

7.08 9.64 NA

.22 NA 9.96

11.46 17.56 16.56

8.91 8.82 12.00

13.65 11.39

3.81 5.01

6.27 5.88

19.00 15.77

22.17 20.55

5.00 7.31

6.20 8.89

8.00 9.80

18.83 19.51

19.60 11.74

Source: Author’s 2006 survey data (n=900). Note: In Altai krai, two of four villages did not distribute land shares. NA=no households in that income category in that region. In highest income decile in Voronezh and Altai krai, n=1.

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increases. We should not read too much into this finding—it does not necessarily mean that higher-income households are absolutely more likely to rent out more of their land or that lower-income households are less likely to rent out—because it may merely reflect the fact that the former often have more land to rent out because, having more household members, they received more land shares. Thus, the first data column is in part measuring human capital in the household. A larger number of people in the household meant more land was available because more land shares were received. Thus, it may be generally true that upper-income households are more likely to rent out land rights, but they also have more to rent out. A question for future investigation is whether upper income households in effect ‘‘traded’’ their theoretical land rights in return for the rental or purchase of real land. The second finding reflected in the table is that there appear to be no obvious regional patterns of land rentals whereby land rights are retained by households in good agricultural regions and rented out in poorer agricultural regions. The regions with the largest rental plots tend to be those where the size of the land share was largest—Amur oblast, Krasnoyarsk krai, and Kurgan oblast. Finally, more research is needed in order to fully understand the spatial relationship between village location and proclivity to rent out land shares.∏∞ One would expect that households that are distant from a raion center may find it difficult to rent their land shares. Most likely, a large farm would constitute the primary demand for land with such a location, but many large farms are located close to an urban center because Soviet planners had intended for these farms to provide urban consumers with food. Private farmers or other private individuals are unlikely to exhibit strong demand for land located more than forty kilometers from a raion center. This is because households would encounter difficulties finding other renters or using the land themselves for growing food and transporting it to market owing to inadequate roads and transportation. Anyone who has traveled in rural Russia could attest to the fact that being forty kilometers from a raion center often puts you in the middle of nowhere, with few modern amenities. For now, analysis of the survey data shows that households within ten kilometers of a raion center received relatively little from dividends and payments in-kind, but this obscures the fact that rental payments could be in the form of services and other material inputs from large farms. Moreover, in some cases that have been discussed in the Russian press, large farms do not make any payments for land rights.∏≤ Households close to the raion center are geographically advantaged in that it would be possible for a member to commute to the center for employment. These households are also advantaged in

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that they have the highest mean income compared to households in the other distance categories. Second, households located eleven to twenty kilometers from a raion center received the highest mean dividends and income in-kind. Third, households located 41 or more kilometers away from a raion center are severely disadvantaged and receive both the lowest mean dividend payments and lowest payments in-kind from land rights rentals.

Conclusion This chapter shifted the locus of analysis from state policy to data collected from rural households. Moving from a macro- to a micro-level of analysis allowed examination of households’ behavioral responses within the parameters defined by reform institutions. In several former communist nations in Eastern Europe the impact of reform policies was direct and immediate. In some of those countries, such as Albania and Estonia, decollectivization led to the dissolution of collective farms in their entirety. In Russia, the impact of reform institutions has been more differentiated. Nonetheless, the impact is significant. To paraphrase Lampland, the design of reform influenced not only how people wanted to live their lives but how their lives were actually lived.∏≥ The design of reform in Russia had an impact on rural households and framed their responses in the following ways. 1. The design of reform determined the predominant types of land that would be used and owned by households. Most agricultural land used and owned by households consisted of private plots and land shares. Only a certain cohort of households leased additional land or engaged in other formal or informal land transactions. 2. The design of reform determined how much land households would use and own. Ordinary rural dwellers and rural households in Russia own very little real agricultural land. On a per capita basis, the amount of real land held by most households does not differ that much from the amount held in the Soviet period. Reform brought paper entitlements to land which do not represent true ownership and for which property rights are less than secure owing to postprivatization economic trends. The economic consequences of this reform design led to land and activity fragmentation for households that expanded holdings beyond land shares. 3. The design of reform created dependence by households on government or large farms, and much less so on market sources, in order to expand land holdings. As a result, land transactions tend to be more formal than informal. In the formal market, bureaucratic obstacles act as an important constraint on the purchase market, as do economic and financial considerations. 4. The design of reform stipulated that land transactions be regulated by law.

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5.

6.

7. 8.

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This in and of itself is neither unique nor sinister, and in fact is considered a positive aspect in terms of protecting and enforcing property rights. But regulation is not value-neutral. The impact of reform influences households’ land transactions by creating incentives to lease small plots of land. Incentives and economic outcomes stemming from reform policies have been differentiated among households by income level. Significant increases in land holdings at the household level are evident for only a relatively few. Higher-income households are more likely to lease land in. But the number of high-income households is small. Responses to reform policies have been differentiated not only across household income strata but also by profession. Private farmers and farm managers increased the size of their rental plots the most, while common farm workers may be considered losers in terms of the amount of real land they obtained. Reform institutions created incentives for individuals to lease their land shares to large farms, in effect helping to keep large farms intact. By influencing the types and sizes of land plots, the design of reform had an indirect effect on income potential by imposing inherent limits on income. Among rural households, only higher-income households are more likely to lease land out.

Thus, the impact of reform institutions is evident at the household level in several important ways. But this chapter also demonstrated that higherincome households are able to adapt and maneuver within an illiberal framework. They have been able to utilize the liberal aspects of reform in order to expand land holdings and to benefit economically. The dual nature of Russia’s land reform yields differentiated opportunity structures and outcomes for different types of households. The impact of reform institutions on households’ behavioral responses has socioeconomic implications. Allina-Pisano argued that ‘‘poverty and inequality ossified many villagers’ economic status and limited opportunities for improvement in the material quality of their lives. As owners of land on paper alone, and unable to garner the economic and political resources necessary to make use of their property, many worker-shareholders saw their opportunities recede into the distance.’’∏∂ To be sure, market reform was attended with the rise of mass rural poverty and significant declines in the standard of living for many rural households. But those outcomes appear to be linked to other economic processes, for instance, inflation, price disparities, and wage arrears, and not specifically to land privatization. Nonetheless, it is true that land privatization is a relevant factor in undoing Soviet-era egalitarianism and contributing to increasing stratification among rural households. This topic is explored in more detail in Chapter 6.

6

The Effects of Land Reform: Stratification and Class Development

Chapter 5 illustrated that considerable constraints are discernible at the household level due to the design of reform. It was shown that most rural households do not have much real agricultural land. In this respect, contemporary land reform has been illusory for many rural dwellers—households did not receive much actual land on a per capita basis, and most households have only fractionally more land after reform than they had during the Soviet period. If property is the basis for economic and political power, not much change has taken place since the end of the Soviet Union in terms of transferring property (and power) to ordinary rural citizens. Only a small percentage of households have taken advantage of opportunities presented by land reform and have benefited significantly. At the same time, upper-income households did adapt, did utilize new opportunities, and did benefit economically. The effects of their adaptation are demonstrable through increased rural stratification and the emergence of a nascent class structure. This chapter uses survey data to show how the liberal aspects of reform institutions contributed to ongoing sociological changes in the countryside. Therefore, the purpose of this chapter is to widen the analytic scope by exploring the impact of Russia’s land reform on rural stratification and social structure. The chapter investigates identifiable characteristics and behaviors of the richest and poorest categories of households, using a specific

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set of criteria for class composition. In particular, the chapter analyzes how top and bottom strata differ, arguing that these differences form the basis for an emerging class structure in rural Russia. The analysis is based on empirical data from panel surveys conducted during 1995–2003, and from a crosssectional survey conducted in 2006. The following arguments are presented. 1. In addition to the illiberal aspects of the design of reform examined in Chapter 5, reform had a liberal component—the introduction of new opportunities for risk-taking, entrepreneurship, and adaptation. The analysis focuses on the socioeconomic effects of these new opportunities. 2. The processes of differentiation and stratification that began during the 1990s have passed a critical point. The economic processes inherent in market reforms have gone beyond stratification or the presence of mere economic strata. 3. As a result of reform processes, it is now appropriate to talk in terms of an emerging class structure within Russia’s rural society. Using specific criteria and measurements of class (drawn from the literature about class), it is possible to sketch the broad parameters of this emerging class structure in rural Russia. As detailed below, the concept of class is much broader than mere stratification (although certainly classes stem from stratification). Beyond stratification, additional economic processes are shown, as are various psychological and value orientations that separate upper and lower classes.

The null hypothesis would argue that an emerging class structure has yet to appear, that various forms of resistance stopped historical development, that market reforms did not engender processes that contributed to the development of nascent classes, or that processes begun in the 1990s have not progressed beyond stratification. This alternative hypothesis may have been more or less tenable in the early or mid-1990s, but now it is no longer plausible. In short, the argument herein rests on the premise that a class is comprised of a constellation of factors including but not limited to economic differentiation, consciousness, and shared values. The analysis below demonstrates not only income and land stratification between the top and bottom income strata, but also significant differentiation with regard to attitudes and values.∞ From the outset it is appropriate to note the following caveats. First, the analysis presents a two-tiered class structure, essentially comprised of well-off individuals and households (known as kulaks during the Soviet period) and poor individuals and households.≤ This is admittedly a rudimentary, perhaps crude, paradigm. The analysis does not investigate a middle stratum that might compose a third stratum of peasant class. Why? The primary reason is that based on the criteria for class, the differences between a ‘‘middle peas-

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antry’’ and the ‘‘poor peasantry’’ are often blurred. At present, economic characteristics and class consciousness, as well as attitudes and values, do not vary enough to allow significant distinctions between poor and middle-income peasants. In short, at this time, the rural class structure is better demonstrated and more accurately characterized by focusing on the two extremes of the income continuum. If one were to introduce an artificial middle category that is not distinctive, the analysis would become muddled. Thus, the analysis is based on a two-tiered class structure because aside from income levels, the poorest cohort is not radically different from middle-poor, upper-poor, lowermiddle, and middle-middle income groups on the other dimensions used to measure class development. The second caveat is that although the findings are presented with confidence that they are real and reflect processes and developments that are broadly representative of rural Russia, it is a daunting task to make broad generalizations that pertain to 39 million people (the rural population of Russia) based on a limited sample or a series of limited samples. For that reason, the findings perhaps should be interpreted as suggestive rather than definitive. The third caveat is that even though some panel data are used, the actual survey questionnaires changed somewhat when new questions were added as new ideas and interests evolved in later waves of the surveys, and in that sense not all of the measures of class may use data from the entire 1995–2003 time frame. The fourth caveat is that the surveys used for the analysis were not specifically designed to measure the development of class, and so some of the measures may not be as precise as they would be in a survey that was specifically designed for that purpose. Consequently, in some cases proxy measures have to be used, although I am comfortable with the criteria selected to define class composition and the data used for measurement. Writing in the early 1980s, Alain de Janvry presented a typology of three broad categories of land reform: (1) those that do not challenge precapitalist estates’ domination of agriculture; (2) those that promote the transition away from feudalism and toward agrarian capitalism; and (3) those within capitalist structures. Of the three, the first is merely redistributive, leaving the dominant mode of production and the classes that are in control of land intact. The second type, which induces transformation from precapitalist to capitalist agriculture, has two variants. The first variant leaves the landed elite in control of the state and creates a large-scale capitalist agricultural sector based on hired wage laborers. Examples are the land reforms in Colombia in 1968 and in Ecuador in 1964. The second variant displaces the landed elite and substitutes it for a newly created urban and rural bourgeoisie, the latter created through transfer of landownership and the transition from landed estates to commercial farms. Examples of this type of land reform took place in Chile

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(1967–73) and Guatemala (1952–54). The third type of land reform occurs within the capitalist mode of production and is characterized by a shift from agriculture based on hired labor to agriculture based on privately owned commercial farms.≥ Thus, de Janvry’s typology was important for making us sensitive to several critical elements of land reform: the change in the mode of production, the composition of the dominant stratum of producers, which elites control the government, the composition of the dominant economic and political elite in rural society, and the rural class structure. Although de Janvry did not explicitly apply his typology of land reform to communist nations, it is easy to see how the components would apply. In the Soviet Union, and later in Eastern Europe, communist land reforms were not intended to lead to agrarian capitalism, but several similar components were present in communist land reforms, as indicated by de Janvry’s typology. For example, communist land reforms changed rural class relations and elite control of the government by removing land from individual ownership and nationalizing land. Communist land reforms changed the dominant mode of food production from private producers to large state-controlled farms. Communist land reforms also were intended to break the economic links between economies in the Soviet bloc and capitalist economies.∂ Thus, communist land reform was intended to facilitate economic autarky. Because de Janvry was interested mainly in land reforms in feudal and capitalist states, his typology was never applied to subsequent land privatizations in postcommunist states. Nonetheless, it may be argued that the components of his typology apply to postcommunist land reforms as well: (1) the change in the mode of production (the transition from large state-owned farms to the individualization of production); (2) the composition of the dominant stratum of producers (the abolition or reformation of large state-owned farms by market-based corporate farms with financial and operational independence); (3) a change in the elites who control the government (the replacement of the party nomenklatura by a nonparty economic elite that gained power through market reforms, although within the agricultural sector less elite turnover has occurred among the most important political and economic institutions); and (4) change in rural stratification and the rural class structure (emerging stratification and the development of a rural petit bourgeoisie). Particularly pertinent to Russia’s contemporary land reform is the fourth aspect.

Rural Stratification and Class Structure in Soviet and Post-Soviet Russia During the Soviet period, the degree of economic stratification, a contentious issue among Western academics, was exacerbated by the paucity of the

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data released by the Soviet government. Disagreement existed about whether stratification in Soviet society increased or decreased over time, whether the Soviet Union was more or less equal than its communist counterparts in Eastern Europe, and how much more unequal the capitalist West was than Soviet society. A detailed examination of inequality in the USSR is beyond the scope of this chapter, but it has been studied by others.∑ Detailed data about farm wages and individual incomes were largely lacking until the mid-1960s. When data did become available, stratification by occupation was evident. For example, farm managers and brigade leaders were the best paid persons on a collective farm and could earn up to four times the monthly income of an unskilled field worker.∏ Nonetheless, household differentiation was mitigated somewhat by the state’s rural social policies, which pursued egalitarian goals beginning in the late 1960s. Moreover, household differentiation was limited by the fact that all farm families had access to a plot of land in order to grow food for family consumption or for sale at urban farmers’ markets. The size of households’ land plots was regulated by law, so that no one household was able to use large tracts of land. While differences in land plots did exist, these size differences were not extremely large and were based on family size, not occupation. Thus, although Soviet rural society had elements of differentiation, overall, one could not conclude that the rural sector was highly stratified, at least in terms of household income and productive capital. A consensus exists that economic differentiation was more significant within urban areas of Soviet Russia, and between town and country, than within the countryside itself, owing to existing rural material conditions and to overt state policies.π Nonetheless, to say that the kulaks were destroyed by Stalin is not to suggest that rural living standards were perfectly egalitarian. There is evidence to suggest that within the collective farm economy the quality of the housing distributed by farm managers varied according to whether he liked the recipient or not.∫ A significant portion of total household income came from the production and consumption of food from the family’s plot of land, and this was a source of inequality because some households grew more food and/or sold more food at urban markets.Ω With regard to income derived from farm labor, there was wage inequality among different types of labor performed by farm members and between farm specialists and manual workers.∞≠ In the mid-1970s, the wages of the top 10 percent were four times higher than the wages of the lowest 10 percent.∞∞ Finally, even the sizes of land plots that rural households were allowed to use to grow food were not equal (although the differences in size were not enormous). Plot sizes varied by republic, by raion within an oblast, by family size, and by type of employment (collective farm worker, state farm worker, and pensioner).

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Although inequality existed among rural individuals, in the post-Stalin period macro-level rural policies were designed to level economic differences across regions, among collective farms, across occupations within collective farms, and between state and collective farms.∞≤ This policy of leveling (uravnilovka) was pursued with even greater rigor after 1965, when a more egalitarian wage system was employed, subsidies and higher above-quota prices were directed toward weaker farms, and higher procurement prices were offered to poor agricultural areas. As a result, by the mid-1980s the Soviet countryside was not completely equal, but it would be misleading to portray rural social structure as divided into distinct classes (poor, middle, rich) as in the Leninist conception. According to the official propaganda, by the time the Soviet Union had reached the stage of ‘‘mature socialism’’ there were no significant class divisions in Soviet society. The Soviet government explained this occurrence in Marxist terms: state ownership of the means of production removed the basis for class and class exploitation. In the 1930s Stalin removed the vestiges of a rural class structure through the violent elimination of the kulaks. Thereafter, policies were instituted to prevent their reemergence. Not only was their land taken, but their economic power in the countryside was destroyed.∞≥ The absence of private ownership of the means of production required the traditional Marxist conception of class to be modified due to the nationalization of land and state ownership in communist society. In the late 1950s Milovan Djilas introduced his idea of a ‘‘new class,’’ by which he meant class based on control of the means of production, not ownership of it.∞∂ Subsequently, concepts of class were applied to Soviet society based upon profession and type of work rather than ownership of the means of production. Western analysts grouped individuals within the Soviet rural economy according to a fourfold social structure: collective farm workers, state farm workers, individual peasants, and others (pensioners, housewives, and students). Within the rural collective sector (collective and state farms), four official categories were used to designate social structure: administrative personnel and specialists, workers who performed mechanized labor, poultry and livestock handlers, and ordinary field workers.∞∑ According to the Soviet government, these categories represented a replication of social cleavages and social structure in the rural economy. Rural social policies were designed on this basis. THE POST-SOVIET PERIOD

Egalitarian tendencies and policies from the Soviet period were evident into the 1990s, despite reform rhetoric that spoke of creating a new class of rural entrepreneurs (harkening back to Bukharin’s exhortation to peasants to ‘‘enrich yourselves’’ during the New Economic Policy of the mid-1920s). In

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fact, a primary goal of postcommunist agrarian reform was to provide opportunities and incentives for ambitious individuals to differentiate themselves. In short, the goal was to usher in a social revolution of sorts and to encourage economic stratification and economic efficiency. Doing so would upend the rural social structure of the Soviet era, one based on egalitarian policies. In the vision of Moscow reformers, the primary instrument for redefining the rural social structure was to be the creation of a stratum of private farms that was to supplant the economic importance of large collective farms. The fate of private farming is another story and has been dealt with elsewhere. But here it is important to note that throughout rural society beginning in the mid-1990s, the effects of market reforms and growing inequality started to become apparent in some regions, while in others the egalitarian Soviet legacy was still strong.∞∏ As Russia’s economy improved and economic growth ensued after 1999, rural stratification and the question of class development in rural Russia have taken on new importance. Three main institutional changes began in the early 1990s that affected rural stratification. First, incomes were deregulated, which meant that members of the household were able to earn as much (or as little) as they wanted. Moreover, wage levels were no longer centrally determined, although the Ministry of Agriculture continued to issue ‘‘recommendations’’ for wage gradients for workers engaged in production on large farms. Most important, household members were free to terminate their employment on large farms and seek alternative forms of employment, full- or part-time, either in agricultural or nonagricultural enterprises. They could become self-employed and start a household enterprise or they could work for others in whatever employment they could find. Restrictions on changing one’s residence was relaxed, which gave some impetus to the growth of a labor market and the (theoretical) right to migrate to areas where wages were higher. Second, the freedom to sell food grown on the household plot was expanded, and marketing opportunities were increased. In the Soviet period, selling food at urban farm markets was technically illegal and was tolerated by the regime only because food from private plots supplied such a large percentage of the nation’s food and provided a crucial source of food for urban dwellers.∞π Through the late Gorbachev period and into the post-Soviet era, restrictions were liberalized and then lifted altogether on the number of livestock the household could possess, the size of the household plot, and the avenues through which food could be sold.∞∫ Thus, in the post-Soviet period, significant stratification occurred as some households used their food production for subsistence, while others used the sale of their production as a primary source of income.∞Ω Third, in the post-Soviet period, households were given the right to expand

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their land holdings through the paper land shares that were obtained as a result of farm privatization and also to acquire additional real land. As we have seen, most real land expansion was through lease arrangements, although the purchase of agricultural land was legalized as well. Land expansion has a demonstrable effect on household income and stratification.≤≠

The Impact of Land Reform: Rural Stratification When Russia began its transition to a market economy in the early 1990s, society was not highly unequal, at least outwardly, a legacy of deliberate Soviet social policies that regulated land holdings and income from the primary place of employment. In communist Russia economic strata existed, though certainly the differentiation was less than that in capitalist nations. Robin Okey, citing the Hungarian sociologist Zsuza Ferge, argues that the socialist system improved living conditions and decreased relative differences between social classes but was not dedicated to complete equality.≤∞ For this reason, Soviet-type societies, including the USSR, were not perfectly egalitarian. Differences were manifest mainly in terms of differing access to goods, services, and opportunities, mostly as a result of privilege and position rather than ownership.≤≤ Moreover, in Soviet-type societies, lifestyles acted as boundary markers between social groups more than income or housing did.≤≥ Despite evidence of differentiation in Soviet society, the relatively egalitarian nature of communist Russia stands in stark contrast to the widening differentials in the post-Soviet period. As market reforms unfolded during the 1990s, popular attitudes shifted: preferences for income equality diminished and the acceptance of significant differentiation began to appear in Russia.≤∂ Indeed, income differentiation became the new reality, as reflected by an increasing Gini coefficient, a commonly used statistical measure of inequality. In 1991 the Gini coefficient in Russia was .25. It rose to a peak of .40 in 1994 before declining slightly to stand at .39 in 1999, at the end of the Yeltsin period.≤∑ By the mid-1990s, the richest 20 percent of the population received almost 50 percent of total monetary income in the nation.≤∏ Inequality within the urban population during the 1990s grew the most, attended with the rise of an oligarchic class—the concentration of wealth in the hands of the few—and the emergence of urban ‘‘New Russians.’’≤π More broadly, an urban ‘‘middle class’’ appeared, mostly in large cities, which not only represented an important change in social structure but also implied that a stratum of the population had been successful in separating itself from the miseries of mass impoverishment and poverty that have characterized the Russian economic transition.≤∫

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As a result of these trends, already by the mid-1990s considerable attention was being devoted to differentiation and stratification in Russia.≤Ω This attention was focused mainly on urban society.≥≠ Much less attention was paid to economic differentiation in the rural sphere, with a few exceptions.≥∞ Most interest in rural stratification focused on the rural poor and rural poverty.≥≤ Generally speaking, it is often assumed that while economic differentiation did occur in the rural sector during the 1990s, it was less significant than in urban Russia.≥≥ Among rural households in the post-Soviet period, there are clear indicators that some differentiated themselves in significant ways and that stratification has increased. The initial adaptation strategy of rural households to market reform was to lean on informal networks and social capital to cope with the dramatic changes brought on by market reform. In short, impulses to preserve peasants’ traditional ‘‘moral economy’’ were strong, and adaptive responses were geared toward survival and subsistence. Thus, it is clear that during the early phases of the transition from a command to a market economy rural households relied primarily on the labor of the peasant moral economy and the social helping networks of kin and neighbors to survive. It is not surprising, therefore, that early on economically better-off households possessed higher levels of household labor and social capital. In addition, because households were mainly concerned with survival for much of the 1990s, participation in the land market consisted mainly of privatizing the household’s private plot or acquiring land shares; it was not until deep into the Putin period that the acquisition of rental plots became much more popular, aided by a growing economy and a feeling of societal stability. Consequently, as time passed, the evidence suggests that labor and land began to affect household income independently, thereby giving rise to new mechanisms of rural stratification. Therefore, in the postcommunist period, two economic effects became evident as time went on: (1) the Russian countryside became increasingly stratified—in terms of both land and income—as a small cohort began to differentiate itself by taking advantage of opportunities created by market reform, including land reform and a combination of other economic opportunities; and (2) rural social mobility, both upward and downward, ensued. Postcommunist social mobility was quite different from its Soviet-era counterpart. The nature of change and the factors that affect rural social mobility have been analyzed elsewhere.≥∂ This discussion focuses on stratification. The Russian countryside today is more stratified than it was during the Soviet period, when differences in income and land holdings existed but were not significant. One continuity from the Soviet period is that the household private plot continues to be an important factor in differentiation among

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households, and financial assistance to private plot operators from government programs is likely to increase rural stratification.≥∑ What has changed is that contemporary stratification is characterized by a significant increase in the coefficient of differentiation and a growth in the concentration of monetary income and land holdings in an upper cohort.≥∏ In particular, the rebound in the Russian economy at large has been accompanied by increasing income stratification among rural households. For example, in the 2001 survey, the coefficient of differentiation was 5.6, rising to 6.3 in 2003 and to 10.8 in the 2006 survey, which means that by 2006 the upper 10 percent of households had almost eleven times the mean monthly monetary income that households in the lowest decile had.≥π Panel survey data from 1995–2003 are useful for identifying some of the sources of stratification.≥∫ Panel data are important because they track changes in a given cohort over time and are directly comparable. An important source of stratification is productive capital—animals and land. These two variables are mutually supportive—additional land is acquired (mainly through leases) to provide pasture and grazing for animals. There is clear evidence that higherincome households increased their productive capital, a fact that not only led to increased food production and sales during the 1990s but also positions them to increase differentiation in the future. Conversely, lower-income households often experienced an erosion in productive capacity. In the 1995 survey, animal holdings by low-income individuals were very close to the mean for the entire sample. The 2003 wave of the survey, however, showed a deterioration in animal holdings in the lowest income categories: mean holdings were significantly below the mean for the sample as a whole, with lower means of cows, pigs, and poultry.≥Ω Changes in animal stocks may be a short-term survival strategy because animals may be consumed. For this reason, a better measure of stratification is land used by the household. In this respect, it is noteworthy that upper-income individuals increased substantially the amount of rented land they used. Using 1999, 2001, and 2003 as time points for comparison, a ‘‘total land holdings’’ variable was created by summing land from household plots, rental land, allocated land, and land shares. Mean land holding by the top and bottom income deciles are indicated in table 6.1. In the table, the 1999 and 2003 data are directly comparable because they are from different waves of a panel survey. The data from 2001 are from a separate survey conducted in different regions and are not directly comparable to the data from 1999 and 2003 but are illustrative of a general trend. The table shows that during the macro-economic recovery in Russia beginning in 1999, differences in land holdings became more pronounced.∂≠ In 2003 the

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Table 6.1. Comparison of mean household land holdings by top and bottom income deciles, 1999–2003 (in hectares)

Top income decile Bottom income decile

1999

2001

2003

8.2 6.0

12.3 5.8

14.8 5.9

Sources: Author’s survey data for 1999 (n=382); 2001 (n=800); and 2003 (n=382). Note: Land holdings are defined as land shares, private plots, rental land, and other land such as an allotted plot from a large farm.

upper income decile of households had almost doubled their land holdings compared to 1999, while the bottom decile actually experienced a slight decrease. To put it differently, in 1999 the differential between the highest and lowest deciles was about 1.3; in 2003, the highest decile controlled almost 2.5 times more land than the lowest decile. Thus, land differentiation increased over time, and there is a linear increase in the coefficient of differentiation across the three time points. To be sure, the 2003 data are hardly suggestive of the emergence of a stratum of large landed estates (especially since this variable includes land shares). But the emergence of differences in land holdings is significant, and there is strong evidence that land has surpassed profession in terms of affecting stratification among households.∂∞ It might be argued—rightly so—that the inclusion of land shares in household land holdings distorts the picture because of co-linearity with the number of household members who received land shares. Even so, at worst, the data suggest that lower-income households experienced an erosion in human capital or disposed of their land shares. The response to that argument is that even if real land holdings are considered, the land differential increased nonetheless, as shown in table 6.2. This table reflects three main developments during 1995–2003: (1) households in the top income decile increased real land holdings significantly; (2) households in the bottom income decile actually experienced a decrease in real land holdings; and (3) as a result, the coefficient of differentiation in land holdings between top-income-decile and bottom-income-decile households increased. If one combines tables 6.1 and 6.2, it is clear that lower-income households experienced stagnation in land holdings that include land shares and actually had less real land in 2003 than in 1995. Both of these occurrences may be at least in part attributed to household demographics and labor, but they also speak to households’ strategies, inclinations, and abilities.

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Table 6.2. Comparison of mean household land holdings by top and bottom income deciles, 1995–2003 (in hectares)

Top income decile Bottom income decile

1995

2003

2.70 .58

15.90 .42

Sources: Author’s survey data for 1995 (n=382); 2003 (n=382). Note: Land holdings are defined as private plot, rental land, and other land; land shares are excluded.

The panel data reflecting land stratification are confirmed by the crosssectional survey data from 2006. In terms of total real land holdings, the 2006 survey data show that households in the lowest decile of total income have real holdings of .43 hectares, while households in the highest income decile have real holdings of 6.6 hectares. This differentiation is found in the size of rental plots as well. Households in the lowest decile of total income have rental plots with a mean size of .02 hectares, in other words, virtually no rental land.∂≤ In contrast, households in the upper 10 percent of total income have rental plots with a mean size of 6.1 hectares, thereby representing a significant difference from the rest of the sample. More specific analysis of stratification has been made by Alexandr Petrikov, director of the All-Russian Agrarian Institute in Moscow. The 2006 national agricultural census found that 17.9 million private plots were in use on 8.6 million hectares of land, with an average size of .14 hectares for the urban population and .52 hectares for the rural population. On the basis of survey data collected by his Agrarian Institute (conducted in thirty-three regions and sampling forty-five hundred owners of private plots), Petrikov postulated a three-tiered grouping of private plot operators. In the first group, comprising about 12 percent of the sample, were private plot operators who depended on the sale of production as their primary source of income. This group was not distinct from private farms and in fact competed with them. The second group, making up about 55 percent of the sample, had mixed use of their private plot—some production was sold, some was consumed—and this group used production from their private plot as a supplementary source of income. The third group, consisting of 33 percent of the sample, depended on the private plot as their basic source of food and engaged in very little food trade and thus earned little monetary income from food sales.∂≥ With Petrikov’s typology as a point of departure, the effect of the size of the

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Table 6.3. Size of private plot and household income, 2006

Size of private plot (ha.)

Mean household income from food sales (rubles)

Mean household monetary income (rubles)

0 2,023 2,822 2,208 2,064 3,095 3,878 3,326 4,350 4,726 4,775 6,423 3,848 2,159 3,902

11,117 9,667 12,703 12,606 14,344 13,700 15,786 14,000 15,579 15,245 15,041 12,441 10,028 13,002 14,780

00 (no plot) .01–.019 .02–.029 .03–.039 .04–.049 .05–.059 .06–.10 .11–.15 .16–.20 .30–.35 .36–.40 .41–.45 .46–.50 .51+ Mean for the sample

Source: Author’s survey data, 2006 (n=900). Note: Numbers have been rounded.

household private plot on monetary stratification is shown by the 2006 survey data and illustrated in table 6.3. As the table shows, households with the very smallest private plots have less income from food sales, as would be expected, and also have less total monetary income. Conversely, households with larger plots have more income from food sales and total income. However, the main finding is that this trend—more land equals more income—is true only up to a point. Income from food sales and total household income rise with the size of a private plot up to .45 hectares and decrease thereafter. Thus, Petrikov’s argument is nuanced by the 2006 data in that private plots do not facilitate income stratification through all sizes of plots, and their effects on income do not extrapolate indefinitely. Market reforms created new opportunities for economic advancement. Some households were better able and disposed to take advantage of those opportunities, and this section has shown an increase in rural stratification in three directions: productive capital, monetary income, and land holdings. With the ownership of property (the means of production) as the basis for the

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formation and existence of classes, the question of rural class development is considered in the next section.

The Impact of Land Reform: Class Development According to official propaganda from the former Soviet government, the USSR was an egalitarian society without significant class differences. Most analysts agree that, in reality, egalitarianism was more theoretical than real and that meaningful differences did exist, both within and between the broad categories of social structure defined by the Soviet government. Since market reforms were introduced into Russia in the early 1990s, the economy and society as a whole have experienced a number of phenomena that were largely unknown during the Soviet period: a significant increase in differentiation and stratification, growing inequality within and between different strata of the population, and rising poverty. Overall, as noted above, economic differentiation increased significantly throughout Russia during the 1990s and continued in the new millennium. This section addresses two main questions: (1) Have the processes of differentiation and stratification passed a critical point so that it is possible to talk about the development of a rural class structure rather than simply discrete economic strata? That is, using specific criteria and measurements of class (drawn from the literature on class), is it possible to sketch the broad parameters of an emerging class structure in rural Russia? (2) If the answer to the first question is yes—that it is now accurate to talk in terms of an emerging class structure within Russia’s rural society—the second question is whether this upper class is economically significant. This section is a slight digression from our focus specifically on land reform, but is important because it illustrates the effects of reform institutions and also because land is a component of class development. This section argues that a process of class formation has begun and that this development will affect the process and patterns of land acquisition going forward. Land reform is not the only driver of class development—broader economic liberalization and market reforms contribute significantly as well— but we shall see that land accumulation is important as well. However, the countryside is still in the early stages of class development historically speaking because the upper class is limited in its economic power, especially with regard to land, and does not appear ready to contend economically with international competitors. As noted above, the Soviet countryside was more egalitarian than not, and income differentials were not large because factors that contribute to house-

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hold stratification—farm salaries, private plot sizes, and number of livestock owned by the household—were regulated by the state.∂∂ But the removal of Soviet-era restrictions engendered developments beyond mere stratification. After restrictions on variables affecting stratification were removed in the post-Soviet period, consciousness of relative economic status and class identity became evident.∂∑ For example, survey data from 2000 gathered by Goskomstat and the Moscow Carnegie Center showed that based on material well-being, roughly 16 percent of rural respondents identified themselves as middle class, 51 percent of rural respondents felt that they belonged to the lower middle class, and 33 percent answered that they were in the lower class. Based on self-identification—a subjective measure that asked the respondent to identify the class to which he or she belonged—33 percent of rural respondents answered that they were middle class, 41 percent were lower middle class, and 26 percent were lower class.∂∏ Groupings of classes commonly begin with economic stratification as a primary criterion. For Marxists, economic stratification is an indicator of class standing in society because it reflects the relationship to the means of production. In contemporary rural Russia the conception of class needs to be broader, which is to say that our understanding of class should include more than mere income stratification, occupational status, or landownership (although those factors remain important). With regard to landownership, the peasant-petit bourgeoisie (owner-nonowner) designation is insufficient because of the widespread privatization and distribution of land. Today in rural Russia most residents have become owners of land, either by privatizing the household plot that they used but did not own during the Soviet period or by receiving land shares as a result of post-Soviet land reform policies. In 2004, more than 35 million families, most of whom were rural, were owners of a land plot. Because ownership of the means of production (land) is not a sufficient criterion for distinguishing the existence of class, the question for postcommunist rural Russia is how to operationalize an emerging class structure. A publication using panel data from 1995, 1997, 1999, and 2003 used a cluster of five criteria that the measurement of an emerging class structure in rural Russia: income stratification, land holdings, capital stock, class consciousness, and shared attitudes and values. Based on responses from the same households over time, that article revealed a process whereby (a) income stratification between top and bottom income deciles widened; (b) differences in land holdings increased between top and bottom income deciles; (c) differentials in the possession of capital stock grew between top and bottom income deciles; (d) members of upper- and lower-income households were con-

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scious of their economic status relative to other groups and were able to discern how they had fared during market reforms; and (e) attitudes among members of the top income decile displayed shared values, and these values were different from those expressed by those in the bottom income decile.∂π The subjective evaluations of status by households were especially important because they provided evidence that class formation extends beyond economic differentiation. The article concluded that this evidence was suggestive of the emergence of a class structure in Russia’s postcommunist countryside. Thus, the 1995–2003 panel data were useful for capturing processes during the Yeltsin period and the early Putin period. The panel data used in the article described above and the cross-sectional data used here come from entirely different surveys and are not directly comparable, but they may be used to illustrate directional trends. INDICATORS OF RURAL CLASSES: WHAT THE SURVEY DATA SHOW

The development of rural classes must meet three criteria: identifiable and significant economic differentiation based on objective and measurable indicators, class consciousness, and shared values. The analysis of rural class development in Russia begins by examining objective economic factors— comparative income levels, land holdings, and possession of capital stock—in households in the lowest two income deciles and households in the upper two income deciles (in other words, comparing the lower 20 percent to the upper 20 percent). These measures are defined as follows. ∞ Income stratification is based on mean monthly monetary income for households. Nonmonetary income is a significant source of income for rural households, comprising as much as 30 percent of total income for lowerincome households.∂∫ Nonmonetary income (food production) is consumed by most households, however. Therefore, monetary income is used in the analysis of income stratification because money may be used for investment, to obtain capital stock, to acquire land, or for other capitalist economic purposes that nonmonetary income cannot. The implicit assumption is that monetary income is more important to the development of class differences than total income (monetary and nonmonetary). Moreover, monetary income is used by the Russian government to establish subsistence minimums that define poverty thresholds. Monetary income is also a more commonly used measure in the literature on classes and class development. ∞ Land holdings include two measures: mean land holdings including household land shares, and mean land holdings excluding land shares, that is, only real land.

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Table 6.4. Mean measures of inequality between top 20 percent and bottom 20 percent income deciles, 2006

Total monthly household monetary income (rubles) Total land holdings w/land shares (ha) Real land holdings (ha) Number of cows Number of pigs Number of sheep Number of poultry Number of autos Number of trucks Number of tractors Number of mechanized agricultural tools Number of mechanized agricultural machines

Top income decile

Secondhighest income decile

Lowest income decile

Secondlowest income decile

38,330

23,336

3,530

5,845

8.0

8.4

5.0

5.7

6.6 2.8 4.1 4.3 30 .98 .45 .47 .97

.57 1.2 2.3 .95 23 .82 .18 .13 .36

.43 .11 .14 1.0 14 .27 .08 .06 .04

.36

.25

.04

.21 .29 .42 .70

Coefficient of differentiation between top and bottom deciles 11 1.6

.21 .01 .01 .07

15 25 29 4 2.1 3.6 5.6 7.8 24

.06

9

18

Sources: Author’s survey data, 2006 (n=900); author’s calculations. ∞ Capital stock is defined as the mean number of cows, pigs, autos, trucks, tractors, agricultural machines, and pieces of agricultural equipment owned or used by a household.

These measures were chosen because they are broadly representative of an economically advanced household. With these definitions in mind, the comparative measures are displayed in table 6.4. The table presents the means for income, land holdings, and capital stock for households in the top two and bottom two income deciles in the 2006 survey. The last column presents the coefficient of differentiation between the top and bottom income deciles. The data clearly show significant economic differentiation between these cohorts: the richest households have eleven times the income of the poorest households and fifteen times the real land holdings. The great equalizer and the measure with the lowest coefficient of differentiation is land holdings that include land

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shares; this finding supports the argument that the early design of reform was egalitarian. It may be hypothesized that this particular feature of reform—the distribution of land shares of equal size to all—was decided on in order to make land reform palatable to the rural population at a time when considerable suspicion existed about significant differentiation. There are also noticeable differences in capital stock, which are suggestive of present and future inequality between the top and bottom households because those that are better capitalized will be able to produce more and earn more going forward. The data on capital stock are also useful for portraying the overall poorness of Russian households and the continued undercapitalization of even ‘‘rich’’ ones. Overall, the data demonstrate significant economic differentiation based on objective indicators. The second requirement for class development is that members have a consciousness of shared attributes and economic status with other members of that cohort. Does the member of a ‘‘class’’ have not only similar economic characteristics but also a consciousness that those characteristics impart a sense of belonging to a certain group or stratum? In other words, a member of a class must have some level of consciousness that he is a member of that class, and shared economic characteristics alone are not sufficient.∂Ω For the analysis of consciousness, some creativity was necessary because the surveys were not specifically designed to measure class development. For that reason, proxy measures were used to indicate class consciousness. Two questions were employed. The first question asked the respondent to evaluate the income status of the household, and the second question asked the respondent to evaluate whether his or her household was a winner or loser in reform since 1991. The results are shown in table 6.5. The table shows that respondents in the lowest income category have a clear sense of being poor or very poor and do not consider their income status as above average or higher. Conversely, only 8 percent of respondents in the secondhighest income decile considered themselves poor or very poor, and 0 (zero) percent in the top income decile did so. In contrast, most of the respondents in the top two income categories considered themselves as being either middle class or above middle class. Thus, the first question indicates a clear demarcation of perceived class standing between upper and lower income respondents. The second question asked respondents for a subjective evaluation: Had they been winners or losers during reform? Lower income respondents have a clear sense of being losers, and upper-income respondents more frequently evaluate their families as winners. The results presented in the table are not particularly surprising, but they are important for illustrating a level of aware-

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Table 6.5. Evaluation of household status, 2006

Income Deciles Lowest 10% Second lowest 10% Highest 10% Second highest 10%

Higher than Very Loser or Winner or Poor or absolute high absolute average very poor Average (%) loser (%) winner (%) (%) (%) (%) 57 44 0 8

40 54 63 85

2 1 34 8

0 0 3 0

44.5 57 1 9

10 7 66 51.5

Source: Author’s survey data, 2006 (n=900). Note: Percentages may not add to 100 due to rounding. For columns 2–5, the question asked was: ‘‘In which income group would you place your family compared to the rest of the village?’’ For columns 6–7 the question asked was: ‘‘Do you consider your family a winner or loser as a result of reforms since 1991?’’ The response ‘‘no change’’ for the winner/loser question is not included in this table.

ness by respondents as to where they or their families stand in relation to other households, suggesting a sufficient level of consciousness to meet this criterion of class development. What is intriguing is whether respondents in better-off households would be hesitant to indicate class standing if emerging inequality contributed to social tension in intravillage relations. In other words, if an egalitarian culture were embedded from the Soviet past, respondents from households that have prospered during reform might be inclined to mask their good fortune, much as they did during the Soviet period. Therefore, an ancillary question concerns the social environment in the villages regarding emerging inequality. The key issue is the extent to which a sense of social justice continues to prevail (in part a carryover from the Soviet period), and the extent to which inequality is considered illegitimate. How are the upwardly mobile treated in the village? Early in the reform process, there were many anecdotes about vengeful acts against private farmers and others who had begun to differentiate themselves economically. I remember interviewing private farmers in Kostroma oblast during the early and mid-1990s who told of their cattle being killed or their heat being turned off in the dead of winter. Newspapers reported incidents of land belonging to entrepreneurs being salted or potatoes uprooted. A strong impression was created that egalitarian values continued to prevail and that differentiation was frowned on by other rural dwellers. Other authors have also documented efforts to sabotage economic activities of private farmers and overt acts of discrimination.∑≠

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But the optimism expressed by some analysts about the results of market reform policies is justified by reality.∑∞ Not only has reform changed rural institutions and policies, but it appears to have facilitated changes in values as well. Inequality may not have been liked and may have contributed to feelings of jealousy early in the reform period, but survey data reflect changes in attitudes as the 1990s progressed. An example based on the panel data shows how persons who were better off were treated in the village. A survey question included in the panel data asked about a household’s relations with the rest of the village. The responses were scaled 1–7, with 1 = very bad and 7 = very good. In 1997, the panel survey data showed that highest- and lowest-income households were treated as essentially equal by the rest of the village, that is, higher-income households did not appear to be disliked by the rest of the village because of their relative differentiation. The lowest-income group had a mean of 4.76 on the 7-point scale, while the highest-income group had a mean of 4.82. In the 2003 panel survey, the trend showed a marked change. The mean for the lowest-income households fell to 3.81; in short, relations with the rest of the village deteriorated. But the mean for the highest-income households increased to 5.01; in other words, relations with other villagers improved.∑≤ The result was that in 2003 a significant gap had appeared between the poorest and richest households in the three villages that participated in the panel survey. From these data we may tentatively conclude that, while other factors may have been at play that affected these trends, income inequality alone was not a cause for bad relations in the village. In this sense, the social environment in Russian villages seems to have experienced significant change since the early 1990s, and after 2001 income stratification does not appear to be considered illegitimate. Supplementing and supporting the analysis from survey data is longitudinal fieldwork by the anthropologist Margaret Paxson, who visited a specific Russian village many times during the 1990s and at one point lived in the village for a year. She found that inequality and the accumulation of wealth were not considered illegitimate per se. What did lead to lower status and poor relations within the village was the inequality of giving. She discovered that status was ‘‘won’’ by giving more than had been received to other persons in the village. Social status was improved by being an agent of redistribution, that is, the one who gives more, a phenomenon she called ‘‘one downmanship.’’∑≥ She writes that ‘‘it is good to be generous with one’s possessions,’’ but in terms of social status in the village, it is imperative ‘‘to meet generosity with even greater generosity.’’∑∂ This redistribution of wealth ‘‘tends to encourage economic homogeneity in the village,’’ although in reality actual homogeneity is elusive. Thus, the accumulation of wealth in and of itself is not illegitimate

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(although certainly it does lead to petty jealousy on the part of some) and is not an obstacle to good social relations in the village as long as the fortunate share their good fortune and are not perceived as exploiting other villagers in social exchanges. The final measure of an emerging class structure in rural Russia concerns shared attitudes and values. Social scientists have long argued that classes are defined not only by economic characteristics and class consciousness but also by shared attitudes and values. As before, proxy measures were employed. Turning first to shared attitudes, the 2006 survey asked respondents: ‘‘How do you evaluate changes in family income and social status since 1991?’’ The responses were scaled as follows: 1=became very bad, 2=became bad, 3=no change, 4=became good, 5=became very good. Respondents who reside in households in the lowest income decile felt that family income and status had deteriorated since 1991, with a mean of 2.2 for income and 2.4 for status. Respondents in the highest income decile felt that income improved and social status did not change, with a mean of 4.0 for income and 3.1 for status. The main point is that though the lower income cohort perceived deterioration, upper income households did not. Shared attitudes extend into the policy realm as well. In the 2003 survey, a question asked respondents to agree or disagree with the statement: ‘‘The government should continue market reforms in agriculture.’’ In the lowest income category, only 4 percent of respondents agreed, but 30 percent did so in the highest income category. Another question asked respondents to agree or disagree with the statement: ‘‘Government reforms have hurt people like me.’’ In the lowest income category, 0 (zero) percent of respondents disagreed, while 50 percent in the highest income category disagreed. Finally, a question in the 2003 survey asked respondents to agree or disagree with the statement: ‘‘It is better to go back to the period before 1991.’’ In the lowest income category, 0 (zero) percent disagreed and 50 percent agreed with the statement. In the highest income category, 55 percent disagreed and only 15 percent agreed. Thus, it is apparent that distinct attitudes are held by lower income respondents and upper income respondents. Important aspects of shared values are a work ethic and a sense of personal efficacy. In the 2001 survey, a question asked respondents: ‘‘What can your family do to improve its economic condition?’’ In the lowest income category, a little more than 52 percent answered ‘‘work more,’’ but another 25 percent answered that there was ‘‘nothing’’ they could do. That answer does not necessarily reflect laziness (although it might), but it certainly reflects an absence of personal efficacy. In contrast, among the highest income respondents 76 percent answered ‘‘work more,’’ and only 12 percent indicated that there was

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‘‘nothing’’ their family could do. In the 2003 survey, similar results were found, but the difference was more dramatic. A question in the 2003 survey asked respondents to agree or disagree with the following statement: ‘‘Hard work will lead to a better life.’’ In the lowest income category fewer than 10 percent agreed with the statement, while in the highest income category, 40 percent agreed. The value of work was suggested by another question in the 2003 survey that asked whether people who were well-off personally benefited from illegal activities. In other words, this question probed the degree to which a person’s work was important—whether socially useful behaviors were rewarded. In the lowest income category, 65 percent of respondents answered that the well-off benefited from illegal activities, while only 30 percent of respondents in the highest income category answered similarly. The value of work has an impact on the feeling of personal efficacy, which in turn is a measure for how a person perceives his value to society and his role in the economy. An efficacious person perceives himself to be valuable and is able to control his own life and influence others. His actions have meaning and worth. The absence of personal efficacy—that is, the feeling that a person does not control his destiny and has low worth—was indicated by a question in the 2006 surveys that asked respondents, ‘‘Are you able to control your life?’’ In the lowest income decile, only 26 percent of respondents said yes, whereas 78 percent of respondents in the highest income decile indicated a sense of personal efficacy. Thus, upper-income respondents share a value that hard work matters and they have a sense of personal efficacy that affects one’s value in life.∑∑ This analysis has argued that three measures of class—objective aspects of economic stratification, self-consciousness of status, and shared attitudes and values—are important because they demonstrate that the relative social and economic homogeneity of the Soviet period has given way not only to differentiated strata but also to the formation of nascent classes. To be sure, the rural class structure is primitive—the class structure is at present best characterized as consisting of ‘‘upper’’ and ‘‘lower’’ classes, with sharp differences between the two ends of the spectrum but much less well-developed cleavages between lower and the upper-lower strata, or between upper-lower and middle strata.∑∏ Thus, at this point the class structure appears bifurcated between an upper stratum and everyone else. If this line of analysis has been accurate, the next line of inquiry concerns the social characteristics of class, that is, who is in the upper and lower classes? The 2006 survey data were used to create a sociological profile of the upper and lower classes that indicates interesting and important socioeconomic differences.∑π Households in the ‘‘upper class’’ (for lack of a better term) have a younger age structure, slightly higher mean educational levels, tend to consist

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of an employed couple with children and other adults (have a higher household labor value), hold higher occupational status, and are not unemployed. Households in the ‘‘lower class’’ have quite different characteristics: an older age structure for the husband and wife, lower mean educational levels, one member (have a low household labor value), do not have high occupational status, and have a significant chance of being unemployed. The final question to be addressed in this section concerns the economic importance of the upper class. Land reform unfolded as part of a larger process of economic adaptation and change. Some households took advantage of new opportunities more than others did, and this study investigates which adapted the most and the factors that explain that adaptation with regard to agricultural land. The present question concerns the economic significance— both potential and actual economic clout—of the households that adapted the most. The 2006 survey data suggest that even high-income households that enlarged their land holdings are not likely to be globally competitive. That is, it is too early to talk about the emergence of rural hegemons in the countryside. Most households, even the ‘‘winners,’’ lack significant capital and economic clout, which in turn puts them at a disadvantage relative to urban investors, developers, and speculators. The economic weakness of households in the top income decile, the upper class, is reflected in the 2006 data: such households have a mean of 6.6 hectares of real land, .98 automobiles, .45 trucks, .47 tractors, 2.9 cows, .29 horses, 4 pigs, and 4 sheep and have monthly agricultural sales totaling less than $450 (at 2006 exchange rates). In contrast, households in the lowest income decile have only .43 hectares of real land, not much more than during the Soviet period. Thus, in contemporary rural Russia one does not find large landed estates or landlords who preside over latifundia, and this outcome was a result of deliberate policy decisions. Winning, therefore, is relative to the pervasive poverty in the Russian countryside. These ‘‘winning’’ households are hardly positioned to compete effectively with large agrofirms from the European Union, the United States, Australia, or Canada, which in turn justifies the Russian government’s assistance programs to develop the household sector, and also justifies its disposition toward large farms as the basis for resurrecting Russian agriculture.

Conclusion The design of reform has had not only negative effects in terms of limiting significant transfers of real land to ordinary rural dwellers but also a positive impact in terms of creating opportunities and conditions for improvement in socioeconomic status. As a result, Russia’s countryside has experi-

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enced significant stratification since the early 1990s, although it may be too early to talk in terms of a class of economic hegemons as in urban society. Stratification may be considered a positive development because it sends a signal that differentiation—monetary rewards—may result from certain types of behavior, in this case increasing land and capital stock. The development of an upper class is important in the short term for sending signals that risktaking behavior and opportunism are rewarded. In the longer term an upper class may be important for representing the growth of capital in rural society and as a cohort that has a stake in stability and development. Contemporary rural social structure has also experienced significant change in comparison to the Soviet era. At that time inequality was based on occupation in the collective sector, but new opportunities afforded by market reforms have made those categories increasingly irrelevant to present-day social structure. As a result, old questions and problems have to be examined anew: the proletarianization of rural labor, rural out-migration, particularly by the young, and the quality of rural human capital. This chapter has argued that as a result of market reforms, social and economic relations have evolved beyond stratification. Rural Russia today is better understood as a sector in which a class structure is emerging rather than a hierarchy based on economic stratification alone. Market reforms introduced new principles of economic decision making that spurred new types of economic activity. In the social realm, the design of reform engendered processes that would contribute to the development of classes. The result has been a discernible rural class structure. This class structure continues to evolve and has not yet matured. Based on a cluster of five components, a two-tiered class structure of upper- and lower-income households and individuals was presented. The argument for a rural class structure was substantiated by analyzing the highest and lowest income strata in Russia’s rural population. This chapter has shown that objective and subjective income stratification occurred during the 1990s and continues to exist. It has shown that differences between upper- and lower-income strata in land holdings have become more pronounced since 1999. The discussion of capital stock depicted a process of accumulation by upper-income households to improve their capital stock, whereas lowerincome households had fewer cows, pigs, autos, and agricultural machines and pieces of equipment in 2003 than in 1995. Beyond stratification, class development also requires class consciousness. The preceding analysis demonstrated an awareness of class standing in terms of income status relative to others and how the household had fared during the reform period. With regard to shared attitudes, it was shown that upperincome individuals held more positive attitudes about economic changes since

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1991. With regard to shared values, the data led to the conclusion that upperincome individuals valued hard work more and saw it as an avenue to a better life. Moreover, the value of work contributed to a feeling of personal efficacy and self-worth. The data suggest that upper-income individuals had a sense of greater efficacy and self-esteem. In sum, the use of selected criteria of class indicate that the economic processes inherent in market reforms have gone beyond stratification or the presence of mere economic strata; rather, it is now more accurate to talk in terms of an emerging class structure within Russia’s rural society. It has been argued that distinctive classes are emerging in rural Russia, but important questions remain for the future. The answers to these questions, which will unfold and evolve over time, will affect in fundamental ways the future development of the class structure described herein. The first question concerns whether a genuine rural bourgeoisie will emerge in the countryside from a process of capital accumulation that will allow them to exert economic hegemony. During the 1990s, rural Russia experienced demodernization, with resources being siphoned out of the countryside. As a result, it is hard to identify significant ‘‘capitalist accumulation’’ let alone argue that it occurred during the 1990s for the vast majority of rural households. Economic growth followed Putin’s rise to power, and a process of accumulation began. At present, the ‘‘upper’’ class, though distinct from the lowest stratum, nonetheless would hardly be considered an economic hegemon according to traditional definitions. For that to happen, income differentiation should widen more, land holdings should expand, and capital stock has to improve significantly. Households and individuals control this process, but it should not be forgotten that human capital continues to exert an enormous influence on household production. Moreover, governmental policies—tax, budgetary, rural social development, and commodity intervention—affect households’ decisions. The question is whether the rural class structure will remain largely dichotomous, having relatively few well-off households while the bulk of the population is poor and exists near or just above the subsistence level. Will economic growth diminish the numbers of poor and increase the ranks of the well-off? And will the well-off increase their economic power? How will increased power be exercised, and what effect will it have on land holdings? Or will the rural upper class be dominated by an even wealthier and more powerful urban bourgeoisie that will strive to keep the rural elite relatively weak and dispossess them of their land? The second question concerns the effects of the rural upper class on the trajectory of Russia’s democratic development. Barrington Moore reminds us that the behaviors of the landed class in the commercialization of agriculture

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and the relationship that landed classes have with central authority are important factors in determining whether a nation ends up with an authoritarian or a democratic system.∑∫ Historically, he argues, a rural ‘‘nobility’’ that remains too closely aligned with the Crown creates unfavorable conditions for democracy. Countries that made the successful transition to democracy experienced a rough balance of power between the nobility and the Crown, and though the latter predominated, the nobility had substantial independence.∑Ω Applying Moore’s broad conceptual framework to contemporary Russia (and adjusting it to contemporary realities), the question is whether the rural upper class will be closely tied to the Kremlin or will have significant economic and political independence. Trends since 2000 suggest that political independence is already being eroded as the Kremlin has made overt attempts to co-opt rural parties and interests, on one hand, while on the other hand it has worked to undermine rural support for any political opposition, in particular, the Communist Party, which depended on rural electoral support during the 1990s for its political comeback. Rural political trends support Russia’s drift toward an authoritarian political system, although a return to communism is highly unlikely. The long-term political independence of an upper rural class is therefore an open question, but the trends are not favorable.

7

The Effects of Rural Demographics and Labor on Households’ Land

The design of Russia’s land reform determined the types and sizes of land plots used or owned by most rural households. It has been shown that private ownership of large tracts of agricultural land was not broad-based among the rural population. Private farmers, farm managers, and households at the upper end of the income continuum were shown to be the main beneficiaries in terms of land expansion, but these cohorts comprise a small stratum of the rural population. It has also been argued that the way land reform policies were defined also contributed to rural stratification and more recently to the development of a nascent class structure. This chapter adds another layer of analysis by considering rural demographics and the relationship between household labor and household land holdings. The analysis considers the way responses to land reform policies were affected by households’ demographic makeup and labor supply. In other words, the fulfillment of reform goals was influenced (and limited) not only by the design of reform but also by demographic factors. It is important to note that formal institutions and their effects do not operate in a vacuum and may be affected by environmental factors. Nor is the causation unidirectional. Contemporary rural demographics in turn are affected by past policies and present conditions. The net effect of rural demography on household labor further narrows the number of households that may be considered ‘‘winners’’ in Russian land reform. 164

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The chapter hypothesizes that a set of independent variables—macrosocioeconomic conditions, rural demographics, and household labor—affect the dependent variable, households’ responses to land reform, defined as their land holdings and land expansion. The specific question that this chapter addresses is: What is the impact of the availability of household labor (human capital) on responses to land reform (land holdings and enlargements)? This chapter examines the aggregate effect of households’ labor value on responses to land reform. Household demographics and labor as intervening variables are justified by the obvious fact that behavioral responses are influenced by the rural demographic condition, and this condition has deteriorated since the early 1990s, thereby acting as a constraint. The chapter presents three arguments. 1. Household labor value has a clear and demonstrable effect on a household’s land holdings and land expansion. Advantaged households, those having a higher labor value, have larger holdings and larger expansion of holdings for both land shares and real land. Thus, a household’s demographic condition is important for understanding its responses to land reform. 2. The failure to resolve socioeconomic problems has consequences for household demographics and human capital, which in turn affect households’ responses to land reform in terms of both land holdings and land enlargement. Thus, there is a link between macro-socioeconomic problems and the demographic condition of a household. 3. If agrarian and land reforms are to have a beneficial economic impact in the long term, they must be broadly defined and pursued. Reform ‘‘success’’ is not narrowly achieved through the introduction of farm privatization or land privatization. In transitional states, other factors such as social relationships and informal linkages also undergo change.∞ Likewise, various types of markets need to be created and an understanding of how to operate in a market environment must occur.≤ That takes time, and there is no guarantee of success.≥ In other words, responses to reform do not operate in a vacuum; there are environmental factors at play at the national level and at the household level that affect households’ income and households’ land holdings. Moreover, the welfare of rural households affects the long-term health of the rural economy. Therefore, the long-term success of land reform and the competitiveness of Russian agriculture depend on the resolution of critical socioeconomic and sociodemographic challenges. This chapter offers evidence to suggest that contemporary rural social policy is insufficient and is in need of adjustment, which is especially important as Russia faces increased competition from international integration.

The analysis of the relationship between households’ human capital and behavioral responses to land reform draws on various survey data from rural

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households in Russia. One data set comes from panel surveys of three Russian villages conducted at different time points during 1995–2003. The second data set comes from a survey of eight hundred rural households in five regions conducted during the second half of 2001. The third data set comes from a survey of nine hundred rural households in nine regions conducted in the second half of 2006. A full description of the villages and survey methodology may be found in appendix D. Before the statistical analysis is discussed, socioeconomic conditions at the national level are reviewed.

Rural Socioeconomic Problems in the 1990s and Beyond Since the early 1990s Russia has experienced significant change from the Soviet period in its agricultural system and agrarian policies. This change is characterized by withdrawal of the state from economic control and deregulation of the agricultural economy.∂ Moreover, the introduction of market reforms signaled the ending of the ‘‘social contract’’ between the regime and the population.∑ After Vladimir Putin became president in 2000, agrarian policy shifted from ‘‘creative destruction’’ to ‘‘creative creation.’’∏ Nevertheless, despite improvement in the rural economy since 2000, aided by financial assistance programs adopted under Putin, one may argue that rural social conditions continue to be deficient. Thus, the introduction of market reforms in the agrarian economy contributed to a number of socioeconomic problems that have yet to be ameliorated. The transition from a communist to market economy was accompanied by severe economic contraction during the 1990s. Russia’s agricultural sector not only did not escape this process but was among the hardest hit. By the late 1990s, government statistics indicated that gross agricultural production had decreased about 40 percent from its 1990 level, with most of the decline coming from large farms.π This economic contraction was important because it led to a decline in rural living standards and exacerbated other socioeconomic problems. Even though household food production increased and became the largest component of total food production by the late 1990s (measured in ruble value), most of this production was consumed by the households that grew the food. In other words, the 1990s were a time of survival for most households, and production from their private plots played a large role.∫ Even for most of the families that sold some of their food production, income from food sales did not compensate for lower real income from farm employment or the outright loss of a job. To be sure, many rural socioeconomic problems that existed during the 1990s also were present during the Soviet period.Ω It is well documented that

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the Soviet regime made concerted efforts to overcome social problems of rural development. Starting in the late 1960s and continuing into the 1980s, it attempted to reduce the vast differences in living standards between urban and rural residents.∞≠ Any progress made during those decades was sharply reversed during the 1990s. And thus, the onset of market reforms led to the exacerbation of leftover problems as well as the appearance of new ones during the 1990s and beyond. A review of some of the socioeconomic problems linked to market reform in the agrarian economy is presented below.∞∞ RURAL SOCIOECONOMIC PROBLEMS AT THE NATIONAL LEVEL

Deterioration of Rural Incomes This problem is considered the number one contemporary social problem in the countryside by Russian analysts. The deterioration of rural incomes had three dimensions in the 1990s, although the problem continues to the present. The first is that rural salaries from farm employment were too low, which motivated people to find alternative sources of income or to leave agricultural employment altogether.∞≤ By the late 1990s, agricultural labor was among the least well-remunerated in the national economy, and persons employed in agricultural work had the lowest monetary income of those in any branch in the economy.∞≥ This trend continued during the two Putin administrations. For more than one-half of households employed in agriculture, farm employment produced monetary income that was below the minimum subsistence level established by the Russian government.∞∂ Sectoral differences between agricultural work and other types of employment were significant. For instance, in Putin’s first term an agricultural worker (on a large farm) earned one-seventh what the average person employed in the financial sector earned and one-tenth what a worker in the gas industry earned.∞∑ Because of low agricultural pay, millions of rural workers spent considerable time tending to their private land plots, reflecting a significant shift in sources of family income.∞∏ Generally speaking, the poorer a large farm, the more income its employees derived from private plot production.∞π Furthermore, low agricultural incomes contributed directly to widespread rural poverty (see below), added to health and dietary problems in the workforce, made it difficult to retain skilled labor, and undermined attempts to train agricultural specialists. The seriousness of the rural income problem has led Russian academics to repeatedly call on the government to raise rural wages to the minimum wage standards contained in state legislation.∞∫ The second dimension of rural wage deterioration is that urban and rural incomes became increasingly differentiated.∞Ω During the late Soviet period the average farm worker had a monetary monthly income that almost reached the

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average level of an industrial worker’s income. According to official statistics, on average in 1990 a collective farm worker received 85 percent of the industrial average of monthly monetary income, and a state farm worker received 100.6 percent.≤≠ During the 1990s, however, trends in rural incomes (from wages and salaries) deteriorated in comparison to average urban incomes. As a result, by 1998 a worker on a large agricultural enterprise earned 39 percent of the average monthly income of an industrial worker, and in 1999, he earned 34 percent.≤∞ Even during the Putin period, rural incomes lagged urban incomes to a considerable degree. For example, the average rural monthly monetary income still was only 34 percent of the average monthly urban monetary income in 2002.≤≤ Thereafter, some improvement occurred, and by late 2005 the average rural income (monthly per capita) reached 47 percent of the average urban income.≤≥ In the fourth quarter of 2007 the average per capita rural income was 52 percent of the average urban income, but this still was far below the level of the late Soviet period.≤∂ The third dimension of rural wage deterioration is that rural incomes were less monetized than urban incomes. During the 1990s debt levels on large farms rose and wage arrears became chronic, and as a result farm managers were forced to pay salaries with produce in-kind due to a lack of cash.≤∑ According to official statistics, throughout the nation in 2000 only about 74 percent of the average monthly rural income was monetized, and this percentage represented an improvement from the mid-1990s. Household survey data collected in the mid-1990s confirm that about 30 percent of household income was nonmonetary.≤∏ In comparison, about 93 percent of an urban dweller’s income was monetary in 2000.≤π Improvement occurred during the Putin period as large farms became more profitable, their incomes increased, and wage arrears abated in most regions. Official statistics show that by late 2007, 88 percent of rural households’ income was monetized, but this still trailed the 97 percent level for urban households.≤∫ Contraction of Farm Employment During the Soviet period the vast majority of rural dwellers were employed by, had been employed by, or provided services to a large farm. As reform unfolded during the 1990s two problems arose: a contraction in large farm employment and a substantial increase in rural unemployment, leading experts to argue that unemployment is the number two rural social problem after low rural incomes. The contraction in rural labor is reflected in the fact that the total number of employed persons in the national economy decreased about 11 percent from 1992 to the beginning of 2000, but the number employed in agriculture fell 17

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percent during the same time period.≤Ω In the individual sphere (private plots and private farms), since 1999 the number of employed persons has varied within a narrow range. But on large farms the situation has been quite different. If the number of persons employed on large farms is considered separately, the percentage decline is significantly greater. For example, in Moscow oblast, where large farms have been the most profitable and food demand from the city of Moscow the highest, the number of workers on large farms declined 28 percent during 1995–2000.≥≠ Thus the decline in employment on large farms accounts for the vast majority of the 5.6 million people who left agricultural work during 1990–2002.≥∞ The agricultural employment problem did not improve during the Putin period. The number of people employed in agriculture decreased by 18 percent during 2000–5.≥≤ Overall, during 1990–2004 rural employment declined about 30 percent.≥≥ Nationwide, the gap between the number of working-age rural residents and the number of people employed in agriculture continued to grow during that period. Clearly, some of these people found work in other sectors of the economy, some died or left the country, and others took up other forms of agricultural or nonagricultural labor in the countryside. For example, instead of working on farms, increasing numbers of rural people became selfemployed, worked their private plots, or found alternative employment in rural industry, transportation, communications, or construction. These branches of the rural economy experienced growth in employment ranks after 2000 and are considered more attractive lines of work due to higher salaries.≥∂ There are still significant numbers of rural people who are unable to find rural employment, however, and are either unwilling or unable to migrate to an urban area. An Increase in Rural Unemployment The contraction in rural labor was attended with a rapid increase in rural unemployment during the 1990s. Rural unemployment occurred for a variety of reasons, including: (1) involuntary contraction of employment on large farms due to declining farm profitability; (2) a drop in demand for food and thus less need for farm labor; (3) lower levels of subsidization to keep unprofitable farms solvent and the termination of some large farms during the reorganization process or subsequent bankruptcy; and (4) limited alternative employment opportunities once farm employment was lost. For example, early in the new millennium, one-half of rural dwellers under the age of thirty were unable to find employment.≥∑ The search for alternative employment near the place of residence was complicated by a substandard rural road network and by the fact that bus service between rural villages was commonly curtailed or had ended.≥∏ Caroline Humphrey describes how in Buriatiia in the

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late 1990s the unemployed were unable to find employment on large farms because they are ‘‘virtually all bankrupt, and none of them pay wages in money.’’≥π In Buriatiia, where she conducted research, on-farm employment dropped to just over one-half of households in the village, a few were non– farm members who did contract work for the farm, and the rest ‘‘make do from their plots, pensions, and some occasional work in building, sheep shearing, or hay cutting, being paid in-kind and not with money.’’≥∫ Another factor contributing to rural unemployment was (and remains) chronic alcoholism— Grigory Ioffe argues that many of the rural unemployed are simply unemployable for this reason.≥Ω By the late 1990s, official data estimated that there were approximately one-half million unemployed rural persons, whereas alternative calculations using the method employed by the International Labor Organization suggested that there were more than three million rural unemployed.∂≠ Since 2000 the national rural unemployment rate has been estimated at 11–12 percent, but some estimates place the real rate at 20–22 percent, or double the rate indicated in official statistics.∂∞ Although rural unemployment is believed to have declined in recent years, one Russian academic who studies rural employment argues that it is ‘‘not less than 25 percent.’’∂≤ Moreover, the percentage would be much higher if not for deliberate efforts by large farm managers to contain unemployment despite financial consequences to the farm.∂≥ Paternal behaviors on the part of factory managers were found in industry as well. In villages, employment protection was intended to avoid social protest and the moral disapproval of other villagers. As a result, it is estimated that despite a contraction in large farm employment and increased rural unemployment, there still may be a personnel surplus on many large farms.∂∂ The discrepancy between actual rural unemployment and official statistics is due to underreporting. Many rural unemployed persons do not register because registration offices are located in distant raion centers and rural transportation is often inconvenient. For example, in 2000 only 2 percent of the rural unemployed had registered for state assistance.∂∑ Because job opportunities are often limited for rural dwellers, instead of registering for state support, many rural unemployed persons conduct private plot operations as their main source of income, and land laws are designed in such a way as to facilitate this survival strategy.∂∏ Paradoxically, concomitant with the rise of rural unemployment has been a shortage of skilled farm personnel. By the end of the 1990s, almost thirty-one thousand management and specialist positions were vacant in large agricultural enterprises. Throughout the entire agroindustrial complex the personnel deficit was estimated at fifty thousand managers and specialists and one hun-

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dred thousand skilled workers. As a result, agricultural enterprises suffer from an ‘‘acute’’ shortage of skilled workers, mechanics, electricians, and other highly skilled specialists.∂π This situation in turn has an effect on productivity and efficiency because less qualified individuals are in positions of leadership and the less skilled are using machinery and equipment.∂∫ Mass Rural Poverty Like rural unemployment, the rise of mass rural poverty is a post-Soviet phenomenon. Estimates have varied as to the exact percentage of the rural population living in poverty, but it is commonly accepted that the incidence of rural poverty is higher than the incidence of urban poverty (though rural poverty is offset somewhat by access to land to grow food). Using total income (monetary, nonmonetary, and transfer payments), official government data stated that as many as two-thirds of rural Russians were living below the poverty line in 2000, a percentage that declined to 52 percent in 2003 and to 50 percent in 2004.∂Ω Alternatively, the director of the All-Russian Agrarian Institute in Moscow, Alexandr Petrikov, estimated that 59 percent of rural households had monetary incomes below the poverty line in 2004–5 and that 43.5 percent of rural households had total incomes below the poverty line. In addition, 12 percent of rural households had total incomes equal to one-half or less of the subsistence minimum established by the government, compared to 4 percent of urban residents.∑≠ Not all categories of rural residents have the same incidence of poverty. Retired persons, single-parent households, and households with many children are more likely to exist below the official poverty line. The incidence of poverty among farm management and specialists is the lowest among those employed on large farms.∑∞ Particularly worrisome for the future is the fact that poverty affects the working population and the rural young at very high rates. Based on survey data collected by two Russian researchers in Stavropol krai in 2003, more than one-half of working-age persons had total incomes below the poverty line. Among young workers (those aged thirty or younger), 58 percent lived below the poverty line. More troubling was the fact that more than 70 percent of rural youth aged fifteen or younger lived in poverty (based on total income, if monetary income is used the percentage was more than 80 percent).∑≤ Deterioration of Rural Infrastructure Starting in the 1960s deliberate attempts by the Soviet government began to be made to improve rural infrastructure. Although significant progress was made, when the Soviet Union collapsed rural infrastructure was still notably behind that of urban areas. During the 1990s, federal investment monies

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for rural infrastructure declined as part of conscious policy decisions and fiscal crises. In 1993, financial responsibility for rural infrastructure was shifted from the federal budget to municipal budgets, to regional budgets, or to large farms themselves.∑≥ Regional and municipal administrations were incapable of funding rural infrastructure, however, because of their own budgetary pressures. The consequence was that large farms were forced to assume a greater portion of responsibility for capital investments, which in reality meant significant declines in the construction of rural infrastructure.∑∂ As early as 1994, the Russian government indicated that agricultural enterprises were the basic source for financing construction projects. In 1996, it was reported that large farms were financing 65 percent of all rural capital investments, and this figure rose during the remainder of the 1990s. Because large farms were increasingly burdened with high levels of debt during the 1990s and experienced high rates of unprofitability due to price disparities, the construction of rural infrastructure was drastically curtailed.∑∑ The influx of state monies from the federal government under the auspices of the programs ‘‘Development of the Agroindustrial Complex’’ (2006–7) and ‘‘Development of Agriculture’’ (2008–12) was intended to improve the situation, but most of the monies were allocated to increase food production. Therefore, if improvement in rural infrastructure is to be accomplished at all it will take a very long time, and this is an important consideration for land reform because buyers prefer land plots that have access to sufficient infrastructure. In addition to inadequate infrastructure, the closure of educational, social, medical, and recreational facilities accelerated.∑∏ For example, during the 1990s the number of rural preschools declined by 40 percent, as did the number of universal education schools, and those that stayed open taught fewer classes in upper grades. Furthermore, the number of rural recreational facilities declined from 62,600 in 1990 to 49,300 in 1998.∑π These closures meant that fewer facilities existed per thousand rural residents and those residents had to travel farther to find facilities that were operational. The quantitative decline in the number of rural preschools, schools, hospitals, and clubs continued in the first decade of the millennium.∑∫ Decline in Rural Medical Services During the Soviet period rural health care never was of particularly high quality. Rural hospitals often lacked hot water or running water. Soviet rural health care did little more than provide basic services. During the 1990s, however, rural health care became significantly worse as hundreds of rural hospitals closed. During 1993–96 alone, nearly five hundred rural hospitals closed. Even those that remained open often experienced critical shortages of

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the most basic medicine and supplies, such as aspirin. By the end of 1996, the rate of construction of rural hospitals was one-sixth its 1990 level, and the number of new hospital beds was one-fifth the 1990 level.∑Ω Overall, during 1990–2001 the number of health care institutions in rural areas declined by more than two-thirds, from 5,301 in 1990 to 1,743 in 2001.∏≠ In addition to the chronic shortages of basic medicines, the shortage of doctors and medical personnel grew more serious.∏∞ A consequence of these occurrences was a surge in the rural death rate, which, starting in 1992, exceeded the rural birth rate for the first time since the late 1940s and continued to do so through 2008.

Governmental Responses to Socioeconomic Problems The Soviet government had for decades been sensitive to the shortcomings in the rural standard of living, rural social services, and the range of socioeconomic problems that afflicted the countryside. A particular concern was the non–black earth region of Russia, where residents were motivated to leave the countryside because of lower standards of living than in urban centers, fewer educational opportunities, fewer recreational and cultural outlets, and poor-quality services. Survey data showed that a key motivation for rural out-migration was the desire to live in a town in order to enjoy the amenities and higher standard of living of urban life.∏≤ Soviet-era surveys also indicated that motivations to migrate to urban centers in order to acquire education remained essentially constant over time and continued to be felt as late as the mid-1980s.∏≥ During the Soviet period a number of government programs were enacted in response to these problems. Starting with Nikita Khrushchev’s idea of creating agrogorods (‘‘rural cities’’), several programs were adopted in order to raise the rural standard of living and stem out-migration. In the 1960s and 1970s Leonid Brezhnev introduced programs designed to lessen differences between urban and rural standards of living, the intent being to provide material reasons to remain in the countryside.∏∂ Under Gorbachev, a program titled ‘‘On the Further Development and Increase of Effectiveness of Agriculture and Other Branches of the AgroIndustrial Complex of the Non–Black Earth Zone of the RSFSR During 1986– 1990’’ was adopted in June 1985.∏∑ The purpose of the program was to improve the material-technical base of the countryside and to stem the outmigration of rural dwellers, an outflow that claimed 2.7 million persons from the non–black earth zone during 1976–86, including 2.3 million who were of working age.∏∏ Priority was given to the construction of homes, buildings for cultural use, intra-farm hard paved roads, the construction of repair enterprises

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and food storage capacity, and the purchase of farm machinery and mineral fertilizer.∏π In February 1988 the Politburo approved additional measures for a program of construction and repair of hard paved roads in the non–black earth zone of the RSFSR.∏∫ As a result, instead of the original 46 billion rubles’ worth of capital investments allocated for that zone, in fact more than 50 billion rubles were invested by the end of 1990, representing about one-half of total capital investments in agriculture during 1986–90.∏Ω Nonetheless, the programs adopted under Khrushchev, Brezhnev, and Gorbachev were not very effective, as evidenced by the fact that rural out-migration from the non–black earth zone remained high. After the main wave of rural out-migration ended, the rural outflow from the Russian Republic (RSFSR) averaged almost one hundred thousand persons per year during 1979–88.π≠ During the 1980s, rural social conditions continued to deteriorate, reaching ‘‘crisis’’ levels by the mid-1980s, according to some Russian analysts. In the late Soviet era the government in the Russian Republic devoted further attention to rural socioeconomic problems.π∞ Government responses to these problems were embodied in the 1990 law titled ‘‘On Social Development of the Countryside’’ and the 1991 law titled ‘‘On the Priority of Supplying Material-Technical Resources to the Agroindustrial Complex.’’ These laws were intended to provide the rural sector with state financial resources—not less than 15 percent of the national budget—to address various socioeconomic problems. Neither of these programs was fulfilled and promised funding was not forthcoming. In 1992 the new postcommunist Russian government under Boris Yeltsin adopted a program titled ‘‘Revival of the Russian Countryside’’ that also promised federal financial resources. In reality, this initiative was not financed, nor were its goals even moderately fulfilled. Federal financing never was forthcoming as envisioned. Concerns about socioeconomic problems in the countryside and outright criticism of state policies began to appear in the immediate aftermath of the introduction of market reform and continued throughout the 1990s (and after), but to little avail. During the remainder of the 1990s, two more programs for the social development of the countryside were adopted, but like previous programs they were neither adequately funded nor successful in fulfilling their goals. As a result, by the end of the decade the social infrastructure of the Russian countryside was significantly worse off than at its beginning.π≤ The earliest months of the new Putin presidency in 2000 reflected elites’ awareness of the need for corrective measures. Speaking at an agricultural conference in June 2000, Minister of Agriculture Aleksei Gordeev spoke of a ‘‘new strategy’’ for the agroindustrial complex that was embodied in a pro-

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gram for the socioeconomic development of the country. In the agricultural part of the program, it was stated (once again) that a primary goal was to bring rural standards of living closer to those in urban areas.π≥ In January 2001 the Russian government issued instructions to begin work on a program of rural social development. In May 2001 a federal program for the social development of the countryside was approved in principle by the government.π∂ In December 2002 the Russian government approved the adoption of the program, titled ‘‘Social Development of the Countryside to 2010.’’π∑ The program took effect on January 1, 2003, with implementation coming in two stages, the first stage running 2003–6 and the second 2007–10. The program planned to expend 187 billion rubles, of which 18.7 billion would come from federal financing, 76.9 billion from regional budgets, and 83.1 from nongovernmental (off-budget) sources such as farms, enterprises, and private investment. The 2002 program came under criticism, and doubts persist as to whether it will or is able to reach its goals. For example, during the discussion of the 2002 program, questions were raised about the level of federal expenditures, and it was noted that the federal government was to contribute a little more than 10 percent of the budgetary expenditures. Second, there were questions as to whether the program was sufficiently comprehensive and devoted to social problems. One group of Russian authors noted that, ‘‘unfortunately, the present program does not encompass the entire complex of acute social problems found in the Russian countryside, and affects them only indirectly.’’π∏ Indeed, the program envisions multiple goals, not all of which are strictly aimed at ‘‘social development.’’ For instance, the program intends to increase food production by way of achieving national ‘‘food security’’ and to improve the fertility of soil.ππ Therefore, doubts exist as to the government’s genuine commitment to improving rural social conditions. While the Putin administration did a better job than did Yeltsin’s in fulfilling its budgetary promises to agriculture, the percentage of budgetary fulfillment tended to be highest for food production goals while falling short for infrastructure and social development. For example, in 2003, there was 0 (zero) percent fulfillment by the federal government for capital investments in the social development program of the 67.8 million rubles that had been earmarked for such use in the budget.π∫ In the federal budget for 2004, only 5 percent, or 1.7 billion rubles, was devoted to ‘‘social’’ expenses in the agricultural part of the budget.πΩ Thus, despite awareness of a critical socioeconomic environment in the countryside, there remained something of a disconnect between the rhetoric of governmental leaders and actual remedial action. The lack of significant progress in addressing various socioeconomic condi-

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Table 7.1. Perceptions of rural services during 2000–2003

Transportation services Everyday services Utilities services Telephone services Bank services Legal services Health services Education and child care services Cultural services Sports services

Improved (%)

Declined (%)

No change (%)

11 6 3 10 11.5 5 13 4 1 [1

30 43.5 52 23 7 7 25 16 27 20

48 44.5 42 59 47 50 60 57 55 56

Source: Author’s survey data 2003 (n=382). Note: Percentages may not add to 100 because the response ‘‘too difficult to answer’’ is not reported. The question asked was: ‘‘How do you evaluate changes in rural services since 2000?’’

tions under Putin is reflected in household survey data. Table 7.1 illustrates that during 2000–3 few rural residents perceived improvement across a range of different services, and most expressed a perception of decline in rural services or no improvement. Among the services perceived to have declined the most are utilities, everyday services, and transportation. The government’s emphasis on socioeconomic problems, so clearly evident in 2000–1, had by 2005–6 yielded to other concerns. In 2005 President Putin identified agriculture as a national priority, and subsequently a discussion began about the nature and content of a national project for the development of the agroindustrial complex.∫≠ The project that concerned agriculture, a joint federal-regional initiative, was called ‘‘The Development of the Agroindustrial Complex’’ and originally spanned 2006–7.∫∞ This program expended more than R30 billion during this two-year period, with about R14.2 billion coming from the federal budget.∫≤ The Development of the Agroindustrial Complex originally consisted of state financial support in two broad areas.∫≥ The first was development of the animal husbandry sector, leading to an increase in the production of animal husbandry products. The second broad policy area was stimulation of small farming enterprises (personal and family plots and private farms), along with various types of credit and consumer cooperatives. A third policy arena was added by Gordeev in April 2006—

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providing adequate housing for young specialists in the countryside as part of the general personnel policy in agriculture.∫∂ A relevant question concerns the priorities of the program. One journalist noted that expenditures for rural social problems received significantly lower budget allotments than soil improvement projects or biological experiments in the fishing industry.∫∑ As time went on it became increasingly clear what the true priorities were: national food security, increased food production, soil fertility, modernization of production processes, strengthening the domestic agricultural machine–building branch of industry, and the development of small rural businesses.∫∏ To the extent that social problems were to be addressed it was mainly by improving the stock of rural housing; the fuller complex of socioeconomic problems was not directly addressed.∫π Concern for rural social conditions and the amelioration of rural social problems had given way to emphasis on food production and other economic issues. The program’s efficacy was also questioned, with one Russian scholar noting that federal expenditures in agriculture amounted to R364 per rural resident (about $14 per person at early 2007 exchange rates).∫∫ In addition, other members of the government did not support the program in its entirety. For instance, Minister of Finance Aleksei Kudrin argued that the goal of the program was to subsidize investments that would have long-term benefits, and he opposed the subsidization of short-term loans (those with terms of less than five years) on the grounds that such loans were not ‘‘investments.’’∫Ω In March 2007 then Deputy Prime Minister Dmitri Medvedev indicated that the program would continue as part of the five-year state program called ‘‘Development of Agriculture’’ that would run 2008–12.Ω≠ During that five-year period, state expenditures in agriculture would increase from R75.9 billion in 2008 to R130.5 in 2012.Ω∞ After being elected president in March 2008, Medvedev continued to pledge state financial support for agriculture, promising assistance not only for production but also for resolving ‘‘sharp social problems in the rural way of life.’’Ω≤ If that happens, it will represent a sharp break from past trends.

Rural Demographic Trends The aforementioned socioeconomic problems were important not only because of the drag they exerted on the rural economy but also because they had direct and indirect effects on rural demographics. Among the indirect effects, socioeconomic problems exacerbated the difficulty of rural life, making it even less pleasant and thereby increasing motivations for subsistence agriculture and out-migration.Ω≥ Among the direct effects, socioeconomic

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problems—low incomes, mass poverty, and unemployment—affected personal health among rural residents and thereby affected both the quantity and quality of household labor. This section presents a summary of rural demographic trends in Russia, starting at the national level and proceeding to the household level. Before investigating recent rural demographic trends, two broader demographic processes should be noted. First, in the decades following World War II the size of the rural population declined due to out-migration to urban centers. Net rural outflow was reversed in the first years following the breakup of the Soviet Union, but it restarted in 1995 and has continued since. The point is that the contraction since 1995 is not unique to postcommunist Russia.Ω∂ The country’s rural population is forecast to continue to decline by about 205,000 persons per year. An official mid-range estimate predicted that by 2015 it could decline by as much as 10 percent from its 2000 level, to about 36.3 million. The pessimistic prediction foresees a drop of 12 percent to 34.7 million.Ω∑ With the aging of the rural population, along with a deterioration in rural health care, it is entirely possible that even the most pessimistic variant will be surpassed.Ω∏ The second broad demographic trend is that the contemporary decline in the rural population is occurring within the context of a shrinking national population. In 2007 Russia had a total population of 142.2 million, down from 148.5 million in 1992, when market reform was introduced. In mid-2007 the Russian Ministry of Economic Development predicted that the population would shrink to 138.1 million by 2020 and that the decline could be even greater unless demographic policy changed substantially.Ωπ RURAL DEMOGRAPHIC TRENDS AT THE NATIONAL LEVEL

The implicit argument is that the aforementioned socioeconomic problems found in the rural sector had an effect on rural demographics. Although erosion of rural human capital was not unique to the post-Soviet period, several negative demographic trends did accelerate with the introduction of market reforms in the early 1990s and continuing through the Putin presidency. Deterioration in the Rural Population Coefficient A standardized measure of births to deaths per one thousand persons is a statistic called the ‘‘natural increase coefficient,’’ or simply the population coefficient. For many decades following World War II the rural natural increase coefficient was positive, which meant that more people were born in rural Russia than died. As late as 1990 the rural population coefficient was positive (+2.2).Ω∫ With the introduction of market reforms in 1992 Russia has

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experienced a decline in its population coefficient. The deterioration in the rural population coefficient was reflected by an increase in the rural death rate and a decrease in the rural birth rate.ΩΩ The rural population coefficient declined from +2.2 in 1990 to –7.1 in 1999 and to –7.3 in 2000.∞≠≠ In other words, rural birth rates lagged behind death rates. Since 2000, there has been some modest improvement, but even so, the coefficient has remained negative (–7.3 in 2001, –7.7 in 2002, –7.3 in 2003, –6.8 in 2004, –7.4 in 2005, and –6.0 in 2006).∞≠∞ Many individual regions experienced double-digit declines in their population coefficient for most or all of the 1990s (particularly the northern and central regions). By 2004, of the eighty-nine regions that existed in 2004, seventy-one were experiencing a decline in rural population, and according to a mini 2002 census, more than thirteen thousand rural villages had become empty.∞≠≤ Other negative trends also affected the rural population coefficient. In 2003 the rural suicide rate was fifty-five per hundred thousand persons, or 1.7 times the level in urban areas. The rural mortality rate was 18.4 per thousand, with the male death rate almost four times higher than the female rate. Moreover, the incidence of various diseases increased, and life expectancies have declined since the 1980s as well.∞≠≥ Declining Male Life Expectancy Within the deterioration of the rural population coefficient, declines in rural male life expectancy stand out. Rural male life expectancy dropped from 62.7 years in 1988 to 58.6 years in 1999 and continued to drift downward thereafter, declining to 57.5 years in 2004 and to 57.1 years in 2005.∞≠∂ In 2006 there was a slight upturn to 58.6 years, but it is not clear at the time of this writing whether that improvement is a trend or an anomaly.∞≠∑ As rural male life expectancy fell in the early 1990s the decline was partly offset by a migratory influx of young males into the countryside. In 2000, however, it was estimated the number of rural males aged eleven to fifteen would decline by one-third during 1999–2004, while the number of rural dwellers approaching pension age would rise by 37 percent.∞≠∏ Declining male life expectancy is important because it is men who are most engaged in private agricultural businesses, men who are more likely to start private farms, and men who provide most of the labor for mechanized operations. Declining rural male life expectancy also has social consequences such as the problem of fatherless families. For example, during 1993–98, for every hundred rural women aged thirty-five to fifty-four who died, more than five times as many men died in the same age cohort.∞≠π

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Gender Imbalance It is well known that there are many more rural women than rural men who are aged sixty and above, a lingering consequence of World War II. But it is much less well recognized that there is also a demographic imbalance between young rural women and young rural men. During the 1990s the demographic imbalance between young men and women worsened. In 1993, for every 100 unmarried women aged eighteen to twenty-five there were 110 unmarried men in the same age group. In 1998 the ratio was 100:113, and in 2000 it was 100:114.∞≠∫ It is important to retain young rural women in order to offer young males the prospect of marriage and a family. Most rural employment is unattractive, however; more than 80 percent of agricultural work performed by females is manual, and one-half of positions occupied by women do not meet sanitary norms, thereby contributing to the motivations to leave rural employment.∞≠Ω The imbalance between the number of young men and young women is an enduring feature of the Russian countryside, and the problem was even more acute in the late Soviet period. In 1989 there were 5.50 million rural males aged twenty to twenty-nine but only 2.90 million rural females of the same age, a deficit of 2.6 million. In the mid-1990s there were 2.42 million rural males in this age group but only 2.29 million rural females, a deficit of about 130,000.∞∞≠ By the early Putin period the imbalance had worsened compared to 1996. In 2001 there were 2.73 million rural males in this age bracket but only 2.48 million females, a deficit of about 250,000.∞∞∞ Toward the end of Putin’s second term, this group contained 2.89 million rural males and 2.67 million rural females, a deficit of 220,000, an improvement, but still a significant difference.∞∞≤ Rural Out-Migration Official statistics depict decades of rural out-migration in the second half of the twentieth century as rural dwellers left the countryside in search of alternative employment opportunities, a higher standard of living, and amenities offered by urban life that were not present in rural areas. As a result, the postwar period in Russia was characterized by a rapidly growing urban population, an expansion in the number of large cities with more than one hundred thousand residents, and a declining rural population.∞∞≥ From the mid-1940s to the early 1990s the rural population coefficient was positive (more births than deaths), but the total rural population declined from about 61 million in 1946 to 38.8 million in 1991, with most of the reduction due to rural outmigration. As a result, since 1959 the number of rural villages with fifty-one to one hundred persons declined almost 75 percent, and the number of villages with one hundred or more persons declined by more than 50 percent.∞∞∂

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After the collapse of the Soviet Union rural migration patterns changed for almost a decade. In a reversal of several decades of rural out-migration, in 1991 the Russian countryside became a net recipient of new settlers. The net number of rural arrivals increased from 57,000 in 1991 to 289,000 in 1992. Overall, during 1992–94 the number of people migrating into rural areas averaged more than 275,000 annually.∞∞∑ The positive flow of migrants into the countryside continued through 2000, though in greatly reduced numbers, before turning negative starting in 2001 and continuing through 2007.∞∞∏ Since 2001 both the rural population coefficient and rural migratory flows have been negative, a fact that has accelerated the decline of the rural population. While most of the contemporary decline is due to higher death rates, rural out-migration now adds to the net loss instead of partly compensating for the negative population coefficient, as it did in the 1990s. Much of the rural outflow occurred from the Urals, Siberia, and Far Eastern federal regions.∞∞π In addition, the outflow of rural youth has accelerated since the late 1990s. This development calls into question the long-term sustainability of the rural economy. In 2003 out-migration of rural youth made up more than 35 percent of total rural out-migration, leading to an outflow of more than four hundred thousand persons below working age. One Russian academic noted that most rural dwellers who leave the countryside today are aged fourteen through thirty, with the single largest cohort of out-migrants aged sixteen to twenty.∞∞∫ The outflow of younger rural residents affects and will continue to affect the quality of labor and management personnel in agriculture. In the late 1990s, only 15–20 percent of young specialists remained in the countryside after their technical education to work on large agricultural enterprises. In Kurgan oblast, one-half of the people who migrate out of the countryside are younger than thirty, and a significant number are aged fifteen to nineteen; they move to urban areas for education and better employment opportunities. Low agricultural salaries, poor living conditions, inadequate cultural opportunities, declining rural services, limited employment options, and the economic instability of many large farms also contribute to the outflow of youth.∞∞Ω RURAL DEMOGRAPHIC TRENDS AT THE HOUSEHOLD LEVEL

Survey data permit an examination of rural demographic trends at the household level. Two sets of data are used for analysis: panel data from 1995– 2003 are used to track changes longitudinally, and cross-sectional data from 2006 present a more recent picture of rural household demographics. We start with the question of whether there are any discernible patterns to changes in the size of the family. Using the panel data, a ‘‘demographic change’’ variable was created that illustrated change in family size during 1995–2003. Based on

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Table 7.2. Demographic change in size of household by income deciles, 1995–2003 (number of households) Increase of Monetary income Decrease of Decrease of Decrease of Increase of 2 or more deciles 4–5 members 2–3 members 1 member No change 1 member members 0–9% 10–19% 20–29% 30–39% 40–49% 50–59% 60–69% 70–79% 80–89% 90+% Total

2 1 0 1 0 0 0 0 0 1 5

3 3 2 4 3 1 4 5 2 5 32

11 12 11 5 7 9 9 11 6 9 90

22 21 25 24 24 23 16 15 20 17 207

0 1 1 3 2 4 4 3 7 1 26

0 0 0 1 2 2 2 3 1 5 22

Source: Author’s 1995–2003 survey data (n=382).

that variable, table 7.2 shows the decrease or increase in the number of household members by income decile. The table shows that a slim majority (54 percent) of households did not experience any net change in the number of members. Among households that experienced a reduction of one person, thirty-four lower-income households (the bottom three deciles) lost one person, and only twenty-six upper-income households lost one member (the top three income deciles). While a decrease in the size of the household may also occur because of a death in the family (which usually would be reflected in a decrease of one), a larger number of decreases should be understood as an escape from rural life.∞≤≠ Because the n is small, we should be wary of reading too much into the trends. Nonetheless, members of both upper- and lower-income households would be motivated to migrate in search of more economic opportunity, in search of higher income, to escape low standards of rural life, or to pursue education. In particular, members of lower-income households might simply hope to find a better existence outside of the countryside, although they may be limited in their ability because of a smaller skill set. Members of upper-income households might want to utilize their advantages, higher skill levels and education, to escape rural life, that is, to transfer their advantages to an improvement in their material well-being. The most popular destinations for migrants, according to the 2003 wave of the survey, were a larger village, a raion center, or the oblast

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Table 7.3. Weighted labor value of households by income deciles, 2006 (in percent) Monetary income deciles

0–1.74

1.75–2.74

2.75–3.74

3.75–4.74

4.75+

Mean of household labor

0–9% 10–19% 20–29% 30–39% 40–49% 50–59% 60–69% 70–79% 80–89% 90%+

78 47 21 20 18 11 6 7 3 2

18 44 57 51 38 40 40 40 26 19

2 3 20 19 32 34 43 30 32 32

2 3 2 8 10 14 9 14 33 34

0 2 1 3 2 1 2 9 6 14

1.0 1.6 2.1 2.2 2.4 2.6 2.7 2.8 3.2 3.4

Source: Author’s 2006 survey data (n=900). Note: Percentages have been rounded.

center. The table also shows that upper-income households are much more likely to add one or more members than are lower-income households. This finding should be interpreted as an ability to care for an additional member, such as a parent or grandparent, rather than an innate attraction to rural life. Levels of household human capital and household labor value are important because they affect household land holdings and land acquisition, as examined below. It will be shown that households with a higher labor value have larger land holdings and experience larger land expansion. For now, however, the processes depicted in the 1995–2003 data are also reflected in the 2006 data: lower-income households shed members and upper-income households are more likely to attract members. Using the 2006 survey data, a weighted labor value for each household was calculated using the age of the members of the household.∞≤∞ This weighted scale is as follows: 0 (zero) for persons aged less than 8 years or more than 80; .25 for persons aged 8–11 and 75–79; .50 for persons aged 12–14 and 71–74; .75 for persons aged 15–16 and 66–70; and 1.0 for persons aged 17–65. These figures were then summed for each household. The result is the following scale of household labor: 0–1.74, 1.75–2.74, 2.75–3.74, 3.75–4.74, and 4.75+. The higher the summed number, the greater the value of labor in the household.∞≤≤ The distribution of the weighted labor value for households participating in the 2006 survey is shown in table 7.3.

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The table clearly illustrates the fact that lower-income households have a lower labor value. Note that a household’s labor value is somewhat different than the mere number of people in the household. The weighted labor value is a reflection of the amount of labor a household is able to utilize; how much labor each member is potentially able to contribute. The labor value takes into account not simply the presence of a household member but the labor utility that each member has for the household at that point in time (based on the assumption that the extremely young and the aged contribute less labor). The table shows that poorer households are grouped in the lower ranges of labor value, while upper-income households have a greater labor value and are grouped in the higher range of labor value. The mean household labor value (the last column in the table) appears as a linear relationship whereby each successive income decile has a higher labor value than the decile below. From these data it may be concluded that the amount of labor that a household has available is an important factor in determining household welfare.

Rural Demographics and Effects on Land Reform The sections above surveyed socioeconomic problems in the countryside and concomitant erosion in rural demographics. At the national level, rural socioeconomic problems contributed to increased death rates, lower birth rates, increased incidence of disease, and out-migration. At present and going forward rural demographics affect the operation and performance of the rural economy and influence rural responses to reform more generally. At the household level, a link between the demographic condition of a household and household income was established, showing a linear relationship between the level of household labor and household income (more household labor translates into higher household income). Upper-income households are less likely to experience a significant decline in the number of members, are more likely to increase in size, and have a significantly higher weighted labor value. The purpose of this section is to bring the different strands of the foregoing analysis together. A link has been posited whereby socioeconomic conditions exacerbate negative demographic trends and affect the level of household labor. This section quantifies the relationship and extends that argument by using household survey data to investigate the effect of household labor on household land holdings; and to examine the relationship between the level of household labor and the likelihood of obtaining more land. In short, this section addresses two main questions: (1) What is the impact of household labor on land holdings? (2) What is the impact of household labor on land enlargement?

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Table 7.4. Mean amounts of total land controlled by households by level of household labor, 2001 and 2006 (in hectares)

0–1.74 1.75–2.74 2.75–3.74 3.75–4.74 4.75+ Total mean

2001

2006

.42 (n=215) 1.96 (n=280) 1.55 (n=176) 1.95 (n=107) 14.5 (n=22) 1.79

.22 (n=190) .38 (n=335) 2.97 (n=221) .52 (n=117) 2.04 (n=36) 1.07

Sources: Author’s survey data, 2001 (n=800); 2006 (n=900). Note: The two years are not directly comparable since the surveys were taken in different regions, among different households, and include different types of land. ‘‘Total land controlled’’ in 2001 is defined as size of private plot, size of rental land, size of plot allocated by large farm, and any other land from informal arrangements. ‘‘Total land controlled’’ in 2006 is defined as size of private plot, size of land in-kind from land shares, size of rental plot, and any other land from informal arrangements.

In terms of the first question, the weighted labor value variable was used to measure the impact of household labor on land holdings. The initial hypothesis is that households with more labor (a higher score on the labor value scale) are more likely to have larger total land holdings. The results, using crosssectional data from eight hundred rural households in 2001 and nine hundred rural households in 2006, are presented in table 7.4. The analysis uses only real land holdings; paper land shares are excluded. While the results from the two surveys are not directly comparable because they were taken in differing regions at different time points, and sampled different households, the results from each survey display the same pattern. The table shows several interesting findings that warrant mention. First, in both surveys the number of households with lower labor values (the bottom two categories) is larger than the number of households with higher labor values (the top two categories). In particular, households in the lowest labor

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value category account for 27 percent of the sample in 2001 and 21 percent of the sample in 2006. Second, it is clear that households with the lowest level of labor have significantly smaller total holdings of real land than do the other labor categories, reflecting the demographic structure of the household. The lowest labor value category is dominated by persons aged sixty and older (25 percent of the cohort) and aged seventy and older (55 percent of the cohort). Both surveys show that households with the lowest level of labor have real land holdings that are far below the mean for the entire sample. Third, the difference in land holdings between the lowest and highest labor value categories is significant. Although the number of households with a labor value of 4.75 or more is not great, their land holdings are more than thirty-four times the mean size of the lowest category in 2001 and more than nine times the mean size of the lowest category in 2006. Based on these data, the link between households with higher labor values and larger land holdings is substantiated. Moreover, the fact that the analysis included only real land is significant. The leveling effect of land shares is evident. When land shares are factored in, the differences between top and bottom labor value categories are reduced significantly. We turn next to the effect of household labor value on enlargement of land holdings. A hypothesis is posited whereby households with a higher labor value will have increased their land holdings by a larger amount since 1991. The hypothesis was examined using data from the 2006 survey that included a longitudinal question asking the amount by which different types of land plots had been enlarged since 1991. The results are presented in table 7.5. The table examines two categories of land increases. The first includes land shares, and the second includes only increases in real land. For both categories of land enlargement the findings show that households with lower labor values (the bottom two categories) lag behind the other categories in the amount of land that was added to household use since 1991. For land expansion including land shares, the largest increase (almost eleven hectares) was experienced by households in the labor category 4.75+. Although the number of these households is small (n=36), their demographic structure is such that most household members are aged forty through forty-nine (56 percent of the cohort). The labor category with the second highest mean increase in land holdings is 2.75–3.74, an increase of almost nine hectares. This labor category has respondents distributed across the age spectrum, although the largest cohorts are aged thirty through thirty-nine (29 percent) and forty through fortynine (34 percent). For expansion of real land, which arguably is the more important category,

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Table 7.5. Mean land increase by level of household labor, 1991–2006 (in hectares)

0–1.74 1.75–2.74 2.75–3.74 3.75–4.74 4.75+ Total mean

Increase in land, including land shares

Increase in land, real land only

5.50 (n=190) 5.33 (n=335) 8.97 (n=221) 6.97 (n=117) 10.82 (n=36) 6.69

.05 (n=190) .17 (n=335) 2.58 (n=221) .21 (n=117) .63 (n=36) .76

Standard deviation for increases in real land .14 .47 21.5 .45 2.54 10.7

Source: Author’s survey data, 2006 (n=900). Note: The first data column includes the increase in size of private plot, size of land from land shares, size of rental plot, and any other land from formal or informal arrangements. The second data column includes increase in private plot, rental land, and other formal or informal land arrangements. Land shares are excluded.

households with the lowest labor value experience an increase of only .05 hectares, and the households with second-lowest labor value fared only marginally better, with an increase of just .17 hectares. Households in the 2.75– 3.74 category had the largest increase, just over 2.5 hectares. And households with the highest labor value increased real holdings by .63 hectares. Although the amounts by which holdings were expanded are not large, there is significant differentiation between households with high and low labor values. Thus, the results shown in the table strongly suggest that, quantitatively, a household’s labor value is an important factor that affects land enlargement. But is there a qualitative aspect as well? The data support that idea, thereby supporting the importance of keeping the rural young in the countryside. Households with a younger age structure have a higher labor value, which in turn translates into larger land holdings, larger land expansion, and higher household income. Therefore, a household with a younger age structure is better able to combat poverty and increase household income. The causal relationship between household labor and household income is illustrated by a linear regression analysis that used total household monetary

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Table 7.6. Monthly mean household monetary income by level of household labor in 2001, 2003, and 2006 (in rubles) Household labor value

2001

2003

2006

0–1.74 1.75–2.74 2.75–3.74 3.75–4.74 4.75+ Total mean

2,599 5,369 6,287 7,300 9,601 5,201

3,762 8,421 10,837 12,171 12,443 8,125

7,859 13,002 17,888 21,704 26,682 14,797

Sources: Author’s survey data, 2001 (n=800); 2003 (n=382); 2006 (n=900). Note: The three years are not directly comparable since the surveys were taken in different regions and among different households.

income as the dependent variable and household labor as the independent variable. The outcome was statistically significant and yielded a standardized coefficient (beta) of .305, which is quite high for a single variable, demonstrating the impact of household labor on household income. Household income is important because it in turn influences motivations to migrate from the village or to search for alternative employment. The relationship between household labor and household income is further illustrated in table 7.6. Using mean monetary household income from three surveys, the table shows that there is a linear progression for total income as the labor scale is ascended. In each survey, households with the lowest level of labor had significantly lower levels of total income than did those in other labor categories, and the surveys show that households with the lowest level of labor had total incomes that were far below the mean for the entire sample. The relations of household labor to income and household labor to land are important because therein is the genesis for change in rural class structure—from a largely egalitarian social structure to one that is highly differentiated in terms of land, labor, and income, as discussed in Chapter 6.

Conclusion Since market reforms were introduced in the early 1990s, many rural socioeconomic problems have worsened, and the rural demographic situation has deteriorated. While it would be unfair to argue that the Russian government has been oblivious to these problems, it is fair to say that the resolution

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of those problems is a lower priority than national food security and other economic issues such as food production. Since 1999–2000 there has been a rebound in food production on large farms, and combined with food production from the private sector the rural economy as a whole began to grow. Despite the improvement in food production, farm profitability, and economic growth, however, many serious rural socioeconomic problems remain unresolved, and the rural demographic base continues to erode. For this reason, two Russian academics assert that in a market economy, the agricultural sector is not able to generate enough financial resources to increase food production, protect land from ecological destruction, and fund social development in the countryside. They believe that the Russian government should take responsibility for funding rural social development through budgetary transfers.∞≤≥ This chapter has argued, first, that behavioral responses are affected not only by the design of reform, but that implementation of reform institutions is also influenced by households’ demographics and labor value. Therefore, it is important to recognize that in reality a multiplicity of factors affect reform outcomes. Second, the chapter demonstrated how human capital and household labor are central to the ways households respond to land reform initiatives. Disadvantaged households, those with low levels of human capital and low labor value, are limited by restrictive property rights and by their demographic profile. These types of households comprise the majority in the Russian countryside. On the other hand, advantaged households, those with higher income and favorable levels of human capital and household labor, are constrained by insufficient rural social policies that affect services and infrastructure. Therefore, advantaged households are limited not only by the restrictions found within reform policies but also by the broader socioeconomic and demographic situation. These types of households make up a small percentage of the countryside. The analysis of survey data demonstrated that the level of household labor affects both household land holdings and household land enlargement. That finding in turn is significant because small household land holdings are not competitive in a global economy in which Russian food producers are competing with international agrofirms that are both horizontally and vertically integrated. Excessively small plots may represent the successful individualization of land holdings, as in Transcaucasus states, but such plots are useful mainly for family subsistence and do not make a country internationally competitive.∞≤∂ Thus, unresolved socioeconomic and demographic problems represent a further limitation on Russia’s land reform. Because of these problems, even advantaged households are constrained. The advantaged are less constrained

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than the disadvantaged, but they are constrained nonetheless. While it is not clear that any reform design could operate successfully within the socioeconomic and demographic environment found in rural Russia, it certainly is appropriate to conclude that contemporary reform institutions were not designed to overcome Russia’s socioeconomic and demographic deficiencies, and may even magnify them.

8

The Regional Impact on Households’ Land

Russia’s geography and climate differ greatly from region to region. Due to its size and diversity, we should not necessarily expect uniform responses to economic reform policies, just as other elements of postcommunist reform have varied from region to region.∞ Even in a relatively small country local variables may be significant. Rosemary Hopcroft observed that ‘‘important regional differences arose in agricultural and economic development in late medieval and early modern England, despite common state policies and institutions throughout England. These regional differences are best explained by the nature of local economic institutions, and not by state policies and institutions, which we may assume affected all areas of England more or less equally.’’≤ With regard to Russia’s land reform, various local factors have affected regional responses, including but not limited to regional land laws, the level of economic development, the quality of social, demographic, and human capital, and regional political leadership. Despite the impact of local factors, the influence of the design of reform and reform policies is evident by similar patterns of responses and similar limitations across regions. As Judith Pallot once remarked to me, it’s the same story in each region, but the same story in different ways. A commonality of responses—similar patterns across regions—speaks to the importance of reform institutions, and similar effects from external factors demonstrate the

191

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salience of those variables. Whereas previous chapters used aggregated survey data, combining all regional data into one response, this chapter disaggregates the data and shifts the analysis to behavioral responses at the regional level. The primary motivation is to examine the extent to which independent variables have the same effects across regions. This chapter applies the independent variables used in previous chapters in order to discern their impact across different regions. By revisiting those variables with an eye toward regional differences the chapter addresses the following questions: (1) How do the different independent variables affect land reform across regions? In short, how have behavioral responses to land reform policies evolved differently across regions? (2) Do the independent variables that were considered previously have the same effects across regions, or are some variables more significant in different regions than in others? (3) Did land reform distribute land to the ‘‘right’’ households in the ‘‘right’’ regions, that is, where agriculture is strong? Although contemporary Russian land reform was introduced for political and not only economic reasons (at least at the beginning of the reform process), nonetheless land reform was expected to lead to beneficial economic effects. Thus, the question is whether land reform put land in the hands of households in favorable agricultural areas. In order to address these questions the analysis of regions draws on data from the 2006 survey of nine hundred households in nine regions. These data are particularly useful because the nine regions stretch the entire width of Russia, from west to east, and represent each of the federal okrugs. The chapter is divided into four main sections. The first discusses the reasons for a focus on regional patterns of behavior. The second section presents a descriptive overview of regional factors: household income, land holdings, land transactions and enlargement, and land fragmentation. This section is intended to provide a context for the analytical sections that follow and addresses the following questions: How does household income vary by region? How does household income stratification vary by region? How do upper- and lowerdecile income categories differ in terms of subjective perceptions across regions? How do household land holdings vary by region? How do household land transactions and land accumulation vary by region? How does land fragmentation vary by region? The third section investigates the reasons why households expanded their land holdings (and here, the dependent variable is actual land, not land shares). The analysis uses household income and household human capital (labor value) as independent variables and assesses their impact on the dependent variable (the amount of real land that was added to households’ land holdings after 1991). Two hypotheses are presented and tested for their effects on re-

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sponses to land reform across regions. (1) The household income hypothesis examines household income across regions and analyzes the differing impact of income and stratification on land enlargement. This hypothesis addresses the following questions: How does household income vary by region? How does household income stratification vary by region? How do subjective perceptions of material well-being across regions differ? How do subjective perceptions of those in upper- and lower-decile income categories differ? How does household income affect households’ land enlargement across regions? (2) The human capital hypothesis analyzes regional demographic trends and the impact of household labor on land holdings and land enlargement across regions. This hypothesis addresses the following questions: How does household human capital and labor value vary by region? How does household human capital and labor value affect land holdings and land enlargements across regions? Does household human capital and labor value vary by location of the village? The conclusion ties the analysis together and makes explicit the important findings and patterns. It also assesses the issue of which households and regions have been winners and which have been losers in land reform by addressing the following questions: Did the strongest households in the most favorable agricultural regions end up with the most land? What do the findings suggest about regional winners and losers in land reform?

The Importance of a Regional Focus Because Russia is a vast country, differing responses to the postcommunist experience are to be expected. These regional differences encompass political, economic, and social aspects.≥ With the demise of the Soviet Union the literature on Russia’s regions has burgeoned, so much so that selected citations can only give a flavor of the breadth and depth of regional studies that have been published. The focus on regions has brought to life the political and economic diversity experienced within Russia. In the political realm, a number of case studies have focused on one region and on regional attributes that stood out for one reason or another.∂ Other political studies have been crossregional, and as a result it is now well established that not only voting patterns but also the pace and degree of democratization differ across regions.∑ We know that the nature of regional governance varies, as do the variables that affect a region’s political economy.∏ One very valuable two-volume study examines myriad political aspects and they way they differ across regions, for instance, the role of presidential envoys and their relations with regional governors, and the role of big and small businesses.π Other topics analyzed by Western authors at the regional level include crime and corruption,∫ regional

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elections and legislatures,Ω the development of political parties,∞≠ and inequality in economic policy.∞∞ These and other subjects provide a sense of the magnitude and difficulty of reforming Russia, thereby providing a context for understanding the recentralization of power in the center under President Vladimir Putin and raising the question of whether Russia can be reformed as a single space. A regional focus also aids our understanding of Russia’s economy and economic development. Although it is hardly new knowledge, we have become more sensitive to the fact that different regions have diverse strengths, weaknesses, resource endowments, and growth potential. In the agricultural sector, there are enormous differences in agricultural potential, production capacity, and value of production, as indicated by the national ranking of effectiveness in agricultural production.∞≤ Moreover, local, national, and cross-national analyses have provided useful contrasts in experiences with agricultural reform in various parts of the postcommunist world.∞≥ Analyses and descriptions of developments at the regional level provide valuable insight into the reform processes and effects in a way that national-level analysis cannot.∞∂ Thus, the breakup of the Soviet Union and the larger Soviet bloc has led directly to a greater awareness and deeper understanding of regional differences and the factors that affect those differences. Therefore, the regional focus used for land reform in this chapter is important for several reasons. First, it has been clear for several years that regional responses to land reform differ considerably and not only because of geographical and climatic differences. Sizes of land shares and total land holdings differ very much by region, and during the 1990s regional land legislation varied significantly.∞∑ Since the adoption of the Land Code in 2001, regional land legislation has been required to conform to the broad parameters of federal law (the Land Code and subsequent legislation), but there remains a great deal of regional diversity, and it is possible to conceptualize regional legislation along a liberal-illiberal scale. Some regions continue to have more restrictive legislation than others, and the mere scope of what legislation covers varies considerably. For example, regional land legislation (usually called ‘‘law on land’’ or ‘‘law on land relations’’) in Altai krai takes up more than one hundred pages, whereas in Amur and Leningrad oblasts, as well as in the Republic of Tatarstan, similar legislation may span but a few pages. Legislation varies considerably in terms of how large a regulatory role the regional government will play in agriculture. Concerning agricultural land, the size of permissible private plots differs from region to region, and this is important for framing incentives to expand holdings. Thus, the national design of reform has spawned subsequent regional designs that must be broadly in accordance with national legislation but that also reflect and engender regional differences.

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The second reason why a cross-regional focus is important is the need to address a void in the literature. Several single-oblast studies of Russian agrarian reform exist in English,∞∏ but relatively few analysts have studied behavioral responses across regions.∞π Specific analyses in English of crossregional responses to land reform in Russia are few and far between.∞∫ This chapter is intended to contribute an original analysis to the literature about regional land reform. The third reason why a regional focus is important is that it permits us to test for the effects of reform institutions and their impact across regions, that is, the degree to which reform institutions yield similar response patterns. Because Russia is characterized by a variegated geography with significant differences in soil, climate, and topography, there is no uniform national response to land reform, but similar patterns suggest that policies emanating from the center were efficacious in shaping regional responses. Finally, a regional analysis provides important details about how the post-Soviet transition is playing out—how the ‘‘renegotiation of status and identity’’ by individuals, households, and groups is occurring in different regions.∞Ω Therefore, household responses at the regional level and across regions are central to our understanding of Russia’s contemporary land reform.

A Descriptive Overview of Household Income and Land Relations Across Regions The descriptive information presented in this section provides a context for the analytical section that follows, starting with an overview of rural households’ income and land holdings in the nine regions that were surveyed in 2006. Regarding land holdings, the impact of reform institutions is seen in the fact that similar patterns are evident across regions. Namely, mean holdings of real land are small, and households have significant land holdings only if land shares are included. Household income and land holdings are shown in table 8.1. Total household income, monetary and nonmonetary, is indicated in the first data column. Nonmonetary income is the value of production that is consumed by the household from the food it produces on its private plot. The table shows that there are significant differences across regions in total household income. The inclusion of nonmonetary income slightly lessens the differentiation between the highest and lowest mean regional household income. If one uses both forms of income, the ratio between the top and bottom regions is 2.05. In contrast, if one uses monetary income only, the ratio is 2.17. Levels of monetary income are affected by the employment structure of the household. Household income tends to be lower in areas where the economy

196

Table 8.1. Indicators of household income and land holdings in regions included in 2006 survey

Moscow oblast (not including Moscow city) Leningrad oblast (not including St. Petersburg) Kurgan oblast Amur oblast Voronezh oblast Krasnodar krai Altai krai Krasnoyarsk krai Republic of Tatarstan Mean of total sample

Mean size of rental plot (ha.)

Mean total land holdings 1: pai as paper entitlement (ha.)

Mean total land holdings 2: pai in-kind (ha.)

.17

.02

4.00

.20

57

.12

.03

4.05

.35

33 22 62 77 24 36 13 —

.09 .15 .22 .38 .14 .09 .29 .18

1.04 1.57 .06 .36 .11 .15 3.10 .71

9.41 14.65 5.29 5.24 7.87 13.43 5.21 7.20

1.15 1.88 .35 1.23 .25 .97 3.41 1.09

Total mean monthly household income in rubles (rank within sample)

Coefficient of differentiation (monetary income only)

Individuals below the per capita subsistence minimum (%)

Mean size of private plot (ha.)

14,831 (7)

6.8

62

17,604 (4)

5.5

15,626 (5) 25,903 (1) 12,645 (8) 12,619 (9) 17,713 (3) 17,748 (2) 15,472 (6) 16,681

6.2 3.5 4.3 4.2 4.9 3.4 4.7 —

Source: Author’s 2006 survey data (n=900); author’s calculations. Notes: Total mean household income includes both monetary and non-monetary income. Coefficient of differentiation: the ratio of monetary income received by the top 10 percent of households compared to the bottom 10 percent of households, and is used to measure the degree of inequality. Subsistence minimum: calculation based upon monthly per capita monetary income for each region in the 4th quarter of 2006 (instead of using national threshold). Total land holdings 1 includes private plot, land shares distributed as paper entitlements, rental land, and other land. Total land holdings 2 includes private plot, land shares distributed in-kind, rental land, and other land.

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is based on agriculture, and higher where alternative employment opportunities exist. Because agricultural work is the least well remunerated sector of the economy, the larger the contribution of agriculture to the regional economy, the smaller the mean income. For example, Amur oblast has the highest total income, and that region has opportunities for employment in mining (gold) and manufacturing, sectors in which salaries are much higher. Only 10 percent of the population is employed in agriculture. Conversely, in both Krasnodar krai and Voronezh oblast, 20 percent of the workforce is employed in agriculture, and the mean income is lower.≤≠ Income differences as shown in the table may be expressed as a coefficient of differentiation, which is a measure of the degree of inequality or stratification within each region. This coefficient is shown in the second column as a ratio of monetary income received by the top 10 percent of households to the monetary income received by the bottom 10 percent of households. Moscow oblast is the most highly stratified, with a coefficient of 6.8, and Amur oblast is the least stratified, with a coefficient of 3.5. Regions with a larger agricultural workforce (Voronezh and Krasnodar) also are found at the lower end of the inequality scale. The obverse of high income is poverty, and the third data column shows the percentage of individuals in each region who fall below the subsistence minimum based on per capita monetary monthly income. Rather than use a poverty threshold that applies to the nation as a whole, this column employs a poverty level that varies from region to region, with each region having its own income threshold. The benefit of using a variable poverty line is that it places individuals along an income continuum that reflects the reality in which they actually exist; they are compared to others in the same region. The disadvantage is that this method overstates somewhat the number of people below the poverty line, particularly in regions with higher thresholds. Nonetheless, the data show a wide variance in the incidence of poverty, from a high of 77 percent in Krasnodar krai to a low of 13 percent in Tatarstan. Note that the agricultural regions (Voronezh and Krasnodar) have extremely high incidences of poverty that again may be traced to lower income from agricultural work. The table also indicates households’ land holdings. The mean sizes of private plots by region are indicated in the fourth data column. A similar pattern found nationwide and across regions is that these plots are small, and although there are regional differences, they are not enormous. Households sampled in Krasnodar krai have the largest mean private plot size at .38 hectares, whereas households in Kurgan oblast and Krasnoyarsk krai are tied with the smallest mean size, .09 hectares. The mean size for a private plot for the entire sample is .18 hectares. Proceeding from the basis that private plots

198

Behavioral Responses

tend to be used for food production to be consumed (nonmonetary income), these differences reflect a variety of operational factors: favorable agricultural conditions, lower household monetary income, and the age structure of the household. Overall, variation in the size of private plots does not appear to be a significant factor in income stratification. Other factors, such as income from nonagricultural activities, appear to be more important to income stratification among households. The mean amount of land rented by a household also tends to be small. These differences are more significant across regions than are differences in private plots. Households located in areas that are close to large cities or where population densities are highest have the lowest mean amount of rental land, owing to an imbalance between supply of rental land and demand, as in Moscow and Leningrad oblasts (.02 and .03 hectares, respectively). Households that were surveyed in Tatarstan have the highest mean amount of rental land, more than 3 hectares, and Kurgan and Amur, where population densities are low and land is plentiful, also are above the mean for the sample (1.04 and 1.57 hectares, respectively). Proceeding from the premise that rental land is often used for livestock grazing, rental land may contribute significantly to total household income. For example, in Amur oblast, with a mean of 1.57 hectares of rental land, agricultural food sales contributed 30 percent of total mean household income, due in large part to the sale of meat and potatoes. Despite having the largest mean amount of rental land, households in Tatarstan sold less meat and more potatoes. Because the latter is a low-value food product, only 19 percent of total household income came from food sales. Households located in the regions with the smallest mean rental plot sizes, Moscow and Leningrad, reaped only 7 percent and 6 percent of total income from agricultural food sales, respectively, and were at the bottom of the scale of meat sales. Therefore, there appears to be a symbiotic relationship between rental land and the composition of food sales, and this linkage deserves more attention in future research. Turning to total land holdings, the table differentiates between land holdings that include land shares as paper entitlements and land holdings that include land shares that have been converted to actual land (the final two data columns). As noted for the country as a whole, a distinct pattern of land reform is that the first of these two categories—land shares held as paper entitlements—is much larger than the second category, which means that throughout Russia’s regions paper land shares constitute the primary form of landownership for most households. The regions where land shares were the largest are Amur oblast (13.7 hectares) and Krasnoyarsk krai (13.1 hectares), and these two regions have the largest land holdings. Conversely, in Moscow

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and Leningrad oblasts the mean size of a land share was 3.79 and 3.89 hectares, respectively, and these two regions have the smallest mean total land holdings. The last column in table 8.1 clearly demonstrates that households’ real land holdings are not large in any region of the country, and this statistic speaks volumes about the nature of the design of Russia’s contemporary land reform. For most rural households, holdings of real land do not differ significantly from the amount held during the Soviet period, although as previous chapters demonstrated, income, profession, and household labor influence the degree to which households will differentiate themselves. Households in Leningrad, Moscow, and Voronezh oblasts and in Altai krai have the smallest total land holdings, less than .5 hectares. Conversely, households in Tatarstan have the largest mean of actual land holdings. This is explained by three main factors. First, private landownership came late to Tatarstan, and thus for most of the 1990s land leasing was the primary option for households wanting to expand holdings. Leasing was not only less expensive but also less risky than land purchases. Second, nationality and cultural norms appear to have an influence on behavioral responses. In the 2001 survey of five regions, the Republic of Chuvashia, also a Muslim republic, displayed some unique patterns of responses to land reform,≤∞ which gives rise to the hypothesis that regions with large non-Russian populations display different behavior patterns than regions with a dominant Russian population.≤≤ The third factor is that the government in Tatarstan has for several years pursued a policy of support for the agricultural sector that creates incentives for households to obtain additional land.≤≥ REGIONAL HOUSEHOLD LAND EXPANSION

Beyond households’ land holdings, even more interesting is land expansion, because it represents the degree to which households utilized opportunities presented by land reform and shows how different types of land plots were enlarged. Table 8.2 presents data showing mean amounts of land enlargement by households in each region. The table supports the pattern depicted in table 8.1, namely, that regions where land shares were the largest experienced the largest total increase in land since 1991 and that most households did not increase holdings of real land by substantial amounts. The data given in the first column show the mean total increase by region, including land shares. Some of the increases have been impressive. For example, households in Krasnoyarsk krai saw their land holdings expand by over eleven hectares, and in Tatarstan, holdings grew by over thirteen hectares. If household land expansion is examined more closely, however, it is appar-

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Behavioral Responses

Table 8.2. Household land expansion in regions included in the 2006 survey

Moscow oblast (not including Moscow city) Leningrad oblast (not including St. Petersburg) Kurgan oblast Amur oblast Voronezh oblast Krasnodar krai Altai krai Krasnoyarsk krai Republic of Tatarstan Mean of total sample

Mean total land increase since 1991 (ha)

Mean size of rental plot increase since 1991 (ha)

Mean size of private plot increase since 1991 (ha)

Mean size of other land increase since 1991 (ha)

3.04

.04

.02

.001

3.39

.04

.01

.009

8.81 8.89 2.87 7.36 1.42 11.55 13.13 6.71

1.04 1.58 .06 .44 .12 .17 3.10 .71

.02 .02 .02 .14 .02 .01 .04 .03

.013 .018 .020 .007 .001 .003 .017 .010

Source: Author’s 2006 survey data (n=900). Notes: Total land increase includes increase in size of private plot, rental land, other land, and land shares. The mean increase in Altai krai is low because two of four villages were federal property and thus did not distribute land shares, thereby lowering the overall mean increase.

ent what accounts for most of the increase. If one sums the size of increases in rental land, private plots, and other land (data columns 2–4) and then subtracts the result from column 1, it is apparent that the distribution of land shares has been the primary method by which land households increased land holdings, and, as noted above, land shares constitute the primary form of household ‘‘landownership.’’ Further, the relationship between land holdings (table 8.1) and land enlargement (table 8.2) is sometimes quite complex. In some cases, such as Tatarstan, the amount of increase reported in table 8.2 (13.13 hectares) exceeds the reported size of land holdings shown in table 8.1 (5.21 hectares with paper shares and 3.41 without). How is it possible? The answer is that sometimes a household increased land holdings, for example, through the acquisition of land shares, and then disposed of some or all of the increase by leasing or selling the land shares. The same is true in Krasnoyarsk—it shows a total increase of 11.55 hectares, but 10.6 hectares were disposed of, leaving households with a mean of .97 hectares.

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201

These examples are interesting because they reflect the fact that land holdings and their enlargement do not operate in a vacuum but form a part of the overall calculation that households make as to how to improve their welfare. It is important to understand that households had several choices: to increase land holdings, to not increase land holdings, or to retain land that was assigned to them in the form of shares. The data show that households also decreased land holdings, largely by renting out or selling land shares. Households in every region were very reluctant to decrease holdings of actual land. But the point is that land was considered an opportunity cost, and some households were more prone to dispose of land shares than to retain them. This calculation was made by households with regard to the location of the village, the demographic structure of the household, and alternative employment opportunities in the local economy. Thus, in some regions, such as Tatarstan, Krasnodar, and Krasnoyarsk, the renting out of land shares made economic sense, and the in-kind income from these rental agreements could be substantial. According to the 2006 survey data, the monthly value of in-kind income from the renting out of land shares in Tatarstan was $180, in Krasnodar it was $153, and in Krasnoyarsk it was $39 (assuming an exchange rate of R26=$1). In other regions, such as Moscow, Leningrad, Kurgan, and Amur, income from the rental of land shares was minimal. In Leningrad it was $0, in Kurgan it $5, in Amur it was $0, and in Moscow it was less than $9 (assuming an exchange rate of R26=$1). Clearly, in the latter regions other alternative economic opportunities were pursued, as shown by the fact that households in these four regions had the highest mean monthly income from nonagricultural household business activities.≤∂ Overall, the primary conclusion to be drawn from tables 8.1 and 8.2 is that similar patterns emerge across regions, a finding that speaks to the impact of reform institutions: not only did most households not possess much actual land, but also that most households did not increase real land holdings very much, and this is a pattern found in all of the regions. Households engaged in private farming are the most likely to expand land holdings by significant amounts, but in the 2006 survey private farmers constituted less than 1 percent of the sample, a statistic that resonates in reality in the Russian countryside.≤∑ REGIONAL LAND FRAGMENTATION

The final descriptive aspect is physical land fragmentation by region, which is important because it influences how effectively land may be used by indicating how much land surrounds the household. This factor is important in areas where infrastructure is poor, where distances between land plots is large, or where poorer households do not own motorized means of transpor-

202

Behavioral Responses

tation. Furthermore, physical land fragmentation reflects the difficulty that a household will have in using land to either escape poverty or increase income. Fragmented land, as defined, consists of holdings that are not contiguous to the household dwelling. In several ways fragmentation affects directly the potential to use land productively. Table 8.3 presents data on land fragmentation by region and household income deciles. The table presents three measures of physical land fragmentation. The first is the mean size of total land holdings by household income decile (rows 1–2, using real land plots, which includes private plots, land shares that were converted to actual land, rental land, and other land). A comparison of the households in the highest and lowest income deciles shows that in every region, those with the highest incomes have larger total land holdings, and in some regions such as Tatarstan and Kurgan the difference is very significant. The second measure is the mean size of the family plot, which usually is contiguous to the dwelling (rows 3–4). Private plots are usually carried over from the Soviet period and do not normally represent a new land acquisition in the post-Soviet period. As such, the size of households’ private plots does not reflect economic status. Regional land legislation continues to regulate the maximum size of private plots. A comparison of rows 3 and 4 shows that there is not much difference in the mean size of a private plot between upper- and lower-income households, and in Krasnodar krai, the latter actually have a larger mean size for their private plot. The most interesting measure shows the percentage of total household land holdings that is fragmented, that is, not located around the house (rows 5–6). It is apparent that households in the lowest income decile experience less land fragmentation, in large part because these households have limited land holdings other than their private plot (Voronezh oblast provides the only exception). Due to limited land holdings, a large percentage of lower-income households’ land surrounds the household. (In three regions—Moscow, Amur, and Altai—households in the lowest income decile have no land holdings in addition to their private plot, and therefore have no land fragmentation.) For upper-income households that possess large amounts of additional land, fragmentation is much more severe and is very high in each region with the exceptions of Moscow and Voronezh. Land fragmentation is a function of how much land and what types of plots are possessed, but these high levels of land fragmentation are important because they place implicit restraints on income that may be derived from land use, limit the use of machinery and modern equipment, and place limits on the economic growth that can be realized by the household. While it might be argued that reform facilitated land fragmentation, it will be difficult to reverse

Table 8.3. Regional land fragmentation, 2006

Mean size of total land holdings (ha.) Highest income decile Lowest income decile Mean size of private plot (ha.) Highest income decile Lowest income decile Physical land fragmentation (%) Highest income decile Lowest income decile

Moscow oblast

Leningrad oblast

Kurgan oblast

Amur oblast

Voronezh oblast

Krasnodar krai

Altai krai

Krasnoyarsk krai

Republic of Tatarstan

.22 .16

.80 .16

12.6 .12

5.1 .15

.46 .52

2.9 1.5

1.1 .12

.54 .08

37.9 .31

.20 .16

.14 .12

.11 .07

.16 .15

.24 .15

.39 .88

.14 .12

.09 .02

.31 .29

9 0

82 25

97 0

48 71

87 41

87 0

83 75

99 42

99 6

Sources: Author’s 2006 survey data (n=900); author’s calculations. Note: Total land holdings include private plot, land shares distributed in-kind, rental land, and other land. Physical land fragmentation is defined as the percentage of land holdings not contiguous to the household.

203

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Behavioral Responses

those effects or to consolidate land because of structural factors that are inherent to the Russian countryside. It is extremely difficult to add significant amounts of land around the household dwelling because of the way villages are structured. Thus, the more land a household adds, the greater its land fragmentation, and this appears to be an inherent and enduring characteristic of contemporary Russian land reform.≤∏ Some of the consequences of land fragmentation may be offset by a robust rural social policy that significantly improves rural infrastructure, but that is a long-standing policy goal that has yet to be realized.≤π

The Regional Effects of Household Income on Land Expansion The previous discussion established that a similar pattern exists across regions: most households have relatively small land holdings when measured in actual land. The main household land holding is in the form of land shares, but these are mostly paper entitlements, and the acquisition of those shares did not require any initiative on the part of the household other than to accept the land shares and register them once they had been received. Land shares represented a passive method of land acquisition. Survey data allow us to extend the analysis. To find that most rural households did not increase holdings of real land to a significant extent is to mask differences among different economic strata within regions. The differences in land expansion across regions by income decile are illustrated in table 8.4. The table shows that land enlargement varies considerably by region. Given the size and diversity of rural Russia, this finding is not particularly surprising. More detailed analysis as to causal properties of different independent variables appears below. For now, the table reflects significant differences between upper and lower income deciles and shows that upper-income households acquired more real land.≤∫ For the sample as a whole, upper-income households added a mean of 6.1 hectares of real land after 1991, but households in the lowest income decile enlarged their holdings by only .22 hectares. In some regions, such as Tatarstan and Kurgan, the land expansion of upper-income households is several times that of the lowest income decile. Thus, across disparate regions not all households responded similarly during land reform, and upper-income households utilized the opportunities presented by reform to a greater degree. The remainder of this section examines the explanatory power of household income on expansion of land holdings for each region. Household income is defined as monthly monetary income from all sources (wages, agricultural

Table 8.4. Mean household land enlargement by selected income deciles across regions, 2006 (in hectares)

Lowest income decile Second-lowest income decile Second-highest income decile Highest income decile Total mean

All regions in sample

Moscow oblast

Leningrad oblast

.22

.005

.04

.06

.006

.19 6.1 .78

Kurgan oblast

Amur oblast

Voronezh oblast

Krasnodar krai

Altai krai

Krasnoyarsk krai

.06

.20

.05

1.34

.01

.07

.05

.03

.08

.06

.08

.11

.03

.12

.01

.03

.05

.06

.44

.21

.00

.22

.07

.17

.10

.02

4.5

.30

.33

1.04

.48

.06

.06

1.62

.11

.59

.15

.19

12.5 1.08

Source: Author’s 2006 survey data (n=900). Note: Mean land enlargement includes increases in real land: private plot, rental land, other land. Land shares are excluded.

Republic of Tatarstan

37.6 3.16

205

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Behavioral Responses

sales, business income) from all members of the household. Through regression analysis the impact of household monetary income on land enlargement across regions is investigated. The purpose is to understand the causal properties of household income on land expansion in different regions.≤Ω The amount of real land that was added since 1991 is the dependent variable. The amount of real land holdings was summed to create a variable called ‘‘total land expansion’’ in the analysis below. Land shares as part of household land holdings and expansion are excluded from this analysis. Total monetary household income was regressed on the dependent variable. The results are presented in table 8.5. The results from the regression equation are statistically significant in six of the nine regions when analyzed individually, and for the entire sample when all regions are analyzed together. For all regions in the survey, the standardized coefficient (beta) for household monetary income is .26, which is moderately strong for a single variable model, suggesting that the level of monetary income is a reasonably strong explanation as to whether a household increased its real land holdings.≥≠ Thus, for the sample as a whole, it may be argued that household monetary income has some influence whether a household obtained more land since 1991; and from that basis household monetary income may be used as a predictor for future behavior. If one disaggregates the results by region in the six regions where the results were statistically significant, the strength of beta—a measure of the variable’s causal power—ranged from .21 in Krasnoyarsk to .71 in Tatarstan. In three regions (Moscow, Leningrad, and Krasnodar) the results were not statistically significant, which means that the income hypothesis was not supported, but it may be difficult to draw any firm conclusions due to the small number of cases. The household income hypothesis is conditioned by other information that is known about the regions where the regression was not statistically significant. For example, in Moscow and Leningrad oblasts population density is higher than average, the supply of agricultural land is tight, and competition for land with adequate infrastructure is high. Thus, in those two regions it is the supply of good land and not only household income that affects the ability of households to increase land holdings. In the third region where the findings are not statistically significant, Krasnodar krai, which is a prime agricultural region, poorer households expand land holdings in order to grow and consume more food, with more than 15 percent of total household income coming from nonmonetary income. In Krasnodar, therefore, household land expansion comports well with household survival and peasants’ moral economy.

Table 8.5. Regression of monthly monetary household income on land enlargement by region, 2006 All regions in sample R square Unstandardized coefficients Standardized coefficients T Anova F

Moscow oblast

Leningrad oblast

Kurgan oblast

Amur oblast

Voronezh oblast

Krasnodar krai

Altai krai

Krasnoyarsk krai

.069 .000

.023 1.9E–006

.001 –2E–007

.155 .000

.140 .000

.105 6.0E–006

.00 6E–006

.140 1.6E–005

.046 9.1E–006

.262*

.150

–.023

.394*

.375*

.374*

.215**

1.503 2.260

–.231 .053

8.133 66.154

Source: Author’s 2006 survey data (n=900). Note: *p[.01; **p[ .05

4.241 17.990

4.002 16.019

.324* 3.38 11.47

–.104 –.138 .019

3.998 15.985

2.182 4.760

Republic of Tatarstan .511 .002 .715* 10.064 101.279

207

208

Behavioral Responses

The Effects of Household Human Capital on Land Expansion Aggregate household human capital was used as an independent variable affecting land holdings and expansion in Chapter 7. This section extends that analysis to examine the effects of human capital on households’ land expansion in different regions. The household human capital variable may be defined in two ways: first, simply as the number of members in the household, and second, as the labor value of members in the household.≥∞ Regional variance in human capital is shown in table 8.6, illustrating significant differences in mean family size, the mean number of pensioners in the household, and the mean labor value in the household. These regional differences may be attributed to rural out-migration that occurred over time, regional alternative employment opportunities, and the quality of rural life in that locality. Households surveyed in Moscow oblast are the most disadvantaged in terms of mean family size and mean labor value, and are tied with Tatarstan and Leningrad for the highest mean number of pensioners.≥≤ This occurrence in Moscow oblast is no doubt a reflection of the migration of rural youth into Moscow city or the outskirts to find higher-paying employment. The constellation of human capital factors may explain why households surveyed in Moscow oblast have the smallest holdings of rental land and total land, the lowest expansion of real land, and a low ranking on household income, despite favorable proximity to the city of Moscow. Households in Krasnodar krai have the largest mean family size (3.96) and the highest mean household labor value of all regions in the sample (2.88), with Amur oblast second (with 3.62 and 2.72, respectively). Turning to the variance in human capital by proximity of the village to a raion center, a hypothesis is postulated whereby households in villages located closer to an urban center will have more family members, based on previous findings in the literature that remote villages have tended to lose more population to out-migration.≥≥ Household members in closer-in villages may commute to work and do not have to leave the household permanently. The proximity-of-the-village hypothesis was confirmed, as a Pearson correlation (two-tailed test) yielded a negative coefficient (–.102) that was statistically significant (p].05), indicating that the farther a village was located from a raion center, the smaller its population was likely to be. Although the correlation coefficient is unable to indicate the exact reason for a smaller village population, it is likely to have resulted as younger villagers moved to a larger village, a small city such as the raion center, or even the oblast center in search of better employment opportunities, better housing, and better education.

Table 8.6. Mean household human capital and labor value across regions, 2006

Family size Number of pensioners Household labor value

All regions in sample

Moscow oblast

Leningrad oblast

Kurgan oblast

Amur oblast

Voronezh oblast

Krasnodar krai

Altai krai

Krasnoyarsk krai

Republic of Tatarstan

3.28 .83

2.54 1.04

3.03 1.03

3.30 .67

3.62 .69

3.21 .62

3.96 .73

3.12 .76

3.38 .84

3.33 1.06

2.41

2.00

2.25

2.43

2.72

2.27

2.88

2.45

2.34

2.39

Source: Author’s 2006 survey data (n=900).

209

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The second definition of household human capital refers to the labor value of members. The sum of weighted human labor for each household may be used as a proxy to measure household production potential. A higher household labor value corresponds with higher household income, food production, and land expansion. Recall that it was previously found that aggregate household labor was positively associated with an increase in total land holdings, and when household labor was regressed on land holdings the result was statistically significant. The present question concerns the regional effect: whether households with higher labor values will be more likely to increase their holdings of real land in the different regions. Paper land shares are excluded from the analysis. The mean increase of real land by interval of household labor value for each region is shown in table 8.7. The table illustrates variance on three dimensions: between labor categories, across regions, and within each labor interval. Considering differences between labor categories first, households with the lowest labor value increased their real land holdings by the smallest amount, and this is true in all regions except Krasnoyarsk, where the second-lowest labor value category had the lowest mean increase. For all the regions included in the survey, households with the lowest labor interval (0–1.74) had a mean increase of .05 hectares, and the second-lowest labor interval (1.75–2.74) had a mean increase of .17 hectares. Households in the upper two labor intervals (3.75–4.74 and 4.75+) had mean land increases of .21 hectares and .63 hectares, respectively. The labor interval with the largest mean land increase is 2.75–3.74, with an increase of 2.58 hectares. Thus, a linear increase is not evident, but more broadly we may conclude that households with less labor tend to increase their land holdings the least. This is important because households with lower labor values far outnumber households with higher labor values, a fact that is reflected not only in the survey sample but throughout rural Russia.≥∂ Second, significant variation in land expansion exists across regions, ranging from a high of 3.16 hectares in Tatarstan to a low of .06 hectares in Moscow and Leningrad oblasts. Notably, households in the very best agricultural regions—Krasnodar and Voronezh, for example—did not experience the largest increases in land holdings. Third, turning to differences within labor categories, the mean increase in real land across labor intervals reflects a variety of factors, including location of the village, local economic conditions, and employment alternatives. As a result, there is considerable regional diversity within each labor category. Nonetheless, a similar pattern emerges in which households with the highest labor values increased their land holdings more than households in the lowest labor category did. In the lowest labor interval, land expansion ranged from a

Table 8.7. Mean increase in real land by household labor value across regions, 2006 (in hectares)

0–1.74 1.75–2.74 2.75–3.74 3.75–4.74 4.75+

All regions in sample

Moscow oblast

Leningrad oblast

Kurgan oblast

Amur oblast

Voronezh oblast

Krasnodar krai

Altai krai

Krasnoyarsk krai

Republic of Tatarstan

.05 .17 2.58 .21 .63

.01 .11 .08 .06 .00

.01 .12 .04 .08 .09

.03 .11 4.62 .06 .09

.19 .64 3.21 .65 4.23

.09 .11 .11 .11 .16

.08 .15 1.40 .17 .15

.01 .08 .37 .08 .12

.14 .11 .26 .28 .54

.02 .15 11.70 .13 .20

Source: Author’s 2006 survey data (n=900). Note: Real land defined as increase in private plot, rental land, and other land. Land shares are excluded. In labor category 4.75+ in Moscow oblast, n=1. In labor category 4.75+ in Leningrad oblast, n=2.

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low of .01 hectares in Moscow and Leningrad oblasts and Altai krai, to a high of .19 hectares in Amur oblast. For the labor interval with the highest mean increase in real land (labor value =2.75–3.74, mean increase of 2.58 hectares), regional means ranged from a low of .04 hectares in Leningrad oblast to 11.7 hectares in Tatarstan, 4.62 hectares in Kurgan, and 3.21 hectares in Amur. Households with the highest labor values ranged from a low increase of 0 (zero) in Moscow and .09 hectares in Leningrad and Kurgan oblasts, to a high of 4.23 hectares in Amur oblast.

Conclusion The purpose of this chapter has been to examine and explain regional differences in households’ land holdings and expansion. Because of Russia’s size and geographical diversity, uniform responses to land reform polices are not expected. If the premise of this book is correct—that the design of reform is a significant factor in shaping responses and outcomes—then similar patterns of responses would be expected. The chapter described similar patterns as a result of the design of reform. Holdings of real land were not large for most households, and this is true in each region. In addition, land enlargement and land fragmentation differ considerably by region, as would be expected. But a common pattern found in each region was that reform policies created the conditions for some households to differentiate themselves. Apart from geographical location, a basic finding was that households’ land holdings and land enlargement are affected by the level of household income, and this pattern holds true in each region. The chapter also examined the causal properties of two independent variables at the regional level. First, it was found that household monetary income is a significant factor in determining whether a household expands real land holdings, although income was not statistically significant in all regions.≥∑ Higher-income households have larger holdings and have expanded holdings more. Thus, while the majority of rural households in Russia may be said to be ‘‘land poor,’’ this is less true for upper-income households. The restrictive aspect of Russia’s land reform is evident in the fact that the percentage of upper-income households is small, and therefore relatively few households actually benefited in substantial ways from reform policies. This pattern holds true for the aggregated data and for the regionally disaggregated data. Note that the supply of good land and not merely household income affects the propensity of households to increase land holdings, which is to say that other factors are also relevant. But it was shown that household income has a signifi-

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cant impact and high causal properties. Second, a similar pattern in each region was found whereby households with the lowest labor value have increased their land holdings the least, and those with higher labor value have increased their land holdings more. Overall, the effects of households’ human capital on land increases are mixed, and this is most likely due to the fact that households’ labor values and human capital vary so significantly from region to region. A regression analysis for each region was not statistically significant. Other statistical methods confirmed that low levels of human capital are important to understanding households’ responses to land reform, but higher levels of human capital are not the sole determining factor in land increases because no linear pattern was detected. These findings suggest that household labor value affects responses to reform policies but also that local economic conditions and other factors, not only human capital, influence households’ decisions to increase land holdings. The upshot is that a low level of human capital is relevant to understanding households’ responses to land reform. The suggestion that higher levels of household human capital may have limited impact on expansion of real land at the micro-level appears reasonable when the size of land expansion is considered. Both Chapter 5 and this chapter have shown that the expansion of real land across regions is exceedingly small—a mean of .63 hectares for all regions in the sample. Many individual regions had a much smaller mean. With this small increase in land, the availability of household labor may not be a crucial consideration in the decision whether to acquire more land. Presumably, the larger the size of the land expansion, the more important household labor becomes, and this pertains most of all to private farmers. The effect of household labor on responses to reform will vary by region but also is limited by the fact that in most cases land expansion was not large. Other macro-indicators were also examined in the course of researching this chapter but were not included because the results were nonconclusive. These factors include the level of regional land privatization, regional investment potential, the level of regional socioeconomic risk, and regional land prices. (With regard to the latter, unfortunately, the survey did not collect raion-level land prices, and the government provides land prices only at the oblast level.) Although the larger contextual environment cannot be excluded entirely, through statistical analysis it was found that those measures do not support the idea that the regional economic environment and various contextual factors are major determinants as to whether households will increase their real land holdings. Instead, it would appear that household decisions

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regarding land increases are derived from conditions found within the household, and secondarily, perhaps factors in the village have some effect. But the larger regional context does not appear to have much of an impact, at least in terms of quantifying the effects. Intuitively this finding makes sense—one does not base the decision to buy a house on the condition of the economy in one’s state; rather, that decision flows from the family economic situation and the local housing market and economy. Further analysis of the effects of the larger economic environment on household decision making is warranted. Beyond limited expansion and the effects of income and labor, we are left with two main questions: (1) At the regional level, did the strongest households in the best agricultural regions end up with the most land? (2) What do the findings suggest about regional winners and losers in Russia’s land reform, with winners defined by how much real land they acquired? With regard to the first question, it is clear that upper-income households utilized opportunities presented by land reform and benefited more than did lower-income households. That said, there is little basis to conclude that households in ‘‘good’’ agricultural regions enlarged real land holdings more than did households in poor agricultural areas. For example, the data do not show that households in good agricultural regions (Krasnodar or Voronezh) had greater increases in real land. Thus, household land expansion based solely on regional location is not confirmed. That is not to say that such patterns do not exist, but on the basis of this survey and these data, such patterns are not found. Instead, the key determinant to understanding regional differences appears to be the level of household income. Thus, in answer to the first question, it may be concluded that the ‘‘strongest’’ households ended up with more land (if strength is measured by household monetary income), and this is true in each region irrespective of climate or geographical location. It cannot be confirmed that households in ‘‘good’’ agricultural areas benefited the most, and this finding suggested that the illiberal aspect of land reform was felt across all regions. Regarding the second question, it is also difficult to conclude that winners and losers at the household level are decided based on regional location. In terms of the amount of land that was obtained during land reform, households in regions where land is more plentiful and competition for use is lower received larger land allotments and may be said to be ‘‘winners,’’ even if ‘‘ownership’’ based on land shares is a slippery concept. It cannot even be concluded that land reform distributed more land to households in ‘‘good’’ agricultural locations. Concerning expansion of real land holdings, households in ‘‘good’’ agricultural regions did not necessarily experience the greatest increase. In part this is due to the nature of Russia’s rural economy: households engaged in

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agricultural employment, even in rich agricultural areas, have lower monetary incomes, and their income level affects their ability to expand land holdings. Thus, similar response patterns are evident in different regions, even though regions differ from each other in their characteristics and attributes. What determines winners and losers is better understood, however, by considering household characteristics than by considering regional location.

9

Russia’s Contemporary Land Reform: An Assessment

The Soviet economy and its land tenure regime remained decidedly illiberal even after the introduction of Gorbachev’s reforms, during which he eschewed private property and did not threaten in any significant way vested interests in the countryside. After the Gorbachev period, the introduction of contemporary land reform was a component of the deliberate attempt to move away from a command economy and the Soviet past. Contemporary land reform, now twenty years old, is intended to complement and facilitate the development of capitalism in postcommunist Russia. Both the land reform process and the development of agrarian capitalism in Russia continue to evolve. Even though the trajectory of Russia’s land reform may be outlined, the final effects have yet to manifest themselves. Russia’s land reform was introduced as a state initiative from above, not as a result of land hunger or pressure for distribution from below. The reform did not bring restitution of land and did not distribute real land plots to the vast majority of recipients, making Russia’s experience analytically and theoretically distinct from those of other former communist nations that underwent restitution of land. A central argument of this study has been that the design of reform institutions is important in shaping outcomes and is instructive for helping us understand behavioral responses, even after accounting for differences at the local level. A variety of factors exert some degree of influence on

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households’ behavioral responses to reform institutions, including resistance by local interests. But the impact of resistance on reform outcomes was at the margins, and therefore, in order to understand Russia’s contemporary land reform, it is necessary to consider first and foremost the design of reform. Russia’s land reform has certain distinctive characteristics defined by the institutional design: (1) Most households have small holdings of real land, and those that expanded land holdings experienced significant land fragmentation. (2) Households’ largest land holdings are in the form of land shares, which tend to be leased to large farms. (3) Only a small percentage of households expanded land holdings by a significant amount. (4) Transactions involving large parcels of land are subject to considerable constraints on rights of disposal. (5) A bifurcated social structure has arisen in the countryside. The institutional design of reform defines parameters of behavior and indicates what is permissible and possible and what is not. As such, state-generated institutions have an enormous impact on economic behavior, not only influencing responses but in some cases predetermining them. The fact that economic actors in Russia’s rural economy have responded to their legislative and policy environment should hardly be surprising because the same occurrence has been demonstrated by other authors for other sectors of the economy as well.∞ Nor is analysis of the role of institutions restricted to postcommunist Russia or its land reform. The role of economic institutions has been a particular focus of ‘‘new institutionalists’’ in economics and sociology.≤ In the postsocialist transition literature, scholars such as Verdery, Humphrey, and Allina-Pisano bring an anthropological approach to the question of institutional impact as it relates to property rights, embedded behaviors, and postsocialist values.≥ In particular, Verdery and Allina-Pisano see the design of formal institutions as less important to reform outcomes than local responses and embedded behaviors and values. In this respect it is worthwhile to recall Granovetter, who provides a useful nuance when he argues that ‘‘the level of embeddedness of economic behavior is lower in nonmarket societies than is claimed by substantivists and developmental theorists, and it has changed less with ‘modernization’ than they believe.’’∂ The design of Russia’s fourth land reform of the twentieth century was important because it contained both illiberal and liberal elements, although the two were not equally weighted. The illiberal design was effectuated not through compulsion or coercion, although it most certainly circumscribed the power of the market and limited economic potential. As Gerald Easter has noted, ‘‘post-communist society was lacking in economic, coercive, and organizational resources, and remained in certain critical respects dependent on the state.’’∑ Instead, contemporary reform was intended to ‘‘liberalize’’ prop-

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erty rights relative to those of the Soviet era and to unleash the power of private property and a market approach to land. Toward this end the design of reform determined the rules of the game for obtaining land and defined disposal rights. But the design of reform turned out to be much less liberal than the goals of reform required. The state’s illiberal design brought the distribution of land shares, but not real land, to the vast majority of rural households. For example, in 2007, according to official data, 91.5 percent of agricultural ‘‘landownership’’ was in the form of land shares.∏ Because land shares represent abstract and increasingly insecure property rights, in effect a very large portion of agricultural land is without a true owner. In this respect, the economic power of private property was never realized. As was shown in previous chapters, the distribution of actual agricultural land was quite limited: only persons willing to take on significant risk by becoming private farmers were able to leave a large farm with real land; for the remainder, ‘‘landownership’’ consisted of abstract paper entitlements. Land distribution in the 1990s led to a very low percentage of real agricultural land being owned by private individuals and households. More recently, postprivatization processes such as land ‘‘raiding’’ and land ‘‘wars’’ have endangered the property rights of households that hold land shares.π In particular, lower-income households and those with insufficient human capital and labor are the most vulnerable to being dispossessed of their rights to land. But beyond a limited distribution of real land the design of reform was central to determining and limiting the parameters of property rights. If we want to know why most households tend to use or own only certain types of land plots with certain sizes, it is due to the design of reform. If we want to know why foreigners are limited in their right to own agricultural land, it is due to the design of reform. If we want to know why individuals tend to engage in transactions involving small plots of land, it is due to the design of reform. If we want to know why the land market is dominated by land leasing and not land purchasing, the reason may be traced back to the design of reform. If we want to know why there is dependence on local governments as a source for rental land, it is due to the design of reform. If we want to know why reform restricted who could obtain agricultural land and restricted their rights of disposal, it is due to the design of reform. If we want to know why rural dwellers are in danger of being dispossessed from their land shares today, it is due to the original design of reform. These patterns of responses—small land holdings and small expansion of land—are indicators of rationality in response to the institutional environment and also to the uncertainty that characterized economic life for rural dwellers throughout the postcommunist region. Writing in the mid-1990s, Stark argued

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that ‘‘in the highly uncertain organizational environment that is the postsocialist economy, relatively few actors set out with the aim to create a market economy. Many, indeed, would welcome such an outcome. But their immediate goals are more pragmatic: at best to thrive, at least to survive. As so they strive to use whatever resources are available. The task is not so simple because one must first identify the relevant system of accounting in which something can exist as a resource. At the extreme, it is sometimes even difficult to distinguish a liability from an asset.’’∫ And thus for most households, not only was the value of land shares unclear, it was uncertain if expansion of real land beyond that needed for survival was a liability or an asset. The 2006 data show that only after several years of economic growth was there a significant increase in motivation on the part of households to acquire more agricultural land. There were also liberal aspects of Russia’s land reform that created new opportunities that some households with specific socioeconomic and demographic characteristics used to their benefit. Thus, a second broad argument has been that responses to the institutional design of reform are not uniform but variegated according to households’ income, demographic, and labor characteristics. It was idealistic to believe that the mass of the rural population would benefit from privatization, especially within the context of declining standards of living, high inflation, and deficiencies in infrastructure, capital investment, and capital stocks that existed in the 1990s. Therefore, experience shows that some households adapted to new opportunities more than others did (this is true as well in other transitional states and in both urban and rural economic environments), and for that reason differentiated adaptation is a major characteristic of Russia’s land reform, even within its largely illiberal design. That economic actors adapt to their environment in and of itself is not surprising, but by employing survey data this study was able to examine systemically who responded and how in a way other studies and methodologies have not. The result of differentiated adaptation has been a stratified rural society, but that occurrence was not immediately evident. The development of agrarian capitalism proceeds through different ‘‘generations’’ of beneficiaries. Only a small percentage of ‘‘first-generation’’ economic actors prosper—those with certain characteristics that give them an advantage. There is little social justice during the early development of agrarian capitalism, which in turn creates localized social pressures and jealousies, but these have not been major impediments to economic development since 2000. Because economic growth in the rural economy is a relatively recent occurrence, Russia appears to continue to be in its first generation as far as winners and losers are concerned. As land relations continue to evolve, however, it is reasonable to expect that the composition of winners may change.

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The liberal aspects of reform legalized the private ownership of agricultural land, whereas during the Soviet period private ownership of land was prohibited. During the 1990s, tens of millions of hectares of agricultural land were transferred from state to private ownership. Aside from the fact that ‘‘ownership’’ was often illusory, by the end of Putin’s second term a bifurcated countryside had emerged based on income and land holdings. Upper-income households (which cut across professions) had significantly larger holdings of real land. Bifurcation was also found among private farmers, who had been the primary recipients of real agricultural land according to the design of reform. According to the 2006 rural census, 54 percent of private farmers had farms that were less than ten hectares in size, while 1.6 percent of farmers had 44 percent of all land used by private farmers.Ω Moreover, the state program for the development of agriculture (2008–12) was intended to assist the larger and stronger private farms and was not designed to solve the problems of small and medium-sized private farms.∞≠ Land reform’s liberal aspects allowed for land expansion by a variety of means. Previous chapters demonstrated that land expansion was patterned on income, profession, and labor. Revised legislation passed in 2003 under Putin brought land mortgaging to reality, so that a landowner could use land as collateral to raise capital for investment. According to data from Rossel’khozbank, agricultural enterprises and private farmers account for 93 percent of mortgages, with private farmers ‘‘the most actively involved in land mortgaging.’’∞∞ During 2006–7, Rossel’khozbank loaned out R6.3 billion collateralized by more than 250,000 hectares of agricultural land.∞≤ Yet private plot holders accounted for just over 1 percent of land mortgages, undoubtedly because using larger tracts of land as collateral makes most economic sense for raising investment capital. Moreover, only agricultural land that is owned may be mortgaged, and thus for the vast majority of rural households this method of raising capital either has marginal utility or is precluded altogether. Only households with land holdings based on ownership may raise capital by using land as collateral, and we have seen that most agricultural land ‘‘owned’’ by households is in the form of land shares. Moreover, to the extent that households expand holdings beyond their private plot, it tends to be rental land, and this land cannot be mortgaged. The upshot is that land mortgaging is likely to increase socioeconomic bifurcation of the countryside between households that have land to collateralize and those that do not.

Land Reform Gone Awry Despite the presence of both illiberal and liberal elements within the design of land reform, original expectations and goals were not met, and on

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this basis it may be argued that Russia’s contemporary land reform went awry. In reality, land reform was illusory for most rural dwellers—households did not receive much actual land on a per capita basis, and most households have only fractionally more real land after contemporary reform than they had in the Soviet period. This result flowed directly from the design of reform and not because of local opposition or local interpretations of what was to be done. If property is the basis for economic and political power, not much has occurred since the Soviet period in terms of transferring property (and power) to rural citizens. Only a minority of rural households took advantage of opportunities presented by land reform and have benefited significantly. Moreover, it is not necessarily the case that the strongest households in the best agricultural areas ended up with more land. Thus, Russia’s land reform was fraught with constraints during the 1990s, and limitations continue to be evident in the land market today.∞≥ Russia’s contemporary land reform went awry because it failed to achieve two main goals held by reformers: (1) Land reform failed to remove land from the control of large farms. Because land shares are not ‘‘owned’’ by large farms but are only leased, the consequence of this occurrence is that a large percentage of agricultural land cannot be transferred to other users.∞∂ (2) Land reform failed to transfer ownership of significant amounts of agricultural land to private individuals, taken on a per capita basis. The vast majority—almost 70 percent of agricultural land in 2007—continues to be owned by the state and by municipal governments.∞∑ Thus, it appears that the design of reform was ill suited to achieve the goals of reform. If land reform in Russia has gone awry, the key question is why. Why did contemporary land reform not meet two of its most fundamental original goals? To begin, note that seldom are all original goals implemented or realized, particularly in a revolutionary period when events are in flux and when numerous political impulses are at work and may be contradictory such as during the early 1990s. Thus, the standard for success should not be the realization of all original goals. But in the case of Russia’s contemporary land reform, we are not talking about ‘‘all’’ goals, but the two core goals: transfer real land away from the control of large farms and put significant amounts of real agricultural land in the hands of private individuals. Why did Russia end up with an institutional design that limited the transfer of real land? Absent the ‘‘smoking gun’’ that would explain the reasons for the adoption of restrictive property rights—that answer awaits the publication of candid memoirs by those who made decisions at the time—two pieces of circumstantial evidence suggest that pragmatism on the part of policy makers played an important role in deciding on institutional design. First, the Russian population had to eat, particularly urban Russians, on whom liberal reformers

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depended for electoral support after the introduction of competitive elections in 1989.∞∏ It is well to remember that in the years when the foundations of the institutional design for land reform were being laid (1990 and 1991), large farms produced 76 and 72 percent of the nation’s food, respectively, and the significant decline in food production from large farms had not yet occurred.∞π Even as late as 1993, when Yeltsin’s breakthrough decree on land relations was issued, large farms produced 57 percent of the nation’s food (measured in ruble value).∞∫ Moreover, foreign trade, especially for agricultural products, had not yet been fully liberalized. The level of food imports, which would subsequently reach very high levels in the mid and late 1990s, was still quite low in the early 1990s.∞Ω Reformist policy makers had to reconcile their desire to destroy Stalinist institutions in agriculture with the need to feed the nation. The latter consideration meant that not all Stalinist-era institutions could be abolished. Therefore, the early revolutionary zeal to decollectivize the countryside and break up all state and collective farms was very short-lived, lasting only a few weeks, if that long. As a result, large farms continued to exist (though they were to reform operations and re-register as different legal entities), and there was no mass decollectivization. The second factor that suggests pragmatism was the existing policy context and range of policy options. By the time post-Soviet Russia got around to serious land reform, the revolutions that expelled communists from power in Eastern Europe had already occurred. The land reform policies adopted in most former communist countries revolved around two options: share distribution and land restitution. Land restitution in Russia was impractical and unfeasible for a variety of reasons, while land share distribution was possible and seemed equitable. In the early 1990s the policy debates in Russia equated land share ownership with genuine landownership, and at the time most political disagreement focused on the rights of disposal. Policy debates in Moscow never really questioned whether land share distribution was an adequate form of landownership, let alone whether it could ultimately lead to dispossession. Only recently have serious questions been raised about whether land share distribution represents real land reform.≤≠ The point is that the resulting institutional design of land reform was not accidental, did not occur by chance, was not a result of conservative opposition in Moscow or on the ground at the local level but, rather, was a series of deliberate decisions based on calculations made at the time. In addition to institutional design, other factors have affected the land reform outcomes, namely, low incomes in most households and a high level of rural poverty, an erosion of human capital and a low level of available household labor, and regional land policies that are affected by the continued deteri-

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oration of infrastructure. When thinking about behavioral responses to land reform it is important to keep in mind the socioeconomic environment in which reform occurred. For many if not most villagers, it is hard to be interested in abstract property rights and participation in the land market when the family’s house is collapsing, there is no running water and the available water supply (often a nearby stream or pond) is polluted, when medical care and rural services have all but disappeared, when off-farm employment prospects are nil, when educational and recreational facilities have closed, and when alcoholism and delinquency run rampant.≤∞ Thus, a combination of factors, all working in concert, yielded a land reform that failed to achieve its original intentions, suggesting that a successful reform package is broader than mere privatization and must address a number of other issues simultaneously. Although modification to land legislation has occurred since 2000 and some restrictions were either amended or removed, why has the restrictive institutional design from 1991–93 not been significantly liberalized in the years following Yeltsin’s departure from power? The answer is twofold. First, the weighting of state and private interests has changed, attended with a loss of revolutionary zeal. The early reform years were energized by a dedication to de-Stalinizing society as well as to prioritizing private citizens’ rights and interests and developing private property rights; both of these aims were attended with building democracy and civil society (within parameters established by the state).≤≤ That political equation has changed considerably since 2000.≤≥ President Vladimir Putin, from the beginning of his first term, emphasized the need for societal stability and order—evidenced by his reference to the need for a ‘‘dictatorship of law.’’ Over time it became clear that he was not talking about a rule of law. In reality, he had in mind conformity with the interests of the state. Democracy (at least the Western version) and civil society were put on the back burner as Putin set out to rebuild state strength and recentralize power in the federal center, thereby rectifying the chaos that typified the Yeltsin years. As state interests have grown in importance, private citizens’ interests have diminished proportionately. There is little disagreement that Putin strengthened the Russian state, with some analysts even suggesting the rise of a state capitalist system.≤∂ Private property, which often acts as a barrier to state incursion, has been precluded in whole sectors of the economy that have been defined as ‘‘strategic’’ and are off-limits to foreign ownership. Under Putin, not even private ownership could withstand assaults by the state, as witnessed by the Russian state’s muscling its way into majority ownership of several previously privatized oil companies, including the complete takeover of Yukos in 2004.≤∑ What are ‘‘state interests’’? In agriculture, state interests have been expressed as increased domestic food production, less

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reliance on food imports, and a domestic agricultural sector that is financially stable and internationally competitive. How were those goals to be attained? The early Putin administration emphasized the revitalization of large farms, and specific policy measures were adopted to help large farms get back on their feet financially and to improve profitability.≤∏ Private citizens’ interests—liberalized property rights or receiving more land—were not a stated priority, in part because the private sector in agriculture was perceived as less able to help Russia attain the state-centrist goals of increased production, decreased importation of food, and increased competitiveness. Indeed, during the 1990s private farms had not shown themselves to be significant food producers that could feed the nation; they contributed only 3 percent of Russia’s food in the year Putin came to power.≤π The other component of the ‘‘private’’ agricultural sector—households—experienced a leveling-off of total food production after 1995.≤∫ Both types of private-sector producers were beset with numerous social, financial, technical, and infrastructural inadequacies. The early emphasis on rebuilding the economic might of large farms to ensure national food security was evidenced by Minister of Agriculture Gordeev’s statement at an agricultural conference in Moscow oblast in late February 2001 when he stated that the policy of attempting to destroy large farms in the early 1990s ‘‘had a negative influence on the course of reform.’’ Gordeev continued that ‘‘no one should doubt the priority of large producers over small ones.’’≤Ω Thus to the extent that land reform fit into a larger strategy of agrarian policy, it may be argued that there was little political impetus to liberalize the institutional design of land reform. The second reason why institutional design from 1990–93 has not been liberalized is that political trends and political goals have changed significantly since the Yeltsin period. Just as the political struggle gave birth to land reform in the 1990s, so, too, has politics influenced the course of reform since 2000. Illiberal land reform policies reflect the increasingly illiberal nature of the political regime and fit well within the framework of ‘‘managed democracy.’’≥≠ Managed democracy is a political strategy that emphasizes political stability; elections are held but results are more or less foreordained, political competition is regulated and its activities confined within defined parameters, and serious political challenges to executive power are either absent or muted. Upheaval, spontaneity, and unpredictability are precluded. The argument here is that strengthening the state and developing the political system based on managed democracy took on more importance than protecting and expanding personal property rights. As Russia moves inexorably toward a weak twoparty or strong one-party system, managed democracy affects the agricultural sector in several ways.

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First, as political loyalty to the Kremlin and personal loyalty to the president have taken on increased importance, pressure may be brought to bear on regional governors to ‘‘influence’’ the amount of financial support and other resources received by large farms, depending on whether the farm manager proves his worth by turning out the vote for the pro-Kremlin and pro-presidential party United Russia (or whichever party the Kremlin decides is to be supported, for instance, A Just Russia—the left-of-center, pro-Kremlin, pro-presidential party that was created to capture the leftist vote and take support away from the Communist Party).≥∞ Second, United Russia has increased its presence and power in regional legislatures since 2003, and at the time of this writing no fewer than sixty-nine regional governors were officially aligned with the party.≥≤ There is significant evidence of an ongoing process of coopting agricultural elites into United Russia and of the formation of alliances between United Russia and agrarian political and economic organizations.≥≥ In this respect, agrarian organizations are increasingly becoming an appendage of United Russia and by extension, the Kremlin, to which loyalty is expected. As power coalesces around the Kremlin-dominated center, we have witnessed the collapse of the liberal right, embodied in the Union of Right Forces. This amalgamation of liberal parties received less than 1 percent of the vote in the 2007 Duma election, reflecting the drift away from liberalism in the political arena. Third, state-sponsored pro-agrarian policies create dependence on the state for financial support, which is to say that the leverage of the state increases and freedom of political action by economic actors decreases. Although it would be unwieldy and impractical to use political loyalty as a litmus test for the distribution of credits to individual private plot operators, the introduction of financial support programs, combined with increased restrictions and constraints on political competitors, facilitate political support for United Russia among rural voters. The 2001 and 2006 survey data confirm this development. In 2001, for example, of respondents who answered the question: ‘‘Which party best represents your interests?’’ 29 percent said the Communist Party and 27 percent said Unity (which subsequently became United Russia).≥∂ Thirty-one percent of the sample had voted for Unity in the 1999 Duma election. In the 2006 survey, the same question was asked, and 35 percent of respondents said United Russia, and only 14.5 percent said the Communist Party.≥∑ Moreover, the percentage of respondents who voted for United Russia in the 2003 Duma election increased to 50 percent, but only 11 percent voted for either the Agrarian Party or the Communist Party. Thus, the introduction of managed democracy in turn affected economic policy, and in land reform managed democracy restricted policy choices and options. State control over

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Behavioral Responses

resources was strengthened, political and economic power were not decentralized, and political consolidation around pro-Kremlin forces was emphasized. As a system of political winners and losers emerges, opportunities arise for government-backed political parties to curry favor with different segments of the rural population in order to obtain their political support. There is already evidence of this occurring with regard to United Russia.≥∏ To the extent that United Russia (now headed by Vladimir Putin) remains the dominant political party in Russia and does not favor radical revision of the design of land reform, it is not likely to change significantly.

Implications of Russian Land Reform: The Trajectory for the Future The core of the institutional design of Russian land reform was defined during the Yeltsin years, and more recent legislative initiatives (since 2002– 2003) have changed land policies mainly at the margins. As a result of that institutional design, the vast majority of households have little real land, and former state and collective farms continue to control most farmland even if it is formally considered ‘‘private’’ property. Even larger corporate farms have emerged that may evolve into oligopsonies. Further, as the agricultural sector has become profitable since 2000, banks, food processors, and other companies have begun to buy up agricultural land. As a result, small landowners not only face restrictions on property rights stemming from the institutional design but due to ongoing economic processes, face significant challenges in retaining the land rights that they received, and some owners face the threat of being dispossessed of their land rights altogether. The challenges for rural households are significant; small, noncontiguous land plots are a metaphor for a politically weak cohort of landowners, owners who are fractured, divided, unorganized, and have not been politically mobilized. This situation in contemporary Russia stands in contrast to those of peasantries caught up in previous ‘‘great’’ land reforms (those in Mexico, Russia [1917], China, Vietnam, Cuba, and elsewhere).≥π A politically weak cohort of landowners supports the argument that a change in the trajectory of Russian land reform is unlikely and diminishes the chances that common landowners will win the war over agricultural land. This situation has caused ripples in Russia’s managed democracy, although one should not overestimate the impact, and no one is suggesting the acts of protest are regime-threatening. Yet in a political environment where stability and predictability are of paramount importance, any disruptions are a cause for concern. During 2005–7, for example, hundreds of protests occurred from

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the Far East to Kaliningrad, organized by local branches of agrarian trade unions and the national agrarian trade union, Rosagrosoiuz, with the active participation of the Communist Party. This is one reason why the Kremlin has been interested in creating a loyal left-of-center party that will act ‘‘responsibly.’’≥∫ According to information from deputy chairman of the Communist Party of the Russian Federation (KPRF), V. I. Kashin, the KPRF has been very active in organizing various protests over land and agrarian policies in several regions. He pointed specifically to Krasnodar krai, where, he says, the KPRF organized more than ninety protest actions in all thirty-four raions. In the rural raions of Saratov oblast, the party helped organize ‘‘weekly’’ pickets. In all forty-three raions of Kirov oblast more than nine hundred protest actions occurred during 2005–7. In 2007, additional protest work was being organized in Belgorod, Moscow, Sverdlovsk, and other oblasts. Kashin characterizes these actions as the formation of ‘‘peasant fronts’’ that are demanding that the owner of land should be the person who works the land.≥Ω To be sure, the views coming from the KPRF are politically biased and are presented as part of their larger political agenda to oppose state policy, and thus should be taken with a grain of salt. On the other hand, there is evidence to suggest that land reform failed to protect individuals’ property rights from predatory capitalists. For example, a long article in an agricultural weekly chronicled events in Ruzskii raion (Moscow oblast) that resulted in farm members’ being cheated out of their land shares. In 1992, during the farm reorganization that was occurring nationwide, the land of the joint stock farm Dovator was transferred to collective ownership in the form of land shares to 831 members of the farm. The list of recipients, new landowners, contained the names of the owners and the size of their land shares. In 2003 some members of the farm petitioned to convert their land shares into land for the formation of a private farm. But the original list of owners had disappeared. Undeterred, the petitioners were able to gather all the necessary documents and went to the raion administration. But they were not able to receive the real land they desired. Why? In 1992 the raion administration had received legal documents that stated the land had been transferred to the ownership of the farm as part of the process of re-registering the farm as a different juridical entity. During the process of land privatization, once a farm member received his land shares, he could opt to lease the land back to the parent farm, in which case ownership was retained and a claim to a plot of land could be made in the future. However, if the land share owner decided to invest his land shares in the capital stock of the parent farm, his ownership was forfeited and he had no further right to claim a land plot. In 2003 Dovator farm members were surprised to find out that their agricul-

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Behavioral Responses

tural land had been registered as the property of a company owned by a man named Vasilii Boiko. The farm members turned to the court in the raion, sure that their rights to their land shares would be upheld. But the court upheld the decision that the land had been transferred to Boiko’s company. One of the persons who wanted his land, Nikolai Kliuev, turned to the procurator, who could not help. Kliuev then went to the State Duma, and after that, the Ministry of Internal Affairs. According to Kliuev, Boiko took the original list of land share owners and made a counterfeit of it. In other words, Boiko produced a forged list of land share owners. Kliuev states that ‘‘in the forged list, there is a signature [that] is supposed to be mine, but it is not mine. Someone else signed my name. And by these forged documents my land shares illegally became part of capital stock of the farm.’’∂≠ Vasilii Uzun, the deputy director of the All-Russian Agrarian Institute in Moscow, explains in the same article that the process of land distribution gave land to 12 million rural people who were ‘‘without legal rights and [were] the poorest’’ in the country. Attempts were made to take land from the rural poor. ‘‘It was necessary to persuade every dweller in the countryside, especially pensioners, to give up their land plot. Our business [class] is not very well liked. There began efforts to change the situation. Business, of course, is interested in land first and foremost around large cities. But not at all for agricultural purposes, agriculture is just a cover. The basic idea was to convert land to housing and cottage construction. The price of this land increased by hundreds of times.’’∂∞ In the same vein, members of the Russian Land Union speak of the ‘‘illusion’’ of land reform—that land reform made millions of people owners—and instead they describe the ongoing ‘‘war’’ over land that pits the interests of the ordinary rural dweller against the interests of oligarchs, big business, and even local governments.∂≤ The necessity of rectifying this situation and modifying land legislation has been explicitly addressed by Minister of Agriculture Gordeev. In an interview conducted in early 2007, Gordeev argued, ‘‘It is necessary that legislation restrict the procedure of converting agricultural land to other categories. . . . It is necessary to change legislation so that he who works on the land has priority. Precisely those who work the land and not ‘new renters.’ For this to occur, it is necessary to return the function of state regulation of land relations to the Ministry of Agriculture, which lost this role in the course of administrative reform.’’∂≥ It is interesting that Gordeev has not suggested greater ‘‘liberalism’’ in land rights but, rather, more state regulation and more restrictions. In particular, the existence of land shares and the principle that land should belong to he who works it will be difficult to reconcile. Although some regions have begun to convert land shares to plots of real land when lease or purchase transactions

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take place (as stipulated in the 2002 Law on Agricultural Land Transactions), the overall number of land shareholders who do not work in agriculture continues to increase. Therefore, the problem of unclaimed land shares has become acute in certain regions.∂∂ For this reason, appeals to the slogan ‘‘land to those who work it’’ are unlikely to be efficacious and difficult to enforce, even if such calls are politically popular. Moreover, from a pragmatic standpoint, given the fact that most households are undercapitalized and have limited human capital resources, and given that the growth rate in their food production has been essentially flat since 2004, it is not clear whether there are significant economic benefits to keep land in the hands of those who work it.∂∑ Significant change in the institutional design or direction of Russia’s contemporary land reform appears to be unlikely for the foreseeable future. Russia’s land reform was part of the process of political reform begun in the early 1990s, and the future of land reform will likewise be deeply influenced by politics. In addition to the fact that the Putin administration in its later years had few of the revolutionary impulses of its predecessor and managed democracy has muted political voices from below, two arguments support the thesis that the trajectory of Russia’s land reform is unlikely to change from illiberal to liberal in the post-Putin years. The first argument concerns the motivations of the government. Going forward, trends would appear to augur for more consolidation and enlargement, not more fragmentation. Clearly, the interest of the state is to maximize food production. To this end the Putin government initiated a National Project in 2006 for selected sectors of the economy. In agriculture, the project was called Development of the Agroindustrial Complex, originally implemented during 2006–7 and expending several tens of billions of rubles in credits and financial support for large farms, private family farms, and rural households during this time. This program should be understood as an attempt to prepare domestic producers for increased international competition.∂∏ In 2007 the program was extended to run for five more years 2008–12. This program was intended to revive agricultural production, however, not to spur or increase households’ landownership. It is obviously more costly to provide financial assistance, credits, and subsidized loans to millions of small plots than to a few thousand larger farms. Households already have about one-half the labor productivity of large farms, making it even more costly to expand the number of potential recipients of state assistance.∂π Furthermore, households already suffer from land fragmentation, and an increase in land use by households portends even more fragmentation that is uneconomical.∂∫ Thus, increasing landownership by rural households would appear not to be in the government’s economic interest (though households produce more than one-half of the ruble value of agricultural output in the nation).∂Ω

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Behavioral Responses

The second argument concerns the motivations of households. It stands to reason that rural households have an interest in increasing their income. Using 2006 survey data, a comparison was made between households that added land since 1991 and those that did not. Commercially oriented households—defined as those that sold 50 percent or more of their production—had roughly the same monthly monetary income whether or not they had added land since 1991.∑≠ In other words, land expansion was not necessary for households to obtain a high income. The key variable in high income was the commercial orientation of the household and the productive use of its land; less important was how much additional land the household had acquired. Thus, despite Gordeev’s frankness about the need for change in the institutional design of land reform, it is difficult to envision the circumstances under which the essential core of land legislation would change in any significant manner or what the source of that change would be. The Medvedev administration is similar to Putin’s in that it is statist and nonrevolutionary, opting for stability over societal tumult. Economic considerations suggest that further land distribution would lead to more land fragmentation and would not be economically efficient. Emerging elite interests have a growing interest in preserving their economic gains in the agricultural sector, including obtaining land and control over large farms. ‘‘People power,’’ the ability of the common person to prevail over the bureaucracy and the legal system, continues to erode. The combination of these factors suggests that Russia’s contemporary land reform went awry and that few corrective actions are likely to be implemented to allow reform to meet its original goals. Although the institutional design is unlikely to change in any significant way, the findings of this study suggest that the state can influence desired land reform outcomes by adopting policies that increase the incomes of more households and by creating incentives for households to retain human capital and labor.

Appendix A: Selected Governmental Acts Concerning Land Reform in the USSR and the RSFSR, 1990–91

Mar. 1990 May 1990 Oct. 1990 Nov. 1990 Nov. 1990 Dec. 1990

Dec. 1990 Jan. 1991 Jan. 1991

Jan. 1991 Jan. 1991

USSR Law: ‘‘On Land’’ RSFSR Government Resolution: ‘‘On the Development of Peasant Farms and Agricultural Cooperatives’’ RSFSR Government Resolution: ‘‘Questions of the State Committee on Land Reform in the RSFSR’’ RSFSR Law: ‘‘On Peasant Farms’’ (amended in December 1990) RSFSR Law: ‘‘On Land Reform’’ (amended in December 1990) RSFSR Government Resolution: ‘‘On the Program for the Revival of the Russian Countryside and Development of the Agroindustrial Complex’’ RSFSR Law: ‘‘On Property in the RSFSR’’ USSR Presidential Decree: ‘‘On the Priority Tasks for the Realization of Land Reform’’ RSFSR Government Resolution: ‘‘On the Procedure for Developing Peasant (Farmer) Farms, Their Associations, Unions, and Cooperatives’’ RSFSR Government Resolution: ‘‘On the Republican Program for Conducting Land Reform on the Territory of the RSFSR’’ Recommendation of the Ministry of Agriculture of the RSFSR and State Land Committee of the RSFSR: ‘‘On the Procedure for the Exit of Workers from Collective Farms, State Farms, Other Agricultural Enterprises, Assigning Them Land Plots and Production Assets’’

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Feb. 1991

Mar. 1991

April 1991 Aug. 1991

Sept. 1991

Oct. 1991 Dec. 1991 Dec. 1991

RSFSR Government Resolution: ‘‘On the Procedure for Giving Land Plots to Citizens for Individual Housing Construction, and Also for Operating Fruit Gardens, Vegetable Gardens, and Animal Husbandry’’ Resolution of the RSFSR Supreme Soviet and RSFSR Council of Ministers: ‘‘On Supplementary Measures for Accelerating Land Reform in the RSFSR’’ Land Code of the RSFSR Resolution of the USSR Cabinet of Ministers: ‘‘On the Procedure for Conducting State Land Cadastre, Monitoring of Land, and Principles of Payment for Land in the USSR’’ RSFSR Government Resolution: ‘‘Confirming the Forms of State Acts for the Right of Ownership of Land, Lifetime Use with Rights, Ownership upon Inheritance, and Lifetime Use of Land’’ RSFSR Law: ‘‘On Payment for Land’’ (concerning land taxes, with numerous changes and amendments introduced subsequently) RSFSR Government Resolution: ‘‘On the Procedure for the Reorganization of Collective and State Farms’’ RSFSR Presidential Decree: ‘‘On Urgent Measures for the Implementation of Land Reform in the RSFSR’’

Appendix B: Selected Governmental Acts Concerning Land Reform in the Russian Federation, 1992–2006

Jan. 1992 Jan. 1992

Jan. 1992 Mar. 1992 Mar. 1992 Mar. 1992

Mar. 1992 Aug. 1992

Sept. 1992

Ministry of Agriculture: ‘‘Recommendations for the Reorganization of Collective and State Farms’’ Ministry of Agriculture: ‘‘List of Agricultural Enterprises Not Subject to Government Resolution no. 86 from 29 December 1991 ‘On the Procedure for the Reorganization of Collective and State Farms’ ’’ Government Resolution: ‘‘On Measures for State Support for Peasant Farms in 1992’’ Presidential Decree: ‘‘On the Procedure for Establishing Norms for the Free Transfer of Land Plots to Citizens’’ Government Resolution: ‘‘On the Course and Development of Agrarian Reform in Russia’’ Government Resolution: ‘‘Confirmation of the Form of Certificates for the Right to Landownership, Leasing Agricultural Land, and the Temporary Use of Agricultural Land’’ Presidential Decree: ‘‘On the Sale of Land Plots to Citizens and Juridical Persons upon the Privatization of State and Municipal Enterprises’’ Government Resolution: ‘‘On the Procedure for Conserving Degraded Agricultural Land and Land Polluted by Industrial Waste and Radioactive Land (amended in October 2002)’’ Government Resolution: ‘‘On the Procedure for the Privatization and Reorganization of Enterprises and Organizations in the Agroindustrial Complex’’

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Dec. 1992

Feb. 1993

April 1993 May 1993 Oct. 1993 Dec. 1993 Dec. 1993 Dec. 1993

April 1994 July 1994 Nov. 1994 Nov. 1994

Feb. 1995 Mar. 1996 Jan. 1997 May 1997

July 1997 April 1998 July 1998 June 1999

Law: ‘‘On the Rights of Citizens of the Russian Federation to Receive Land as Private Property and to Sell Land Plots in Order to Conduct Personal Subsidiary and Dacha Farming, Gardening, and Individual Housing Construction’’ Government Resolution: ‘‘On the Committee for Land Resources and Land Tenure of the Russian Federation’’ (creation of federal committee on land policy, oversight, and implementation of land reform) Presidential Decree: ‘‘On Supplementary Measures for the Allotment of Land Plots to Citizens’’ Government Resolution: ‘‘The Procedure for the Sale-Purchase of Land Plots by Citizens of the Russian Federation’’ Presidential Decree: ‘‘On the Regulation of Land Relations and Development of Agrarian Reform’’ Presidential Decree: ‘‘On State Land Cadastre and Registration of Documents Concerning the Rights to Real Estate’’ Constitution of the Russian Federation Presidential Decree: ‘‘On Bringing Land Legislation of the Russian Federation into Accordance with the Constitution of the Russian Federation’’ Government Resolution: ‘‘On the Experience of Agrarian Reform in Nizhnii Novgorod Oblast’’ Government Resolution: ‘‘On the Reorganization of Agricultural Enterprises Based on the Experience in Nizhnii Novgorod Oblast’’ Government Resolution: ‘‘On the Procedure for Defining Normative Prices for Land’’ Civil Code (Part 1 was adopted in 1994 with a section on landownership and entered into force in 1995. Part 2 was adopted in January 1996. The Civil Code was amended in subsequent years.) Government Resolution: ‘‘On the Procedure for the Realization of Rights of Land Share Owners and Owners of Property Shares’’ Presidential Decree: ‘‘On the Realization of the Constitutional Rights of Citizens Concerning Land’’ Law: ‘‘The Forest Code of the Russian Federation’’ Presidential Decree: ‘‘On Guarantees to Acquire Land Plots in Ownership for Land Located Under Buildings’’ (paraphrase of a title that is convoluted and cumbersome if translated literally) Law: ‘‘On State Registration of Rights to Real Estate and Real Estate Transactions’’ (amended in March 2001, April 2004) Law: ‘‘On Fruit Gardens, Vegetable Gardens, and Dachas of Noncommercial Organizations of Citizens’’ (amended in October 2000) Law: ‘‘On Mortgaging of Real Estate’’ (amended in 2002, replaced by new law in 2004) Government Program: ‘‘The Development of Land Reform in the Russian Federation During 1999–2002’’

Appendix B Aug. 1999 Sept. 1999

Jan. 2000 April 2000 Sept. 2000 Sept. 2000 Jan. 2001 June 2001 July 2001 Oct. 2001 Oct. 2001 April 2002 June 2002 July 2002

July 2002

Nov. 2002 May 2003

June 2003

235

Government Resolution: ‘‘On State Cadastral Valuation of Land’’ Government Resolution: ‘‘On the State Committee for Land Policy of the Russian Federation’’ (this resolution renamed the federal Committee on Land Resources, created in 1993, as Roskomzem) Law: ‘‘On State Land Cadastre’’ Government Resolution: Confirmation of previous government resolution ‘‘On State Cadastral Valuation of Land’’ (from August 1999) Government Resolution: ‘‘Rules Governing Cadastral Divisions of Territories of the Russian Federation’’ Government Resolution: ‘‘Rules for Assigning Cadastral Numbers to Land Plots’’ Government Resolution: ‘‘On the Federal Service for Land Cadastre of Russia’’ (renamed Roskomzem and created Roszemkadastr) Law: ‘‘On Land Surveying’’ (amended in 2005) Law: ‘‘On the Demarcation of State Ownership of Land’’ (amended in 2005) Land Code of the Russian Federation (replaced Land Code of 1991; amended with numerous changes during 2001–6) Government Resolution: ‘‘Creation of an Automated System of State Land Cadastre and State Account of Real Estate’’ Government Resolution: ‘‘On Control During Land Surveying’’ Government Resolution: ‘‘On Conducting Territorial Land Surveying’’ Government Resolution: ‘‘On Agreement and Confirmation of Land Surveying Documents, and the Creation of a State Database Resulting from Land Surveying’’ Law: ‘‘On Agricultural Land Transactions’’ (adopted in July 2002, entered into force on January 1, 2003, with numerous changes and amendments introduced from 2002 to 2007). This law superseded government resolutions from December 1991 (‘‘On the Procedure for the Reorganization of Collective and State Farms’’), March 1992 (‘‘On the Course and Development of Agrarian Reform in Russia’’), September 1992 (‘‘On the Procedure for the Privatization and Reorganization of Enterprises and Organizations in the Agroindustrial Complex’’), July 1994 (‘‘On the Reorganization of Agricultural Enterprises Based on the Experience in Nizhnii Novgorod Oblast’’), and February 1995 (‘‘On the Procedure for the Realization of Rights of Land Share Owners and Owners of Property Shares’’) Government Resolution: ‘‘On the Implementation of State Monitoring of Land’’ Government Resolution: ‘‘Rules for Compensating Land Owners for Land That Is Withdrawn from Private Ownership for State or Municipal Needs’’ (the full title of the resolution is extremely long and cumbersome to translate, so this title is paraphrased) Law: ‘‘On Peasant Farms’’ (replaced November 1990 Law on Peasant

236

Appendix B

July 2003 Oct. 2003 Dec. 2004

Oct. 2005

Mar. 2006

April 2006 June 2006

Nov. 2006 Nov. 2006 Dec. 2006 Dec. 2006

Dec. 2006

Farming and December 1990 amendments to it, as well as subsequent amendments to that law) Law: ‘‘On Personal Subsidiary Farming’’ (replaced previous Sovietera laws on personal subsidiary farming) Resolution of the Federation Council: ‘‘On Urgent Measures for the Demarcation of State Ownership of Land’’ Law: ‘‘On the Conversion of Land or Land Plots from One Category to Another’’ (signed in December 2004, became effective in January 2005) Government Decree: ‘‘Conception of Special Purpose Federal Program for Protecting and Improving Agricultural Land Fertility During 2006–2010’’ (truncated title) Governmental Resolution: ‘‘Federal Special Purpose Program: Protecting and Improving Agricultural Land Fertility During 2006– 2010’’ Government Resolution: ‘‘On State Cadastral Valuation of Land’’ (amended a 2000 government resolution) Government Resolution: ‘‘List of Documents Necessary for State Registration of Rights of Ownership of Land Plots in the Russian Federation, Subjects of the Russian Federation, or Municipalities upon Demarcation of State Ownership of Land’’ Amendment to the law ‘‘On Agricultural Cooperatives’’ Government Resolution: ‘‘On State Land Control’’ (replaced a 2002 resolution having a similar name) Law: ‘‘On the Development of Agriculture’’ Government Resolution: ‘‘Rules for Compensating Interest Rates for 3-Year Loans Obtained from Credit Organizations in 2005, by Persons Conducting Subsidiary Agriculture, from the Federal Budget to Regional Budgets’’ Government Resolution: ‘‘Rules for Compensating Interest Rates for 5-Year Loans Obtained from Credit Organizations in 2006–2007, by Persons Conducting Subsidiary Agriculture, from the Federal Budget to Regional Budgets’’

Appendix C: The Post-Soviet Land Code

The 1991 Soviet Land Code permitted the ownership of agricultural land but restricted its purchase and sale. During the 1990s, disagreement over a new Land Code, and specifically whether agricultural land could be bought and sold, was one of the most contentious and acrimonious policy questions taken up in the Duma and was characteristic of the liberal-conservative split in Russian politics. The Agrarian Party of Russia (APR), in conjunction with the Communist Party, was opposed to the philosophical underpinnings of land reform, in particular, the buying and selling of agricultural land. An assessment of the early years of agrarian reform in the party’s newspaper referred to the government’s policies as ‘‘the beginning of the destruction of the agroindustrial complex.’’ The government’s land reform legislation and the Land Code were described as ‘‘confused’’ and ‘‘contradictory.’’ It was asserted that the government’s policy ‘‘not only did not bring any positive results, but led to chaos [and] instability in society, and caused a growth in protests.’’∞ Debate over a new Land Code commenced following the seating of Russia’s first postcommunist Duma in January 1994. In the first session (1994–95) the code was discussed several times, but the deputies failed to pass the bill. In order for a bill to become a law, it must go through three readings. The legislative process worked thusly: a bill was brought for a vote on the first reading if the sponsoring committee felt that the bill had sufficient political support and that its basic conception was acceptable. If a first reading passed (by a majority vote in the Duma, 226 votes), that version of the bill was used as a basis for further modification and amendment. A

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vote on the second reading was taken to approve the changes that had been made and to consider further amendments to the bill. Once the second round of changes was incorporated, the third reading was the ‘‘polished’’ version of the bill and if approved was sent to the upper house for approval and eventually (assuming the upper house consented) to the president for his signature. The initial discussion of the first reading of a draft Land Code by the new Duma occurred in July 1994. Two versions were drafted: one by the liberal party Russia’s Choice and the second by the government of Prime Minister Viktor Chernomyrdin, which had been worked on by ten ministries and departments.≤ The version by Russia’s Choice envisioned an unregulated land market, while the government’s version contained some restrictions on agricultural land transactions. Both versions were heavily criticized by conservative deputies, reflecting the distance between Yeltsin’s October 1993 decree and the land legislation favored by conservatives. Even the more conservative version presented by the government was criticized by deputies from the APR. Aleksandr Nazarchuk (an APR member who would become minister of agriculture in September 1994), speaking on behalf of the Duma Committee on Agrarian Policy, argued that ‘‘the key question that the Land Code must decide is what kind of land system will be created by legislation. The choice, in essence, has two variants. The first is to create feudal land relations, private latifundia. The second is to create land relations according to the principle: land is for those who work it. The draft Land Code prepared by the government creates a legal base for feudal land relations. In it is envisioned unlimited private landownership, an unlimited right to lease land, an unlimited right of owners to receive payment for leased land. . . . The Land Code should create a sensible balance between the rights of owners and the rights of the state to regulate [land relations]. It is impermissible for no one in no way not to regulate the land market.’’≥ Both versions were simultaneously presented as the first reading to the Duma on July 8, 1994, but neither received the required number of votes to pass, although a motion by Nazarchuk that the Duma Committee on Agrarian Policy to work out a compromise version and to present it to the Duma was adopted. In September 1994, the committee submitted a draft of the Land Code to regions in the country and subsequently received suggestions for more than thirteen hundred amendments.∂ After incorporating suggestions from the regions, on March 22, 1995, a vote on the first reading of a compromise version of the code was taken at a plenary session of the Duma. This conception of the draft code was incoherent, however, and as a result the Communist Party, Russia’s Choice, and Yabloko voted against it. This compromise version received only 142 votes.∑ Following the rejection, a draft was sent for a second time to the regions; fortyseven of fifty-four regions that rendered an opinion supported the draft, six regions opposed private ownership of agricultural land, and another fourteen regions indicated that they either had adopted or were preparing to adopt their own laws regarding land.∏ It was clear that enormous regional differences complicated the drafting of a national law. Nonetheless, on June 14, 1995, a vote was taken on

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whether to pass a first reading of the draft Land Code; it received only 173 votes.π On June 16, 1995, Nazarchuk urged the deputies to adopt this version of the draft, and another attempt was made to approve a first reading. For the fourth time, the effort failed, receiving 210 votes—16 short of the 226 required for approval.∫ Once again, there was disagreement over fundamental issues. The Communist Party objected to the private ownership of agricultural land, although the party did support private ownership of small plots used for private plots and small-scale gardening. The communists and agrarians argued that a free land market would deprive peasants of land. They feared that speculators and other investors would buy up land and dispossess the peasantry from land that they were entitled to have. It was also argued that the rural population was uncompetitive because 40 percent of land that had been distributed had gone to pensioners or workers in the rural social sphere.Ω Meanwhile, the liberal Russia’s Choice objected to restrictions on the sale and purchase of agricultural land. After assurances were given that other supporting legislation would be forthcoming, Yabloko reversed its opposition. The draft came up for another vote on July 14, 1995. The session opened with A. Chernyshev from the Agrarian Party summarizing the main content of the draft, which included the right to private landownership but also a ban on the sale of agricultural land that was obtained prior to the introduction of a new Land Code.∞≠ After a sharp debate, a vote was taken to adopt this version in the first reading. The motion to adopt the first reading received 223 votes, only 3 votes short of the minimum. The vote was repeated two minutes later, and it received 220 votes.∞∞ After a short discussion, another motion was made to adopt this version in its first reading and to create a special commission comprised of representatives from each faction in the Duma, as well as agricultural specialists, to work with the Agrarian Committee on the preparation of a draft for a second reading. Once the provision to create a special commission was proposed, the motion passed, with 230 votes for and 43 negative votes.∞≤ The first reading was adopted because of the solidarity of the Agrarian Party, the Communist Party, and the Liberal Democratic Party.∞≥ A week after the passage of the first reading, Mikhail Lapshin, who was then leader of the Agrarian Party, proudly defended this version of the Land Code. He argued that ‘‘a centuries-long dream of the peasantry is being fulfilled: acceptance of a document that transfers land in ownership to them. The law forbids the sale and purchase of agricultural land, and foreigners are not able to own land. Our country will not have latifundia. Today, a simple legislative base for land reform is being created, the essence of which is—land should belong to those work on it.’’∞∂ After the July 14 vote, for a third time a draft was sent to the regions for amendments. More than 840 were received. The version that resulted was presented to the Duma for a vote on the second reading in October 1995 but fell 35 votes short.∞∑ The second and third readings would have to wait for a new Duma. The first session of the Duma ended without an agreement on a draft Land Code.

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Appendix C The Second Duma, 1996–99

The political situation in the country in late 1995 was very different from the situation that had existed in 1993. Yeltsin’s popularity had declined, and polls showed that confidence in him as president was in the single digits. The economy was in shambles, shaken by a 50 percent decline in GDP and high inflation. Standards of living had plummeted, unemployment was growing, the country experienced widespread strikes, and wage arrears had become a chronic and widespread problem. Popular attitudes favoring large-scale privatization had declined since 1993, when attitudes were more centrist.∞∏ The war in Chechnya that had begun in 1994 was very unpopular and costly. The entire country was becoming more conservative as reflected in public opinion polls concerning radical economic reform and by the results in the December 1995 Duma election.∞π The Duma that was elected in December 1995 and seated in January 1996 was considerably more conservative than the 1994–95 Duma. A large literature exists that has examined the election results, which are not the primary focus here.∞∫ In summary, the December 1995 election witnessed a substantial decline in support (and seats) for liberal parties, those that supported radical economic reform. This election also witnessed the emergence of centrist parties that favored the gradual introduction of market reforms. There was also a strong showing by opposition parties. The liberal Russia’s Choice (renamed Russia’s Democratic Choice) won a total of 9 seats, and Yabloko won 45 seats. The centrist party surrounding Prime Minister Chernomyrdin, Russia Is Our Home, emerged with 55 seats. The big winner was the Communist Party, which won 157 seats and doubled the popular vote it had received in the 1993 Duma election. The Agrarian Party saw its support drop and it did not cross the 5 percent threshold needed to receive party-list seats, but it did win 20 seats from single-mandate districts.∞Ω As before, an Agrarian Party deputy headed the Committee on Agrarian Policy. In sum, Yeltsin was faced with a more hostile national legislature, one that would be even less likely to cooperate with his reform agenda. Regarding land reform legislation, the distance between Yeltsin and the Parliament was growing. After the new Duma was seated, on April 17, 1996 a second reading of the draft Land Code was discussed. Again Chernyshev introduced the draft, explaining that since the first reading had been passed about 1,080 amendments and corrections were considered, and the draft eventually incorporated 550. This version did not envision the sale of land held by agricultural enterprises, did not allow agricultural land held by agricultural enterprises or private farmers to be used for collateral, and only allowed for the leasing of agricultural land from agricultural enterprises. Agricultural land could only be purchased by the state or by local municipalities.≤≠ Three votes were taken on this draft. The first, to accept the amendments, passed by a vote of 240–12. The second, to reject the amendments that the committee had not included in the draft, passed 252–11. The third vote, to accept the second reading of the draft Land Code, passed 270–23.≤∞

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On May 22, 1996, the Duma approved the third reading of the draft code by a vote of 288–18.≤≤ Duma conservatives finally had the Land Code they wanted, or so it seemed. But this version was rejected by the Federation Council in June 1996. Members of the State Duma attempted to overturn the veto by the Federation Council but were only able to muster 269 votes instead of the 300 that were required.≤≥ A mediation commission composed of members of both houses was established to search for a compromise version. One compromise that was reached allowed private farmers to sell their land after ten years, a term that was subject to change by regional law. After ten years, however, land held in private ownership by private farmers still would face significant restrictions on its sale: privately owned agricultural land could only be sold with the approval of the executive authority in that region, and only if the intended use for the land plot would not change.≤∂ Agricultural enterprises were to be allowed to engage in land transactions, but these, too, were restricted to certain defined circumstances. A new version was considered by the Duma on December 25, 1996, but was returned to the commission for further work with the suggestion that it exclude altogether the clauses concerning land mortgaging and the sale of land. Five months of intense debate ensued, until finally the commission reached a dead end and concluded that it was more expedient not to insist on the inclusion of the right to mortgage or sell land. Russia remained without a postcommunist Land Code. A new version of the code was submitted to the Duma in mid-1997 that allowed municipal land to be owned and leased. The right to mortgage or sell agricultural land, however, was not included. Three votes were again taken: one to approve the amendments accepted by the commission, one to reject the amendments excluded by the commission, and one to approve the second reading of the compromise version. All three motions were adopted, and the third reading of the compromise draft was then adopted by a vote of 285–10 on June 11, 1997. This draft was approved by the Federation Council in early July 1997. In addition, on June 11 the Duma passed a second reading of a draft law that prohibited mortgaging land that was state or municipal land. On July 21, 1997, Yeltsin responded to the draft code with a letter to the chairman of the State Duma indicating that the draft ‘‘contradicted the Constitution and the Civil Code.’’ Yeltsin’s long letter detailed specific articles in the draft that were problematic, concluding that ‘‘the code has these and other shortcomings. I suggest that the mediation commission may eliminate these shortcomings only with the participation of leading specialists on land and civil law.’’≤∑ The president had rejected the Land Code. Needing 300 votes to override the presidential veto, on September 24, 1997, the State Duma voted. Chernyshev urged the deputies to support the version that had been rejected by the president, arguing that ‘‘the condition of the economy today is such that it is impermissible to allow the sale of agricultural land.’’≤∏ He did note, however, that small plots of land used by individuals were being bought and sold, so he was speaking about the protection of large agricultural enterprises. In the end,

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the deputies voted 304–52 to override the president’s veto and adopted a resolution to submit the version to the Federation Council for review.≤π In the regions, events were unfolding on their own as the land issue became one of the most contested and discussed issues in the media. In mid-October 1997 a bill was introduced in Saratov oblast that provided the most extensive property rights to date. On November 12, 1997, by a vote of 26–3, the oblast Duma in Saratov adopted a law titled ‘‘On Land.’’≤∫ A few days later the governor of the oblast, Dmitri Aiatskov, signed the law into force. This legislation reconfirmed the right of private ownership and permitted the free sale of land held as private property, including agricultural land. A primary breakthrough of the Saratov law was that owners of land shares in collective farms and their juridical successors would be allowed to sell their shares to whomever they desired in accordance with article 250 of the 1994 Civil Code. Following the introduction of the law, a series of highprofile land auctions were held at which agricultural land was sold off. The Saratov land law was quickly followed by land laws in Samara oblast and the Republic of Tatarstan. Ironically, the Saratov law contradicted federal law, a fact acknowledged by Aiatskov, and if the Land Code had been adopted Saratov would have had to bring its law into conformity with the national law. As it was, in November 1997 the State Duma passed a nonbinding resolution asking Saratov to bring its law into conformity with the Land Code that had been approved, asserting the unconstitutionality of the regional law. This resolution was vetoed by President Yeltsin.≤Ω Back in Moscow, following the State Duma vote that had overturned the presidential veto, both sides searched for an acceptable compromise. A ‘‘roundtable’’ format was proposed, consisting of a total of twenty-five people from the Duma, the Federation Council, and the presidential apparatus to discuss a series of policy issues: the Land Code in November, the denomination of the ruble in December, and prices and tariffs on energy pipelines in January. The participants agreed that the meetings would not hold a formal vote but rather would try to reach agreement on certain principles and conceptions.≥≠ The November meeting concerning the Land Code was postponed until December 11, 1997, and then postponed again until December 26 after Yeltsin became sick. When the December roundtable on land was finally convened some progress was reported, although not all disagreements were bridged. Yeltsin favored opening up urban industrial land as quickly as possible in order to facilitate industrial modernization and urban renewal. But he admitted that rural land sales were more complicated. Often lost in the Western literature on economic reform is the fact that Yeltsin was a good deal more conservative than portrayed in the popular press. Following the roundtable, it became clear that Yeltsin supported state regulation of the land market and turnover of agricultural land. Specifically, this meant that agricultural land could not change purpose and had to be used for agricultural purposes. Second, persons who obtained agricultural land had to demonstrate an ability to use it (this could be done by showing proof of prior experience or coursework). Third, no

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quick resale of land would be permitted because a waiting period would be established regarding the resale and conversion of use following its acquisition. Fourth, there would be restrictions on who could obtain land—agricultural land was to be obtained by people who use it, and there would be regulations concerning the maximum amount of land that could be possessed. Foreigners would not be allowed to own land, only to lease it on a long-term basis.≥∞ The essence of these points of agreement meant that neither legislative representatives nor Yeltsin himself supported a completely unregulated land market.≥≤ The protocol provided for the establishment of another mediation commission that was to work on compromise language for a new Land Code. The protocol set the end of March 1998 as the deadline for work to be completed and for Yeltsin to sign a new code into law. In early February 1998 it was reported that the mediation commission had not even been formed and work had not begun. Later that month the Federation Council upheld Yeltsin’s veto of the Duma’s mid-1997 version of the code.≥≥ After missing the March deadline, in April 1998 Yeltsin forwarded twenty-four amendments to the Duma’s agrarian committee in an attempt to break the stalemate. On April 22 the Duma discussed these amendments at length and suggested several ‘‘corrections’’ of its own to the Yeltsin version. After voting whether to accept the corrections, the Duma passed its version of a Land Code that same day by a vote of 265–3.≥∂ The Duma’s version was approved in the Federation Council on May 20, 1998. But on June 4, 1998, Yeltsin wrote a response to the chairman of the Duma indicating that he did not agree with the Duma’s version, that it did not correspond to the changes the president had suggested in his letter of July 21, 1997—namely, provisions about the sale of agricultural land—and that the Duma had not followed correct legal procedures in the course of adopting this version.≥∑ Yeltsin considered the draft ‘‘a new draft’’ due to the numerous changes that had been made, and as a new bill it had to follow the procedure outlined in the Constitution. On July 3, 1998, the Duma’s agrarian committee presented a resolution to the Duma that it submit the draft Land Code to the Federation Council. On July 15 Yeltsin submitted his own version of the code to the Duma that included seventeen new changes. On July 16, however, the president’s draft failed twice to get the required minimum number of votes, receiving 220 votes the first time and 225 the second time.≥∏ The president’s bill had foundered on two main sticking points, the more important of which was whether persons who left a large farm with a free land plot in order to start a private farm would have the right to sell that land.≥π Thereafter, the Duma Committee on Agrarian Policy asked the president to specify more clearly two articles in his draft: one dealing with the conditions under which land transactions may be restricted (article 76) and one that would state that private farmers’ land that was held in ownership could only be disposed of in accordance with the Land Code (article 99). Yeltsin agreed to these conditions, but also added six more changes not requested by the Duma.≥∫ On December 9, 1998, another draft was ready for consideration, but the Com-

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munist faction in the Duma asked for a delay to have time to study the new text, and thus no vote was taken.≥Ω After review, this version finally went before the Duma for a vote on December 23. Two rounds of votes were taken, but neither vote succeeded in obtaining sufficient support: the first vote was 217–96, and on the second vote only 178 deputies were in favor, with 127 opposed.∂≠ Leading the vote against this version were deputies from the Communist Party, Yabloko, and People’s Power.∂∞ A dead end had been reached, and an entirely new version of the Land Code would have to be drafted. During 1999, however, Yeltsin’s illnesses and increasing isolation from policy decisions affected progress. Debates over a new version of the code occurred again in the Fall of 1999, but preparations for the December 1999 State Duma elections prevented a new draft from coming up for a vote.∂≤ When Yeltsin unexpectedly resigned his position as president on December 31, 1999, Russia remained without a postcommunist Land Code. The man who had led the transformation of Russia left the political scene with a large void in his reform legacy. Putin and the Land Code As is clear from the foregoing discussion, the content and fate of a post-Soviet Land Code was inseparable from the existing political context. Just as Presidents Yeltsin and Putin operated in very different economic climates, so, too, were there significant differences in the political environment in which each president worked. The regularly scheduled election for the third session of the Duma was held on December 19, 1999, and the deputies were seated in January 2000. Prime Minister Vladimir Putin assumed the position of acting president on January 1, 2000, as stipulated in the Constitution. In March 2000 Putin was elected president in his own right, winning 52 percent of the vote in the first round, compared to 29 percent for the runner-up, Communist candidate Gennadi Zyuganov. Putin was inaugurated in May 2000 and subsequently served two terms as president, vacating the presidency in May 2008 but immediately becoming prime minister under President Dmitri Medvedev. The transition from the Yeltsin presidency to the Putin presidency was attended by two cardinal changes. First, Putin did not define himself as a radical reformer and thus was not as polarizing as Yeltsin had been. Putin sought to rebuild Russia, with more emphasis on building a stable society. Second, Putin benefited from less hostile executive-legislative relations and, as time went on, a more compliant Duma. As Thomas Remington noted, ‘‘beginning in January 2000, when he became acting president, Putin worked to create a loyal majority in the Duma that would ensure passage of any legislation he proposed. He was relatively successful in the Third Duma (2000–2003), when the pro-Putin parliamentary faction Unity formed an alliance with three other factions, and gained control over the agenda. He was spectacularly successful with the Fourth Duma, which convened following the December 2003 parliamentary election.’’∂≥

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Putin’s ability to work with the Duma and Unity’s building of a coalition with other parties meant that the Communist Party’s gains in the 1999 election (123 total seats, more than any other party) were offset.∂∂ Overall, the Third Duma was much more centrist than the Second Duma, allowing Putin to score several significant legislative victories early in his first administration.∂∑ Once Putin assumed the presidency work on a new Land Code commenced quickly. In his first speech to Parliament, in July 2000, Putin outlined his legislative priorities for the years ahead, listing policy areas where he wanted to enact law. Among those legislative priorities were a Land Code and property rights for agricultural land. In January 2001 Putin complained that the present land laws were not working and that a national land law was necessary as soon as possible. Like Yeltsin’s, the Putin government would not accept the version of the code that had been worked out by the agrarian committee and approved by the Second Duma, a version that prohibited agricultural land sales.∂∏ Conservatives continued to oppose agricultural land sales on the grounds that it would lead to the dispossession of land by peasants. They argued that because the agricultural economy remained weak, and because rural dwellers had few monetary resources, either domestic speculators or, even worse, foreigners would be able to buy up land and create large landed estates. Not only would the rural population lose their rights to land in this scenario, but the livelihoods of those employed on large farms also would be endangered. Conservatives were not talking about peasants losing access to their subsidiary plots—although that could happen—but mainly had in mind the purchase of large tracts of agricultural land that would change in fundamental ways the class structure of the countryside and perhaps the dominant mode of production. Thus conservatives were trying to play to nationalist sentiments. But the political composition of the Duma had changed, and this affected political outcomes. On February 18, 2000, the Duma rejected a bill that would forbid buying and selling agricultural land or using it as collateral.∂π At the same time, neither Putin nor the Duma was ready to fully embrace a liberal Land Code. Also in February 2000, the liberal Union of Right Forces (SPS) submitted a new draft code that envisioned the unregulated purchase and sale of agricultural land, including sale to foreigners. In mid-March 2000, a plenary session of the Duma was supposed to consider a compromise draft by the Agrarian Party and the presidential administration—a version that did not include agricultural land sales—but the session was postponed after the Kremlin decided to try for an agreement on the text.∂∫ It appears that at this time Putin had not yet made up his mind what kind of Land Code he wanted, nor whether there should have been one national land law for all regions or a national law that acted as a framework, allowing regions to sort out the more difficult issues themselves. Toward the end of April 2000, during a visit to Orel oblast, Putin suggested that he favored a national law (Land Code) that codified the right to landownership, but that the right to sell agricultural land might be best decided by individual regional governments that were in a better situation to understand local conditions. He also indicated that the government and legislators con-

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tinued to work on a draft code.∂Ω The problem with his suggestion was that thirteen regions had adopted legislation that restricted private ownership and/or land transactions, thereby contradicting the Constitution.∑≠ Shortly after Putin visited Orel, Deputy Prime Minister Vladimir Shcherbak explained that without land turnover it would be impossible to increase the effectiveness of land usage. Therefore, he indicated that the president supported the right to buy and sell agricultural land and that the government planned to submit to the Duma a ‘‘special law’’ that would specify a procedure for land turnover that would include restrictions, but as the land market developed, the restrictions would diminish.∑∞ By late June 2000 the head of the Agroindustrial Deputies’ group in the Duma, Nikolai Kharitonov, stated that the Duma would vote on a new draft code by July 5 that would contain suggested corrections by the president.∑≤ In mid-July, however, it was reported that the Duma would not consider the new draft code prior to its summer vacation because the draft with the president’s changes had not been sent.∑≥ Meanwhile, in the second half of August 2000, the chief of the presidential administration, A. Voloshin, in an answer to an open letter written by Communist leaders in the Duma, suggested that Putin was leaning toward a special law on agricultural land transactions. Voloshin wrote that ‘‘the procedure for agricultural land transactions should be defined by a special federal law.’’∑∂ His remarks meant that Putin had decided on a compromise strategy: to submit a Land Code that would gain support from centrists and moderates and to pursue a separate law for land sales. In other words, the intent was to remove the most contentious planks from the Land Code, planks that had divided liberals and conservatives for so long. Minister of Agriculture Aleksei Gordeev suggested that this path was ‘‘softer.’’∑∑ Whereas Yeltsin had chosen to be obstinate and combative, Putin wanted to avoid a prolonged fight. In August 2000 Putin formed a governmental working group to draft a new version of the code to which Duma deputies were not invited.∑∏ While a new version was being prepared, in the fall of 2000 the Duma voted to lift a ban on mortgaging farmland. Although the government had promised a Land Code by the fall of 2000, it was not until 2001 that a new version was ready. In early January 2001 Gordeev indicated that the government was drafting a new version that would exclude the sale of agricultural land, and this draft was to be submitted to the Duma by January 20.∑π That deadline was not met; government sources revealed that Prime Minister Kasianov had been asked to continue working on the text until February 20, 2001.∑∫ Meanwhile, on January 26, 2001, the Duma approved a first reading of a law that allowed the buying and selling of nonagricultural land, thereby ‘‘unfreezing’’ chapter 17 of the Civil Code. In late March 2001 the Duma approved the second and third readings of this bill, thereby bringing into force this chapter of the Civil Code.∑Ω Once the government’s version of the Land Code was prepared and signed by Prime Minister Kasianov, it was submitted to the Duma in April 2001. According to standard procedure the Duma sent it to the regions for comments. It is important that in May 2001 the Council of the Duma voted to remove the draft Land Code

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from the jurisdiction of the agrarian committee and give it to the Committee on Property. This move had strategic importance because the agrarian committee had drafted conservative versions that had not allowed agricultural land sales in the First and Second Dumas. After the Committee on Property considered comments from the regions, it presented a draft Land Code that did not provide for agricultural land sales, which instead would be dealt with in a separate law. The intent clearly was to isolate conservatives and win over centrist deputies. The draft came up for a vote on June 15, 2001, and passed its first reading by a vote of 251–22.∏≠ Shortly thereafter, a list of corrections by the Agroindustrial Deputies’ group was published, including the suggestion that foreigners may only rent land and that the Land Code would regulate transactions involving agricultural land.∏∞ The corrections were sent to the Committee on Property. The Communists then shifted their tactics by questioning the worth of a national law that had significant regional opposition.∏≤ They attempted to pressure regional legislatures to demand rejection, basing their strategy on a hitherto unused law that stated that if one-third of the regions opposed a draft bill it was to be sent to a mediation committee. More than thirty regions sent criticisms of the bill—the Left claimed that the figure was thirty-four regions—but the committee chairman only tabulated twenty-six and interpreted the law in such a way as to undercut the Communists’ claims. The Communist deputies threatened to take the issue to the Constitutional Court, but one of the justices told journalists that the appeal would not be heard until after the law had been enacted.∏≥ With Communist appeals at a dead end, the draft Land Code came up for a vote on its second reading on July 14, 2001, passing by a vote of 253–153.∏∂ Not one Agrarian or Communist deputy voted for this draft in its first or second reading.∏∑ This vote on the second reading essentially defined what the code would contain because only editorial changes were made in the third reading. On September 20, 2001, the Duma passed the third reading of the Land Code, and it passed again on September 28 by a vote of 257–130.∏∏ On October 10 the Federation Council approved the draft code by a vote of 103–29 and forwarded the bill to Putin for his signature. On October 25, 2001, President Putin signed the Land Code into law, and it came into effect the next day, thus ending eight years of political infighting.∏π Russia finally had a federal law that regulated the buying and selling of nonagricultural land.∏∫ The 2001 Land Code in Brief For all the controversy surrounding the 2001 Land Code—Communist leader Gennadi Zyuganov called for a national protest after approval of the third reading —it only regulated about 2 percent of Russia’s total land. Further, it could hardly be considered a radical law, as suggested by the fact that legal norms for the regulation of agricultural land transactions were absent. In fact, the Land Code was clearly a

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political compromise, as acknowledged by supporters and opponents. Former Minister of Economics and Development German Gref admitted that ‘‘it was a compromise, including members of the parliament.’’∏Ω Once the issue of agricultural land sales was removed from the Land Code, one might even say that the law became mundane because much of what it regulates had been previously legislated. What the 2001 Land Code did do was codify certain parameters that act in accordance with the 1993 Constitution. Further, it defines broad principles to which regional land laws must conform. Following the passage of the national Land Code, regional governments began to adopt their own land laws, which vary considerably in length and specificity. The 2001 Land Code is a long document spanning eighteen chapters and 103 articles—much too long for an extended discussion here—but a few important points deserve mention, starting with the structure. The chapters and corresponding articles of the 2001 Land Code are as follows. Chapter 1: General Conditions, articles 1–11 Chapter 2: Land Protection, articles 12–14 Chapter 3: Ownership of Land, articles 15–19 Chapter 4: Unlimited Use, Use with Inheritance Rights, Limited Use, Lease Land, and Free, Limited Use, articles 20–24 Chapter 5: Origin of Land Rights, articles 25–39 Chapter 6: Rights and Responsibilities of Land Owners, Land Users, Land Lessors and Lessees, articles 40–43 Chapter 7: Revocations and Limitations on Land Rights, articles 44–56 Chapter 8: Compensation of Losses of Agricultural Production and Forestry upon Withdrawal of Land for State and Municipal Needs, articles 57–58 Chapter 9: Defense of Rights and Adjudication of Land Disagreements, articles 59–64 Chapter 10: Payment for Land and Land Value, articles 65–66 Chapter 11: Monitoring of Land, Land Tenure, and State Land Cadastre, articles 67–70 Chapter 12: Control over the Observation of Land Legislation, Protection and Use of Land, articles 71–73 Chapter 13: Responsibility for Violation of Land Protection and Land Use, articles 74–76 Chapter 14: Land for Agricultural Purposes, articles 77–82 Chapter 15: Land for Settlements, articles 83–86 Chapter 16: Land for Industrial, Energy, Transportation, Communication, Radio, Television, and Information, Land for Space Operations, Land for Defense, Land for Security, and Other Special Purposes, articles 87–93 Chapter 17: Territories and Objects of Land with Special Protection, articles 94–100 Chapter 18: Forestry, Waterways, and Reserve Land, articles 101–103

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It would be impossible, not to mention tedious, to summarize the entire Land Code, so only a few important issues that are central to individuals’ property rights are considered. After its adoption the original Land Code was amended many times from 2003 to 2007, and the discussion below is based on the text that existed at the end of 2006.π≠ LAND PRIVATIZATION AND OWNERSHIP

The right to private landownership was codified in the 1993 Constitution and the 1994 Civil Code. Chapter 3 of the Land Code (hereafter, the Code) regulates landownership and stipulates that land may be privately owned by Russian citizens and juridical persons (businesses). Article 15, point 2, indicates that state and municipal land may also be converted to privately owned land, provided it is not land that is prohibited from private ownership by federal law and the Code (such as national parks, cultural monuments, military facilities, state security facilities, police facilities, atomic energy plants, and state forestry lands). Article 27, point 4 lists the types of land plots that are not subject to private ownership. Two articles in the original 2001 Code allowed a degree of ‘‘re-privatization’’ but were subsequently amended. Article 20, point 5 and article 21, point 3 in the original code allowed citizens who had use rights for a land plot with either unlimited duration ( postoiannoe pol’zovanie) or lifetime use with rights of inheritance ( pozhiznennoe nasleduemoe vladenie) to convert that land plot to private ownership. These two articles were deleted according to changes adopted June 30, 2006, becoming effective September 1, 2006. Persons who held land as postoiannoe pol’zovanie or pozhiznennoe nasleduemoe vladenie prior to the adoption of the Code retained those use rights, but from September 1, 2006 land is no longer assigned to individuals for use with unlimited duration. Private individuals should lease land for a defined duration or own land. Henceforth only state and municipal enterprises and organizations will be granted use rights with unlimited duration. FOREIGN LANDOWNERSHIP AND USE

Article 5, point 2 states that foreigners and persons without citizenship may own certain types of land plots as defined by the Code. Article 15, point 3 says that foreigners may not own land included in a list of border areas of Russia established by the president, as well as other special territories that are defined by federal law. Companies are allowed to own land. Companies in which foreign ownership exceeds 50 percent may only lease agricultural land and may not own it. But, as noted by a prominent Russian analyst, it is often difficult to trace ownership lineage in Russia, and thus foreigners may be able to control a company that owns farmland.π∞ Article 22, point 1 says that foreigners and persons without citizenship may lease certain types of land plots as defined by the code. Article 28, point 5 stipulates that foreigners may purchase state or municipal land in amounts up to the limits established by the Code.π≤ Article 35, point 5 allows the president to establish a list of buildings and structures whose underlying land foreigners and noncitizens are not permitted to purchase or lease.

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Chapter 6 defines the obligations of land users, and chapter 7 of the Code regulates the conditions under which land rights may be revoked or land may be taken away. Article 44 of the Land Code stipulates that the right to private ownership of land may be terminated in accordance with the relevant sections of the Civil Code.π≥ The Land Code essentially defers to the Civil Code with regard to this issue. The Civil Code indicates that if the state needs the land, it must petition a court for a decision, and assuming a positive reply, may purchase the land from the owner. Article 50 of the Code also stipulates that if land is used to commit a crime it may be confiscated if a court so decides. Privately owned land may also be temporarily requisitioned by the state to meet extraordinary circumstances such as a sudden disaster, accidents, epidemics, or other extreme conditions, with the intent of protecting the interests of citizens, society, and the state. Once the conditions that necessitated requisition have ended, the owner has the right to demand the return of his land plot. If the land plot cannot subsequently be returned, the owner is entitled to monetary compensation at prevailing market value or may be assigned a land plot of equal value (articles 51, 55). Other rights of land use may also be revoked, including lifetime inheritable use, unlimited duration use, lease rights, and temporary use. The conditions under which use rights may be terminated are specified in articles 45–48. The main reasons for revocation include misuse of land, nonuse of land, use that harms the fertility or ecology of the land, use of prohibited land, nonpayment of taxes, withdrawal of rights due to state need, and requisition of land due to extraordinary circumstances. The owner may also lose his rights to private agricultural land: (1) if he does not use it during a three-year period; (2) if the land plot is not used for its intended purposes or is used in a way that changes the category of land use; or (3) if the use leads to a reduction of fertility, in the case of agricultural land, or a significant degradation of its ecological condition.

Appendix D: Survey Methodology and Description of Villages, 1995–2006

Although the conduct of surveys and the use of survey data have been accepted in Western social science for quite some time, the opportunity for Westerners to conduct large-scale surveys in Russia only arose after the fall of the Soviet Union. In particular, rural survey projects by Western scholars were not possible during the Soviet period. The main survey instruments available for giving the West glimpses of Soviet life through responses of émigrés were the Harvard University interview project conducted in the 1950s and the Soviet Interview Project of the 1980s.∞ These émigrés were overwhelmingly from urban areas, and so our knowledge of Soviet rural societal attitudes and behavior was greatly limited. Within the Soviet Union, regional surveys were often conducted by various academic institutes. The utility of these surveys was often limited, however, because ‘‘politically correct’’ issues and questions had to be studied, the conclusions had to fall within accepted parameters, and analytical independence was lacking. In the post-Soviet period, the situation fundamentally changed. As Russia pursued democratization in the early 1990s, the entire system opened up, and new research opportunities presented themselves to both Western and Russian academics. In addition, following the demise of the Soviet Union, the field of Russian studies became cross-fertilized by scholars not trained as area specialists. That cross-fertilization brought new approaches, ideas, and methods to the study of postcommunist Russia. Surveys may take a variety of forms. They may be panel surveys or cross-sectional surveys; they may be random, stratified, concentrated on a single city, region, or

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country, or they may be cross-regional or cross-national. Surveys may be large or small. They may target a specific type of cohort. They may be conducted in person, over the phone, or through the mail.≤ This book employs panel and cross-sectional survey data that were gathered from cross-regional person-to-person interviews, using mostly closed-ended questions but a few open-ended ones as well. Surveys present both advantages and disadvantages to the researcher. On one hand, if survey questions are well-crafted and designed properly, the resulting survey data have enormous utility for providing more detailed information about the sample population than could be obtained by direct observation, interviews, or site visits by the researcher. Large cross-regional surveys, as used here, provide masses of data that are able to be assembled much more quickly than if the researcher were to study each unit separately. The result is an ability to analyze broad patterns in distinct regions of Russia. Survey data allow hypotheses to be systemically tested and facilitate the development of middle-range theory. On the other hand, large cross-regional surveys by their nature may lack the depth and understanding that come from indepth individual case studies or long-term fieldwork. This study employs crossregional surveys, fieldwork, and a detailed knowledge of reform policies derived from a reading of specialized newspapers and journals. A key question for the use of survey data is their representativeness. In other words, do the data provide a realistic and representative picture of reality? Bias in the data can result from either initial selection or incomplete participation of those who are selected. In the surveys discussed below, the response rate was 95 percent or above, and so the second issue was not a problem. The first issue, bias from initial selection, is a valid concern, particularly in a country as large as Russia. A researcher would not want to survey in one area of one oblast and draw generalizations for the nation based on that sample. Nor would it be wise to survey only in the south (or the north) and generalize for the nation. At the same time, the cost of large-scale surveys is always an issue. Therefore, particularly in the later cross-sectional surveys (2001 and 2006), an attempt was made to introduce geographical diversity into the overall sample. In the 2006 survey, regions were chosen in each of the seven federal okrugs of Russia—in the north, south, east, and west, encompassing more than 10 percent of the regions of the Russian Federation. For these reasons, I am confident that the data and the findings used in this study are representative. A detailed explanation of the methodology and information about the regions appears below. Methodology for the Surveys The three distinct data sets used in this book are derived from surveys of rural households. The first data set comes from a panel survey of three Russian villages conducted in 1993, 1995, 1997, 1999, and 2003, funded by the Russian Academy of Sciences, the National Science Foundation, the Moscow Public Science Fund, the Ford Foundation, and the University of Missouri.≥ The panel surveys culminated with the 2003 wave. I helped design the 2003 questionnaire, and because this book

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253

is about contemporary land reform, the data from this wave of the panel survey are used more often than are those from the previous waves. A panel survey interviews the same households (or individuals) at different points in time, thereby making longitudinal analysis possible. For purposes of this book, some questions and responses are drawn from the 1995 wave for general comparative insights, although specific questions about land and more detailed analysis draw from the 2003 wave. The reason for this is that some questions were added as the investigators learned from previous rounds and as new interests and questions arose. The three regions studied in the panel surveys include Belgorod oblast, Rostov oblast, and Tver oblast. Belgorod and Rostov oblasts are located in the south, where land and climate are favorable for agriculture. The third oblast, Tver, is located in the north, in the so-called non–black earth zone of Russia, which generally is not conducive to planting. One village was selected for sampling in each oblast, and the same villages were surveyed in alternating waves. The original number of respondents in the first wave was 508, but due to deaths and out-migration, the size of the sample decreased over time. As a result, the findings reported in this book are based on only subjects who were alive and living in the village in each wave of the survey. Thus in 2003 n=382, reflecting the number of respondents who participated in each round of the surveys. In the 2003 round of the survey, 132 respondents were sampled in Rostov oblast, 131 in Belgorod oblast, and 119 in Tver oblast. One person from each household was interviewed, although information was collected about other members of the household as well. The second data set comes from a cross-sectional survey of 800 rural households in five regions conducted during the second half of 2001. This survey was funded by the NCEEER. I was the principal investigator and was instrumental in designing the questionnaire. Those five regions include Belgorod oblast, Krasnodar krai, Novgorod oblast, Volgograd oblast, and the Chuvash Republic. The pretest of the questions was conducted in June 2001 in Riazan oblast, followed by the full survey during July– October 2001. Within each of the five regions, four villages were selected within a raion for a total of twenty villages. Within each village, 40 households were surveyed, for a total sample of 800 households (160 in each region). A cross-section of different types of villages was used: small, middle-sized, economically weak, and economically strong. As with the previous panel surveys, one person from each household was interviewed, although information was collected about other members of the household as well. The questionnaire was made up of more than one hundred questions about various economic, political, social, and demographic aspects. The third data set comes from a cross-sectional survey of nine regions and 900 rural households conducted in 2006. This survey was also funded by the NCEEER, and again I was the principal investigator and was instrumental in designing the questionnaire. The nine regions include Altai krai, Amur oblast, Krasnodar krai, Voronezh oblast, Moscow oblast, Leningrad oblast, Kurgan oblast, Krasnoyarsk krai, and the Republic of Tatarstan. The pretest was conducted in Kaluga oblast in

254

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the first half of 2006. The regions were selected specifically for geographical diversity—the intent was to have a sample region from each part of the country and to add an ethnic component by the inclusion of Tatarstan. A total of ten raions and thirty-four villages were surveyed, with 100 households sampled in each region. As with the aforementioned surveys, one person from each household was interviewed, although information was collected about other members of the household as well. The questionnaire was made up of more than one hundred questions about various economic, political, social, and demographic aspects. A specific section of the survey asked more than thirty different questions about land relations. Interviews were conducted person-to-person by a research team from the Institute on Socio-Economic Studies of the Population (Russian Academy of Sciences, Moscow) led by Valeri Patsiorkovski and his wife Valentina. For all three sets of surveys, households to be surveyed were selected from the household list of permanent residents in each village, a list that is kept by the village administration for all households within its jurisdiction. This list, updated annually, contains demographic and social characteristics of the households in the village. For the 1993– 2003 panel waves and the 2001 survey, once the list was obtained for a specific village, households were selected randomly, a method that had the benefit of accurately capturing the demographic profile of rural Russia but had the disadvantage of over-weighting respondents who were female and older. The consequence is that this method led, perhaps, to an understatement of rural change and the types of change that were occurring. In order to compensate, the 2006 survey used a stratified sample in order to lessen the presence of older females and to capture more of the economically active cohort. Some of the basic socioeconomic and demographic characteristics of households participating in the 1995, 2001, 2003, and 2006 surveys are indicated in tables D.1, D.2, and D.3. Taken together, the data sets used for this book provide important insights into Russia’s land reform, in particular, how rural households and individuals responded to land reform policies that were begun in the early 1990s. The panel surveys allow change over time to be analyzed, although for this book they are used mainly as contextual benchmarks because they were not originally designed to measure land reform or responses to it. More important for my purposes is the ‘‘snapshot’’ provided by the cross-sectional 2001 survey, which was based on a larger and more extensive household sample. Central to the analysis is the nine-region 2006 survey, the questions for which were specifically designed to gather information about land reform. The data used herein make up the most complete set of data on Russian land reform in existence. Population Trends in Raions Where Surveys Were Conducted Responses to land reform policies are affected by many different factors, and one of the key factors concerns rural demographics. It is a truism, but important (if overstated here): if there are no people, there can’t be private landownership. This

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Table D.1. Basic socioeconomic profile of respondents, 1995–2006

Male Female Family size=1 Family size=2 Family size=3 Family size=4 Family size=5+ Aged 18–29 Aged 30–39 Aged 40–49 Aged 50–59 Aged 60+ Employed full-time Employed part-time Unemployed Retired Works in the village Works in other village Works in raion center Works in city

1995 (%)

2001 (%)

2003 (%)

2006 (%)

26 74 16 26 16 25 17 11 25 15 17 32 47 6 2 39 NA NA NA NA

33 67 16 27 20 19 19 11 15 19 14 42 34 2 8 45 NA NA NA NA

26 74 25 25 15 19 16 1 15 25 13 46 33 2 5 50 38 1 1 1

48 52 10 25 22 23 19 11 20 25 18 26 51 1 6 29 47 2 8 6

Sources: Author’s survey data, 1995 (n=382); 2001 (n=800); 2003 (n=382); 2006 (n=900). Note: NA=data not available; question was not asked about respondent. Percentages have been rounded. The 1995 and 2003 data are directly comparable. The other data are meant to be informative about the characteristics of respondents. section provides some general information about the population in raions where the surveys were conducted for the purpose of providing the reader with a context for understanding the responses to reform policies. The discussion is organized chronologically, beginning with the panel surveys begun in 1993. THE ∞ΩΩ≥–≤≠≠≥ PANEL SURVEYS

The 1993–2003 surveys were conducted in three raions: Belgorod oblast, Rakitianskii raion; Rostov oblast, Matveevo-Kurganskii raion; and Tver oblast, Torzhokskii raion. ∞ In 1993, Rakitianskii raion had a total permanent population of 35,400, of which 15,700 (44 percent) were rural dwellers. On January 1, 2006, the

Table D.2. Demographic structure of households, 1995–2006

Single person Retired couple Employed couple, no children at home Employed couple w/children at home Employed couple w/children at home and other adults Single parents Other

1995 (%)

2001 (%)

2003 (%)

2006 (%)

17 9 8

16 14 6

25 12 5

10 11 7

15

22

16

21

12

20

17

20

3 17

2 21

2 24

1 29

Sources: Author’s survey data, 2001 (n=800); 2003 (n=382); 2006 (n=900). Note: Percentages have been rounded. The 1995 and 2003 data are directly comparable. The other data are meant to be informative about the demographic structure of households. Table D.3. Social classification of households, 1995–2006

Leadership/management Specialist Clerical Farm worker Private farmer Pensioner Other

1995 (%)

2001 (%)

2003 (%)

2006 (%)

7 10 7 46 1 28 1

3 9 7 40 1 36 5

5 11 6 28 4 42 4

4 12 15 39 1 23 6

Sources: Author’s survey data, 2001 (n=800); 2003 (n=382); 2006 (n=900). Note: Percentages have been rounded. The 1995 and 2003 data are directly comparable. The other data are meant to be informative about the social classification of households.

256

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257

Table D.4. Rural population trends in raions surveyed during 1993–2003

Raion

Population change, 1993–2006

Population on 1.1.1993

Population on 1.1.2000

Population on 1.1.2006

15,700

15,400

15,234

–466

29,900

44,600

43,786

NA

27,000

25,800

23,244

–3,756

Rakitianskii raion (Belgorod) Matveevo-Kurganskii raion (Rostov) Torzhokskii raion (Tver)

Sources: Chislennost’ naseleniia Rossiiskoi Federatsii po gorodam, rabochim poselkam i raionam na 1 Ianvaria 1993 g. (Moscow: Goskomstat, 1993); Chislennost’ naseleniia Rossiiskoi Federatsii po gorodam, poselkam gorodskogo tipa i raionam na 1 Ianvaria 2000g. (Moscow: Goskomstat, 2000); and Chislennost’ naseleniia Rossiiskoi Federatsii po gorodam, poselkam gorodskogo tipa i raionam na 1 Ianvaria 2006 goda (Moscow: Rosstat, 2006). Note: NA=not available due to change in classification.

total population had declined to 34,200, and the rural population numbered 15,234, or 44.5 percent. ∞ In Matveevo-Kurganskii raion in 1993, the total permanent population was 44,000, of which 29,900 (68 percent) were rural dwellers. On January 1, 2006, the total population had declined to 43,786, all of whom are considered rural, due to a change in administrative classification. ∞ In 1993, Torzhokskii raion had a total permanent population of 27,000, all of whom were rural. On January 1, 2006, the total population had declined to 23,244, all of whom were classified as rural. Rural population data and trends for these raions are illustrated in table D.4. During 1993–2000, in the two raions that did not experience an administrative change the rural population declined, with the greatest reduction occurring in the northern location, Torzhokskii raion. This fact comports with other analysis that shows migratory outflows from rural areas in Russia’s non–black earth zone. After 2000, all three raions experienced a decline in rural population. THE ≤≠≠∞ SURVEY

The 2001 survey was conducted in five regions and raions: Belgorod oblast, Krasnogvardeiskii raion; Volgograd oblast, Uriupinskii raion; Krasnodar krai, Kushchevskii raion; Novgorod oblast, Okulovskii raion; and the Republic of Chuvashia, Tsivil’skii raion.

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Table D.5. Rural population trends in raions surveyed in 2001

Raion Krasnogvardeiskii raion (Belgorod) Uriupinskii raion (Volgograd) Kushchevskii raion (Krasnodar krai) Okulovskii raion (Novgorod) Tsivil’skii raion (Chuvashia)

Population on 1.1.1993

Population on 1.1.2002

Population on 1.1.2006

Population change, 1993–2006

38,500

36,077

33,938

–4,562

33,600

30,615

29,952

–3,648

69,300

70,513

70,355

+1,055

10,600

9,700

8,993

–1,607

26,500

25,777

25,236

–1,264

Sources: Chislennost’ naseleniia Rossiiskoi Federatsii po gorodam, rabochim poselkam i raionam na 1 Ianvaria 1993 g. (Moscow: Goskomstat, 1993); Chislennost’ naseleniia Rossiiskoi Federatsii (Moscow: Goskomstat, 2002); and Chislennost’ naseleniia Rossiiskoi Federatsii po gorodam, poselkam gorodskogo tipa i raionam na 1 Ianvaria 2006 goda (Moscow: Rosstat, 2006). ∞ In 1993, Krasnogvardeiskii raion had a total permanent population of 46,400, of whom 38,500 (83 percent) were rural dwellers. On January 1, 2006, the total population had declined to 41,863, and the rural population was 33,938, or 81 percent of the total. ∞ In Uriupinskii raion in 1993, the total permanent population was 33,600, all of whom were classified as rural. On January 1, 2006, the total population had declined to 29,952, all of whom were classified as rural. ∞ In 1993, Kushchevskii raion had a total permanent population of 69,300, all of whom were considered rural residents. On January 1, 2006, the total population had increased to 70,355, all of whom were rural residents. ∞ In 1993, Okulovskii raion had a total permanent population of 35,500, of whom 10,600 (30 percent) were rural. On January 1, 2006, the total population declined to 28,842, of whom 8,993 (31 percent) were rural dwellers. ∞ Finally, in 1993, Tsivil’skii raion had a total permanent population of 37,100, of whom 26,500 (71 percent) were rural. On January 1, 2006, the total population increased to 38,157, of whom 25,236 (66 percent) were rural. Rural population data and trends for these raions are illustrated in table D.5. The table shows that four of the five raions experienced declines in rural population during 1993–2006. The one exception was Kushchevskii raion in Krasnodar krai.

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THE ≤≠≠∏ SURVEY

The 2006 survey was conducted in ten raions: Altai krai, Pervomaiskii raion; Amur oblast, Zeiskii raion; Kurgan oblast, Shadrinskii raion; Krasnodar krai, Labinskii raion; Krasnoyarsk krai, Minusinskii raion; Leningrad oblast, Luzhskii raion; Moscow oblast, Kolomenskii and Volokolamskii raions; the Republic of Tatarstan, Buinskii raion; and Voronezh oblast, Liskinskii raion. ∞ In 1993, Pervomaiskii raion had a total permanent population of 51,800, all of whom were classified as rural dwellers. In 2006 the raion’s total permanent population declined to 48,790, all of whom were rural. ∞ In 1993, Zeiskii raion had a total permanent population of 28,500, of whom 25,500 (89 percent) were rural dwellers. In 2006, the raion’s total permanent population was 20,318, all of whom were classified as rural (in the interim there was presumably an administrative change in classification). ∞ In 1993, Shadrinskii raion had a total permanent population of 36,800, all of whom were rural. In 2006, the raion’s total permanent population was 32,383, all of whom were rural. ∞ In 1993, Labinskii raion had a total permanent population of 39,000, all of whom were rural. In 2006, the raion’s total permanent population was 37,812, all of whom were rural. ∞ In 1993, Minusinskii raion had a total permanent population of 26,700, all of whom were rural. In 2006, the raion’s total permanent population was 25,359, all of whom were rural. ∞ In 1993, Luzhskii raion had a total permanent population of 45,800, of whom 40,200 (88 percent) were classified as rural. In 2006, the raion’s total permanent population was 39,299, of whom 36,165 (92 percent) were classified as rural. ∞ In 1993, Kolomenskii raion had a total permanent population of 43,400, of whom 39,600 (91 percent) were rural dwellers. In 2006, the raion’s total permanent population was 40,410, of whom 36,736 (91 percent) were rural. ∞ In 1993, Volokolamskii had a total permanent population of 36,100, of whom 28,500 (79 percent) were rural dwellers. In 2006, the raion’s total permanent population was 31,701, of whom 28,518 (90 percent) were rural. ∞ In 1993, Buinskii raion had a total permanent population of 45,800, of whom 28,300 (62 percent) were rural dwellers. In 2006, the raion’s total permanent population was 26,446, all of whom were rural (in the interim there was presumably an administrative change in classification). ∞ In 1993, Liskinskii raion had a total permanent population of 47,700, of whom 41,600 (87 percent) were rural dwellers. In 2006, the raion’s total permanent population was 101,065, of whom 41,813 (41 percent) were rural. In the interim there was presumably an administrative change in classification that accounted for the increase in the total population in the raion.

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Table D.6. Rural population trends in raions surveyed in 2006

Raion Pervomaiskii raion (Altai krai) Zeiskii raion (Amur) Shadrinskii raion (Kurgan) Labinskii raion (Krasnodar) Minusinskii raion (Krasnoyarsk) Luzhskii raion (Leningrad) Volokolamskii raion (Moscow) Kolomenskii raion (Moscow) Buinskii raion (Tatarstan) Liskinskii raion (Voronezh)

Population on 1.1.1993

Population on 1.1.2000

Population on 1.1.2006

Population change, 1993–2006

51,800

45,700

48,790

–3,010

25,500 36,800

22,200 36,600

20,318 32,383

–5,182 –4,417

39,000

39,600

37,812

–1,188

26,700

27,500

23,359

–3,341

40,200

40,900

36,165

–4,035

28,500

26,900

28,518

+18

39,600

38,200

36,736

–2,864

28,300

27,200

26,446

–1,854

41,600

42,600

41,813

+213

Sources: Chislennost’ naseleniia Rossiiskoi Federatsii po gorodam, rabochim poselkam i raionam na 1 Ianvaria 1993 g. (Moscow: Goskomstat, 1993); Chislennost’ naseleniia Rossiiskoi Federatsii po gorodam, poselkam gorodskogo tipa i raionam na 1 Ianvaria 2000 g. (Moscow: Goskomstat, 2000); and Chislennost’ naseleniia Rossiiskoi Federatsii po gorodam, poselkam gorodskogo tipa i raionam na 1 Ianvaria 2006 goda (Moscow: Rosstat, 2006). Rural population data and trends for these raions are illustrated in table D.6. Of the ten raions that were surveyed (two in Moscow oblast), by 2006 eight had experienced a decline in rural populations compared to 1993. Overall, of the eighteen raions that were surveyed, fourteen experienced a decline in rural population, two had a marginal increase, one had a significant increase, and in one raion the figure was indeterminate due to administrative changes. These rural population trends are important because as shown in Chapter 7, there is a strong relationship among household labor, household land holdings, and land enlargement.

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Locations of Raions and Villages Where Surveys Were Conducted One of the strongest influences on household food production, aside from human capital, is proximity of a household to an urban center.∂ This is so because proximity means that demand for food will be higher, infrastructure and roads will probably be relatively better, and access to farmers’ markets will be improved. Previous research found that households that have acquired more land or have more land in general tend to produce more food, and some of those households also sell more food, thereby contributing to household income.∑ This section discusses the proximity of the villages that were surveyed to an urban center.∏ The implicit assumption is that proximity to an urban center or lack thereof will affect incentives to acquire more land as an indirect variable affecting household food production. For each survey, the discussion proceeds by oblast and raion, indicating the name of the village and its proximity to an urban center, usually the raion center. VILLAGES SURVEYED DURING ∞ΩΩ≥–≤≠≠≥

In the 1993–2003 panel surveys, three villages were sampled, one in each of the three oblasts and raions. ∞ In Belgorod oblast (Rakitianskii raion), the village of Vengerovka was sampled. The raion is located in the northwest part of the oblast. Vengerovka is located 15 kilometers from the raion center, Rakitnoe, which in 1993 had a population of 11,000. The village is located 80 kilometers to the northwest of the oblast center, the city of Belgorod, whose permanent population in 1993 numbered 313,000. ∞ In Rostov oblast (Matveevo-Kurganskii raion), the village of Latonovo was sampled. The raion is located in the northwest part of the oblast. Latonovo is located 18 kilometers from a railroad station and the raion center, MatveevKurgan, with a population of about 14,000 in 1993. The closest large city, Taganrog, is more than 40 kilometers away and had a population of 291,000 in 1993. It is also more than 100 kilometers from the oblast center, the city of Rostov-on-the-Don, with more than one million residents in 1993. ∞ In Tver oblast (Torzhokskii raion), the village of Bol’shoe Sviatstovo was sampled. The raion is located in the center of the oblast. Bol’shoe Sviatstovo is located 15 kilometers to the northwest of the raion center, Torzhok, with a population of 17,600 in 1993. Torzhok is located about 70 kilometers to the northwest of the oblast center, the city of Tver, which had a population of 454,100 in 1993. VILLAGES SURVEYED IN ≤≠≠∞

The 2001 survey was conducted in five raions, with a total of twenty villages.

Belgorod oblast, Krasnogvardeiskii raion The raion is located in the eastern part of the oblast. Four villages were surveyed in the raion.

262

Appendix D ∞ Veseloe is located 30 kilometers due west of the raion center, Krasnogvardeiskoe. Krasnogvardeiskoe had a population of 7,600 in 2000. Veseloe is located 110 kilometers east of the oblast center, the city of Belgorod, which had a population of 339,800 in 2000. ∞ Zasosno is located on the southern outskirts of the raion center, Krasnogvardeiskoe. ∞ Kazatskoe is located 15 kilometers northeast of the raion center and 150 kilometers east of the city of Belgorod. ∞ Streletskoe is located 15 kilometers north-northeast of the raion center and 150 kilometers east of the city of Belgorod.

Volgograd oblast, Uriupinskii raion The raion is located in the northwest corner of the oblast, about 30–35 kilometers from the border with Voronezh oblast. Five villages were surveyed in the raion, all of which are several hundred kilometers from the oblast center, the city of Volgograd, which is located in the southeast corner of the oblast. Volgograd had a population of more than one million in 2000. ∞ Besplemianovskii is located close to the right bank of the River Khoper and 30 kilometers southwest of the raion center, Uriupinsk, which had a population of 42,500 in 2000. ∞ Dobrinka is located close to the right bank of the River Khoper and 20 kilometers southwest of the raion center. ∞ Dubovskii is located 25 kilometers to the south of the raion center. ∞ Katovskii is located on the left bank of the River Khoper and 10 kilometers to the north of the raion center. ∞ Mikhailovskaia is located on the left bank of the River Khoper and 25 kilometers to the north of the raion center.

Krasnodar krai, Kushchevskii raion The raion is located in the northern part of the krai near the border with Rostov oblast. Four villages in the raion were surveyed. All four villages are more than 200 kilometers from the oblast center, the city of Krasnodar, which had a population of 755,200 in 2000. The closest large city, Rostov-on-the-Don, is about 65 kilometers to the north. The nearest medium-sized city to the villages is Tikhoretsk, with a population of 66,700 in 2000. ∞ Kartushina-Balka is located 10 kilometers to the north of the raion center, Kushchevskaia, the population of which is unlisted. ∞ Novoivanovskoe is located 15 kilometers to the east of the raion center. ∞ Razdol’noe is located 25 kilometers to the north of the raion center. ∞ Shkurinakaia is located 25 kilometers to the west of the raion center.

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Novgorod oblast, Okulovskii raion The raion is located in the center-east of the oblast, to the east of the oblast center, the city of Novgorod. The city of Novgorod is located about 120 kilometers to the west of the villages. Novgorod had a population of 236,900 in 2000. The nearest medium-sized city, Borovichi, located about 35 kilometers to the east, had a population of 60,200 in 2000. No significant urban centers are located to the west between the city of Novgorod and Okulovka. Four villages were surveyed in the raion. ∞ Berezovik is located 12 kilometers to the west of the raion center, Okulovka, which had a population of 15,300 in 2000. ∞ Borovenka is located 20 kilometers to the northwest of the raion center. ∞ Mel’nitsy is located 22 kilometers to the west of the raion center. ∞ Ozerki is located 8 kilometers to the southeast of the raion center.

The Republic of Chuvashia, Tsivil’skii raion The raion is located in the northern part of the republic. The raion center is located about 30 kilometers to the south of the oblast center, Cheboksary, which had a population of 472,300 in 2000. Located about 15 kilometers to the east of Cheboksary is Novocheboksarsk, which had a population of 124,800 in 2000. The raion center, Tsivil’sk, is about 25 kilometers to the south of Novocheboksarsk. Four villages in the raion were surveyed. ∞ Vurmankasy-Munsiut is located 15 kilometers to the east of the raion center, Tsivil’sk, which had a population of 11,100 in 2000. ∞ Mikhailovka is located 6 kilometers to the southwest of the raion center. ∞ Tyvsi is located 10 kilometers to the northeast of the raion center. ∞ Churachiki is located 15 kilometers to the south of the raion center. VILLAGES SURVEYED IN ≤≠≠∏

The 2006 survey was conducted in nine regions and ten raions, totaling thirtyfour villages.

Altai krai, Pervomaiskii raion The raion is located in the northern part of the krai. Four villages with relatively good proximity to two cities were surveyed. The city of Novoaltaisk sits on the east bank of the River Ob, while the oblast center, the city of Barnaul, is located on the west bank of the Ob and had a population of 604,187 in 2006. ∞ Pervomaiskoe is located about 40 kilometers to the north-northeast of the raion center, Novoaltaisk, which had a population of 73,889 in 2006. ∞ Bobrovka is located 25 kilometers to the south of the raion center. ∞ Zudilovo is located 5 kilometers to the north of the raion center. ∞ Zhuravlikha is located 25 kilometers to the northeast of the raion center.

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Amur oblast, Zeiskii raion Zeiskii raion is located in the center-north of the oblast, several hundred kilometers from the oblast center, the city of Blagoveshchensk, which is located in the southeast corner of the oblast. Three villages were surveyed, and all three are located about 350–375 kilometers to the north of the oblast center, the city of Blagoveshchensk, which in 2006 had a population of 217,485. ∞ Sosnovyi bor is located 5 kilometers to the south-southeast of the raion center, Zeia, which had a population of 27,300 in 2006. ∞ Ovsianka is located 35 kilometers to the southwest of the raion center. ∞ Zarechnaia Sloboda is located 8 kilometers to the south of the raion center, on the other side of the Zeia River from the city of Zeia.

Kurgan oblast, Shadrinskii raion The raion is located in the north-northwestern part of the oblast. Four villages in the raion were surveyed, and all four villages are located more than 100 kilometers from the oblast center, the city of Kurgan, which is located to the east of Shadrinskii raion. Kurgan had a population of 329,981 in 2006. ∞ Myl’nikovo is located 15 kilometers to the west of the raion center, the city of Shadrinsk, which had a population of 79,519 in 2006. ∞ Krasnomyl’skoe is located 20 kilometers to the west of the raion center. ∞ Chistoprudnoe is located about 30 kilometers to the southeast of the raion center. ∞ Shakhmatovo is located about 35 kilometers to the southeast of the raion center.

Krasnodar krai, Labinskii raion The raion is located in the southeastern part of the krai. The raion center, the city of Labinsk, is located about 150 kilometers to the east of the oblast center, the city of Krasnodar. The city of Krasnodar had a population of 779,663 in 2006. Four villages in the raion were surveyed. ∞ Pervaia Siniukha is located 40 kilometers due east of the raion center, Labinsk. In 2006, Labinsk had a population of 62,679. ∞ Voznesenskaia is located 17 kilometers southeast of the raion center. ∞ Chamlykskaia is located 20 kilometers northeast of the raion center. ∞ Vladimirskaia is located 20 kilometers south of the raion center.

Krasnoyarsk krai, Minusinskii raion The raion is located in the south of the krai. The raion center, the city of Minusinsk, is located about 275 kilometers to the south of the krai center, the city of Krasnoyarsk. In 2006 Krasnoyarsk had a population of 921,669. Three villages were surveyed in the raion.

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∞ Tigritskoe is located 60 kilometers to the east-southeast of the raion center, Minusinsk. In 2006, Minusinsk had a population of 67,361. ∞ Znamenka is located about 40 kilometers to the south of the raion center. ∞ Selivanikha is located 10 kilometers to the northwest of the raion center.

Leningrad oblast, Luzhskii raion The raion is located in the south of the oblast, bordering Pskov oblast. The raion center, the city of Luga, is located about 125 kilometers to the south of St. Petersburg, which in 2006 had a population of 4.58 million. The closest large city to the raion center is Novgorod, located about 85 kilometers to the east. In 2006, Novgorod had a population of 217,706. Four villages were surveyed in the raion. ∞ Zaklin’e is located less than 10 kilometers to the east of the raion center, Luga, which in 2006 had a population of 39,426. ∞ Dzerzhinskoe is located about 20 kilometers to the south of the raion center. ∞ Skreblovo is located 40 kilometers to the south of the raion center. ∞ Mezhozernyi is located about 45 kilometers to the south of the raion center.

Moscow oblast, Volokolamskii raion The raion is located in the west of the oblast. The raion center, Volokolamsk, is located 100 kilometers to the west of the city of Moscow. In 2006, the city of Moscow had 10.4 million people. Two villages were surveyed in the raion. ∞ Teriaevo is located 25 kilometers to the northeast of the raion center, Volokolamsk, which in 2006 had a population of 24,548. ∞ Zolevo is located 17 kilometers due east of the raion center.

Moscow oblast, Kolomenskii raion The raion is located in the southeast of the oblast. The raion center, Kolomna, is located about 100 kilometers southeast of the city of Moscow. Two villages were surveyed in the raion. ∞ Zarudnia is located 25 kilometers to the east of the raion center, Kolomna, which in 2006 had a population of 148,020. ∞ Korobcheevo is located 15 kilometers to the east of the raion center.

Republic of Tatarstan, Buinskii raion The raion is located in the far southwest of the republic. The raion center, the city of Buinsk, is located about 105 kilometers to the southwest of the city of Kazan, which is the capital of the republic. In 2006, Kazan had a population of 1.12 million. There are no cities of significant size between Buinsk and Kazan. Four villages were surveyed in the raion. ∞ Meshcheriakovo is located 5 kilometers to the south of the raion center, Buinsk. In 2006, Buinsk had a population of 19,676.

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Appendix D ∞ Cherki-Kil’durazy is located 15 kilometers to the north of the raion center. ∞ Nurlaty is located 25 kilometers to the northwest of the raion center. ∞ Novye Tinchali is located 35 kilometers to the southwest of the raion center.

Voronezh oblast, Liskinskii raion The raion is located in the center-western part of the oblast. The raion center, the city of Liski, is located about 75–80 kilometers to the south of the oblast center, Voronezh. In 2006, Voronezh had a population of 926,499. No cities of any significant size lie between Liski and Voronezh. Four villages were surveyed in the raion. ∞ Srednyi Ikorets is located 20 kilometers to the northeast of the raion center, Liski. In 2006, Liski had a population of 53,627. ∞ Kolybelka is located 40 kilometers to the southeast of the raion center, on the west bank of the Don River. ∞ Tresorukovo is located 30 kilometers to the north of the raion center. ∞ Petropavlovka is located 40 kilometers to the southeast of the raion center, on the east bank of the Don River.

Notes

Chapter 1. Russia’s Contemporary Land Reform: An Overview 1. The four land reforms include the Stolypin reforms, the Bolshevik land reform, begun in 1917–18, Stalin’s collectivization of the 1930s, which was land reform by force, and contemporary land reform, begun in earnest in 1990 and continuing to the present. 2. Oliver E. Williamson, The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting (New York: Collier Macmillan, 1985); Douglass C. North, Institutions, Institutional Change, and Economic Performance (New York: Cambridge University Press, 1990). 3. See David J. O’Brien, Valeri V. Patsiorkovski, and Stephen K. Wegren, ‘‘Household Capital, Sources of Income and Stratification in Rural Russian Households,’’ East European Countryside 14 (2008): 27–42. 4. See Mary C. Brinton and Victor Nee, The New Institutionalism in Sociology (New York: Russell Sage, 1998); Mark Granovetter, ‘‘The Strength of Weak Ties,’’ American Journal of Sociology 78, no. 2 (May 1973): 1360–80. 5. See North, Institutions, Institutional Change, and Economic Performance, 10–11; Paul Pierson, Politics in Time (Princeton: Princeton University Press, 2004). 6. Kurt Weyland, ‘‘Toward a New Theory of Institutional Change,’’ World Politics 60, no. 2 (January 2008): 282. 7. See Mark Granovetter, ‘‘Economic Action and Social Structure: The Problem of Embeddedness,’’ American Journal of Sociology 91, no. 3 (November 1985): 481–510; James C. Scott, The Moral Economy of the Peasant: Rebellion and Subsistence in Southeast Asia (New Haven: Yale University Press, 1976).

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8. For example, Creed argues that ideology was a significant factor in struggles over land reform in Bulgaria. Gerald W. Creed, ‘‘The Politics of Agriculture: Identity and Socialist Sentiment in Bulgaria,’’ Slavic Review 54, no. 4 (Winter 1995): 843–68. Verdery and Allina-Pisano emphasize the way local reactions affected land reform implementation and outcomes. Katherine Verdery, The Vanishing Hectare: Property and Value in Postsocialist Translyvania (Ithaca: Cornell University Press, 2003); Jessica Allina-Pisano, The Post-Soviet Potemkin Village: Politics and Property Rights in the Black Earth (New York: Cambridge University Press, 2008). 9. For an analysis of the impact of legal institutions on Russia’s economic reform, see Kathryn Hendley, ‘‘Legal Development in Post-Soviet Russia,’’ Post-Soviet Affairs 13, no. 3 (July–September 1997): 228–51; Kathryn Hendley, ‘‘Struggling to Survive: A Case Study of Adjustment at a Russian Enterprise,’’ Europe-Asia Studies 50, no. 1 (1998): 91– 120; Andrew Barnes, Owning Russia: The Struggle over Factories, Farms, and Power (Ithaca: Cornell University Press, 2006), chap. 1. Insiders’ views of the effects of reform institutions on Russian land reform are Craig L. Infanger, ‘‘An Inside View of Russian Agrarian Reform,’’ Soviet and Post-Soviet Review 21, nos. 2–3 (1994): 189–210, and Louise Perrotta, ‘‘Divergent Responses to Land Reform and Agricultural Restructuring in the Russian Federation,’’ in Surviving Post-Socialism: Local Strategies and Regional Responses in Eastern Europe and the Former Soviet Union, ed. Sue Bridger and Frances Pine (London: Routledge, 1998), chap. 9. Both of these people worked as consultants in Russia. 10. For example, Frances Pine and Sue Bridger write about ‘‘cultures of survival,’’ which may overlap with resistance but may also be analytically distinct. See Frances Pine and Sue Bridger, ‘‘Introduction: Transitions to Post-Socialism and Cultures of Survival,’’ in Local Strategies and Regional Responses in Eastern Europe and the Former Soviet Union, ed. Sue Bridger and Frances Pine (London: Routledge, 1998), chap. 1. Martha Lampland discusses the problems of legacy, social capital, and the roles of formalinformal economic relations, arguing with regard to the latter that analysts have tended to draw artificial boundaries between the two. Martha Lampland, ‘‘The Advantages of Being Collectivized: Cooperative Farm Managers in the Postsocialist Economy,’’ in C. M. Hahn, ed., Postsocialism: Ideals, Ideologies and Practices in Eurasia, ed. C. M. Hahn (London: Routledge, 2002), chap. 2. 11. See Chris Hahn, ed., The Postsocialist Agrarian Question: Property Relations and the Rural Condition (Munster: Lit Verlag, 2003), chap. 1. 12. Allina-Pisano, Post-Soviet Potemkin Village, 21. 13. For example, while industrial wholesale prices were freed from state regulation on the introduction of shock therapy in January 1992, it was well into 1993 that wholesale prices for grains were liberalized, followed by the liberalization of retail bread prices in the latter part of 1993. 14. Stephen Fortescue, Russia’s Oil Barons and Metal Magnates: Oligarchs and the State in Transition (New York: Palgrave Macmillan, 2006), 53–54, 60. 15. Ibid., 43–65. 16. For the Russian banking industry, see, e.g., Juliet Johnson, A Fistful of Rubles: The Rise and Fall of the Russian Banking System (Ithaca: Cornell University Press, 2000). For other examples of shallow reform in Eastern European nations, see Olivier Blanchard, The Economics of Post-Communist Transition (Oxford: Clarendon, 1997), chap. 3.

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17. Eugenia Serova, ‘‘Results of Transformation of Russian Agri-Food Sector,’’ in Reflecting Transformation in Post-Socialist Rural Areas, ed. Maarit Heinonen, Jouko Nikula, Inna Kopoteva, and Leo Granberg (New Castle, U.K.: Cambridge Scholars, 2007), 19. 18. Other Western authors have concluded that on a per capita basis not much real land was distributed and have argued that this occurrence was due to resistance at different levels or blockage of reform policy. In contrast to those works, this book does not argue that land reform went awry because reform policies were not implemented or were blocked by official resistance. 19. The analysis herein is specific to agricultural land and not to broader agrarian reform. Several very useful books analyze Russia’s agrarian reform using different analytical foci. Chronologically, they are Stephen K. Wegren, Agriculture and the State in Soviet and Post-Soviet Russia (Pittsburgh: University of Pittsburgh Press, 1998); David J. O’Brien, Valeri V. Patsiorkovski, and Larry D. Dershem, Household Capital and the Agrarian Problem in Russia (Aldershot, U.K.: Ashgate, 2000); David J. O’Brien and Stephen K. Wegren, eds., Rural Reform in Post-Soviet Russia (Washington, D.C.: Woodrow Wilson Center Press; Baltimore: Johns Hopkins University Press, 2002); Stephen K. Wegren, The Moral Economy Reconsidered: Russia’s Search for Agrarian Capitalism (New York: Palgrave Macmillan, 2005); David J. O’Brien and Valery V. Patsiorkovsky, Measuring Social and Economic Change in Rural Russia: Surveys from 1991 to 2003 (Lanham, Md.: Lexington, 2006); Judith Pallott and Tatyana Nefedova, Russia’s Unknown Agriculture: Household Production in Post-Socialist Rural Russia (New York: Oxford University Press, 2007); and Allina-Pisano, Post-Soviet Potemkin Village. Land reform focuses on the methods of privatization and distribution of land, property rights, patterns of land use, and different aspects of the land market. An analysis of agrarian reform would focus, in contrast, on the reorganization of collective farms (which I mention only in passing as it relates to land distribution), trends in food production among different types of producers, the privatization of processing plants, food trade policies (both domestic and foreign), terms of trade issues, rural credit, banks, and investment, changes in labor productivity and labor-related policies, and the effects of reform policies on rural standards of living. There is, of course, interplay between land reform and agrarian reform, and land reform affects farming structures and operation, but this study focuses primarily on land. 20. See Barnes, Owning Russia; Allina-Pisano, Post-Soviet Potemkin Village. 21. An early analysis along this line was Don Van Atta, ed., The ‘‘Farmer Threat’’: The Political Economy of Agrarian Reform in Post-Soviet Russia (Boulder: Westview, 1993). 22. Carol Scott Leonard, ‘‘Rational Resistance to Land Privatization: The Response of Rural Producers to Agrarian Reforms in Pre- and Post-Soviet Russia,’’ Post-Soviet Geography and Economics 41, no. 8 (December 2000): 605–20. 23. Serova, ‘‘Results of Transformation of Russian Agri-Food Sector,’’ 11. 24. The argument for adaptation and change in rural Russia among different rural actors is explored in more detail in Wegren, Moral Economy Reconsidered, chaps. 2–4. 25. For Romania, see Katherine Verdery, ‘‘The Elasticity of Land: Problems of Property Restitution in Transylvania,’’ Slavic Review 53, no. 4 (Winter 1994): 1071–1109; Verdery, Vanishing Hectare.

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26. For an example in Belgorod oblast, see Wegren, Moral Economy Reconsidered, 73–74. Often it was the case that policy from above was inexact, contradictory, or unclear, and that necessitated repetition in legislation. When implementation or enforcement was weak, local leaders had room to maneuver. 27. The quotations are taken from Philip T. Hoffman, ‘‘Institutions and Agriculture in Old Regime France,’’ Politics and Society 16, no. 3 (June–September 1988): 242, 247, and 248, respectively. 28. North, Institutions, Institutional Change, and Economic Performance. 29. Robert H. Bates, Markets and States in Tropical Africa: The Political Basis of Agricultural Policies (Berkeley: University of California Press, 1981). 30. William C. Thiesenhusen, Broken Promises: Agrarian Reform and the Latin American Campesino (Boulder: Westview, 1995). 31. Ha-Joon Chang and Robert Rowthorn, The Role of the State in Economic Change (Oxford: Clarendon, 1995). 32. Daniel Treisman, The Architect of Government: Rethinking Political Decentralization (Cambridge: Cambridge University Press, 2007), 24–25. 33. Anders Aslund, Building Capitalism: The Transformation of the Former Soviet Bloc (Cambridge: Cambridge University Press, 2002), chap. 3. 34. Anders Aslund, How Russia Became a Market Economy (Washington, D.C.: Brookings Institution, 1995), chap. 3; Aslund, Building Capitalism, 76–82. 35. With respect to agriculture, see Infanger, ‘‘Inside View of Russian Agrarian Reform,’’ 189–210. 36. David Feeny, ‘‘The Development of Property Rights in Land: A Comparative Study,’’ in Toward a Political Economy of Development: A Rational Choice Perspective, ed. Robert H. Bates (Berkeley: University of California Press, 1988), 273. 37. See Serguey Braguinsky and Grigory Yavlinsky, Incentives and Institutions: The Transition to a Market Economy in Russia (Princeton: Princeton University Press, 2000), esp. chap. 4; Marshall I. Goldman, The Piratization of Russia: Russian Reform Goes Awry (London: Routledge, 2003); Andrei Shleifer, A Normal Country: Russia After Communism (Cambridge: Harvard University Press, 2005); Anders Aslund, How Capitalism Was Built: The Transformation of Central and Eastern Europe, Russia, and Central Asia (New York: Cambridge University Press, 2007). 38. Robert H. Bates, Beyond the Miracle of the Market: The Political Economy of Agrarian Development in Kenya, new ed. (New York: Cambridge University Press, 2005), 7. 39. Stephen F. Williams, Liberal Reform in an Illiberal Regime: The Creation of Private Property in Russia, 1906–1915 (Stanford: Hoover Institution Press, 2006). 40. Williams defines a liberal political system and society as one based on the rule of law, secure property rights, freedom of speech, a robust civil society, and a democratic political culture. Williams, Liberal Reform in an Illiberal Regime, 13–14. 41. Where this book differs from Willams’s is that I do not claim that contemporary land reform is moving an illiberal political regime toward democracy or liberalism. At the time of the Stolypin reforms 85–90 percent of Russian society consisted of peasants, and thus rural society was able to influence the nature of society at large because of its overwhelming size. One hundred years later, the demographic structure of contemporary

Notes to Pages 11–14

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Russia is considerably different (about 27 percent of the population is considered rural, most of whom differ from ‘‘real peasantry’’ in Third World states). Thus, I do not argue that Russia’s contemporary land reform is influencing the development of democracy— nor is this book about the development of democracy—in fact, a restrictive (‘‘illiberal’’) set of land reform policies is more a reflection of the nature of the political regime than a cause of it. Today, land reform has been impacted by political factors more than it has impacted the political system, and thus it is important to clarify the direction of the causal arrow. The point is that we should not be surprised that an illiberal political regime has adopted illiberal land reform policies. 42. For the most detailed political history of the Yeltsin period, see Peter Reddaway and Dmitri Glinski, The Tragedy of Russia’s Reforms: Market Bolshevism Against Democracy (Washington, D.C.: U.S. Institute of Peace, 2001). 43. For a concise definition and examination of managed democracy and its effects, see Timothy J. Colton and Michael McFaul, Popular Choice and Managed Democracy: The Russian Elections of 1999 and 2000 (Washington, D.C.: Brookings Institution, 2003), 206–23. 44. Serova, ‘‘Results of Transformation of Russian Agri-Food Sector,’’ 11. 45. See Stephen B. Butler and Sheila E. O’Leary, ‘‘Urban Land Allocation in the Russian Federation,’’ Post-Soviet Geography 36, no. 1 (January 1995): 13–40. For an updated analysis of urban land and the urban land market, see Gregory Kisunko and Jacqueline Coolidge, ‘‘Survey of Land and Real Estate Transactions in the Russian Federation,’’ World Bank Policy Research Working Paper no. 4115 (Washington, D.C.: World Bank, 2007). 46. That said, it is necessary to note that the 2001 Land Code is largely devoted to urban land; this necessitated a separate law for rural land transactions. See appendix C. 47. George Yaney, The Urge to Mobilize: Agrarian Reform in Russia, 1861–1930 (Urbana: University of Illinois Press, 1982), chaps. 5–9. 48. Alec Nove, An Economic History of the USSR (Middlesex, U.K.: Penguin, 1975), 150. 49. The literature about collectivization is quite large. A short list of the best-known monographs includes Moshe Lewin, Russian Peasants and Soviet Power: A Study of Collectivization (New York: Norton, 1968); R. W. Davies, The Socialist Offensive: The Collectivization of Soviet Agriculture, 1929–1930 (Cambridge: Harvard University Press, 1980); Robert Conquest, The Harvest of Sorrow: Soviet Collectivization and the Terror-Famine (New York: Oxford University Press, 1986); Lynne Viola, The Best Sons of the Fatherland: Workers in the Vanguard of Soviet Collectivization (New York: Oxford University Press, 1987); Sheila Fitzpatrick, Stalin’s Peasants: Resistance and Survival in the Russian Village After Collectivization (New York: Oxford University Press, 1994); Lynne Viola, Peasant Rebels Under Stalin: Collectivization and the Culture of Peasant Resistance (New York: Oxford University Press, 1996); Lynne Viola, V. P. Danilov, N. A. Ivnitskii, and Dennis Kozlov, eds., The War Against the Peasantry, 1927–1930: The Tragedy of the Russian Countryside (New Haven: Yale University Press, 2005). 50. For Romania, see Verdery, Vanishing Hectare; Verdery, ‘‘Elasticity of Land,’’ 1071– 1109. For Hungary, see Csaba Csaki and Zvi Lerman, ‘‘Land Reform and Farm Restructuring in Hungary During the 1990s,’’ in Land Reform in the Former Soviet Union and Eastern

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Europe, ed. Stephen K. Wegren (London: Routledge, 1998), 224–61; Istvan Harcsa, Imre Kovach, and Ivan Szelenyi, ‘‘The Price of Privatization: The Post-Communist Transformational Crisis of the Hungarian Agrarian System,’’ in Privatizing the Land: Rural Political Economy in Post-Communist Societies, ed. Ivan Szelenyi (London: Routledge, 1998), 214– 44; Nigel Swain, ‘‘Agricultural Restitution and Co-operative Transformation in the Czech Republic, Hungary, and Slovakia,’’ Europe-Asia Studies 51, no. 7 (1999): 1199–1219. 51. Nigel Swain, ‘‘Getting Land in Central Europe,’’ in After Socialism: Land Reform and Social Changes in Eastern Europe, ed. Ray Abrahams (Providence: Berghahn, 1996), 197. 52. For anecdotal evidence, see ibid., 197–200. 53. Zvi Lerman, Csaba Csaki, and Gershon Feder, Agriculture in Transition: Land Policies and Evolving Farm Structures in Transition Countries (Lanham, Md.: Lexington, 2004), 67–81. 54. See Swain, ‘‘Getting Land in Central Europe,’’ 194–95. 55. Peter C. Bloch, ‘‘Kyrgyzstan: ‘Almost Done, What Next?’ ’’ Problems of PostCommunism 49, no. 1 (January–February 2002): 53–62; Peter C. Bloch, ‘‘Land Privatization and Land Market Development: The ‘Unsuccessful’ Cases of Kyrgyzstan and Uzbekistan,’’ in Building Institutions in Post-Communist Agriculture: Land, Credit, and Assistance, ed. David A. J. Macey, William Pyle, and Stephen K. Wegren (Lanham, Md.: Lexington, 2004), 15–32. 56. Zvi Lerman, ‘‘Agricultural Development in Central Asia: A Survey of Uzbekistan, 2007–2008,’’ Eurasian Geography and Economics 49, no. 4 (July–August 2008): 484–85. 57. Swain, ‘‘Getting Land in Central Europe,’’ 195, 201–4. 58. Maarit Heinonen, ‘‘Multifunctional Farm Activities in the New Member States,’’ in Reflecting Transformation in Post-Socialist Rural Areas, ed. Maarit Heinonen, Jouko Nikula, Inna Kopoteva, and Leo Granberg (New Castle, U.K.: Cambridge Scholars, 2007), 146–47. 59. Zvi Lerman, ‘‘A Decade of Transition in Europe and Central Asia: Design and Impact of Land Reform,’’ in Transition, Institutions, and the Rural Sector, ed. Max Spoor (Lanham, Md.: Lexington, 2003), 13. 60. Katalin Kovacs, ‘‘Structures of Agricultural Land Use in Central Europe,’’ in Reflecting Transformation in Post-Socialist Rural Areas, ed. Maarit Heinonen, Jouko Nikula, Inna Kopoteva, and Leo Granberg (New Castle, U.K.: Cambridge Scholars, 2007), 87–114. 61. Ibid., 94–97. 62. Lerman, ‘‘Decade of Transition,’’ 16. 63. Ibid., 13. 64. Sel’skaia zhizn’, May 7–14, 2002, 5. 65. Valeri Patsiorkovski, David O’Brien, and Stephen K. Wegren, ‘‘Land Reform and Land Relations in Rural Russia,’’ East European Countryside 11 (2005): 5. The remaining 4.2 million land shares (41.9 million hectares) had not been allocated. 66. Grigory Ioffe, Tatyana Nefedova, and Ilya Zaslavsky, The End of Peasantry? The Disintegration of Rural Russia (Pittsburgh: University of Pittsburgh Press, 2006), 8–9. 67. Rossiiskii statisticheskii ezhegodnik (Moscow: Goskomstat, 2003), 399.

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68. Sel’skokhoziaistvennaia deiatel’nost’ krest’ianskikh (fermerskikh) khoziaistv v Rossii (Moscow: Goskomstat, 2000), 14. 69. Rossiiskii statisticheskii ezhegodnik, 399. 70. See Stephen K. Wegren, Valeri V. Patsiorkovski, and David J. O’Brien, ‘‘Beyond Stratification: The Emerging Class Structure in Rural Russia,’’ Journal of Agrarian Change 6, no. 3 (July 2006): 372–99. 71. Alain de Janvry, The Agrarian Question and Reformism in Latin America (Baltimore: Johns Hopkins University Press, 1981), esp. chaps. 3, 6. 72. Eric R. Wolf, Peasant Wars of the Twentieth Century (New York: Harper Torchbooks, 1969), chap. 1; Thiesenhusen, Broken Promises, chap. 2. 73. Hilton L. Root, Peasants and King in Burgundy: Agrarian Foundations of French Absolutism (Berkeley: University of California Press, 1987), chaps. 6, 7; Geroid Tanquary Robinson, Rural Russia Under the Old Regime (New York: Macmillan, 1932). 74. Wolf, Peasant Wars of the Twentieth Century, chaps. 3, 6; Thiesenhusen, Broken Promises, chap. 6. On the difficulty of mobilizing and controlling the Chinese peasantry in the 1940s, see Lucien Bianco, Peasants Without the Party: Grass-Roots Movements in Twentieth-Century China (Armonk, N.Y.: Sharpe, 2001), chaps. 11, 13. 75. Leon Trotsky, The History of the Russian Revolution, vol. 3 (New York: Monad, 1932), chap. 1; John Keep, The Russian Revolution: A Study in Mass Mobilization (New York: Norton, 1976), pt. 3. 76. More information about these nine regions is found in appendix D, but these regions were chosen because they form the base on which the analysis of household behavioral responses to land reform is presented. 77. See Wegren, Agriculture and the State, chap. 3. 78. See E. Lysenko, ‘‘Sovershenstvovanie form khoziaistvovaniia v agrarnom sektore,’’ Ekonomist, no. 10 (October 2007): 23. 79. S. Lipski, ‘‘Formy zemlepolzovaniia,’’ Ekonomist, no. 3 (March 2006): 90. 80. See Zvi Lerman, ‘‘Successful Land Privatization in Trans-Caucasia: Armenia, Azerbaijan, and Georgia,’’ in Building Institutions in Post-Communist Agriculture: Land, Credit, and Assistance, ed. David A. J. Macey, William Pyle, and Stephen K. Wegren (Lanham, Md.: Lexington, 2004), 53–75. 81. The twenty-million-hectare area includes private plots, collective and individual fruit and vegetable gardens, and private farms. Sel’skokhoziaistvennaia deiatel’nost’ khoziaistv naseleniia v Rossii (Moscow: Goskomstat, 2003), 12; Sel’skokhoziaistvennaia deiatel’nost’ krest’ianskikh (fermerskikh) khoziaistv v Rossii, 14. 82. Rossiia v tsifrakh (Moscow: Rosstat, 2007), 234. 83. The data from the Federal Cadastre agency differ from those given by Goskomstat; the latter indicate that there are 255,400 private farms occupying 20.5 million hectares of land and averaging more than 81 hectares per farm in 2006. Rossiia v tsifrakh (2007), 235. 84. In the late 1980s, official statistics indicated that 98 percent of kolkhoz families had a private plot. After that time, rural dwellers were allowed to privatize their private plot parcels for a small administrative fee and obtain certificates of land deeds guaranteeing ownership. 85. Zvi Lerman and Natalya Shagaida, Land Reform and Development of Agricultural

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Notes to Pages 22–24

Land Markets in Russia, Discussion Paper 2.05 (Jerusalem: Center for Agricultural Research, 2005), 7. A large portion of agricultural land that is not used for farming was transferred to state reserves, to be used for the creation of private farms, the expansion of household plots, or various municipal needs. Ibid. 86. Gosudarsvennyi (natsional’nyi) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2000 (Moscow: Federal Land Cadastre Service, 2001), 56. 87. Natalya Shagaida, ‘‘Living with Constraints: Russia’s Agricultural Land Market,’’ BASIS Brief, no. 36 (November 2005): 1. 88. The leasing of land for private farming is especially popular in southern Russia, particularly in Saratov and Samara oblasts, where more than 60 percent of private farmers’ land is rented. Generally, the average term for leased land is three to six years. The most common form of payment for leased land is payment in-kind to rural dwellers, and less than 10 percent of leases are based on monetary payments to local governments. V. Kataev, ‘‘Tendentsii razvitiia fermerskogo sektora,’’ Ekonomist, no. 2 (February 2007): 90. Payment for leased land may also include seasonal services to be provided by the private farmer to the household operating a private plot. 89. Sergei Sazonov and Damira Sazonova, ‘‘Development of Peasant Farms in Central Russia,’’ Comparative Economic Studies 47, no. 1 (March 2005): 105. 90. The calculation was based on the most common uses of land by rural dwellers, that is, private plots and private farms, and it used the following formula. I assumed that 46 percent of all private plot land is used by rural dwellers (based on the calculation of Pallot and Nefedova); this yields a figure of 3.2 million hectares. I multiplied that by 93 percent, based on the calculation of Shagaida, arriving at 2.9 million hectares; 60 percent of private farmers’ 15 million hectares multiplied by .8 = 7.2 million hectares; 3.2 + 7.2 = 10.4 million hectares, which is 4.7 percent of the 220 million hectares designated as agricultural land in 2006. See Judith Pallott and Tatyana Nefedova, ‘‘Geographical Differentiation in Household Plot Production in Rural Russia,’’ Eurasian Geography and Economics 44, no. 1 (January–February 2003): 43. 91. Zvi Lerman and Natalya Shagaida, ‘‘Land Policies and Agricultural Land Markets in Russia,’’ Land Use Policy 24, no. 1 (January 2007): 16. 92. Yu. P. Nasonova, ‘‘Rynok dolei iz zemel’ selkhoziaistvennogo naznacheniia: poblemy funktsionirovaniia,’’ Agrarnaia Rossiia, no. 2 (March–April 2007): 49–51. 93. Karen Brooks et al., ‘‘Agricultural Reform in Russia: A View from the Farm Level,’’ World Bank Discussion Papers no. 327 (Washington, D.C.: World Bank, 1996), 15–24, 29–33; Wegren, Agriculture and the State, 69–77, 152–66. 94. Of the 127.5 million hectares of land in private ownership, 112.7 million hectares were in the form of land shares. See Lerman and Shagaida, Land Reform and Development of Agricultural Land Markets in Russia, 9. 95. See Stephen K. Wegren, ‘‘The Development of Market Relations in Agricultural Land: The Case of Kostroma Oblast,’’ Post-Soviet Geography 36, no. 8 (October 1995): 496–512; Stephen K. Wegren, ‘‘Land Reform and the Land Market in Russia: Operation, Constraints, and Prospects,’’ Europe-Asia Studies 49, no. 6 (1997): 959–87; Stephen K. Wegren and Vladimir R. Belen’kiy, ‘‘The Political Economy of the Russian Land Market,’’ Problems of Post-Communism 45, no. 4 (July–August 1998): 56–66; Stephen K. Wegren and Vladimir R. Belen’kiy, ‘‘Change in Land Relations: The Russian Land Mar-

Notes to Pages 24–27

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ket,’’ in David J. O’Brien and Stephen K. Wegren, eds., Rural Reform in Post-Soviet Russia (Washington: Woodrow Wilson Center Press; Baltimore: Johns Hopkins University Press, 2002), 88–115; Stephen K. Wegren, ‘‘Why Rural Russians Participate in the Land Market: Socio-Economic Factors,’’ Post-Communist Economies 15, no. 4 (December 2003): 483–501; Natalya Shagaida and Eugenia Serova, ‘‘Formirovanie rynka zemli v sel’skom khoziaistve Rossii,’’ in Obzor ekonomicheskoi politiki Rossii za 2003 god (Moscow: TEIS, 2004), 271–88; Lerman and Shagaida, Land Reform and Development of Agricultural Land Markets in Russia; Natalya Shagaida, ‘‘Agricultural Land Market in Russia: Living with Constraints,’’ Comparative Economic Studies 47, no. 1 (March 2005): 127–40; Lerman and Shagaida, ‘‘Land Policies and Agricultural Land Markets in Russia,’’ 14–23. 96. Different types of users have different preferences. Agricultural land purchases are most common among private farmers, although private farmers also lease a large percentage of the land they cultivate. 97. Vasilii Uzun, ‘‘Adapting to a Market Economy: Changes in Russia’s Farm Structure, BASIS Brief, no. 34 (October 2005): 2. 98. Wegren and Belen’kiy, ‘‘Political Economy of the Russian Land Market,’’ 59–61; Shagaida and Serova, ‘‘Formirovanie rynka zemli v sel’skom khoziaistve Rossii,’’ 274; Lerman and Shagaida, Land Reform and Development of Agricultural Land Markets in Russia, 12. 99. Author’s calculations based on data found in Gosudarstvennyi (natsional’nyi) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2007 godu (Moscow: Federal’noe agentstvo ob’ektov nedvishimosti, 2008), 175. 100. Lerman and Shagaida, Land Reform and Development of Agricultural Land Markets in Russia, 8. 101. Interview with Natalya Shagaida, Moscow, December 18, 2006. 102. Gosudarstvennyi (natsional’nyi) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2007 godu, 175, 184; and see table 4.3 in this book. 103. Calculations are from Gosudarstvennyi (natsional’nyi) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2007 godu, 175, 184. 104. Calculated from ibid. 105. Dmitri Rylko and Robert W. Jolly, ‘‘Russia’s New Agricultural Operators: Their Emergence, Growth and Impact,’’ Comparative Economic Studies 47, no. 1 (March 2005): 115–26. 106. Impact is defined as change in dominant food producers, a significant change in landownership, and significant change in social and class structure. 107. Allina-Pisano, Post-Soviet Potemkin Village, 20. 108. Ibid., chap. 2. 109. The fullest and most detailed description of the privatization of a collective farm and its dissolution in English is Ilkka Alanen, ‘‘The Dissolution of Kanepi Kolkhoz,’’ in Decollectivisation: Destruction and Disillusionment, ed. Ilkka Alanen, Jouko Nikula, Helvi Poder, and Rein Ruutsoo (Aldershot, U.K.: Ashgate, 2001), 63–276. 110. As Allina-Pisano notes, ‘‘local state institutions did not release their grasp as communism took its last breath. Instead, privatization provided an opportunity for the state to reassert its power at the local level.’’ Allina-Pisano, Post-Soviet Potemkin Village,

276

Notes to Pages 27–31

13. A similar argument was originally made in Wegren, Agriculture and the State in Soviet and Post-Soviet Russia. 111. Jerry F. Hough, The Logic of Economic Reform in Russia (Washington, D.C.: Brookings Institution, 2001), 18.

Chapter 2. Politics and Property Rights in the Soviet Period 1. Prior to the Stolypin reforms, peasants had land rights only as users, and ownership was vested in the community. After 1917 landownership appeared to be vested in the community, but in reality land was owned by the state. I thank David Macey for this point. 2. Until 1958 private plot users were subject to obligatory deliveries and taxes on their production. These were gradually reduced and eventually eliminated, and in the 1980s they were replaced with a tax on land. S. Pshennikov, ed., Agrarian Relations Under Socialism (Moscow: USSR Academy of Sciences, 1987), 23. 3. V. E. Grigorovskii and M. A. Alekseev, Lichnoe podsobnoe khoziaistvo kolkhoznikov, rabochikh i sluzhashchikh v SSSR (Leningrad: Leningrad University, 1968), 36. 4. Karl-Eugen Wadekin, The Private Sector in Soviet Agriculture (Berkeley: University of California Press, 1973), 7–8. 5. V. B. Ostrovskii, ed., Lichnoe podsobnoe khoziaistvo v usloviiakh agropromyshlennoi integratsii (Moscow: Nauka, 1988), 51; Lichnoe podsobnoe khoziaistvo naseleniia v 1988 godu (Moscow: USSR Goskomstat, 1989), 3. 6. Wadekin, Private Sector in Soviet Agriculture, chaps. 8–10; Zhores A. Medvedev, Soviet Agriculture (New York: Norton, 1987), chap. 11; Stephen K. Wegren, ‘‘Private Agriculture in the Soviet Union Under Gorbachev,’’ Soviet Union/Union Sovietique 16, nos. 2–3 (1989): 105–44; Stephen K. Wegren, Agriculture and the State in Soviet and Post-Soviet Russia (Pittsburgh: University of Pittsburgh Press, 1998), 33–48. 7. Grigorovskii and Alekseev, Lichnoe podsobnoe khoziaistvo kolkhoznikov, rabochikh i sluzhashchikh v SSSR, 36; Ostrovskii, Lichnoe podsobnoe khoziaistvo v usloviiakh agropromyshlennoi integratsii, 33; Narodnoe khoziaistvo SSSR za 60 let: iubileinyi statisticheskii ezhegodnik (Moscow: Statistika, 1977), 299. 8. For example, in 1940 an average collective farm family received more than 48 percent of its gross income (monetary and nonmonetary) from private plot activities. By 1986 this percentage had declined to 23 percent, a function of the monetization of collective farm incomes, higher farm salaries, and a decrease in the importance of the private plot. Narodnoe khoziaistvo SSSR za 70 let: iubileinyi statisticheskii ezhegodnik (Moscow: Finansy i statistika, 1987), 445. 9. Z. I. Kalugina and T. P. Antonova, Lichnoe podsobnoe khoziaistvo sel’skogo naseleniia: problemy i perespektivy (Novosibirsk: Nauka, 1984), 88–89. 10. Z. I. Kalugina, Lichnoe podsobnoe khoziaistvo v SSSR: sotsial’nye reguliatory i rezul’taty razvitiia (Novosibirsk: Nauka, 1991), 123. 11. Lichnoe podsobnoe khoziaistvo naseleniia v 1988 godu, 70. 12. Grigorovskii and Alekseev, Lichnoe podsobnoe khoziaistvo kolkhoznikov, rabochikh i sluzhashchikh v SSSR, 54. 13. Wadekin, Private Sector in Soviet Agriculture, 36.

Notes to Pages 32–36

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14. Ibid., 37. 15. There were exceptions, however. First, if the person was conscripted or sent away for further education, the plot could continue to be used. Second, after five years of service, the right of tenure was retained for life on retirement due to age or disability. Third, if the person employed in service died in the line of duty, his widow (or parents) would retain use rights for life or his children would retain them until maturity. Wadekin, Private Sector in Soviet Agriculture, 38. 16. Ibid. 17. V. Kh. Uliukaev, Chto daet zemel’naia reforma (Moscow: Znanie, 1992), 24–25. 18. For example, Marshall I. Goldman, What Went Wrong with Perestroika (New York: Norton, 1992), 74. 19. Karen M. Brooks, ‘‘Soviet Agriculture’s Halting Reform,’’ Problems of Communism 39, no. 2 (March–April 1990), 36–38. 20. Grain imports rose from 15.5 million tons in 1978 to 46 million tons in 1981 and to 56 million tons in 1984. Goldman, What Went Wrong with Perestroika, 78. 21. Karl-Eugen Wadekin, ‘‘Agriculture,’’ in The Soviet Union Under Gorbachev, ed. Martin McCauley (New York: St. Martin’s, 1987), 127. 22. Ibid., 118–34. 23. Archie Brown, The Gorbachev Factor (Oxford: Oxford University Press, 1997), 145. 24. See Ed A. Hewett, Reforming the Soviet Economy: Equality Versus Efficiency (Washington, D.C.: Brookings Institution, 1988). 25. Mikhail Gorbachev, Memoirs (New York: Doubleday, 1996), 233. 26. Ibid., 234. 27. Anders Aslund, Gorbachev’s Struggle for Economic Reform: The Soviet Reform Process, 1985–1988 (Ithaca: Cornell University Press, 1989), 180. 28. See Pravda, June 26, 1987, 1–4. 29. Mikhail Gorbachev, Izbrannye rechi i stat’i (Moscow: Politizdat, 1988), 5:141–43. 30. Aslund, Gorbachev’s Struggle for Economic Reform, 100. 31. Mikhail S. Gorbachev, Izbrannye rechi i stat’i (Moscow: Politizdat, 1990), 7:359. 32. Rental payments were linked to production costs, land location, and land quality and were differentiated by region. Rent was charged by the hectare leased or per head of livestock. Rent could be paid in-kind or in cash. See A. Unukovich and A. Golos, ‘‘Rentnye platezhi i arendnaia plata za zemliu,’’ APK: Ekonomika, upravlenie, no. 6 (June 1990): 56–60; A. Molodtsov and A. Nikoforov, ‘‘Arenda i oplata truda,’’ APK: Ekonomika, upravlenie, no. 7 (July 1990): 82–87. 33. After the March 1989 plenum the USSR Council of Ministers passed a resolution on leasing, ‘‘Ob ekonomicheskikh i organizatsionnykh osnovakh arendnykh otnosheniy v SSSR,’’ Ekonomicheskaia gazeta, no. 19 (May 1989), 7–8. That resolution was followed by the Supreme Soviet law concerning leases, which specified terms and conditions of land leasing. See the law passed by the USSR Supreme Soviet, Pravda, December 1, 1989, 3–4. The law took effect in January 1990. 34. See Brooks, ‘‘Soviet Agriculture’s Halting Reform,’’ 39–41; Wegren, Agriculture and the State in Soviet and Post-Soviet Russia, 67–69. 35. Izvestiia, March 6, 1990, 1–2.

278

Notes to Pages 36–39

36. Sbornik zakonodatel’nykh aktov, postanovlenii, ukazanii i rekomendatsii po zemel’noi reforme i krest’ianskim (fermerskim) khoziaistvam (Moscow: RSFSR State Committee on Land Reform, 1991), 3–5. 37. For an analysis of agricultural and land reforms in the Baltic states, see Natalija Kazlauskiene and William H. Meyers, ‘‘Land Policy and Economic Development in Lithuania,’’ Baltic Report 96-BR 24 (Ames, Iowa: Center for Agricultural and Rural Development, 1996); William H. Meyers and Natalija Kazlauskiene, ‘‘Land Reform in Estonia, Latvia, and Lithuania: A Comparative Analysis,’’ in Land Reform in the Former Soviet Union and Eastern Europe, ed. Stephen K. Wegren (London: Routledge, 1998), 87–110. 38. Boris Yeltsin, Against the Grain (New York: Summit, 1990), 129–30. 39. Boris Yeltsin, The Struggle for Russia (New York: Times Books, 1994), 15. 40. Gorbachev, Memoirs, 346. 41. ‘‘O krest’ianskom (fermerskom) khoziaistve,’’ in Sbornik zakonodatel’nykh aktov, postanovlenii, ukazanii i rekomendatsii po zemel’noi reforme i krest’ianskim (fermerskim) khoziaistvam, 20–47. 42. Ibid., article 15, point 1. 43. Ibid., art. 15, point 3. 44. For example, the law allowed for the hiring of labor on private farms. Private farmers were also given wide-ranging rights to engage in a variety of commercial activities with other enterprises, associations, and unions related to food production, food processing, material-technical supply, construction, veterinary services, or providing agricultural consulting. They also were given the right to engage in nonagricultural activities with enterprises, associations, and consortiums, as well as to engage in banking and insurance businesses. The state was to assist with the construction of roads, electric power lines, running water, telephone service, land surveying, and land improvements, although private farmers had the right to finance and construct their own infrastructure as well. These aspects of the law possibly could be interpreted as a strategy to bolster private property rights by supporting the economic development of private farms. In reality, however, the financial obligations of the state were not fulfilled. 45. See Don Van Atta, ed., The ‘‘Farmer Threat’’: The Political Economy of Agrarian Reform in Post-Soviet Russia (Boulder: Westview, 1993). 46. English-language analyses of private farming include Stephen K. Wegren, ‘‘Private Farming and Agrarian Reform in Russia,’’ Problems of Communism 41, no. 3 (May– June 1992): 107–21; Van Atta, ‘‘Farmer Threat’’; Frank A. Durgin, ‘‘Russia’s Private Farm Movement: Background and Perspectives,’’ Soviet and Post-Soviet Review 21, nos. 2–3 (1994): 211–52; Stephen K. Wegren, ‘‘The Politics of Private Farming in Russia,’’ Journal of Peasant Studies 23, no. 4 (July 1996): 106–40; Karen Brooks et al., ‘‘Agricultural Reform in Russia: A View from the Farm Level,’’ World Bank Discussion Papers no. 327 (Washington, D.C.: World Bank, 1996), 59–75; Stephen K. Wegren and Frank A. Durgin, ‘‘The Political Economy of Private Farming in Russia,’’ Comparative Economic Studies 39 (Fall–Winter 1997): 1–24; Wegren, Agriculture and the State in Soviet and Post-Soviet Russia, chap. 6; Allina-Pisano, ‘‘Land Reform and The Social Origins of Private Farmers in Russia and Ukraine,’’ Journal of Peasant Studies 31, nos. 3–4 (April– July 2004): 489–514.

Notes to Pages 39–43

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47. There were various economic obstacles. These included, first, the problems of startup costs for farms. Second, independence from the state or collective farm and access to market channels was an extremely important consideration. Third was the availability of equipment, machinery, fuel, and other production inputs, as well as their price. See Roy L. Prosterman and Timothy Hanstad, The Prospects for Individual Peasant Farming in the USSR, Monographs on Foreign Aid and Development, no. 6 (Seattle: Rural Development Institute, 1991). 48. Krest’ianskie vedomosti, no. 15 (May 14, 1991), 8. 49. The average rate of registration was 3,454 private farms per month during the first six months of 1991 and 3,976 farms per month during the second six months. 50. Krest’ianskie vedomosti, no. 33 (September 17, 1991), 9. 51. ‘‘O zemel’noi reforme,’’ in Kak poluchit’ zemliu: sbornik osnovnykh dokumentov po zemel’noi reforme v Rossii (Moscow: Lexica, 1992), 19–24. 52. Ibid., art. 1. 53. Ibid., art. 4; art. 8. 54. Ibid., art. 5. Recall that previously, collective gardening plots were assigned to the individual, not the household. 55. Eugenia Serova, ‘‘Results of Transformation of Russian Agri-Food Sector,’’ in Reflecting Transformation in Post-socialist Rural Areas, ed. Maarit Heinonen, Jouko Nikula, Inna Kopoteva, and Leo Granberg (New Castle, U.K.: Cambridge Scholars, 2007), 11. 56. Section 1, art. 2, ‘‘O sotsial’nom razvitii sela,’’ in Kak poluchit’ zemliu: sbornik osnovnykh dokumentov po zemel’noi reforme v Rossii, 10. 57. Section 2, chap. 1, art. 9, ‘‘O sobstvennosti v RSFSR,’’ Ekonomika i zhizn’, no. 3 (January 1991), 13. 58. Section 1, art. 6, point 2, in ibid. 59. Page 14, sec. 6, art. 30, points 1–5, in ibid. 60. For example, by the end of 1990 the RSFSR Constitution had been amended to codify the legality of different types of land tenure rights: use rights (leasing), lifetime use with rights of inheritance, and private ownership (art. 12). 61. The relevant extracts from the RSFSR Constitution and the RSFSR government resolution are found in Zakony Rossii o zemle (Moscow: Russian Farmers and Gardeners, 1992), 2. 62. Interview with V. N. Shcherbak, First Deputy Minister of Agriculture, in Zemlia i liudi, nos. 2–3 (January 15, 1993), 2. 63. Already by this time, several million hectares of land had been abandoned by large farms, primarily in the Russian non–black earth zone, owing to depopulation through out-migration and low fertility rates. See Grigory Ioffe, Tatyana Nefedova, and Ilya Zaslavsky, The End of Peasantry? The Disintegration of Rural Russia (Pittsburgh: University of Pittsburgh Press, 2006), chap. 6. 64. The published recommendations were accompanied by the forms that were to be submitted. 65. Although private farmers were, according to law, allowed to leave a large farm with a physical land plot, the size of that land plot was determined by the local size limits and the value of the land shares they possessed.

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Notes to Pages 43–47

66. Point 1, ‘‘O dopolnitel’nykh merakh po uskoreniiu provedeniia zemel’noi reformy v RSFSR,’’ Sel’skaia zhizn’, March 20, 1991, 2. 67. Section 2, ‘‘O poriadke vykhoda rabotnikov iz kolkhozov, sovkhozov, drugikh sel’khozpredpriiatii, nadeleniia ikh zemel’numi uchastkami i proizvodstvennymi fondami,’’ in Sbornik zakonodatel’nykh aktov, postanovlenii, ukazanii i rekomendatsii po zemel’noi reforme i krest’ianskim (fermerskim) khoziaistvam, 87–88. 68. Ibid., point 2.7, p. 88. The right to turn to courts or to a state arbitrator in the case of arguments about land, nonallocation of land, or withdrawal of land was confirmed by a decision of the RSFSR Ministry of Justice, the Supreme Court of the RSFSR, and the Chief State Arbitrator in March 1991. See Krest’ianskie vedomosti, no. 15 (May 14, 1991), 11. 69. For examples from Voronezh oblast, see Jessica Allina-Pisano, The Post-Soviet Potemkin Village: Politics and Property in the Black Earth (New York: Cambridge University Press, 2008), chap. 2. Nonetheless, Voronezh oblast had one of the highest rates of private farm registration in Russia during 1992–1994. 70. The RSFSR State Committee on Land Reform and its subcommittees were empowered only to survey the land and to make recommendations; the actual decision to allocate land was to be made by the raion Soviet of People’s Deputies. 71. Point 3.1, ‘‘O poriadke vykhoda rabotnikov iz kolkhozov, sovkhozov, drugikh sel’khozpredpriiatii, nadeleniia ikh zemel’numi uchastkami i proizvodstvennymi fondami,’’ in Sbornik zakonodatel’nykh aktov, postanovlenii, ukazanii i rekomendatsii po zemel’noi reforme i krest’ianskim (fermerskim) khoziaistvam, 89. 72. The equation may be found in ibid., 90. 73. Ibid., points 3.2–3.4, 90–91. 74. Point 1, ‘‘O dopolnitel’nykh merakh po uskoreniiu provedeniia zemel’noi reformy v RSFSR,’’ Sel’skaia zhizn’, March 20, 1991, 2. 75. ‘‘Zemel’nyi kodeks RSFSR,’’ Krest’ianskie vedomosti, no. 16 (May 21, 1991), 3–11. 76. Krest’ianskie vedomosti, no. 5 (March 5, 1991), 7. 77. See Allina-Pisano, Post-Soviet Potemkin Village, 70–71. 78. Krest’ianskie vedomosti, no. 31 (September 3, 1991), 5. 79. Krest’ianskie vedomosti, no. 37 (October 15, 1991), 4. 80. Krest’ianskie vedomosti, no. 32 (September 10, 1991), 5. 81. Krest’ianskie vedomosti, no. 33 (September 17, 1991), 9. 82. Sel’skaia zhizn’, September 24, 1991, 1. 83. Krest’ianskie vedomosti, no. 38 (October 22, 1991), 4. 84. For a wide-ranging and excellent discussion of the development of the shock therapy strategy, its advocates, and its consequences, see Peter Reddaway and Dmitri Glinski, The Tragedy of Russia’s Reforms: Market Bolshevism Against Democracy (Washington, D.C.: United States Institute of Peace, 2001), chap. 5. 85. ‘‘O neotlozhnykh merakh po osushchestvleniiu zemel’noi reformy v RSFSR,’’ Rossiiskaia gazeta, December 31, 1991, 3. 86. ‘‘O poriadke reorganizatsii kolkhozov i sovkhozov,’’ Zemlia i liudi, no. 2 (January 10, 1992), 1, 3. 87. The provisions giving farm directors responsibility for allowing members to leave

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the farm expeditiously and without obstacles already existed, and the December 1991 decree simply served to repeat what had been adopted in March 1991. 88. Point 3, ‘‘O poriadke reorganizatsii kolkhozov i sovkhozov,’’ 1. 89. Participation in the auction was ‘‘mainly for workers of the farm.’’ Any assets remaining after the auction were to be sold at an open auction for ‘‘all those who wish to undertake agricultural activities on the territory of the former farm.’’ Point 14, ‘‘O poriadke reorganizatsii kolkhozov i sovkhozov,’’ 3. 90. Izvestiia, February 20, 1992, 1. 91. By the end of 1991, private farms controlled about 1 percent of the total amount of agricultural land in the RSFSR. 92. See arts. 39–44, ‘‘Zemel’nyi kodeks RSFSR,’’ 6.

Chapter 3. Politics and Property Rights in the Yeltsin Period, 1992–99 1. Joseph A. Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper, 1942). 2. For an extensive listing of relevant laws, decrees, and governmental resolutions enacted during 1992–99, see appendix B. 3. Timothy J. Colton, ‘‘Determinants of the Party Vote,’’ in Growing Pains: Russian Democracy and the Election of 1993, ed. Timothy J. Colton and Jerry F. Hough (Washington, D.C.: Brookings Institution, 1998), 75–114. 4. Richard Sakwa, Russian Politics and Society (London: Routledge, 1993), 58, 62, 67. 5. Thomas F. Remington, The Russian Parliament: Institutional Evolution in a Transitional Regime, 1989–1999 (New Haven: Yale University Press, 2001), 98–99. 6. Consider food prices. After liberalizing retail food prices in January 1992, Yeltsin came under attack for not privatizing food and processing enterprises first, thereby protecting consumers from price gouging by monopolies. As a result of price liberalization, food prices at state stores increased 1,500 percent for beef, more than 1,300 percent for potatoes, and more than 3,500 percent for butter from December 1991 to December 1992. Price data are taken from Krest’ianskaia rossiia, no. 103 (December 19, 1992), 9. In order to try to bring some relief to consumers, in August 1992 the Russian government adopted limits on profit margins for goods, food products, and services offered by monopoly enterprises. Regarding food products, this government resolution capped the markups that stores could charge the consumer. These limits established a percentage by which the store was allowed to increase its retail price over the price at which it had purchased the product. For example, the maximum profit margin for bread and bread products was established at 20 percent; for macaroni products, sugar, and vegetable oil it was 25 percent; for milk, milk products, meat, and meat products it was 10 percent; and for fish and fish products it was 50 percent. ‘‘O gosudarstvennom regulirovanii tsen i tarifov na produktsiiu i uslugi predpriiatii-monopolistov v 1992–1993 godakh,’’ Krest’ianskie vedomosti, no. 34 (August 25–31, 1992), 6. These limits were rescinded in early 1993 by Prime Minister Chernomyrdin, who argued that they contravened the effort to build a market-based economy. 7. The decree may be found in Kak Poluchit’ zemliu? (Moscow: Lexica, 1992), 7. 8. Krest’ianskie vedomosti, no. 14 (March 31–April 6, 1992), 6.

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9. Part of the reason was that the detailed procedures were slow to be delivered and changed numerous times. For an example in Belgorod oblast, see Stephen K. Wegren, The Moral Economy Reconsidered: Russia’s Search for Agrarian Capitalism (New York: Palgrave Macmillan, 2005), 73–74. 10. International Finance Corporation, Land Privatization and Farm Reorganization in Russia, Annexes (Washington, D.C.: International Finance Corporation, 1995), 29–32. 11. Ekonomika i zhizn’, no. 3 (January 1994), 23. 12. For example, a number of situations were envisioned in the ‘‘Urgent Measures’’ decree of December 1991. This decree permitted the sale of land, for instance to other agricultural workers or farms at free prices (see points 12 and 13 in particular). At the end of March 1992, Yeltsin issued a decree that allowed the sale of land to citizens from enterprises that had been privatized and allowed citizens to obtain land in ownership that had been rented from such enterprises; this decree was reaffirmed in June 1992. See ‘‘O prodazhe zemel’nykh uchastkov grazhdanam i iuridicheskim litsam pri privatizatsii gosudarstvennykh i munitsial’nukh predpriiatii,’’ Krest’ianskie vedomosti, no. 15 (April 7–13, 1992), 3. 13. Rossiiskaia gazeta, October 15, 1992, 5. 14. Krest’ianskaia rossiia, no. 93 (October 10, 1992), 1. 15. Izvestiia, November 20, 1992, 1–2. 16. Sel’skaia zhizn’, November 24, 1992, 1. 17. Izvestiia, December 8, 1992, 1. 18. Krest’ianskaia rossiia, no. 100 (November 28, 1992), 2. 19. Izvestiia, December 24, 1992, 1. 20. Russian Television Network, Moscow, December 28, 1992, translated in Foreign Broadcast Information Service-SOV-92–250 (December 29, 1992), 26. 21. Craig L. Infanger, ‘‘An Inside View of Russian Agrarian Reform,’’ Soviet and PostSoviet Review 21, nos. 2–3 (1994): 191–93. 22. Remington, Russian Parliament, 106–8. 23. Boris Yeltsin, Midnight Diaries (New York: Public Affairs, 2000), 106. 24. Boris Yeltsin, The Struggle for Russia (New York: Times Books, 1995), 176. 25. For a description of the political environment leading up to the September–October events, see Yeltsin, Struggle for Russia, chaps. 7–8; Peter Reddaway and Dmitri Glinski, The Tragedy of Russia’s Reforms: Market Bolshevism Against Democracy (Washington, D.C.: United States Institute for Peace, 2001), chap. 7. 26. Remington, Russian Parliament, 109. 27. See Stephen White, Richard Rose, and Ian McAllister, How Russia Votes (Chatham, N.J.: Chatham House, 1997), 77–86. 28. ‘‘O dopolnitel’nykh merakh po nadeleniiu grazhdan zemel’nymi uchastkami,’’ Zakon, no. 3 (March 1997): 7–8. 29. Krest’ianskaia rossiia, no. 16 (May 3–9, 1993), 2. 30. Yeltsin, Struggle for Russia, 242, 244. 31. Ibid., 255. 32. Reddaway and Glinski, Tragedy of Russia’s Reforms, 425. 33. ‘‘O regulirovanii zemel’nykh otnoshenii i razvitii agrarnoi reformy v Rossii,’’ Krest’ianskie vedomosti, no. 43 (November 1–7, 1993), 8–9.

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34. Eugenia Serova, ‘‘Results of Transformation of Russian Agri-Food Sector,’’ in Reflecting Transformation in Post-Socialist Rural Areas, ed. Maarit Heinonen, Jouko Nikula, Inna Kopoteva, and Leo Granberg (New Castle, U.K.: Cambridge Scholars, 2007), 12. 35. In October 1993 Zorkin had been forced to resign as chairman of the Constitutional Court, and in December 1993 he was suspended as a justice altogether. In late January 1994 he was reinstated as a justice on the Constitutional Court by a vote of seven to three by the other judges. 36. One day after the October crisis ended, a list of twenty-eight political organizations was composed and divided into different categories. One category included organizations that had been the most active and had participated in the October crisis as organizations. They were banned. A second included those whose members had participated as individuals. This category included eight organizations, one of which was the Communist Party of the Russian Federation. These organizations were also banned, though the ban was quickly lifted. Opposition publications were also suspended, however, which meant that in the period prior to the December 1993 elections opposition forces were handicapped in their ability to mobilize support and reach out to their potential electorate. 37. New York Times, October 28, 1993, A11. 38. Izvestiia, December 17, 1993, 1. 39. The certificate was based on shares that previously had been established. That is, property shares were based on length of service to the farm, although land shares were equal in size for all members of the farm. 40. This description draws in part from Stephen K. Wegren, ‘‘Yel’tsin’s Decree on Land Relations: Implications for Agrarian Reform,’’ Post-Soviet Geography 35, no. 3 (March 1994): 169–70. 41. Izvestiia, November 6, 1993, 4. Those receiving land but lacking legal title included mainly people with dacha plots, fruit or vegetable gardens, private plots, or land for the construction of individual dwellings; they had privatized their land but never received the proper legal documentation. Private farmers received title upon registration of their farm. 42. Certificates of landownership, or certificates for lifetime use with rights of inheritance, that were issued prior to the October decree were considered valid as long as they were registered with the local Committee on Land Reform. 43. Izvestiia, November 6, 1993, 4. 44. For the legal process of conducting an auction or competitive bidding for land, see Rossiiskaia gazeta, December 17, 1993, 4. 45. Izvestiia, November 11, 1993, 1; Izvestiia, November 18, 1993, 2. 46. Details about the valuation method, goals, and procedures of the privatization program may be found in International Finance Corporation, Land Privatization and Farm Reorganization in Russia (Washington, D.C.: International Finance Corporation, 1995). Selected legal documents and model contracts may be found in Privatizatsiia zemli i reorganizatsiia sel’skokhoziaistvennykh predpriiatii v Rossii (Moscow: Russian Agrarian Institute, 1998). 47. For a description of the farm privatization program and its effects, see Stephen K. Wegren, Agriculture and the State in Soviet and Post-Soviet Russia (Pittsburgh: University of Pittsburgh Press, 1998), 94–106; Doklad o nalichii, sostoianii i ispol’zovanii

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zemel’ Nizhegorodskoi oblasti v 2000g (Nizhnii Novgorod: Committee on Land Resources and Land Surveying, 2001). 48. Izvestiia, November 6, 1993, 4. 49. Based on interviews with land officials in Kostroma oblast, there is anecdotal evidence that the value of the land sale was sometimes understated in order to lower the fee that was due. The undeclared difference was then split between buyer and seller, and sometimes the registering agent. 50. If land was taken from an owner, it would revert to the raion redistribution fund. 51. Sel’skaia zhizn’, July 30, 1994, 1. 52. Rossiiskaia gazeta, November 5, 1994, 7. 53. Jessica Allina-Pisano, The Post-Soviet Potemkin Village: Politics and Property Rights in the Black Earth (New York: Cambridge University Press, 2008). 54. Karen Brooks et al., ‘‘Agricultural Reform in Russia: A View from the Farm Level,’’ World Bank Discussion Paper no. 327 (Washington, D.C.: World Bank, 1996), 16. 55. E. Ivankina and I. Rtishchev, ‘‘Osobennosti zemel’nogo zakonodatel’stva v Rossiiskikh regionakh,’’ Voprosy ekonomiki, no. 7 (July 2000): 77, 82. 56. Stephen K. Wegren and Vladimir R. Belen’kiy, ‘‘The Political Economy of the Russian Land Market,’’ Problems of Post-Communism 45, no. 4 (July–August 1998): 56–66. 57. ‘‘O realizatsii konstitutsionnykh prav grazhdan na zemliu,’’ Sobranie zakonodatel’stva Rossiiskii Federatsii, no. 11 (March 11, 1996): 2704–706. 58. See Stephen Fortescue, Russia’s Oil Barons and Metal Magnates: Oligarchs and the State in Transition (New York: Palgrave Macmillan, 2006), 60–61. 59. Andrew Barnes, Owning Russia: The Struggle over Factories, Farms, and Power (Ithaca: Cornell University Press, 2006), 5. 60. With regard to Russian reform, authors who emphasize resistance include Jessica Allina-Pisano, ‘‘Sub Rosa Resistance and the Politics of Economic Reform: Land Distribution in Post-Soviet Ukraine,’’ World Politics 56, no. 4 (July 2004): 554–81; Barnes, Owning Russia; and Allina-Pisano, Post-Soviet Potemkin Village. With regard to the book by Allina-Pisano, questions arise about the collection of evidence. She interviewed ‘‘whomever agreed to speak with me’’ (xxi), which led to an over-weighting of pensioners. This is problematic because not only did pensioners have the most conservative orientations toward reform, but they were least able to take advantage of the opportunities provided by reform and also were among the biggest losers in terms of being negatively affected during market reform. (Regional and professional distributions of interviewees are not provided.) In other cases, Allina-Pisano states that she assigned ‘‘greater analytical weight to statements that depart from established narratives than to those that echo official scripts’’ (25). Such a method ‘‘required constant alertness to statements my interlocutors may have believed a researcher from North America would want to hear’’ (25). But she also states that ‘‘the majority of my interlocutors had never before met an American’’ (xxi). In contrast, other analyses of reform that are based on fieldwork either do not depict resistance as not a primary characteristic or may not mention resistance at all as a significant factor (although virtually all analyses acknowledge different degrees of difficulty in implementation because of myriad factors). Proceeding chronologically, Gavin Kitching

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studied Russian agrarian reform in three oblasts and argues that as a result of the economic decline of market reform during the 1990s a core of capitalist survivors would emerge, using new opportunities to benefit. See Gavin Kitching, ‘‘The Development of Agrarian Capitalism in Russia, 1991–1997: Some Observations from Fieldwork,’’ Journal of Peasant Studies 25, no. 3 (April 1998): 1–30. The International Finance Corporation found that rather than using tricks to keep workers on large farms, farm managers used paternalistic behaviors to protect their workers from the effects of market reform. See International Finance Corporation, Monitoring Russian Reorganised Farms: An Integrated Analysis of Economic and Social Change in Nizhny Novgorod, Oryol and Other Oblasts: Results of 1997 Studies (Washington, D.C.: International Finance Corporation, 1998). Louise Perrotta, who worked as a consultant to international organizations in Russia and Ukraine, presents a nuanced discussion of Russian land reform by distinguishing between managerial supporters of reform who seized on opportunities to innovate and more conservative managers who were either philosophically opposed to or simply preferred the old system. See Louise Perrotta, ‘‘Divergent Responses to Land Reform and Agricultural Restructuring in the Russian Federation,’’ in Surviving Post-Socialism: Local Strategies and Regional Responses in Eastern Europe and the Former Soviet Union, ed. Sue Bridger and Frances Pine (London: Routledge, 1998), chap. 9. On the basis of fieldwork conducted in Saratov and Leningrad oblasts, Maria Amelina argues that soft credit policies by federal and regional governments meant that structural transformation by large farms was often much less than what reformers had hoped. In other words, soft credit policies gave farm managers an opportunity to avoid direct threats to their power and to keep workers in large farms. See Maria Amelina, ‘‘Why Russian Peasants Remain in Collective Farms: A Household Perspective on Agricultural Restructuring,’’ Post-Soviet Geography 41, no. 7 (September 2000): 483–511. Liesl Gambold Miller, who worked in Nizhegorodskaia oblast, argues that peasants were not risk-averse, originally supported reform efforts before becoming disillusioned, and were motivated to maintain communal coherence (what Leonard and Allina-Pisano would interpret as resistance to reform). See Liesl Gambold Miller, ‘‘Communal Coherence and Barriers to Reform,’’ in Rural Reform in Post-Soviet Russia, ed. David J. O’Brien and Stephen K. Wegren (Washington, D.C.: Woodrow Wilson Center; Baltimore: Johns Hopkins University Press, 2002), chap. 9. Similarly, Margaret Paxson, who lived in the village of Solovyovo in northwest Russia for a year, has argued that concerns about social justice and distribution prevailed over inclinations toward resisting privatization. See Margaret Paxson, Solovyovo: The Story of Memory in a Russian Village (Washington, D.C.: Woodrow Wilson Center Press; Bloomington: Indiana University Press, 2005). In a previous book I argued that because this was a ‘‘giving’’ land reform, there was little reason for employees on large farms to resist Russia’s contemporary land reform, and further that there were several ways in which the managerial stratum benefited from land reform. See Wegren, Moral Economy Reconsidered, chap. 1. O’Brien and Patsiorkovsky assess the magnitude of economic and social change using longitudinal and cross-sectional survey data, demonstrating significant household adaptation, which in turn implies that the extent of official resistance was limited. See David J. O’Brien and Valery V. Patsiorkovsky, Measuring Social and Economic Change in Rural Russia: Surveys from 1991 to 2003 (Lanham, Md.: Lexington, 2006). Pallott and Nefedova analyze the increase in land holdings by both rural and

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urban households, which in turn led to higher food production in every region of Russia (although more in some than in others) in the 1990s, with minimal attention to resistance by either the rural population or farm managers. See Judith Pallott and Tatyana Nefedova, Russia’s Unknown Agriculture: Household Production in Post-Socialist Rural Russia (Oxford: Oxford University Press, 2007), chap 2. Zvi Lerman assembled a number of Russian authors who analyze the impact of land and agrarian reforms. Although the outcomes are mixed and expectations have not fully been met, most of the authors point to substantial structural change, which in turn suggests that resistance was either inconsequential or overcome. See Zvi Lerman, ed., Russia’s Agriculture in Transition: Factor Markets and Constraints on Growth (Lanham, Md.: Lexington, 2008). 61. Carol Scott Leonard, ‘‘Rational Resistance to Land Privatization: The Response of Rural Producers to Agrarian Reforms in Pre- and Post-Soviet Russia,’’ Post-Soviet Geography and Economics 41, no. 8 (December 2000): 606–20. ‘‘Evidence’’ of resistance from other post-communist countries, namely, Bulgaria and Romania, is used by Allina-Pisano to bolster her argument concerning Russia. Note, however, that Bulgaria and Romania used land restitution in their land reform, and thus the theoretical, analytical, and substantive issues are completely different than for Russia, which used land share distribution. 62. Allina-Pisano, Post-Soviet Potemkin Village, chap. 1. The issue is not explored, but one would assume that in 1991–92 most local newspaper editors were holdovers from the communist period. 63. Eugenia Serova, ‘‘Public Opinion Concerning Russia’s Agrarian Reforms,’’ in Russian Views of the Transition in the Rural Sector: Structures, Policy Outcomes, and Adaptive Responses, ed. L. Alexander Norsworthy (Washington, D.C.: World Bank, 2000), 68. One might note that survey data from the late Soviet period suggest that the rural population was more accepting of private ownership of land with the right to sell than was the urban population. See ‘‘Otnoshenie naseleniia k raznym formam khoziaistvovaniia na zemle,’’ Voprosy ekonomiki, no. 5 (May 1990): 77. 64. Clifford G. Gaddy and Barry W. Ickles, Russia’s Virtual Economy (Washington, D.C.: Brookings Institution, 2002). 65. See Mats-Olov Olsson, ‘‘The Russian Virtual Economy Turning Real: Institutional Change in the Arkhangel’sk Forest Sector,’’ Europe-Asia Studies 60, no. 5 (2008): 707– 38. 66. Allina-Pisano, Post-Soviet Potemkin Village, 62. In the final chapter the basis of the objection shifts, and she argues that officials sought to ‘‘preserve collectives in order to maximize tribute from them,’’ which, if true, made actions to retain land and labor by farm managers rational, not resistant (ibid., 192). 67. Caroline Humphrey, Marx Went Away—But Karl Stayed Behind, updated ed. (Ann Arbor: University of Mighigan Press, 1998), 461. 68. Allina-Pisano, Post-Soviet Potemkin Village, 59. In contrast to Allina-Pisano’s argument for bureaucratic resistance, my interviews with land tenure officials, land committee officials, and state economists at the local Goskomstat offices in Kostroma oblast in the early to mid-1990s suggested an agnostic approach to the implementation of land reform. In my opinion, Allina-Pisano’s view appears to assume the issuance of a perfectly clear, noncontradictory, understandable reform design. The reality was that legislation and policies met none of those criteria. It is possible that what she refers to as ‘‘covert

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resistance’’ was in fact confusion on the part of local officials as a result of the lack of specificity in federal policies. A reading of the local press in Krasnogvapdeiskii raion in Belgorod oblast for the years 1991–92 strongly supports this conclusion. See Wegren, Moral Economy Reconsidered, 73–74. 69. Allina-Pisano (Post-Soviet Potemkin Village, 83) argues that various actors’ interests were ‘‘different, but aligned as they sought to preserve collectives.’’ Further, although their resistance was ‘‘covert’’ and ‘‘unspoken,’’ the resisters coordinated their activities. One wonders how this was accomplished. 70. See ‘‘O deiatel’nosti krest’ianskikh (fermerskikh) khoziaistv Rossiiskoi Federatsii,’’ Statisticheskii biulleten’, no. 10 (October 2000): 13. 71. Barnes, Owning Russia, 94; Allina-Pisano, Post-Soviet Potemkin Village, 65–75. 72. Allina-Pisano, Post-Soviet Potemkin Village, 83. 73. Joel S. Hellman, ‘‘Winners Take All: The Politics of Partial Reform in Postcommunist Transitions,’’ World Politics 50, no. 2 (January 1998): 203–34. On the theme of industrial managerial behavior toward reform, see Linda J. Cook and Vladimir Gimpelson, ‘‘Exit and Voice in Russian Managers’ Privatization Strategies,’’ Communist Economics and Economic Transformation 7, no. 4 (December 1995): 465–83; Susan J. Linz and Gary Krueger, ‘‘Russia’s Managers in Transition: Pilferers or Paladins?’’ Post-Soviet Geography and Economics 37, no. 7 (September 1996): 397–425; Barnes, Owning Russia, 128–40. 74. Survey data suggest that farm managers were able to obtain more land during privatization than were ordinary workers, although the amounts of land were not so large that it could be considered blocking market entry for other actors. This theme is explored in more detail in Part 2. 75. Richard E. Ericson, ‘‘Does Russia Have a ‘Market Economy?’ ’’ East European Politics and Society 15, no. 2 (May 2001): 291–319. 76. See Stephen K. Wegren, ‘‘Rural Adaptation in Russia: Who Responds and How Do We Measure It?’’ Journal of Agrarian Change 4, no. 4 (October 2004): 553–78. 77. Barnes, Owning Russia, 13. 78. See V. Ia. Uzun, ed., Sotsial’no-ekonomicheskie posledstviia privatizatsii zemli i reorganizatsii sel’skokhoziaistvennykh predpriiatii (1994–1996 gg) (Moscow: Entsiklopeiia Rossiiskikh Dereven’, 1997), chap. 2. 79. See Anthony Downs, Inside Bureaucracy (Boston: Little, Brown, 1967). 80. To a significant degree, the core functions of farm management did not change very much between the Soviet and the post-Soviet periods. In the Soviet period, the ‘‘main obligations’’ of farm management were to lead all production, economic, and financial activities of the farm, lead and verify the work of labor brigades, work out all plans and norms for the farm, assign land for private plots, and conclude agreements with other persons and organizations doing business with the farm. See K. P. Obolenskii, ‘‘Rukovodstvo i upravlenie delami arteli,’’ in V pomoshch’ izuchaiushchim ekonomiku kolkhozov (Moscow: Sel’khozgiz, 1956), 340. In addition, recall that during the first few years of the post-Soviet experience, large farms continued to have delivery obligations to federal and regional food funds, although the levels of procurement were considerably lower than during the Soviet period. See Stephen K. Wegren, Russia’s Food Policies and Globalization (Lanham, Md.: Lexington, 2005), chap. 3.

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81. V. Ia. Uzun, ed., Reformirovanie sel’skokhoziaistvennykh predpriiatii: Sotsial’noekonomicheskii analyiz (1994–1997 gg) (Moscow: Znak, 1998), 40–46. 82. Rossiiskii statisticheskii ezhegodnik (2000), 395. 83. Although by the end of the Yeltsin period the primary food producers for the nation changed from large farms to households—at least in terms of ruble value—this occurrence was due less to an increase in production by households (during only 1992–1995) than to a significant decrease in food production on large farms. Moreover, conservatives did not consider small-scale production from households to be a threat to the large farm sector. As noted in this chapter, the ownership and disposal of private plot land was an early concession by conservatives. 84. Brooks et al., ‘‘Agricultural Reform in Russia,’’ 33. 85. Humphrey, Marx Went Away, 461. 86. Allina-Pisano, Post-Soviet Potemkin Village, 63–84. Allina-Pisano’s story is very different from that of Ioffe and Nefedova, who argue that by the 1990s the quality of farm labor (and rural human capital in general) was quite low and that large farms had abandoned tens of millions of hectares of agricultural land owing to the poor quality of this land and farms’ demographic problems, which affected their ability to cultivate it. Thus farm managers had few incentives to hold onto either land or labor. Although these problems were more acute in the non–black earth zone of Russia, they were not entirely absent in the black earth zone. See Grigory Ioffe, Tatyana Nefedova, and Ilya Zaslavsky, The End of Peasantry? The Disintegration of Rural Russia (Pittsburgh: University of Pittsburgh Press, 2006), chap. 4. It may be further argued, in contrast to Allina-Pisano, that the behaviors she describes managers as using to prevent exit were not prohibited by law and thus cannot really be considered resistance in the strict sense of the word. In particular, with regard to the apportioning of farm debt to those who wanted to leave, in Russia (where economic conditions were different from those of Ukraine in 1999), relatively few farms were formally in debt. Farm managers received little guidance from above as to what was to be done with debt in the case the farm was not dissolving. One could argue that the assignment of debt to departees was both fair and prudent. Farm managers were responsible for the financial condition of their farm. It was hardly fair to distribute only among those who remained debt that had been incurred previously. Thus, rather than resistance motivated by a desire to retain power, land, and labor, an alternative argument is that these types of behaviors were examples of farm managers’ acting responsibly on behalf of the larger collective. 87. On managerial adaptation, see David J. Sedik, Michael Trueblood, and Carlos Arnade, ‘‘Agricultural Enterprise Restructuring and Land Reform in Russia, 1991–1995: An Efficiency Analysis,’’ paper presented to the 29th American Association for the Advancement of Slavic Studies National Convention, Seattle, November 23, 1997; International Finance Corporation, Monitoring Russian Reorganized Farms, 30–31; Zemfira Kalugina, ‘‘Survival Strategies of Enterprises and Families in the Contemporary Russian Countryside,’’ in Russian Views of the Transition in the Rural Sector: Structures, Policy Outcomes, and Adaptive Responses, ed. L. Alexander Norsworthy (Washington, D.C.: World Bank, 2000), 118–31; and Stephen K. Wegren, David J. O’Brien, and Valeri V. Patsiorkovski, ‘‘Winners and Losers in Russia’s Agrarian Reform,’’ Journal of Peasant Studies 30, no. 1 (October 2002): 1–29.

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88. See Serova, ‘‘Public Opinion Concerning Russia’s Agrarian Reforms,’’ 82; Natalya Shagaida and Zvi Lerman, ‘‘Land Reform and Development of Land Markets,’’ in Russia’s Agriculture in Transition: Factor Markets and Constraints on Growth, ed. Zvi Lerman (Lanham, Md.: Lexington, 2008), 137. 89. For example, the reported number of private farms that were started becomes less significant after one considers that a large percentage existed only on paper. Further, some private farms existed but did not engage in food production, instead acting as middleman financiers or providing other services. 90. S. Lipski, ‘‘Osobennosti sovremennogo etapa zemel’noi reformy,’’ Ekonomist, no. 10 (October 2002): 80. 91. Pallott and Nefedova, Russia’s Unknown Agriculture, chap. 2. 92. Lipski, ‘‘Osobennosti sovremennogo etapa zemel’noi reformy,’’ 80. 93. Unless otherwise noted, data are taken from ‘‘Itogi raboty za 10-letie zemel’noi sluzhby Rossii i zadachi na 2001 god,’’ Zemel’nyi vestnik Rossii, no. 4 (April 2000): 2–3. 94. Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2000 godu (Moscow: Federal Land Cadastre Service, 2001), 111. 95. The data are for registered transactions. There is anecdotal evidence of a black market in land transactions as well. Speaking in March 1998, then Minister of Agriculture Viktor Khlystun alleged that the number of ‘‘secret deals’’ could equal the number of registered transactions. RIA-Novosti [news agency], March 18, 1998. 96. These figures are calculated from data found in Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2000 godu, 121. 97. Sel’skoe khoziaistvo v Rossii (Moscow: Goskomstat, 2002), 82; Rossiiskii statisticheskii ezhegodnik (Moscow: Goskomstat, 2000), 290. 98. See Wegren and Belen’kiy, ‘‘Political Economy of the Russian Land Market,’’ 59– 62; Stephen K. Wegren and Vladimir R. Belen’kiy, ‘‘Change in Land Relations: The Russian Land Market,’’ in Rural Reform in Post-Soviet Russia, ed. David J. O’Brien and Stephen K. Wegren (Washington, D.C.: Woodrow Wilson Center Press; Baltimore: Johns Hopkins University Press, 2002), 95–97. 99. Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2000 godu, 111. 100. Allina-Pisano, Post-Soviet Potemkin Village, 71. 101. Barnes, Owning Russia, 143; Sel’skokhoziaistvennaia deiatel’nost’ krest’ianskikh (fermerskikh) khoziaistv v Rossii (Moscow: Goskomstat, 2000), 14. 102. See Ralph S. Clem and Peter R. Craumer, ‘‘Urban-Rural Voting Differences in Russian Elections, 1995–1996: A Rayon-Level Analysis,’’ Post-Soviet Geography and Economics 38, no. 7 (September 1997): 379–95; Ralph S. Clem and Peter R. Craumer, ‘‘Urban and Rural Effects on Party Preference in Russia: New Evidence from the Recent Duma Election,’’ Post-Soviet Geography and Economics 43, no. 1 (January 2002): 1–12. Yeltsin’s failure to avoid alienation had two important political effects: it strengthened the Communist Party, which leaned heavily on the rural vote for electoral support during the 1990s, and it increased the isolation of Yeltsin so that he became increasingly dependent on the oligarchs for political support in the second half of the decade. 103. The argument is that Yeltsin’s land reform may be considered an illiberal reform coming from an illiberal political regime. Space constraints preclude a detailed discussion

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of this regime during the 1990s, but a few central elements stand out: Yeltsin’s threats to cancel national elections, the manipulation and abuses of the election process, the committing of fraud during elections, the drafting of a partisan constitution that concentrated enormous power in the hands of the president and created a ‘‘super-presidential’’ system, the weakness of civil society, the lack of a democratic political culture, and the president’s employing an autocratic method of rule. Whereas the 1990s witnessed competitive elections, and postcommunist Russia was more democratic and had more democratic rights than Soviet Russia, it was not a liberal regime compared to established democracies or to several former communist nations in Eastern Europe. Even at the height of democratic development, Freedom House rankings characterized Russia as ‘‘partly free,’’ in contrast to countries such as Poland, the Czech Republic, and Hungary, which by 1997–98 had attained ‘‘free’’ status. Thus, Russia’s land reform contained few liberalizing impulses for the political system as a whole. For further discussion, see Reddaway and Glinski, Tragedy of Russia’s Reforms, 623–42, and see Michael McFaul, Nikolai Petrov, and Andrei Ryabov, Between Dictatorship and Democracy: Russian Post-Communist Political Reform (Washington, D.C.: Carnegie Endowment for International Peace, 2004). 104. See Stephen K. Wegren, ‘‘Land Reform in Russia: What Went Wrong?’’ PostSoviet Affairs 24, no. 2 (April–June 2008): 121–48. 105. Zvi Lerman, Csaba Csaki, and Gershon Feder, Agriculture in Transition: Land Policies and Evolving Structures in Post-Soviet Countries (Lanham, Md.: Lexington, 2004), chap. 3. 106. Krest’ianskie vedomosti, no. 40 (October 6–12, 1997), 4, emphasis in original. 107. Vladimir Bogdanovsky, ‘‘Land Reform: Expectations and Social Consequences,’’ in Russian Views of the Transition in the Rural Sector: Structures, Policy Outcomes, and Adaptive Responses, ed. L. Alexander Norworthy (Washington, D.C.: World Bank, 2000), 58. 108. Ibid., 57. 109. See Stephen K. Wegren, ‘‘The Politics of Private Farming in Russia,’’ Journal of Peasant Studies 23, no. 4 (July 1996): 106–40. 110. See Don Van Atta, ed., The ‘‘Farmer Threat’’: The Political Economy of Agrarian Reform in Post-Soviet Russia (Boulder: Westview Press, 1993); and Allina-Pisano, PostSoviet Potemkin Village, chaps. 2–3. 111. See Zvi Lerman, ‘‘Successful Land Individualization in Trans-Caucasia: Armenia, Azerbaijan, Georgia,’’ in Building Market Institutions in Post-Communist Agriculture: Land, Credit, and Assistance, ed. David A. J. Macey, William Pyle, and Stephen K. Wegren (Lanham, Md.: Lexington, 2004), chap. 3. 112. See Pallott and Nefedova, Russia’s Unknown Agriculture, chap. 2.

Chapter 4. Politics and Property Rights in the Putin Period and Beyond 1. On these issues, see the following (in chronological order): Philip Hanson, ‘‘What Sort of Capitalism Is Developing in Russia?’’ Communist Economies and Economic Transformation 9, no. 1 (January 1997): 27–42; Daniel Treisman, ‘‘Russia’s Taxing Problem,’’ Foreign Policy, no. 112 (Fall 1998): 55–65; Anders Aslund, ‘‘Russia’s Col-

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lapse,’’ Foreign Affairs 78, no. 5 (September–October 1999): 64–77; George Breslauer, ‘‘Russia at the End of Yel’tsin’s Presidency,’’ Post-Soviet Affairs 16, no. 1 (January– March 2000): 1–32; Richard E. Ericson, ‘‘Does Russia Have a ‘Market Economy’?’’ East European Politics and Society 15, no. 2 (May 2001): 291–319; Marshall I. Goldman, The Piratization of Russia: Russian Reform Goes Awry (London: Routledge, 2003). 2. Clifford G. Gaddy and Barry W. Ickes, ‘‘Russia’s Virtual Economy,’’ Foreign Affairs 77, no. 5 (September–October 1998): 53–67. 3. In the agricultural sector during the 1990s, the performance of large farms deteriorated, and private farms failed to compensate. Domestic food production fell precipitously (by an estimated 40 percent or more on large farms), the productivity of large farms declined, farm debt and unprofitability soared, and food imports increased across the board, especially for meat and poultry products, as Russia became the largest poultry meat importer in the world. See Stephen K. Wegren, Russia’s Food Policies and Globalization (Lanham, Md.: Lexington, 2005), 132–44. Overall, domestic output from the agricultural sector contracted, reducing its contribution to GDP from about 14 percent at the beginning of the 1990s to about 7 percent at the end (in a significantly smaller economy). Declines in animal stocks during the Yeltsin years exceeded those of Stalin’s collectivization, and by the end of the decade there were fewer farm animals than at any time since the 1950s. The amount of agricultural land under cultivation declined, and land reclamation virtually ceased. During 1995–97, grain harvests averaged only 73.7 million tons. The nadir was reached in 1998, when the harvest totaled only 47.9 million tons, the least since the early 1950s. By the latter years of the Yeltsin era, the combination of extraordinarily bad harvests and the financial collapse of the ruble in August 1998 led to regionally imposed price controls on food products. Because of this combination of economic disasters, food aid was provided by the West during 1999 and 2000 in order to prevent starvation in some regions of Russia. The prospects for a quick rebound in Russia’s agriculture appeared poor because rural infrastructure had crumbled at an accelerated rate during the 1990s, accompanied by a precipitous decline in government capital investments. Annually, large amounts of capital stock became unusable as farm equipment fell into disrepair or lacked spare parts. More machinery was retired from use than was produced, leading to a demechanization of agricultural production. 4. Stephen K. Wegren, ‘‘Putin and Agriculture,’’ in Putin’s Russia: Past Imperfect, Future Uncertain, 3d ed., ed. Dale R. Herspring (Lanham, Md.: Rowman and Littlefield, 2007), 147. 5. For policy statements by Medvedev on agriculture prior to becoming president, see Krest’ianskie vedomosti, nos. 1–2 (January 2008), 4; no. 5 (February 2008), 3; no. 8 (February 2008), 3. Once elected president, Medvedev delivered a detailed speech about agriculture and his government’s orientation toward it. See Krest’ianskie vedomosti, no. 10 (March 2008), 1–2. 6. See Izvestiia, July 25, 1998, 1–2; V. Semenov, ‘‘Novyi kurs agrarnoi politiki,’’ Ekonomist, no. 1 (January 1999): 12–16. 7. Under Putin’s government and with Gordeev as minister of agriculture, the government adopted several federal-level special programs that were designed to strengthen the sector and help Russia reduce its reliance on food imports. For example, one early program was directed at the development of land reform (1999–2002), another was for the

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development of the agro-industrial complex (2000–2008), and a third was for the social development of the countryside (2002–2010). In addition, numerous laws were adopted that affected agriculture and land reform. Gordeev was minister of agriculture from August 1999 into February 2009. On March 12, 2009, President Medvedev signed a decree replacing him with Elena Skrynnik. Because this book concerns policies in force under Gordeev’s leadership, the remainder of the book refers to him as Minister Gordeev instead of former minister. 8. For a discussion of initiatives to improve agriculture under Putin, see Stephen K. Wegren, ‘‘Russian Agriculture During Putin’s First Term and Beyond,’’ Eurasian Geography and Economics 46, no. 3 (April–May 2005): 224–44. 9. Sel’skaia zhizn’, August 31–September 6, 2006, 6. 10. ‘‘Rabota APK v 2006 g. i formirovanie agroprodovol’stvennoi politiki,’’ Ekonomist, no. 4 (April 2007), 23; Krest’ianskie vedomosti, nos. 1–2 (January 2008), 2. 11. ‘‘O razvitii sel’skogo khoziaistva,’’ Sobranie zakonodatel’stva Rossiiskoi Federatstii, no. 1 (January 2007): 173–83. 12. For a further discussion of the law and its provisions, see L. A. Kosholkina, ‘‘Zakon ‘O razvitii sel’skogo khoziaistva’ i mery po ego realizatsii,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 4 (April 2007): 8–12. 13. For example, Sel’skaia zhizn’, December 12, 2006, 1. 14. Interview with Sergei Kiselev, negotiator on the Russian side for WTO accession, Moscow, December 8, 2006. 15. Krest’ianskie vedomosti, nos. 25–26 (June 2006), 3. 16. Krest’ianskie vedomosti, no. 6 (February 2007), 2. 17. Sel’skaia zhizn’, December 19–24, 2008, 3. 18. Krest’ianskie vedomosti, no. 3 (January 2008), 3. 19. Rossiiskaia gazeta, January 12, 2007, www.rg.ru/2007/01/12/fermer.html. 20. For a discussion, see Krest’ianskie vedomosti, no. 42 (October 2006), 2. A ‘‘hot line’’ for people with questions was opened, and some of the most common questions (with answers) were reprinted in Krest’ianskie vedomosti, no. 37 (September 2006), 4, 6, 7. 21. See ‘‘Postanovlenie pravitel’stva Rossiiskoi Federatsii,’’ nos. 280 and 281, in Sobranie zakonodatel’stva Rossiiskoi Federatstii, no. 1 (January 2007): 621–26. 22. Krest’ianskie vedomosti, no. 6 (February 2007), 4. 23. For example, during the 2005 agricultural year (July 1, 2004–June 30, 2005), Russia exported 12.5 million tons of grain. During the 2006 agricultural year Russia exported 14 million tons. Krest’ianskie vedomosti, no. 6 (February 2007), 2. In 2007, Russia exported 16.7 million tons of grain. Krest’ianskie vedomosti, no. 11 (March 2008), 3. 24. See the report on the Eighteenth Congress of AKKOR in early 2007 in Krest’ianskie vedomosti, no. 8 (February 2007), 2–3, and on the Nineteenth Congress in Rossiiskaia zemlia, no. 12 (March 2008), 1, 3–4. 25. Medvedev noted that in 2006, the private farming sector had less than 12 percent of the agricultural workforce but produced 20 percent of the nation’s grain, 18 percent of its sugar beets, and one-third of its sunflower seeds. Krest’ianskie vedomosti, nos. 1–2 (January 2007), 3.

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26. Vserossiiskaia sel’skokhoziaistvennaia perepis’ 2006 goda (predvaritel’nye itogi), vypusk 1 (Moscow: Rosstat, 2006), 60. 27. A. Tarasov, ‘‘Zemel’nyi nalog v sisteme nalogooblozheniia sel’khozproizvodstva,’’ APK: Ekonomika, upravlenie, no. 8 (August 2007): 43. 28. ‘‘Sbory zemelnogo naloga vyrosli 2.4 raza,’’ www.klerk.ru/news. 29. Sel’skaia zhizn’, March 7–14, 2001, 3. 30. The survey was carried out in eight regions: Voronezh, Volgograd, Ivanovo, Kaluga, Novgorod, Perm, Moscow, and Tula. For methodology and analysis, see Stephen K. Wegren and Vladimir R. Belen’kiy, ‘‘Change in Land Relations: The Russian Land Market,’’ in Rural Reform in Post-Soviet Russia, ed. David J. O’Brien and Stephen K. Wegren (Washington, D.C.: Woodrow Wilson Center Press; Baltimore: Johns Hopkins University Press, 2002), 89–91. 31. Eugenia Serova, ‘‘Results of Transformation of Russian Agri-Food Sector,’’ in Reflecting Transformation in Post-Socialist Rural Areas, ed. Maarit Heinonen, Jouko Nikula, Inna Kopoteva, and Leo Granberg (New Castle, U.K.: Cambridge Scholars, 2007), 13. 32. In particular, as Natalya Shagaida argues, at least three problems arise when one person wants a part of the collective ownership of land shares: the need for new land surveying and the problem of what the remaining owners want to do with the shares; the need to reevaluate the land and the problems associated with the expenses of doing so; and problems arising in the course of registering and the need to update all previously issued documents. See N. Shagaida, ‘‘Vydelenie uchastkov v schet zemel’nykh dolei: Sposoby i problemy,’’ APK: Ekonomika, upravlenie, no. 4 (April 2007): 41. 33. Serova, ‘‘Results of Transformation of Russian Agri-Food Sector,’’ 14. 34. The primary exception consists of individuals who register a land plot for use as a private plot but in fact may encompass several hectares, thereby making it indistinguishable from a private farm. This practice is followed to avoid income taxes on food produce that is sold. See Sel’skaia Zhizn’, December 23, 2008, 3. 35. Economist, June 17, 2000, 55. 36. The title of the law was ‘‘Ob oborote zemel’ sel’skokhoziaistvennogo naznacheniia.’’ 37. The weakening of the political left was due to divisions within the Communist Party, disagreements between the Communist Party and the Agrarian Party, and the dealignment of the rural voter with the Communist Party. See Luke March, The Communist Party in Post-Soviet Russia (Manchester: Manchester University Press, 2002); Stephen K. Wegren, ‘‘Rural Support for the Communist Party and Implications for the Party System,’’ Party Politics 10, no. 5 (September 2004): 565–82. Putin’s freedom of action was especially strengthened after the 2003 Duma election in which the pro-Kremlin party United Russia not only captured a majority of seats but also captured two-thirds of all of the legislature’s seats—thereby enabling Putin to pursue his legislative agenda successfully. The 2003 election also marked a significant decline in electoral support for the more conservative Communist Party of the Russian Federation, which obtained only about one-half the number of seats it had in 1999. In particular, the Communist Party experienced a decline in rural electoral support, which heretofore had been a bulwark for conservative candidates.

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38. For example, the number of regional governors who were United Russia members grew to sixty-nine by 2006. See Andrew Konitzer and Stephen K. Wegren, ‘‘Federalism and Political Recentralization in the Russian Federation: United Russia as the Party of Power,’’ Publius 36, no. 4 (Fall 2006): 503–22. 39. Sel’skaia zhizn’, March 19, 2002, 1–2. 40. See RFE/RL Newsline 6, no. 75, pt. 1, April 22, 2002; RFE/RL Newsline 6, no. 76, pt. 1, April 23, 2002. 41. Krest’ianskaia rossiia, no. 18 (May 6–12, 2002), 8. 42. Sel’skaia zhizn’, May 21, 2002, 1. 43. Sel’skaia zhizn’, June 11, 2002, 1. 44. Sel’skaia zhizn’, June 20–26, 2002, 2. 45. RFE/RL Newsline 6, no. 117, pt. 1, June 24, 2002. 46. RFE/RL Newsline 6, no. 119, pt. 1, June 26, 2002. See also the coverage in Sel’skaia zhizn’, June 27–July 3, 2002, 2; Economist, June 29–July 5, 2002; and Johnson’s Russia List, no. 6324, June 26, 2002. 47. The full text of the law is found in Sobranie zakonodatel’stva Rosssiiskoi Federatsii, no. 30 (July 29, 2002): 7632–42. The 2005 version of the law with commentary may be found in A. V. Mazurov, V. V. Nakhratov, and V. Z. Churkin, Kommentarii k federal’nomy zakonu ‘Ob oborote zemel’ sel’skokhoziaistvennogo naznacheniia’ (Moscow: Chastnoe pravo, 2006). 48. A new version of the law was prepared and circulated in early 2007. It was even more restrictive and includes a moratorium on the sale of privately owned agricultural land. See Mazurov, Nakhratov, and Churkin, Kommentarii k federal’nomy zakonu ‘Ob oborote zemel’ sel’skokhoziaistvennogo naznacheniia,’ 186–205. 49. In 2000 the Federal Cadastre service had a central office in each of Russia’s eightynine regions, as well as 1,697 raion and 455 city committee offices. More than nineteen thousand people worked for the service, not including more than two thousand private land surveying companies. ‘‘Itogi raboty za 10-letie zemel’noi sluzhby Rossii i zadachi na 2001 god,’’ Zemel’nyi vestnik Rossii, no. 4 (April 2000), 2. According to the law, the sales process is subject to various fees. 50. Shagaida, ‘‘Vydelenie uchastkov v schet zemel’nykh dolei,’’ 40–42; Krest’ianskie vedomosti, no. 44 (November 2008), 1. 51. See Stephen K. Wegren, ‘‘Russian Peasant Farms and Household Plots in 2003: A Research Note,’’ Eurasian Geography and Economics 45, no. 3 (April–May 2004): 230– 39. 52. ‘‘O perevode zemel’ ili zemel’nykh uchastkv iz odnoi kategorii v druguiu,’’ Sobranie zakonodatel’stva Rossiiskoi Federatsii, no. 52, pt. 1 (December 27, 2004): 11967– 76. 53. Krest’ianskie vedomosti, no. 15 (April 2006), 3; ‘‘Postanovlenie pravitel’stva Rossiiskoi Federatsii,’’ Sobranie zakonodatel’stva Rossiiskoi Federatsii, no. 15 (April 10, 2006): 4533–35. 54. Sel’skaia zhizn’, December 14–20, 2006, 2. 55. ‘‘Postanovlenie pravitel’stva Rossiiskoi Federatsii,’’ Sobranie zakonodatel’stva Rossiiskoi Federatsii, no. 28 (July 10, 2006): 7941–42. 56. Krest’ianskie vedomosti, no. 45 (November 2006), 2.

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57. Krest’ianskie vedomosti, nos. 47–48 (December 2006), 2. 58. See Krest’ianskie vedomosti, no. 44 (October 2004), 2; Krest’ianskie vedomosti, no. 45 (November 2004), 2, 8; Sel’skaia zhizn’, February 1–7, 2007, 6. 59. Sel’skaia zhizn’, March 29–April 4, 2007, 2. 60. For example, it removed from the 2002 version the limitation on how much land a person or family could own in a raion. 61. See Krest’ianskie vedomosti, no. 44 (November 2007), 2, in which he calls for ‘‘social justice’’ on the part of large agricultural firms and argues that the buying up of agricultural land for speculative purposes and easy profit will not be permitted. 62. See the report on Prime Minister Mikhail Kasianov in Sel’skaia zhizn’, March 26, 2002, 2. 63. Note that under Putin one continuity with the Yeltsin period in terms of the land market was that the leasing of state and municipal land continued to account for most land transactions, although the percentage declined from over 90 percent in 2001 to 84 percent in 2005 and 80 percent in 2007. One discontinuity was the fact that the total number of transactions (lease transactions and land sales and purchases) rose, then declined, then stabilized—from 5.2 million transactions in 1999, the last year of Yeltsin’s rule, to 5.5 million in 2001, to 4.3 million in 2005, and 4.5 million in 2006 and 2007. Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2001 godu (Moscow: Federal Land Cadastre Service, 2002), 97; Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2005 godu (Moscow: Federal’noe agentstvo kadastra ob’ektov nedvizhimosti, 2006), 143; Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2007 godu (Moscow: Federal’noe agentstvo kadastra ob’ektov nedvizhimosti, 2008), 175. 64. Krest’ianskie vedomosti, nos. 25–26 (June 2006), 10. 65. Gosudarstvennyi (natsional’ny) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2007 godu, 184. 66. Sel’skaia zhizn’, May 3–9, 2007, 7. 67. The term is from Dmitri Rylko and Robert W. Jolly, ‘‘Russia’s New Agricultural Operators: Their Emergence, Growth and Impact,’’ Comparative Economic Studies 47, no. 1 (March 2005): 115–26. 68. Rylko and Jolly categorize market entry by time period, starting with the period immediately after the 1998 crash, with the most significant number of NAOs emerging after 2001. Ibid., 122. 69. Vasilii Uzun, ‘‘Large and Small Business in Russian Agriculture: Adaptation to Market,’’ Comparative Economic Studies 47, no. 1 (March 2005), 88. 70. Rylko and Jolly, ‘‘Russia’s New Agricultural Operators,’’ 116, 120. 71. Krest’ianskie vedomosti, no. 3 (January 2008), 3. 72. S. N. Volkov, ‘‘Zemel’nye otnosheniia kak bazovyi factor ustoichivogo razvitiia sel’skogo khoziaistva,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 4 (April 2007), 5. 73. Jessica Allina-Pisano, The Post-Soviet Potemkin Village: Politics and Property Rights in the Black Earth (New York: Cambridge University Press, 2008), 190. 74. Krest’ianskie vedomosti, no. 24 (June 2007), 4.

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75. Krest’ianskie vedomosti, no. 12 (April 2007), 3. 76. Krest’ianskie vedomosti, no. 46 (November 2006), 7. 77. Ibid. 78. Sel’skaia zhizn’, November 20, 2007, 2. 79. Krest’ianskie vedomosti, nos. 42–43 (November 2007), 9. 80. See Wegren and Belen’kiy, ‘‘Change in Land Relations,’’ 107–10. 81. Iu. P. Nasonova, ‘‘Rynok dolei iz zemel’ sel’skokhoziaiztvennogo naznacheniia: problemy funktsionirovaniia,’’ Agrarnaia Rossiia, no. 2 (March–April 2007): 51. 82. Natalya Shagaida, ‘‘Agricultural Land Market in Russia: Living with Constraints,’’ Comparative Economic Studies 47, no. 1 (March 2005): 3. 83. Ibid., 1. 84. Alfred Evans Jr., ‘‘The Decline of Rural Living Standards in Russia in the 1990s,’’ Journal of Communist Studies and Transition Politics 12, no. 3 (September 1996): 293– 314. 85. Wegren and Belen’kiy, ‘‘Change in Land Relations,’’ 100–102. 86. The literature in Russian about rural social problems is very large, but one of the best known and most widely published Russian analysts is A. V. Petrikov. See A. V. Petrikov, ed., Ekonomicheskie i sotsial’nye problemy agrarnogo sektora (Moscow: Russian Academy of Sciences, 1998); A. V. Petrikov, ‘‘Sotsial’nye problemy Rossiiskoi derevni,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 3 (March 1999): 37–41; A. V. Petrikov, ‘‘Perspektivy ustoichivogo razvitiia sel’skikh territorii,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 7 (July 2005): 7–10; A. V. Petrikov, ‘‘Neobkhodimo sozdat’ novuiu sel’skuiu infrastrukturu,’’ Krest’ianskie vedomosti, no. 23 (June 2005), 7; and A. V. Petrikov, ‘‘Ustoichivst’ sel’skogo razvitiia,’’ Ekonomist, no. 7 (July 2006): 86–93. See also ‘‘Sotsial’noe razvitie sela: problemy i tendentsii (ekonomicheskii obzor),’’ APK: Ekonomia, upravlenie, no. 2 (February 1998): 21–31; V. Deineko and D. Toropov, ‘‘Sotsial’noe razvitie sela: Problemy i tendentsii,’’ APK: Eekonomia, upravlenie, no. 5 (May 2000): 21–29; A. Mikhalev, ‘‘Neotlozhnye problemy sotsial’nogo obustroistva sela,’’ APK: Ekonomia, upravlenie, no. 10 (October 2003): 3–8; and N. Latyshev and S. Isakova, ‘‘Sotsial’nye problemy sela Tsentral’ngo Chernozem’ia,’’ APK: Ekonomia, upravlenie, no. 8 (August 2004): 17–22. 87. Interview with Olga Panteleeva, Kostroma Agricultural University, October 30, 2006. The federal program may be found in ‘‘Federal’naia tselevaia programma ‘Sotsial’noe razvitie sela do 2010 goda,’ ’’ Sobranie zakonodatel’stva Rossiiskoi Federatsii, no. 49 (December 9, 2002): 11441–58. 88. Nasonova, ‘‘Rynok dolei iz zemel’ sel’skokhoziaiztvennogo naznacheniia,’’ 51. 89. Zvi Lerman and Natalya Shagaida, ‘‘Land Reform and Development of Agricultural Land Markets in Russia,’’ Discussion Paper 2.05 (Center for Agricultural Research, Jerusalem, 2005), 23. 90. RFE/RL Newsline 11, no. 37, pt. 1, February 27, 2007; RFE/RL Newsline 11, no. 38, pt. 1, February 28, 2007; RFE/RL Newsline 11, no. 43, pt. 1, March 7, 2007. 91. Shagaida, ‘‘Agricultural Land Market in Russia,’’133–36. 92. Dokhody, raskhody, and potreblenie domashnikh khoziaistv v I–IV kvartalakh 2005 goda (Moscow: Rosstat, 2006), 75. 93. Shagaida, ‘‘Agricultural Land Market in Russia,’’ 134–35.

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94. Ibid. In a different publication, she tells the story of a private farmer who spent a year and a half trying to get his land reregistered and ended up going to court, where the process began from the beginning. See Natalya Shagaida, ‘‘Zemel’nyi ‘obrok’ Femidy,’’ Rossiiskaia biznes-gazeta, November 28, 2006, www.rg.ru. 95. See Natalya Shagaida, ‘‘Zemlya v nasledstvo,’’ Rossiiskaia biznes-gazeta, November 23, 2004, www.rg.ru. 96. Shagaida, ‘‘Agricultural Land Market in Russia,’’136. 97. See William Tompson, ‘‘Back to the Future? Thoughts on the Political Economy of Expanding State Ownership in Russia,’’ Russia Papers, no. 6 (2008). Concerning agriculture in particular, see Stephen K. Wegren, ‘‘The State and Agrarian Reform in PostCommunist Russia,’’ Journal of Peasant Studies 34, nos. 3–4 (July–October 2007): 498– 526. 98. On Gordeev’s arguments for state regulation of retail food markets, see Krest’ianskie vedomosti, nos. 47–48 (December 2006), 2; no. 12 (April 2007), 3. 99. Krest’ianskie vedomosti, no. 18 (May 2007), 3.

Chapter 5. Rural Households’ Land Holdings, Enlargement, and Rental 1. Property rights vary considerably among postcommunist nations, with central Asian nations being the most restrictive and East European states being the most liberal. See Zvi Lerman, Csaba Csaki, and Gershon Feder, Agriculture in Transition: Land Policies and Evolving Farm Structures in Post-Soviet Countries (Lanham, Md.: Lexington, 2004), chaps. 3–4. 2. See David J. O’Brien, Stephen K. Wegren, and Valeri V. Patsiorkovski, ‘‘Contemporary Rural Responses to Reform from Above,’’ Russian Review 63, no. 2 (April 2004): 260–63; David J. O’Brien and Valery V. Patsiorkovsky, Measuring Social and Economic Change in Rural Russia: Surveys from 1991 to 2003 (Lanham, Md.: Lexington, 2006), xxi; and Zvi Lerman, Eugenia Serova, and Dmitry Zvyagintsev, ‘‘Diversification of Rural Incomes and Non-Farm Employment: Survey Evidence from Russia,’’ Journal of Peasant Studies 35, no. 1 (January 2008): 60–79. 3. As resistance pertains to Russia, see Stephen K. Wegren, The Moral Economy Reconsidered: Russia’s Search for Agrarian Capitalism (New York: Palgrave Macmillan, 2005). For specific alternative interpretations, see Carol Scott Leonard, ‘‘Rational Resistance to Land Privatization: The Response of Rural Producers to Agrarian Reforms in Pre- and Post-Soviet Russia,’’ Post-Soviet Geography and Economics 41, no. 8 (December 2000): 605–20; Jessica Allina-Pisano, ‘‘Sub Rosa Resistance and the Politics of Economic Reform: Land Distribution in Post-Soviet Ukraine,’’ World Politics 56, no. 4 (July 2004): 554–81; and Jessica Allina-Pisano, The Post-Soviet Potemkin Village: Politics and Property Rights in the Black Earth (New York: Cambridge University Press, 2008). In general, one should never lose sight of the obstacles to successful land reform—whether they come from strategies used by landlords to prevent land distribution in traditional societies, state repression of land rights, onerous conditions that make the acquisition of land uneconomical, unimplemented reforms, or high transaction costs due to bureaucratism and bureaucratic regulations. At the same time, genuine resistance should be understood as sustained opposition that would take on definite characteristics. Because private

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ownership of land by rural and urban individuals, rural and urban households, and private farmers increased so rapidly, it would appear that covert resistance (weapons of the weak) and episodic resistance to a single law or governmental policy are not the most important characteristics of Russia’s land reform. Thus, it is essential to understand that economic incentives (and social effects) condition whether land will be desirable to obtain and that further economic incentives are created when land is obtained and held as private property, as in contemporary Russia. Anecdotal evidence suggests that, if not exactly land hunger, then certainly a disposition to obtain land in contemporary Russia exists, at least among certain types of households. In this context, it is useful to recall that early in the land distribution process, and before land had been surveyed and cadastred, the most common type of legal violation was taking too much land—more than the amount that raion land norms allowed. See Informatsiia o khode zemel’noi reformy na 01.06.93g. (Moscow: Committee on Land Resources and Surveying, 1993), 76. For a discussion of both adaptive and resistant behaviors, see David J. O’Brien and Stephen K. Wegren, eds., Rural Reform in Post-Soviet Russia (Washington, D.C.: Woodrow Wilson Center Press; Baltimore: Johns Hopkins University Press, 2002). 4. James C. Scott, The Moral Economy of the Peasant: Rebellion and Subsistence in Southeast Asia (New Haven: Yale University Press, 1976). 5. Wegren, Moral Economy Reconsidered, chaps. 2–4. 6. Judith Pallott and Tatyana Nefedova, Russia’s Unknown Agriculture: Household Production in Post-Socialist Rural Russia (Oxford: Oxford University Press, 2007), chap. 2. 7. Anders Aslund, ‘‘Russia’s Collapse,’’ Foreign Affairs 78, no. 5 (September–October 1999): 64–77. 8. For a discussion of the end of the rural Soviet social contract and its transformation in the post-communist period, as well as rural socioeconomic trends, see Stephen K. Wegren, ‘‘The Rise, Fall, and Transformation of the Rural Social Contract in Russia,’’ Communist and Post-Communist Studies 36, no. 1 (January 2003): 1–27. 9. Nationwide, the amount of land used for private plots by households increased from 3.2 million hectares in 1990 to 6.1 million hectares at the end of 1999. The amount of land used for individual and collective fruit gardens increased from 576,000 hectares to 1.2 million hectares, and the amount of land used by households for individual and collective vegetable gardens increased from 379,000 hectares to 437,000 hectares during the same time period. Sel’skokhoziaistvennaia deiatel’nost’ khoziaistv naseleniia v Rossii (Moscow: Goskomstat, 2003), 12. 10. See Stephen K. Wegren, Russia’s Food Policies and Globalization (Lanham, Md.: Lexington, 2005), 12–14. 11. David J. O’Brien, Valeri V. Patsiorkovski, Larry D. Dershem, and Oksana Lylova, ‘‘Household Production and Symptoms of Stress in Post-Soviet Russian Villages,’’ Rural Sociology 61, no. 4 (Winter 1996): 688–92. 12. See David J. O’Brien, Valeri V. Patsiorkovski, and Larry D. Dershem, Household Capital and the Agrarian Problem in Russia (Aldershot, U.K.: Ashgate, 2000), chap. 8; L. V. Bondarenko, ‘‘Tendentsii v potreblenii sel’skogo naseleniia,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 3 (March 1998): 39. Eugenia Serova has argued that due to the sheltering effects of increased food production, rural

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households’ standard of living may have fallen less than that of urban households during the 1990s. Interview with Eugenia Serova, Moscow, December 9, 2006. 13. For example, in 1990 households produced 24 percent of the nation’s food (measured in ruble value). By 1998 households were producing more than 58 percent of the nation’s food (as measured in ruble value), and in the Putin period food production by households ranged between 51 percent and 56 percent of the value of total output. Rossiia v tsifrakh (Moscow: Goskomstat, 1995), 231; Rossiia v tsifrakh (Moscow: Rosstat, 2007), 231. 14. On the importance of private plot production to the household, see Judith Pallot and Tatyana Nefedova, ‘‘Geographical Differentiation in Household Plot Production in Rural Russia,’’ Eurasian Geography and Economics 44, no. 1 (January–February 2003): 40–64; Tatyana Nefedova, Sel’skaia Rossiia na pereput’e: geograficheskie ocherki (Moscow: Novoe, 2003), 184–95. 15. See Stephen K. Wegren, ‘‘Typologies of Household Risk-Taking: Contemporary Rural Russia as a Case Study,’’ Journal of Peasant Studies 35, no. 3 (July 2008): 390–423. 16. Karen Brooks et al., ‘‘Agricultural Reform in Russia: A View from the Farm Level,’’ World Bank Discussion Paper no. 327 (Washington, D.C.: World Bank, 1996), 63. 17. Stephen K. Wegren and Vladimir R. Belen’kiy, ‘‘Change in Land Relations: The Russian Land Market,’’ in Rural Reform in Post-Soviet Russia, ed. David O’Brien and Stephen K. Wegren (Washington, D.C.: Woodrow Wilson Center Press; Baltimore: Johns Hopkins University Press, 2002), 105–7; Wegren, Moral Economy Reconsidered, 97, 130–35. 18. Eugenia Serova, ‘‘Public Opinion Concerning Russia’s Agrarian Reforms,’’ in Russian Views of the Transition in the Rural Sector: Structures, Policy Outcomes, and Adaptive Responses, ed. L. Alexander Norsworthy (Washington, D.C.: World Bank, 2000), 68. 19. Wegren and Belen’kiy, ‘‘Change in Land Relations,’’ 105–6. 20. Survey data from 2001 did show opposition to the government’s land reform policies, but the wording of the question was imprecise, and it appears that respondents were opposed to the way the government was implementing land reform rather than opposed to land privatization. 21. Wegren and Belen’kiy, ‘‘Change in Land Relations,’’ 108–9. 22. According to survey data, 21 percent of households would increase production by acquiring livestock, and 10 percent planned to increase production by adding land. 23. See David J. O’Brien, Stephen K. Wegren, and Valery V. Patsiorkovsky, ‘‘Income Stratification in Russian Villages: From Profession to Property,’’ Problems of PostCommunism 54, no. 1 (January–February 2007): 37–46. 24. Natalya Shagaida, ‘‘Living with Constraints: Russia’s Agricultural Land Market,’’ BASIS Brief, no. 36 (November 2005): 1. 25. Lerman, Csaki, and Feder, Agriculture in Transition, 98. 26. As discussed in Chapter 3, during the process of large farm reorganization (1992– 94), farm property and farmland were divided among farm members, with each member receiving a certain quantity of land and property ‘‘shares’’ free of charge. 27. V. V. Patsiorkovski, Sel’skaia Rossiia, 1991–2003 (Moscow: Finansy i statistika, 2003), 250.

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28. Interview with Natalya Shagaida, Moscow, December 18, 2006. See Natalya Shagaida, ‘‘Novye sdelki s zemel’nymi doliami: doveritel’noe upravlenie,’’ Ekonomika sel’skogo khoziaistvo Rossii, no. 10 (October 2006): 31. 29. Gosudarstvennyi (natsional’nyi) doklad o sostoianii i ispol’zovanii zemel’ Rossiiskoi Federatsii v 2007 godu (Moscow: Federal’noe agentstvo ob’ektov nedvizhimosti, 2008), 88. 30. The variables included the size of the household private plot, the amount of rental land, the size of the paper land share entitlement, and any other land through arrangements. 31. O’Brien and Patsiorkovsky, Measuring Social and Economic Change, xx. 32. Rachel Sabates-Wheeler, Cooperation in the Romanian Countryside: An Insight into Post-Soviet Agriculture (Lanham, Md.: Lexington, 2005), 25. 33. For descriptions and diagrams of a typical rural household and the division and use of its land, see Caroline Humphrey, Marx Went Away—But Karl Stayed Behind, updated ed. (Ann Arbor: University of Michigan Press, 1998), 457–58; Pallott and Nefedova, Russia’s Unknown Agriculture, 63, 66, 68. 34. Zvi Lerman and Dragos Cimpoies, ‘‘Land Consolidation as a Factor for Rural Development in Moldova,’’ Europe-Asia Studies 58, no. 3 (2006): 440, 445. 35. Sabates-Wheeler, Cooperation in the Romanian Countryside, 30. 36. The 2003 survey indicated that the most popular way of increasing land holdings was through rental of land, followed by exchange. Both surveys showed that purchasing land and receiving land as a gift or inheritance did not occur very frequently. 37. Richard Rose, ‘‘Uses of Social Capital in Russia: Modern, Pre-Modern, and AntiModern,’’ Post-Soviet Affairs 16, no. 1 (January–March 2000): 33–57. 38. An extended discussion of the relationship between market reforms and the strength of community attachment and personal ties is beyond the scope of this chapter. It is worth noting, however, that previous research has shown a substantial decline in one type of community attachment—actual involvement in the village community—and a less dramatic, but nonetheless consistent, decline in another type of community attachment: community satisfaction. This research concluded that these overall negative trends in community attachment are associated with the growth of the marketplace in the Russian countryside; in other words, market reform had eroded personal networks and community attachment (although the degree of attachment was affected by other variables such as income and age). See David J. O’Brien, Stephen K. Wegren, and Valeri V. Patsiorkovski, ‘‘Marketization and Community in Post-Soviet Russian Villages,’’ Rural Sociology 70, no. 2 (April–June 2005): 188–207. 39. Leo Granberg, ‘‘Rural Paths in Russia,’’ in Reflecting Transformation in PostSocialist Rural Areas, ed. Maarit Heinonen, Jouko Nikula, Inna Kopoteva, and Leo Granberg (New Castle, U.K.: Cambridge Scholars, 2007), 57. 40. Ibid., 59. Italics in original. 41. There is no appreciable difference in the mean amount of assistance from a large farm for households that did not increase their real land holdings and households that did. 42. For more on rural poverty in Russia, see Stephen K. Wegren, David J. O’Brien, and Valeri V. Patsiorkovski, ‘‘Why Russia’s Rural Poor Are Poor,’’ Post-Soviet Affairs 19, no.

Notes to Pages 122–30

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3 (July–September 2003): 264–287; O’Brien and Patsiorkovsky, Measuring Social and Economic Change, 112–28. 43. See Sam Rich, ‘‘Africa’s Village of Dreams,’’ Wilson Quarterly 31, no. 2 (Spring 2007): 14. 44. See David J. O’Brien, Stephen K. Wegren, and Valeri V. Patsiorkovski, ‘‘Poverty and Adaptation in Rural Russia,’’ in Rural Adaptation in Russia, ed. Stephen K. Wegren (London: Routledge, 2005), 95–126. 45. V. N. Khlystun, ‘‘Zemel’no-ipotechnoe kreditovanie: Sostoianie i perspektivy,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 4 (April 2008): 11. 46. Natalya Shagaida, ‘‘Institutsional’nye ogranicheniia zaloga sel’khozzemel,’ ’’ APK: Ekonomika, upravlenie, no. 7 (July 2006): 33. 47. The inclusion of private farmers inflates the total mean land holdings for all households. In the total sample, respondents have mean land holdings of 1.09 hectares; if private farmers are excluded, the remaining households have a mean land holding of .65 hectares. The number of private farmers in the total sample is quite small. 48. Stephen K. Wegren, David J. O’Brien, and Valeri V. Patsiorkovski, ‘‘Winners and Losers in Russian Agrarian Reform,’’ Journal of Peasant Studies 30, no. 1 (October 2002): 1–29. 49. Martha Lampland, ‘‘The Advantages of Being Collectivized: Cooperative Farm Managers in the Postsocialist Economy,’’ in Postsocialism: Ideals, Ideologies and Practices in Eurasia, ed. C. M. Hahn (London: Routledge, 2002), 50. 50. A positive and statistically significant relationship was found between rental land increases and the number of livestock, suggesting that rental land is used for the raising and feeding of animals, which are then sold to increase household monetary income. See Stephen K. Wegren, ‘‘Why Russians Participate in the Land Market: Socio-Economic Factors,’’ Post-Communist Economies 15, no. 4 (December 2003): 497. This discovery is supported by Pallott and Nefedova, who found that rental land is often used for grazing. See Pallott and Nefedova, Russia’s Unknown Agriculture, chap. 3. 51. Rossiia v tsifrakh (2007), 235. 52. The term ‘‘consumed’’ is used broadly, indicating that the household has a variety of uses for food that is not sold. For example, ‘‘consumed’’ food may include food eaten by humans, feed for livestock, payment in-kind or barter, assistance to family or relatives, or gifts to neighbors. 53. Pallott and Nefedova (Russia’s Unknown Agriculture, 32) found that households that were higher on the socioeconomic scale were more likely to engage in food production. Wegren found that households higher on the socioeconomic scale were more likely to sell more of their produce. See Wegren, ‘‘Typologies of Household Risk-Taking.’’ Other articles noting a shift in household income include O’Brien, Wegren, and Patsiorkovski, ‘‘Contemporary Rural Responses’’; Lerman, Serova, and Zvyagintsev, ‘‘Diversification of Rural Incomes.’’ 54. For additional evidence, see Wegren, O’Brien, and Patsiorkovski, ‘‘Winners and Losers,’’ 19–20. 55. See Timothy J. Colton, ‘‘Determinants of the Party Vote,’’ in Growing Pains: Russian Democracy and the Election of 1993, ed. Timothy J. Colton and Jerry F. Hough

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Notes to Pages 131–41

(Washington, D.C.: Brookings Institution, 1998), chap. 3; Timothy J. Colton, Transitional Citizens: Voters and What Influences Them in the New Russia (Cambridge: Harvard University Press, 2000). 56. In the case of private farmers, income from food sales was coded as business income because that is their livelihood. 57. Pallott and Nefedova, Russia’s Unknown Agriculture, chap. 3. 58. Another option was to sell, bequeath, or gift one’s land shares. In the 2006 survey, 466 households still owned their land shares, or 52 percent of the sample. Among households with land shares, 417 had either one or two land shares, representing one or two individuals who had received shares from a large farm. 59. See Stephen K. Wegren, ‘‘Risk Environments and the Future of Russian Private Farming,’’ Current Politics and Economics of Russia, Eastern and Central Europe 16, no. 2 (2001): 130. 60. See V. Ia. Uzun, ed., Sotsial’no-ekonomicheskie posledstviia privatizatsii zemli i reorganizatsii sel’skokhoziaistvennykh predpriiatii (1994–1996 gg.) (Moscow: Entsiklopediia Rossiiskikh dereven’, 1997), 85–90. 61. In general, spatial relationships are among the least often studied aspects of Russian agrarian and land reforms. The few exceptions are Grigory Ioffe and Tatyana Nefedova, Continuity and Change in Rural Russia: A Geographical Perspective (Boulder: Westview, 1997); Nefedova, Sel’skaia Rossiia na Pereput’e; Judith Pallott and Tatyana Nefedova, ‘‘Geographical Differentiation in Household Plot Production in Rural Russia,’’ Eurasian Geography and Economics 44, no. 1 (January–February 2003): 40–64; Pallott and Nefedova, Russia’s Unknown Agriculture, chap. 3; and Stephen K. Wegren, David J. O’Brien, and Valeri V. Patsiorkovski, ‘‘The Economics of Rural Households in Russia: Impact of Village Location,’’ Eurasian Geography and Economics 49, no. 2 (March–April 2008): 200–214. 62. Iu. P. Nasonova, ‘‘Rynok dolei iz zemel’ sel’skokhoziaistvennogo naznacheniia: problemy funktsionirovaniia,’’ Agrarnaia Rossiia, no. 2 (March–April 2007): 50. 63. Lampland, ‘‘Advantages of Being Collectivized,’’ 38. 64. Allina-Pisano, Post-Soviet Potemkin Village, 165.

Chapter 6. The Effects of Land Reform: Stratification and Class Development 1. In making this argument, I am less interested in attaching labels to these classes and am reluctant to apply the Marxist labels ‘‘rural bourgeoisie’’ or ‘‘petit-bourgeoisie.’’ What I am interested in doing is identifying a cluster of shared attributes that are characteristic of class development. 2. Broadly speaking, I am aware that a dichotomous class structure may be somewhat misleading, and I am not suggesting that a two-tiered class structure of rich and poor means that a middle peasant class does not exist. I am suggesting that a two-tiered class structure is the best way to illustrate the emerging class structure, and this analytical framework dramatizes the differences between the rich and poor. 3. Alain de Janvry, The Agrarian Question and Reformism in Latin America (Baltimore: Johns Hopkins University Press, 1981), 205–11.

Notes to Pages 141–45

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4. Joan Sokolovsky, Peasants and Power: State Autonomy and the Collectivization of Agriculture in Eastern Europe (Boulder: Westview, 1990), 6; Ronald A. Francisco, Betty A. Laird, and Roy D. Laird, eds., The Political Economy of Collectivized Agriculture: A Comparative Study of Communist and Non-communist Systems (New York: Pergamon, 1979). 5. See Aaron Vinokur and Gus Ofer, ‘‘Inequality of Earnings, Household Income, and Wealth in the Soviet Union in the 1970s,’’ in Politics, Work, and Daily Life in the USSR: A Survey of Former Soviet Citizens, ed. James Millar (New York: Cambridge University Press, 1987), chap. 6. 6. Mervyn Matthews, Class and Society in Soviet Russia (London: Penguin, 1972), 161–62. 7. Ibid., chap. 3; Hedrick Smith, The Russians, rev. ed. (New York: Ballantine, 1976), chaps. 1, 8. 8. Andrei Amalrik, Involuntary Journey to Siberia (New York: Harcourt, Brace, Jovanovich, 1970), chap. 13. 9. Caroline Humphrey, Marx Went Away—But Karl Stayed Behind, updated ed. (Ann Arbor: University of Michigan Press, 1998), 290–93; Lichnoe podsobnoe khoziaistvo v 1988 godu (Moscow: Goskomstat SSSR, 1989), 67–69. 10. Murray Yanowitch, Social and Economic Inequality in the Soviet Union (White Plains, N.Y.: Sharpe, 1977), chap. 2. 11. Ibid., 25. 12. A. P. Tiurina, Sotsial’no-ekonomicheskoe razvitiie Sovetskoi dereveni, 1965–1980 (Moscow: Mysl’, 1982); Stephen K. Wegren, Agriculture and the State in Soviet and PostSoviet Russia (Pittsburgh: University of Pittsburgh Press, 1998), chap. 2. 13. Merle Fainsod, Smolensk Under Soviet Rule (New York: Vintage, 1958), chap. 12. 14. Milovan Djilas, The New Class: An Analysis of the Communist System (New York: Praeger, 1957). 15. Matthews, Class and Society in Soviet Russia, 152. It would be wrong to assume that these four broad categories encompassed all types of farm labor, and in fact other categories of workers were often indispensable to collective and state farms (for example, construction personnel, service providers who may have lived in a nearby town, or other rural dwellers who were not engaged in agricultural work). 16. David J. O’Brien, Valeri V. Patsiorkovski, and Larry D. Dershem, Household Capital and the Agrarian Problem in Russia (Aldershot, U.K.: Ashgate, 2000); Stephen K. Wegren, ‘‘Socioeconomic Transformation in Russia: Where Is the Rural Elite?’’ EuropeAsia Studies 52, no. 2 (2000): 237–71. 17. Article 17 of the Soviet Constitution allowed ‘‘individual labor,’’ but this was applied primarily to handicrafts. 18. After the Land Code was adopted in 2001 and the Law on Subsidiary Farming was passed in 2003, the size of household plots was regulated by regional land laws, which produced variability from region to region. 19. David J. O’Brien and Valery V. Patsiorkovsky, Measuring Social and Economic Change in Rural Russia: Surveys from 1991 to 2003 (Lanham, Md.: Lexington, 2006), 75–94. 20. See David J. O’Brien, Stephen K. Wegren, and Valery V. Patsiorkovsky, ‘‘Income

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Stratification in Russian Villages: From Profession to Property,’’ Problems of PostCommunism 54, no. 1 (January–February 2007): 37–46. 21. Robin Okey, The Demise of Communist East Europe: 1989 in Context (London: Hodder Arnold, 2004), 29. 22. Kevin Willis, Klass: How Russians Really Live (New York: St. Martin’s, 1985). 23. Okey, Demise of Communist East Europe, 29. 24. Vladimir Shlapentokh, ‘‘Social Inequality in Post-Communist Russia: The Attitudes of the Political Elite and the Masses (1991–1998),’’ Europe Asia Studies 51, no. 7 (1999): 1167–82. 25. E. Kuznetsova and S. Kuznetsov, ‘‘Protsessy differentsiatsii dokhodov naseleniia i ikh gosudarstvennoe regulirovanie,’’ Ekonomist, no. 2 (February 2002): 47. Estimates differ as to the size of the Gini coefficient, with another analyst placing it at .31 in 1991 and increasing to .47 by the fall of 1999. N. M. Rimashevskaia, ed., Rossiia 2000: Sotsial’no-demograficheskaia situatsiia (Moscow: Russian Academy of Sciences, 2001), 88. Despite the disagreement, there is a broad consensus that inequality increased significantly during the 1990s. 26. Rossiia v tsifrakh (Moscow: Goskomstat, 2004), 108. According to official statistics, the greatest growth in inequality occurred during 1992–95. 27. Chrysti Freeland, Sale of the Century: Russia’s Wild Ride from Communism to Capitalism (New York: Crown Business, 2000); David Hoffman, The Oligarchs: Wealth and Power in the New Russia (New York: Public Affairs, 2002). 28. Bertram Silverman and Murray Yanowitch, New Rich, New Poor, New Russia: Winners and Losers on the Russian Road to Capitalism, 2d ed. (Armonk, N.Y.: M. E. Sharpe, 2000). 29. Alastair McAuley, ‘‘Inequality and Poverty,’’ in Russia in Transition: Politics, Privatisation and Inequality, ed. David Lane (New York: Longman, 1995), 177–89; T. I. Zaslavskaia, ‘‘Stratifikatsiia sovremennogo Rossiiskogo obshchestva,’’ Ekonomicheskie i sotsial’nye peremeny, no. 1 (January–February 1996): 7–15; M. D. Krasil’nikova, ‘‘Bogatyye: 1% naseleniia,’’ Ekonomicheskie i sotsial’nye peremeny, no. 3 (May–June 1996): 29–33; N. Lapina, Rossiiskie ekonomicheske elity i modeli natsional’nogo razvitiia (Moscow: Russian Academy of Sciences, 1997); Natalia Dinello, ‘‘Elites and Philanthropy in Russia,’’ International Journal of Politics, Culture and Society 12, no. 1 (1998): 109–33. 30. Igor V. Kukolev, ‘‘The Formation of the Business Elite,’’ Sociological Research 36, no. 1 (January–February 1997): 23–43. 31. I. E. Shteinberg, ‘‘Tendentsii transformatsii vlasti v postsovetskom sele,’’ Sotsiologicheskie issledovaniia, no. 7 (July 1996): 21–26; V. Ia. Uzun, ‘‘Puti kontsentratsii zemli i kapitala v agrarnom sektore,’’ Ekonomika sel’skokhoziaistvennykh i pererabayvaiushchikh predpriiatii, no. 7 (July 1999): 12–16. 32. For studies in English, see Stephen K. Wegren, David J. O’Brien, and Valeri V. Patsiorkovski, ‘‘Why Russia’s Rural Poor Are Poor,’’ Post-Soviet Affairs 19, no. 3 (July– September 2003): 264–87; David O’Brien, Valeri V. Patsiorkovski, and Stephen K. Wegren, ‘‘Poverty and Adaptation in Rural Russia,’’ Journal of Peasant Studies 31, nos. 3–4 (April–July 2004): 457–88. 33. There are several reasons why the rural sector did not become as differentiated as

Notes to Pages 146–48

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the urban sector in Russia during the 1990s. First, oligarchs and entrepreneurs had more interest in investing in oil and gas, and investments in rural land and agricultural enterprises were not considered economically attractive; second, rural incomes were low, lagging behind urban incomes and inflation, thereby leading to diminished real purchasing power; third, economic opportunity and avenues for upward mobility were more limited, and finally, decaying rural infrastructure reduced the value of rural landownership as an investment. 34. Stephen K. Wegren, David J. O’Brien, and Valeri V. Patsiorkovski, ‘‘Social Mobility in Rural Russia, 1995–2003,’’ Journal of Peasant Studies 33, no. 2 (April 2006): 189– 218. 35. A. V. Petrikov, ‘‘Lichnye podsobnye khoziaistva Rossii: Problemy i perspektivy razvitiia,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 5 (May 2007): 6. During 2006, the first year of the National Project, the head of Rossel’khozbank indicated that his bank distributed R18 billion to 122,000 private plot operators and another R5 billion during the first quarter of 2007. Krest’ianskie vedomosti, no. 23 (June 2007), 6; Krest’ianskie vedomosti, no. 13 (April 2007), 4. The maximum line of credit for private plot operators with collateral is R150,000 for one individual or R300,000 for a jointly owned plot, repayable within two or five years, depending on how the money is to be used. Krest’ianskie vedomosti, no. 37 (September 2006), 4, 7. Unsecured loans (those with no collateral) have a maximum credit line of R30,000. 36. The ‘‘coefficient of differentiation’’ is a ratio of income received by the top 10 percent of households and the bottom 10 percent of households. Using total income (monetary and nonmonetary), panel survey data show an increase in the coefficient of differentiation from 2.7 in 1991 to 6.3 in 2003. See O’Brien and Patsiorkovsky, Measuring Social and Economic Change in Rural Russia, 96–97. 37. Households in the lowest 10 percent income category had a mean of 3,530 rubles per month; households in the upper 10 percent of income had a monthly mean of 38,330 rubles. 38. A panel survey asks the same households (or individuals) the same questions at different points in time, thereby making longitudinal analysis possible. The original number of respondents in the first wave was 508, but due to deaths and out-migration, the size of the sample decreased over time. For purposes of a longitudinal analysis, it is necessary to measure only respondents who were still alive or present in their respective villages in 2003, as well as their behavior, and thus in 2003 n=382, which reflects the number of respondents who participated in each round of the surveys. In the 2003 round, 132 respondents were sampled in Rostov oblast, 131 in Belgorod oblast, and 119 in Tver oblast. One person from each household was interviewed, although information was collected about the respondent as well as other members of the household. 39. The reference to ‘‘lowest two income categories’’ refers to individuals with monetary incomes ranging from 0 to 49 percent and from 50 to 75 percent of the minimum subsistence level as established by the Russian government. 40. During 1999–2006, gross domestic product increased by an average of more than 6 percent annually. 41. See O’Brien, Wegren, and Patsiorkovsky, ‘‘Income Stratification in Russian Villages,’’ 37–46.

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42. Households in the second-, third-, fourth-, and fifth-lowest deciles are only marginally better off. Households in the second-lowest decile had holdings of .03 hectares of rental land and .21 hectares of total land; those in the the third-lowest decile had .04 hectares of rental land and .24 hectares of total land; those in the fourth-lowest decile had .04 hectares of rental land and .52 hectares of total land; and households in the fifthlowest decile had .08 hectares of rental land and .27 hectares of total land. 43. Petrikov, ‘‘Lichnye podsobnye khoziaistva Rossii,’’ 7. 44. See Wegren, Agriculture and the State in Soviet and Post-Soviet Russia, chap. 2. 45. In the post-Soviet period, the sizes of private plots remained regulated in most regions; the difference was that larger plots simply had to be registered as a different type of land use, from which the production may be subject to income tax. 46. Lilia Ovcharova and Alina Pishnyak, ‘‘Rural Poverty in Russia,’’ in The World Bank, Local Self-Governance and Civic Engagement in Rural Russia (Washington, D.C.: World Bank, 2003), 34. 47. Stephen K. Wegren, Valeri V. Patsiorkovski, and David J. O’Brien, ‘‘Beyond Stratification: The Emerging Class Structure in Rural Russia,’’ Journal of Agrarian Change, 6, no. 3 (July 2006): 372–99. 48. It should be pointed out that stratification among households is greater when using total income (monetary and nonmonetary), suggesting that a number of factors contribute to rural stratification, including household labor, food production, land holdings, and animal stocks. See O’Brien, Patsiorkovski, and Dershem, Household Capital and the Agrarian Problem, chap. 9. 49. It will be remembered that Lenin argued that the proletariat (and poor peasantry) lacked a sufficient level of class consciousness to lead them to revolution. It therefore was incumbent on the Bolshevik Party to lead—to bring class and revolutionary consciousness to the proletariat and to the poor peasantry. 50. See Jessica Allina-Pisano, The Post-Soviet Potemkin Village: Politics and Property in the Black Earth (New York: Cambridge University Press, 2008), chaps. 2, 3. 51. See Anders Aslund, How Capitalism Was Built: The Transformation of Central and Eastern Europe, Russia, and Central Asia (New York: Cambridge University Press, 2007). 52. See Stephen K. Wegren, The Moral Economy Reconsidered: Russia’s Search for Agrarian Capitalism (New York: Palgrave Macmillan, 2005), 160–61. 53. Margaret Paxson, Solovyovo: The Story of Memory in a Russian Village (Washington, D.C.: Woodrow Wilson Center Press; Bloomington: Indiana University Press, 2005), 71. 54. Ibid., 72. 55. Respondents who felt that they do not control their lives or have a low personal efficacy also were more likely to feel depressed or unhappy. Such persons also were less likely to take advantage of reform opportunities such as increasing land holdings, increasing food production, or selling more produce to increase income. Thus, a feeling of personal worth is a key variable that has important psychological and economic ramifications. 56. Different measures of ‘‘capitalist activity’’ show few differences between top and bottom. For example, neither upper- nor lower-income households tended to have insurance on crops or livestock, and few upper- and lower-income households were planning

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on borrowing money in the following year. In addition, political cleavages are not well developed (or perhaps had closed due to the effects of managed democracy), as the preference for United Russia was evident at both ends of the income continuum. 57. The results derived from the data are available from the author on request. 58. Barrington Moore Jr., Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World (Boston: Beacon, 1966). 59. Ibid., 417.

Chapter 7. The Effects of Rural Demographics and Labor on Households’ Land 1. Martha Lampland, ‘‘The Advantages of Being Collectivized: Cooperative Farm Managers in the Postsocialist Economy,’’ in Postsocialism: Ideals, Ideologies and Practices in Eurasia, ed. C. M. Hahn (London: Routledge, 2002), 32. 2. Ray Abrahams, ‘‘Introduction: Some Thoughts on Recent Land Reforms in Eastern Europe,’’ After Socialism: Land Reform and Social Change in Eastern Europe, ed. Ray Abrahams (Providence: Berghahn Books, 1996), 1–22. 3. Adam Przeworski, States and Markets: A Primer in Political Economy (New York: Cambridge University Press, 2003), chap. 2. 4. See Stephen K. Wegren, ‘‘State Withdrawal and the Impact of Marketization on Rural Russia,’’ Policy Studies Journal 28, no. 1 (January 2000): 46–67. With input from Western advisors and lending institutions, Russian reformers developed agrarian laws and policies that have little in common with those of their Soviet predecessor. Several of the most important pillars of Soviet agriculture—the planning of production, wholesale and retail trade, credit, financing, and subsidy policy—have been disassembled. The withdrawal of the state from economic control and deregulation of the agricultural economy brought an end to the Soviet-era planning bureaucracy. Wholesale food trade has been deregulated and domestic food trade occurs mostly through private, marketbased channels. The state monopoly on retail food sales has ended, and retail prices reflect conditions of supply and demand. The credit and subsidy systems have been revamped, and these policies have changed in fundamental ways. Large agricultural enterprises—former collective farms—continue to exist and physically dominate rural geography in many regions, but these farms interact with other economic actors differently than during the Soviet period, when production and management decisions were made for them. Finally, during the 1990s foreign trade was deregulated, and producers of all kinds and processors of different food products are able to engage in direct foreign trade. 5. See Alfred B. Evans Jr., ‘‘The Decline of Rural Living Standards in Russia During the 1990s,’’ Journal of Communist Studies and Transition Politics 12, no. 3 (September 1996): 293–314; Stephen K. Wegren, ‘‘The Rise, Fall, and Transformation of the Rural Social Contract in Russia,’’ Communist and Post-Communist Studies 36, no. 1 (January 2003): 1–27. 6. As Russia’s economy attained positive growth rates, personal incomes rose, leading to increased demand for and consumption of various food products. See Sel’skoe khoziaistvo, okhota, i lesovodstvo v Rossii (Moscow: Goskomstat, 2004), 145–46. In the face of

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Notes to Pages 166–67

growing consumer demand, large farms’ physical output of food rebounded from the lows of the 1990s. In addition, Russia’s private farms (krest’ianskie fermerskie khoziaistva), while still relatively small numerically, increased their output of certain grain crops. Private family farms also increased the total acreage under cultivation with a concomitant growth in the average size per farm to more than eighty-one hectares in 2007. Rossiia v tsifrakh (Moscow: Rosstat, 2007), 235. With increased demand, higher production, and more income from food sales, the agricultural sector as a whole improved its profitability. The percentage of unprofitable large farms fell from its 1998 high of 89 percent to about 50 percent in 2004 to roughly 33 percent in 2005, and it continued to trend downward, falling to 27–28 percent in 2007. In addition, a core of highly efficient and profitable large farms arose that account for a high percentage of total profitability and a disproportionate share of production. A growing economy and increased revenue from the sale of oil and gas allowed the Russian government to fulfill more of its budget obligations to agriculture, to cancel some farm debt and write off some fines and penalties, and to help grain producers by intervening in the grain market. The government used price intervention and commodity intervention to influence wholesale market prices. In years of surplus grain (2001, 2002, 2004, 2005, 2006, 2007, and 2008), the government offered price floors and purchased some of the surplus grain for storage. During lean harvests (2003), the government sold off grain that it had previously purchased, with the intent to increase the supply on the wholesale market and restrain increases in retail bread prices. See Stephen K. Wegren, ‘‘Putin and Agriculture,’’ in Putin’s Russia: Past Imperfect, Future Uncertain, 3d ed., ed. Dale R. Herspring (Lanham, Md.: Rowman and Littlefield, 2007), 147–69. 7. Rossiia v tsifrakh (Moscow: Goskomstat, 1998), 214. 8. Frances Pine and Sue Bridger, ‘‘Introduction: Transitions to Post-Socialism and Cultures of Survival,’’ in Surviving Post-Socialism: Local Strategies and Regional Responses in Eastern Europe and the Former Soviet Union, ed. Frances Pine and Sue Bridger (London: Routledge, 1998), chap. 1. 9. The literature on rural social problems during the Soviet period was vast. For representative samples, see V. F. Maier, Uroven’ zhizni naseleniia SSSR (Moscow: Mysl’, 1977), chap. 9; Gertrude E. Schroeder, ‘‘Rural Living Standards in the Soviet Union,’’ in The Soviet Rural Economy, ed. Robert C. Stuart (Totowa, N.J.: Rowman and Allanheld, 1983), 241–57; A. P. Stepanov, Realizatsiia agrarnoi politika KPSS (Moscow: Mysl’, 1984), 158–75; Elizabeth M. Clayton, ‘‘Soviet Rural Roads: Problems and Prospects,’’ Studies in Comparative Communism 20, no. 2 (Summer 1987): 163–73; I. Ivannikov, ‘‘Sotsial’noe razvitie sela,’’ Planovoe khoziaistvo, no. 11 (November 1989): 117–22; ‘‘O torgovom i bytovom obsluzhivanii naseleniia v sel’skoi mestnosti,’’ APK: Ekonomika, upravlenie, no. 3 (March 1990): 20–25; L. Demidova, ‘‘Sotsial’nye problemy sela v novykh usloviiakh khoziaistvovaniia,’’ APK: Ekonomika, upravlenie, no. 8 (August 1990): 62–66; and L. Levina, ‘‘Preodolenia defitsita bytovykh uslug na sele,’’ APK: Ekonomika, upravlenie, no. 8 (August 1990): 66–70. 10. See Alfred E. Evans, ‘‘Equalization of Urban and Rural Living Levels in Soviet Society,’’ Soviet Union/Union Sovietique 8, pt. 1 (1981): 38–61; A. P. Tiurina, Sotsial’noekonomicheskoe razvitie Sovetskoi derevni 1965–1980 (Moscow: Mysl’, 1982); L. Nikiforov, ‘‘Razvitie vzaimosviazei goroda i sela,’’ Voprosy ekonomiki, no. 3 (March 1987):

Notes to Pages 167–68

309

75–85; O. Vasil’ev and V. Kozlov, ‘‘Optimizatsiia sotsial’nogo ravnovesiia mezhdu gorodom i derevnei,’’ APK: Ekonomika, upravlenie, no. 9 (September 1990): 83–87. 11. A fuller survey of social problems during the 1990s may be found in ‘‘Sotsial’noe razvitie sela: Problemy i tendentsii,’’ APK: Ekonomika, upravlenie, no. 2 (February 1998): 21–32; and A. V. Petrikov, ed., Ekonomicheskie i sotsial’nye problemy agrarnogo sektora (Moscow: Russian Academy of Sciences, 1998). 12. See Zvi Lerman, Eugenia Serova, and Dmitry Zvyagintsev, ‘‘Diversification of Rural Incomes and Non-Farm Rural Employment: Survey Evidence from Russia,’’ Journal of Peasant Studies 35, no. 1 (January 2008): 60–79. 13. U. R. Gusmanov, R. Gataulin, and I. Shaiakhmetov, ‘‘Sotsial’nye problemy sela—v tsentre agrarnoi politiki,’’ APK: Ekonomika, upravlenie, no. 7 (July 1998): 12. 14. N. G. Tarasov, ‘‘Dokhody i sotsial’nye standarty urovnia zhizni sel’skogo naseleniia,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 2 (February 2005): 49. 15. I. Ushachev, ‘‘Sotsial’no-ekonomicheskie problemy razvitiia APK Rossii,’’ APK: Ekonomika, upravlenie, no. 4 (April 2003): 10. 16. V. Ia. Uzun, ed., Reformirovanie sel’skokhoziaistvennykh predpriiatii: sotsial’noekonomicheskii analiz (1994–1997) (Moscow: Znak, 1998), 94–100; David J. O’Brien, Stephen K. Wegren, and Valeri V. Patsiorkovski, ‘‘Contemporary Rural Responses to Reform from Above,’’ Russian Review 63, no. 2 (April 2004): 260–63; Lerman, Serova, and Zvyagintsev, ‘‘Diversification of Rural Incomes and Non-Farm Rural Employment,’’ 60–79. 17. V. Ia. Uzun, ed., Sotsial’no-ekonomicheskie posledstviia privatizatsii zemli i reorganizatsii sel’skokhoziaistvennykh predpriiatii (1994–1996 gg.) (Moscow: Russian Academy of Sciences, 1997), 82–85. 18. Tarasov, ‘‘Dokhody i sotsial’nye standarty urovnia zhizni sel’skogo naseleniia,’’ 50. 19. See Valeri V. Patsiorkovski, Sel’skaia Rossiia, 1991–2001 gg. (Moscow: Finansy i statistika, 2003), chaps. 7, 8. 20. Narodnoe khoziaistvo Rossiiskoi Federatsii, 1992 (Moscow: Goskomstat, 1992), 372, 405, 408. 21. Trud i zaniatost’ v Rossii (Moscow: Goskomstat, 1999), 309; Rossiiskii statisticheskii ezhegodnik (Moscow: Goskomstat, 2000), 155. 22. Tarasov, ‘‘Dokhody i sotsial’nye standarty urovnia zhizni sel’skogo naseleniia,’’ 49. 23. Dokhody, raskhody i potreblenie domashnikh khoziaistv v I–IV kvartalakh 2005 goda (Moscow: Rosstat, 2006), 75. 24. Dokhody, raskhody i potreblenie domashnikh khoziaistv v I–IV kvartalakh 2007 goda (Moscow: Rosstat, 2008), 69. 25. From the end of 1995 to the end of 1999, agricultural enterprises saw their total debt grow from 44 to 185 billion rubles. Sel’skoe khoziaistvo v Rossii (Moscow: Goskomstat, 2000), 120. 26. David J. O’Brien, Valeri V. Patsiorkovski, and Larry D. Dershem, Household Capital and the Agrarian Problem in Russia (Aldershot, U.K.: Ashgate, 2000), chap. 9. 27. Dokhody, raskhody i potreblenie domashnikhkhoziaistv v 2001 godu (Moscow: Goskomstat, 2002), 29. 28. Dokhody, raskhody i potreblenie domashnikh khoziaistv v I–IV kvartalakh 2007 goda, 69.

310

Notes to Pages 169–71

29. Rossiiskii statisticheskii ezhegodnik (Moscow: Goskomstat, 2001), 141. 30. Sel’skaia zhizn’, June 7–13, 2001, 4. 31. A. Mindrin, ‘‘Zaniatost’ sel’skogo naseleniia—glavnyi factor ustoichivogo razvitiia sel’skikh territorii,’’ APK: Ekonomika, upravlenie, no. 7 (July 2005): 13. 32. Trud i zaniatost’ v Rossii (Moscow: Rosstat, 2006), 198. 33. Ibid. 34. B. P. Pankov, ‘‘Tendenstii i paradoksy agrarnogo rynka truda v Rossii,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 6 (June 2005): 45, 47. 35. Ushachev, ‘‘Sotsial’no-ekonomicheskie problemy razvitiia APK Rossii,’’ 12. 36. Krest’ianskie vedomosti, no. 19 (May 2003), 2. 37. Caroline Humphrey, Marx Went Away—But Karl Stayed Behind, updated ed. (Ann Arbor: University of Michigan Press, 1998), 456. 38. Ibid. 39. Grigory Ioffe, ‘‘The Downsizing of Russian Agriculture,’’ Europe-Asia Studies 57, no. 2 (2005): 192. A Russian sociologist reported that 75 percent of rural respondents felt that drunkenness had increased since 1992, and 58 percent felt it had increased significantly. More than one-half of respondents feared that their children or grandchildren would become alcoholics. L. Bondarenko, ‘‘Sostoianie sotsial’no-trudovoi sfery sela i predlozheniia po eyo regulirovaniiu, ezhegodnyi doklad po rezul’tatam monitoringa 2004 g,’’ unpublished presentation, Moscow, February 2005. I thank Allan Mustard for making the data in the report available to me based on his notes. 40. Tatyana Nefedova, Sel’skaia Rossiia na pereput’e (Moscow: Novoe izdatel’stvo, 2003), 345. During the 1990s, rural unemployment became significant in certain regions, exacerbated by resettlement programs of the Federal Migration Service that placed migrants from former Soviet republics in rural areas owing to a lack of urban housing and employment possibilities. 41. L. V. Bondarenko, ‘‘Sotsial’no-psikhologicheskii klimat v Rossiiskoi derevne,’’ APK: Ekonomika, upravlenie, no. 11 (November 2005): 36. 42. Zemfira I. Kalugina, ‘‘The Rural Labour Market in Present-Day Russia,’’ East European Countryside 11 (2005): 29. 43. Ibid., 24–25; International Finance Corporation, Monitoring Russian Reorganized Farms: An Integrated Analysis of Economic and Social Change in Nizhny Novgorod, Oryol and Other Oblasts; Results of 1997 Studies (Washington, D.C.: International Finance Corporation, 1998), 30–31. 44. Kalugina, ‘‘Rural Labour Market in Present-Day Russia,’’ 25. 45. N. Vlasova, ‘‘O polozhenii na rynke truda v sel’skoi mestnosti,’’ Ekonomist, no. 9 (September 2001): 91. 46. Bondarenko, ‘‘Sotsial’no-psikhologicheskii klimat v Rossiiskoi derevne,’’ 36; Judith Pallot and Tatyana Nefedova, ‘‘Trajectories in People’s Farming in Moscow Oblast During the Post-Socialist Transition,’’ Journal of Rural Studies 19, no. 3 (July 2003): 351; Nefedova, Sel’skaia Rossiia na pereput’e, 79–81. 47. Kalugina, ‘‘Rural Labour Market in Present-Day Russia,’’ 25. 48. N. Dolgushkin, ‘‘Problema kadrovogo obespecheniia APK,’’ APK: Ekonomika, upravlenie, no. 1 (January 2001): 21–22; E. Zlobin, ‘‘Chelovecheskii kapital—glavnyi reserv razvitiia proizvodstva,’’ APK: Ekonomika, upravlenie, no. 2 (February 2005): 23.

Notes to Pages 171–73

311

49. L. V. Bondarenko and V. I. Trukhachev, ‘‘Sel’skaia bednost’ kak ona est’,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 12 (December 2004): 32; Bondarenko, ‘‘Sotsial’no-psikhologicheskii klimat v Rossiiskoi derevne,’’ 37. 50. A. V. Petrikov, ‘‘Perspektivy ustoychivogo razvitiia sel’skikh territorii,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 7 (July 2005): 7. 51. I. Ushachev and L. V. Bondarenko, ‘‘Kontseptsiia snizheniia sel’skoi bednosti,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 1 (January 2007): 5. 52. Bondarenko and Trukhachev, ‘‘Sel’skaia bednost’ kak ona est,’ ’’ 33. 53. V. Deyneko and D. Toropov, ‘‘Sotsial’noe razvitie sela: Problemy i tendentsii,’’ APK: Ekonomika, upravlenie, no. 5 (May 2000): 22. 54. Patsiorkovski, Sel’skaia Rossiia 1991–2001 gg., 26–27. 55. See Rossiiskii statisticheskii ezhegodnik (2001), 210; Sel’skoe khoziaistvo, okhota, i lesovodstvo v Rossii (Moscow: Goskomstat, 2004), 167; Stephen K. Wegren, The Moral Economy Reconsidered: Russia’s Search for Agrarian Capitalism (New York: Palgrave Macmillan, 2005), 114. 56. A. V. Petrikov, ‘‘Sotsial’nye problemy Rossiiskoi derevni,’’ in Ekonomicheskie i sotsial’nye problemy agrarnogo sektora, ed. V. Petrikov (Moscow: Russian Academy of Sciences, 1998), 162–66; A. V. Petrikov, ‘‘Sotsial’nye problemy Rossiiskoi derevni,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 3 (March 1999): 38. 57. Deyneko and Toropov, ‘‘Sotsial’noe razvitie sela,’’ 29. 58. L. V. Bondarenko, ‘‘Sotsial’naia infrastruktura sovremennoi derevni i problemy eyo razvitiia,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 11 (November 2005): 44. 59. Petrikov, ‘‘Sotsial’nye problemy Rossiiskoi derevni,’’ 163–64. 60. World Bank, Local Self-Governance and Civic Engagement in Rural Russia (Washington, D.C.: World Bank, 2003), 45. 61. Sel’skaia zhizn’, March 18, 2003, 3. 62. L. V. Makarova et al., Regional’nye osobennosti migratsionnykh protsessov v SSSR (Moscow: Nauka, 1986), 63. 63. For an analysis of the effects of education on rural attitudes and rural migration in Novosibirsk, see Cynthia S. Kaplan, ‘‘The Emergence of New Attitudes in the Soviet Countryside,’’ in Communist Agriculture: Farming in the Soviet Union and Eastern Europe, ed. Karl-Eugen Wadekin (London: Routledge, 1990), chap. 4. 64. For more detail, see Stephen K. Wegren, Gregory Ioffe, and Tatyana Nefedova, ‘‘Demographic and Migratory Responses to Agrarian Reform in Russia,’’ Journal of Communist Studies and Transition Politics 13, no. 4 (December 1997): 56, 58–59. 65. Postanovleniie TsK KPSS i Soveta Ministrov SSSR, ‘‘O dal’neishem razvitii i povyshenii effektivnosti sel’skogo khoziaistva i drugikh otraslei agropromyshlennogo kompleksa nechernozemnoi zony RSFSR v 1986–1990 godakh,’’ Resheniia partii i pravitel’stva po khoziaistvennym voprosam (1985–1986 gg.), chast’ 1 (Moscow: Politizdat, 1988), 32–39. 66. B. Pankov and V. Chirkin, ‘‘Kontseptsii sotsial’nogo razvitiia necherozemnogo sela—vysokye nauchnoe obespechenie,’’ APK: Ekonomika, upravlenie, no. 2 (February 1989): 69.

312

Notes to Pages 174–76

67. Ibid., 34. 68. Pravda, February 12, 1988, 1. 69. Narodnoe khoziaistvo RSFSR v 1990 g.: statisticheskii ezhegodnik (Moscow: Goskomstat RSFSR, 1991), 491–92. 70. T. Levina, ‘‘Demograficheskaia situatsiia v sel’skoi mestnosti,’’ Vestnik statistiki, no. 1 (January 1992): 11; Judith Pallot, ‘‘Rural Depopulation and the Restoration of the Russian Village Under Gorbachev,’’ Soviet Studies 42, no. 4 (October 1990): 655–74. 71. N. Latyshev and S. Isakova, ‘‘Sotsial’nye problemy sela Tsentral’nogo Chernozem’ia,’’ APK: Ekonomika, upravlenie, no. 8 (August 2004): 17–18. 72. Deyneko and Toropov, ‘‘Sotsial’noe razvitie sela,’’ 21–29; Latyshev and Isakova, ‘‘Sotsial’nye problemy sela Tsentral’nogo Chernozem’ia,’’ 17–22. 73. Sel’skaia zhizn’, June 29–July 5, 2000, 1, 3. 74. I. Ushachev, D. Toropov, and L. Bondarenko, ‘‘O Federal’noi tselevoi programme sotsial’noe razvitie sela na period do 2010 goda,’’ APK: Ekonomika, upravlenie, no. 7 (July 2002): 4. 75. ‘‘O Federal’noi tselevoi programme sotsial’noe razvitie sela na period do 2010 goda,’’ Sobranie zakonodatel’stva Rossiiskoi Federatsii, no. 49 (December 9, 2002): 11441–458. 76. Ushachev, Toropov, and Bondarenko, ‘‘O Federal’noi tselevoi programme sotsial’noe razvitie sela na period do 2010 goda,’’ 4. 77. Interview with Olga Panteleeva, Kostroma Agricultural University, October 10, 2006. A federal program for improving soil fertility during 2002–5 was adopted, and another plan for 2006–10 was approved in early 2006. 78. See Analiticheskii tsentr Agroprodovol’stvennoi ekonomiki, ‘‘Polozhenie v agroprodovol’stvennom sektore v 2003 godu,’’ 2004. www.iet.ru/afe. 79. Petrikov, ‘‘Perspektivy ustoychivogo razvitiia sel’skikh territoryi,’’ 8. Note, however, that this percentage is an increase compared to 2002, when only 1 percent was allotted, and by 2007 the sum for social expenditures in the agricultural budget was expected to increase to R4 billion, or 8.9 percent of the agricultural budget. Whether this sum is sufficient to remedy social problems remains to be seen. 80. The ‘‘National Project,’’ introduced in 2006, identified agriculture, housing reform, health, and education as areas for priority development. 81. From a political angle, the National Project was seen as a way to bolster rural electoral support for United Russia, on the one hand, and as a quid pro quo to the agricultural sector for the concessions Russia made in the WTO negotiations, on the other. 82. Expenditures include R7.45 billion in 2006 and R7.18 billion in 2007 for the development of animal husbandry and R6.6 billion in 2006 and R9.37 billion in 2007 for the stimulation of small farming enterprises and various types of cooperatives. In 2006 alone, the funding for the project made up 20 percent of total state expenditures in agriculture. Eugenia V. Serova and O. V. Shik, ‘‘Natsional’nyi proekt ‘Razvitie APK,’ ’’ 2006. www.iet.ru/afe 83. An early description of the program in agriculture was published in October 2005. See Sel’skaia zhizn’, October 25, 2005, 1, 3, 4. The program is available at the Web site of the Ministry of Agriculture, www.mcx.ru, under the link ‘‘Natsional’nyi proekt ‘Razvitie APK.’ ’’

Notes to Pages 177–79

313

84. ‘‘Vystupleniia Ministra,’’ April 7, 2006. www.mcx.ru. 85. Sel’skaia zhizn’, February 14, 2006, 2. 86. A. Gordeev, ‘‘O merakh po realizatsii prioritetnogo natsional’nogo proekta ‘Razvitie APK,’ ’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 1 (January 2006): 4–6. 87. Sel’skaia zhizn’, December 20, 2005, 3. 88. A. Semin, ‘‘Prioritetnyi natsional’nyi proekt: vzgliad iz regiona,’’ APK: Ekonomika, upravlenie, no. 4 (April 2006): 11. 89. Krest’ianskie vedomosti, no. 11 (March 2007), 9. 90. Sel’skaia zhizn’, March 20, 2007, 1. The goals of the five-year plan are discussed by Medvedev in Krest’ianskie vedomosti, no. 9 (March 2007), 10. 91. The planned expenditures and specific goals and projects are enumerated in Sel’skaia zhizn’, June 26, 2007, 2. 92. Krest’ianskie vedomosti, no. 10 (March 2008), 2. 93. See Humphrey, Marx Went Away, 457–61. 94. The first few years of reform witnessed an increase in the rural population because some urban out-migration occurred as well as placement of migrants from the Near Abroad in rural areas by the migration service. The rural population increased from 38.8 million in 1991 to a peak of 40.1 million in 1995, thereafter declining annually until it reached 38.4 million in 2007. Demograficheskii ezhegodnik Rossii (Moscow: Rosstat, 2007), 20. 95. Ob osnovnykh tendentsiiakh razvitiia demograficheskoi situatsii v Rossii do 2015 goda (Moscow: Goskomstat, 1998), 3. Ten years after this prognosis, the official government estimate remains the same: 36.3 million rural residents in 2015, 34.9 million in 2020, and 33.5 million in 2025. Demograficheskii ezhegodnik Rossii (2007), 527. 96. During 1990–2006, the following changes in the rural demographic structure occurred. The number of persons aged 0–9 decreased from 16.58 million to 9.29 million; the number of persons aged 10–19 decreased from 15.52 million to 13.48 million; the number of persons aged 20–29 increased from 16.36 million to 18.07 million; the number of persons aged 30–39 decreased from 19.10 million to 14.80 million; the number of persons aged 40–49 increased from 12.27 million to 16.81 million; the number of persons aged 50–59 increased from 12.99 million to 14.53 million; the number of persons aged 60–69 decreased from 9.50 million to 8.68 million; and the number of persons aged 70 and above increased from 6.35 million to 8.40 million. www.gks.ru.free/2006/b06— 13/04–07.htm. 97. RosBusiness Consulting, ‘‘Russia’s Population Decline to Continue,’’ July 24, 2007, cited in Johnson’s Russia List, no. 161, July 25, 2007. The problem is not just low birth rates, but also high death rates. Birth rates during 2006 and thereafter began to increase slightly, in part because of incentives from the state and better macroeconomic conditions and perhaps in response to appeals to nationalism. Demograficheskii ezhegodnik Rossii (2007), 58–60. 98. Demograficheskii ezhegodnik Rossii (2002), 57. 99. For reasons behind the decrease in births, see Timothy Heleniak, ‘‘Russia’s Demographic Challenges,’’ Russia’s Policy Challenges: Security, Stability, and Development, ed. Stephen K. Wegren (Armonk, N.Y.: Sharpe, 2003), 205–9.

314

Notes to Pages 179–82

100. Demograficheskii ezhegodnik Rossii (2007), 60. 101. Ibid. 102. I. Cherniavskii, ‘‘Razvitie sel’skikh territorii i zhiznedeiatel’nosti naseleniia,’’ Ekonomist, no. 6 (June 2005): 7. The head of the regional organization of the Agrarian Party of Russia in Buriatiia, Vladimir Pavlov, claims that more than 1,000 villages disappear every year, and that one-third of the country’s 168,000 villages have no residents. See Rossiiskaia zemlia, no. 8 (February 2006), 3. 103. A. I. Manellia, ‘‘O Demograficheskoi situatsii v sel’skoi mestnosti i trudovykh resursakh sela,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 1 (January 2006): 48. 104. Demograficheskii ezhegodnik Rossii (2002), 105; Manellia, ‘‘O Demograficheskoi situatsii v sel’skoi mestnosti i trudovykh resursakh sela,’’ 49; www.gks.ru.free/2006/ b06—13/04–23.htm. 105. Demograficheskii ezhegodnik Rossii (2007), 95. 106. N. Dolgushkin, ‘‘Demograficheskaia situatsiia v sel’skoi mestnosti Rossii,’’ APK: Ekonomika, upravlenie, no. 8 (August 2000): 4. 107. Ibid., 5. 108. Dolgushkin, ‘‘Demograficheskaia situatsiia v sel’skoi mestnosti Rossii,’’ 5. 109. Sel’skaia zhizn’, February 19, 2002, 3. 110. Demograficheskii ezhegodnik Rossii (1996), 41. 111. Demograficheskii ezhegodnik Rossii (2001), 37. 112. Demograficheskii ezhegodnik Rossii (2007), 39. 113. For example, the number of cities with more than one hundred thousand residents increased from 20 in 1926 to 118 in 1967. RSFSR za 50 let (Moscow: Central Statistical Administration, 1967), 14. 114. Petrikov, ‘‘Perspektivy ustoychivogo razvitiia sel’skikh territorii,’’ 7. 115. Demograficheskii ezhegodnik Rossii (2002), 21. 116. Chislennost’ i migratsiia naseleniia Rossiiskoi Federatsii v 2003 godu (Moscow: Rosstat, 2004), 28; Chislennost’ i migratsiia naseleniia Rossiiskoi Federatsii v 2006 godu (Moscow: Rosstat, 2007), 25. Several subtrends were occurring within the macrotrend of rural in-migration during the 1990s. First, many of the new arrivals from former Soviet republics were former urban residents and did not settle in the countryside permanently. Second, the labor pool on large farms continued to decline. New arrivals to rural areas tended not to join large farms but instead engaged in individual subsidiary agricultural activities. Third, a significant percentage of new arrivals into rural areas were less than thirty years of age (new arrivals include rural in-migration from the Near Abroad, intraoblast movement, and inter-oblast migration). 117. Manellia, ‘‘O Demograficheskoi situatsii v sel’skoi mestnosti i trudovykh resursakh sela,’’ 49. 118. N. N. Filippov, ‘‘Degradatsiia chelovecheskogo i kadrovogo potentsiala na sele,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 7 (July 2007): 13. 119. S. Zhandov, ‘‘Gosudarstvennaia politika razvitiia sel’skikh territorii,’’ APK: Ekonomika, upravlenie, no. 12 (December 2005): 7. 120. Regarding health, the 2006 data show a clear pattern wherein respondents in

Notes to Pages 183–93

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lower-income households are more likely to be dissatisfied with the status of their health, and respondents in upper-income households are more likely to be satisfied. For example, in the lowest-income decile, 24 percent were dissatisfied and 33 percent were satisfied. In the upper-income decile, 1 percent were dissatisfied and 84 percent were satisfied, no doubt due to a better diet, less stress, a better mood, and a greater feeling of control over one’s life. 121. This calculation is based on a formula used by Chaianov. See A. V. Chaianov, The Theory of Peasant Economy (Homewood, Ill.: Irwin, 1966). 122. Although the three data sets are not directly comparable, the distribution for each labor category is instructive for depicting household labor availability (percentages are rounded): For 2001: 0–1.74, 27 percent; 1.75–2.74, 35 percent; 2.75–3.74, 22 percent; 3.75– 4.74, 13 percent; and 4.75+, 3 percent. For 2003: 0–1.74, 37 percent; 1.75–2.74, 21 percent; 2.75–3.74, 29 percent; 3.75– 4.74, 12 percent; and 4.75+, 2 percent. For 2006: 0–1.74, 21 percent; 1.75–2.74, 37 percent; 2.75–3.74, 25 percent; 3.75– 4.74, 13 percent; and 4.75+, 4 percent. 123. G. Bespakhotnyi and N. Baryshnikov, ‘‘Federal’nyi fond podderzhki sel’skogo khoziaistva neobkhodim,’’ APK: Ekonomika, upravlenie, no. 1 (January 2007): 15. 124. Zvi Lerman, ‘‘Successful Land Individualization in Trans-Caucasia: Armenia, Azerbaijan, Georgia,’’ in Building Market Institutions in Post-Communist Agriculture: Land, Credit, and Assistance, ed. David A. J. Macey, William Pyle, and Stephen K. Wegren (Lanham, Md.: Lexington, 2004), 53–78.

Chapter 8. The Regional Impact on Households’ Land 1. For example, with regard to democratization and the power of the state Gel’man and Lankina argue that ‘‘the reach and influence of the national government, even in authoritarian settings, may be limited. Alternative sources of diffusion, eroding the power of the authoritarian state, are also likely to be at work.’’ Vladimir Gel’man and Tomila V. Lankina, ‘‘Authoritarian Versus Democratic Diffusions: Explaining Institutional Choices in Russia’s Local Government,’’ Post-Soviet Affairs 24, no. 1 (January– March 2008): 46. 2. Rosemary L. Hopcroft, ‘‘The Importance of the Local: Rural Institutions and Economic Change in Preindustrial England,’’ in The New Institutionalism in Sociology, ed. Mary C. Brinton and Victor Nee (New York: Russell Sage Foundation. 1998), 277– 304. 3. I. Palatkin, O. Atiukova, and A. Pavlov, ‘‘Differentsiatsiia sel’skikh territorii po urovniu razvitiia,’’ APK: Ekonomika, upravlenie, no. 5 (May 2008): 40–42. 4. Single-city or regional studies include: Timothy J. Colton, Moscow: Governing the Socialist Metropolis (Cambridge: Harvard University Press, 1995); Blair A. Ruble, Money Sings: The Changing Politics of Urban Space in Post-Soviet Yaroslavl’ (New York: Cambridge University Press, 1995); Robert W. Orttung, From Leningrad to St. Petersburg: Democratization in a Russian City (New York: St. Martin’s, 1995); Dmitri A. Zimine and Michael J. Bradshaw, ‘‘Regional Adaptation to Economic Crisis in Russia:

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The Case of Novogorod Oblast,’’ Post-Soviet Geography and Economics 40, no. 5 (May 1999): 335–53; Nicolai Petro, ‘‘The Novgorod Region: A Russian Success Story,’’ PostSoviet Affairs 15, no. 3 (July–September 1999): 235–61; Yaroslav Startsev, ‘‘Gubernatorial Politics in Sverdlovsk Oblast,’’ Post-Soviet Affairs 15, no. 4 (October–December 1999): 336–61; Jeffrey H. Hahn, Regional Russia in Transition: Studies from Yaroslavl’ (Baltimore: Johns Hopkins University Press, 2001); Nicolai N. Petro, Crafting Democracy: How Novgorod Has Coped with Rapid Social Change (Ithaca: Cornell University Press, 2004). 5. See Kelly M. McMann and Nikolai V. Petrov, ‘‘A Survey of Democracy in Russia’s Regions,’’ Post-Soviet Geography and Economics 41, no. 3 (March 2000): 1555–82; Nikolai Petrov, ‘‘Regional Models of Democratic Development,’’ in Michael McFaul, Nikolai Petrov, and Andrei Ryabov, Between Dictatorship and Democracy: Russian Post-Communist Political Reform (Washington, D.C.: Carnegie Endowment for International Peace, 2004), 239–67; Tomila Lankina and Lullit Getachew, ‘‘A Geographical Incremental Theory of Democratization: Territory, Aid, and Democracy in Postcommunist Regions,’’ World Politics 58, no. 4 (July 2006): 536–82. 6. Kathryn Stoner-Weiss, Local Heroes: The Political Economy of Russian Regional Governance (Princeton: Princeton University Press, 1997). 7. Peter Reddaway and Robert W. Orttung, eds., The Dynamics of Russian Politics: Putin’s Reform of Federal-Regional Relations, vol. 1 (Lanham, Md.: Rowman and Littlefield, 2004); Natalia Zubarevich, ‘‘Big Business in Russia’s Regions and Its Role in the Federal Reform,’’ in The Dynamics of Russian Politics: Putin’s Reform of FederalRegional Relations, vol. 2, ed. Peter Reddaway and Robert W. Orttung (Lanham, Md.: Rowman and Littlefield, 2004), 215–401; Vladimir Kontorovich, ‘‘Small Business and Putin’s Federal Reform,’’ in ibid., 241–66. 8. Louise I. Shelley, ‘‘The Challenge of Crime and Corruption,’’ in Russia’s Policy Challenges: Security, Stability, and Development, ed. Stephen K. Wegren (Armonk, N.Y.: Sharpe, 2003), 103–22. 9. See Andrew Konitzer, Voting for Russia’s Governors: Regional Elections and Accountability Under Yeltsin and Putin (Baltimore: Johns Hopkins University Press, 2005). 10. Ruth Brown, ‘‘Party Development in the Regions: When Did Parties Start to Play a Role in Politics?’’ Journal of Communist Studies and Transition Politics 14, nos. 1–2 (March–June 1998): 9–30; Vladimir Gel’man and Grigorii V. Golosov, ‘‘Regional Party System Formation in Russia: The Deviant Case of Sverdlovsk Oblast,’’ Journal of Communist Studies and Transition Politics 14, nos. 1–2 (March–June 1998): 31–53; Grigorii V. Golosov, Political Parties in the Regions of Russia: Democracy Unclaimed (Boulder: Rennier, 2004); Henry F. Hale, Why Not Parties in Russia? Democracy, Federalism, and the State (New York: Cambridge University Press, 2006). 11. Philip Hanson, ‘‘Federalism with a Russian Face: Regional Inequality and Regional Budgets in Russia,’’ in The Dynamics of Russian Politics: Putin’s Reform of FederalRegional Relations, ed. Peter Reddaway and Robert W. Orttung (Lanham, Md.: Rowman and Littlefield, 2004), 2:295–318. 12. ‘‘Reiting subektov Rossiiskoi Federatsii po effektivnosti sel’skokhoziaistvennogo proizvodstva,’’ APK: Ekonomika, upravlenie, no. 3 (March 2007): 34–38; A. Serkov, V. Vinogradova, and V. Chekalin, ‘‘Reiting subektov Rossiiskoi Federatsii po effektivnosti

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sel’skokhoziaistvennogo proizvodstva,’’ APK: Ekonomika, upravlenie, no. 4 (April 2008): 46–49. 13. See Ray Abrahams, After Socialism: Land Reform and Social Change in Eastern Europe (Providence: Berghahn, 1996); Ivan Szelenyi, ed., Privatizing the Land: Rural Political Economy in Post-Communist Societies (London: Routledge, 1998); Zvi Lerman, Csaba Csaki, and Victor Moroz, ‘‘Land Reform and Farm Restructuring in Moldova: Progress and Prospects,’’ World Bank Discussion Paper no. 398 (Washington, D.C.: World Bank, 1998); Sue Bridger and Frances Pine, eds., Surviving Post-Socialism: Local Strategies and Regional Responses in Eastern Europe and the Former Soviet Union (London: Routledge, 1998); Csaba Csaki, Zvi Lerman, and Sergey Sotnikov, ‘‘Farm Sector Restructuring in Belarus: Progress and Constraints,’’ World Bank Technical Paper no. 475 (Washington, D.C.: World Bank, 2000); Zvi Lerman and Astghik Mirzakhanian, Private Agriculture in Armenia (Lanham, Md.: Lexington, 2000); Csaba Csaki, Zvi Lerman, and Sergey Sotnikov, ‘‘Farm Debt in the CIS: A Multi-Country Study of the Major Causes and Proposed Solutions,’’ World Bank Discussion Paper no. 424 (Washington, D.C.: World Bank, 2001); Max Spoor, ed., Transition, Institutions, and the Rural Sector (Lanham, Md.: Lexington, 2003); Katherine Verdery, The Vanishing Hectare: Property and Value in Postsocialist Transylvania (Ithaca: Cornell University Press, 2003); Zvi Lerman, Csaba Csaki, and Gershon Feder, Agriculture in Transition: Land Policies and Evolving Farm Structures in Post-Soviet Countries (Lanham, Md.: Lexington, 2004); David A. J. Macey, William Pyle, and Stephen K. Wegren, eds., Building Market Institutions in Post-Communist Agriculture: Land, Credit, and Assistance (Lanham, Md.: Lexington, 2004); Rachel Sabates-Wheeler, Cooperation in the Romanian Countryside: An Insight into Post-Soviet Agriculture (Lanham, Md.: Lexington, 2005). 14. For Russia, see Tatyana Nefedova, Sel’skaia Rossiia na Pereput’e (Moscow: Novoe izdatel’stvo, 2003); Grigory Ioffe, Tatyana Nefedova, and Ilya Zaslavsky, The End of Peasantry? The Disintegration of Rural Russia (Pittsburgh: University of Pittsburgh Press, 2006); Judith Pallot and Tatyana Nefedova, Russia’s Unknown Agriculture: Household Production in Post-Socialist Rural Russia (Oxford: Oxford University Press, 2007); Jessica Allina-Pisano, The Post-Soviet Potemkin Village: Politics and Property in the Black Earth (New York: Cambridge University Press, 2008). 15. Karen Brooks et al., ‘‘Agricultural Reform in Russia: A View from the Farm Level,’’ World Bank Discussion Paper no. 327 (Washington, D.C.: World Bank, 1996), 20–26; E. Ivankina, ‘‘Osobennosti zemel’nogo zakonodatel’stva v Rossiiksikh regionakh,’’ Voprosy ekonomiki, no. 7 (July 2000): 77–81; Valeri V. Patsiorkovski, David O’Brien, and Stephen K. Wegren, ‘‘Land Reform and Land Relations in Rural Russia,’’ East European Countryside 11 (2005): 15–16. 16. See Stephen K. Wegren, ‘‘Agricultural Reform in the Nonchernozem Zone: The Case of Kostroma Oblast,’’ Post-Soviet Geography 33, no. 10 (December 1992): 645– 85; Stephen K. Wegren, ‘‘The Development of Market Relations in Agricultural Land: The Case of Kostroma Oblast,’’ Post-Soviet Geography 36, no. 8 (October 1995): 496– 512; Stephen K. Wegren, ‘‘From Farm to Table: The Food System in Post-Communist Russia,’’ Communist Economies and Economic Transformation 8, no. 2 (March 1996): 149–83; Liesl L. Gambold Miller, ‘‘Communal Coherence and Barriers to Reform,’’ in Rural Reform in Post-Soviet Russia, ed. David J. O’Brien and Stephen K. Wegren (Wash-

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ington, D.C.: Woodrow Wilson Center Press; Baltimore: Johns Hopkins University Press, 2002), 221–42; Jessica Allina-Pisano, ‘‘Reorganization and Its Discontents: A Case Study in Voronezh Oblast,’’ in ibid., 298–324; Zemfira Kalugina, ‘‘Adaptation Strategies of Agricultural Enterprises During Transformation,’’ in ibid., 367–84. 17. In the broader arena of agrarian reform, there has been multi-oblast research, but the focus was on general agrarian reform, not specifically on land reform. The following list proceeds chronologically by date of publication. One early study analyzed Kostroma and Rostov oblasts, comparing demographic factors, agricultural production, and patterns of farm reorganization. Particular emphasis was placed on the development of private farming and socioeconomic and geographic factors that influence the spatial distribution of private farms. See Stephen K. Wegren, ‘‘New Perspectives on Spatial Patterns of Agrarian Reform: A Comparison of Two Russian Oblasts,’’ Post-Soviet Geography 35, no. 8 (December 1994): 455–81. As part of a World Bank survey, Brooks and others examined progress in farm reorganization and private farming in five oblasts: Saratov, Rostov, Novosibirsk, Orel, and Pskov. The primary intent was to use the five regions as benchmarks, identifying areas of progress and the nature of obstacles encountered early in the reform process. Brooks et al., ‘‘Agricultural Reform in Russia: A View from the Farm Level.’’ Ioffe and Nefedova used Belgorod, Yaroslavl, Pskov, and Kostroma oblasts as case studies to analyze the condition of agriculture. Gregory Ioffe and Tatyana Nefedova, Continuity and Change in Rural Russia: A Geographical Perspective (Boulder: Westview, 1997). These authors continued their multiregional approach to study spatial patterns of rural depopulation and its effects on agricultural production. See Ioffe, Nefedova, and Zaslavsky, End of Peasantry? Gavin Kitching surveyed large farms and private farmers in Vologda, Tver, Vladimir, and Orel oblasts. His inductive analysis attempted to identify important variables and conditions that affect progress toward agrarian capitalism for Russia as a whole. See Gavin Kitching, ‘‘The Development of Agrarian Capitalism in Russia, 1991–97: Some Observations from Fieldwork,’’ Journal of Peasant Studies 25, no. 3 (April 1998): 1–30. O’Brien, Patsiorkovski, and Dershem conducted a multiyear panel survey in Belgorod, Tver, and Rostov oblasts, the purpose of which was to test hypotheses about social and human capital and how those variables affect household behavior, in particular, the formation and use of social networks, as well as how social capital variables affect household welfare. These survey data led to the publication of David J. O’Brien, Valeri V. Patsiorkovski, and Larry D. Dershem, Household Capital and the Agrarian Problem in Russia (Aldershot, U.K.: Ashgate, 2000). Patsiorkovski used panel data from 1993–99 and other survey data from 2001 to publish Valeri V. Patsiorkovski, Sel’skaia Rossiia, 1991–2001 gg. (Moscow: Finansy i statistika, 2003). O’Brien and Patsiorkovski continued their cross-regional analysis of social capital and household welfare by drawing on data from a variety of surveys that spanned more than ten years. See David J. O’Brien and Valery V. Patsiorkovsky, Measuring Social and Economic Change in Rural Russia: Surveys from 1991 to 2003 (Lanham, Md.: Lexington, 2006). Eugenia Serova compared Orel, Pskov, and Rostov oblasts with regard to production, marketing and processing, and credit in Eugenia Serova, ‘‘Reform and Economic Behavior in Russian Agriculture,’’ in Russian Views of the Transition in the Rural Sector:

Notes to Pages 195–204

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Structures, Policy Outcomes, and Adaptive Responses, ed. L. Alexander Norsworthy (Washington, D.C.: World Bank, 2000), 103–17. She compared public opinion in eight oblasts for attitudes about land privatization, farm restructuring, privatization of the food industry, market infrastructure, and governmental policies in agricultural and food policies. See Eugenia Serova, ‘‘Public Opinion Concerning Russia’s Agrarian Reforms,’’ in ibid., 67–86. Maria Amelina compared Leningrad and Saratov oblasts, analyzing the use of ‘‘soft credits’’ that kept large farms functioning and the factors that affected the distribution of soft credits. See Maria Amelina, ‘‘What Turns the Kolkhoz into a Firm? Regional Policies and the Elasticity of Budget Constraint,’’ in Rural Reform in Post-Soviet Russia, ed. David J. O’Brien and Stephen K. Wegren (Washington, D.C.: Woodrow Wilson Center Press; Baltimore: Johns Hopkins University Press, 2002), 264–97. 18. For exceptions, see Stephen K. Wegren, David J. O’Brien, and Valeri V. Patsiorkovski, ‘‘Household Responses, Regional Diversity and Contemporary Agrarian Reform in Russia,’’ in Rural Adaptation in Russia, ed. Stephen K. Wegren (London: Routledge, 2005), 190–225; Patskiorkovski, O’Brien, and Wegren, ‘‘Land Reform and Land Relations in Rural Russia,’’ 5–17. 19. Frances Pine and Sue Bridger, ‘‘Introduction: Transitions to Post-Socialism and Cultures of Survival,’’ in Surviving Post-Socialism, ed. Bridger and Pine, 8. 20. Sotsial’noe polozhenie i uroven’ zhizni naseleniia Rossii (Moscow: Rosstat, 2007), 113–14. 21. Wegren, O’Brien, and Patsiorkovski, ‘‘Household Responses.’’ 22. Even though 85–90 percent of the households surveyed in Tatarstan were nonRussian, the nationality hypothesis cannot be systematically explored in this analysis because the 2006 survey unfortunately did not include a question about nationality. 23. On regional support for agriculture, see Sel’skaia zhizn’, July 4, 2006, 1; Sel’skaia zhizn’, July 25, 2006, 2; Krest’ianskie vedomosti, no. 46 (November 2006), 2; Sel’skaia zhizn’, June 5, 2007, 2. 24. The mean monthly nonagricultural household business income was $40 in Leningrad, $37 in Kurgan and Amur, and $30 in Moscow (assuming an exchange rate of R26=$1). 25. The number of private farms in existence declined during 1995–2006. During this period, the average size of a private farm more than doubled, but during the same time, the share of very small private farms, those with an area of 4 hectares or less, increased from 12 percent in 1996 to almost 21 percent in 2006. By the time the 2006 rural census was taken, more than 20 percent of private farms did not have any cultivated land. See L. Kirkorova, ‘‘Krest’ianskie (fermerskie) khoziaistva: transformatsionnye protsessy, problemy zemlepol’zovaniia,’’ APK: Ekonomika, upravlenie, no. 4 (April 2008): 37; ‘‘Osnovnye itogi Vserossiiskoi sel’skokhoziaistvennoi perepisi 2006 goda,’’ Statisticheskii biulleten’, no. 9 (2008), 23. 26. Land fragmentation affects private farmers as well. Most private farmers received their initial land distribution in the form of scattered plots. 27. For example, in 2005–6, more than one-third of Russian villages (50,000) were served by dirt roads or no roads at all, 42,000 villages had no telephone service, 60 percent of rural households had no running water, 85 percent had no hot water, and 70 percent

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had no indoor plumbing. Data are from David Yakobashvili, chairman of Wimm-BillDann, via Allan Mustard (USDA), U.S. Embassy in Moscow, July 25, 2007. 28. There are exceptions, namely, Moscow and Leningrad (regions where land supply is low and competition for land use is high). In Krasnodar krai, lower-income households increased land holdings more than upper-income households did. This result may be a function of the households that were surveyed in that region and does not appear to be a broader regional pattern. 29. In the sample, 145 of 900 households increased their land holdings by expanding their private plot, 323 households increased the size of their rental land, and 58 households expanded other types of land. In total, 455 households expanded real land holdings since 1991, and 445 households had no real land increase. 30. Remember that first, land increases usually occur through rentals, not purchases, and second, it is important to note that not all income has the same effect on land enlargement. If household business income (income generated from nonagricultural activities) is regressed on land increases, the beta is .48 and is statistically significant with p].01. Thus, households that are able to generate significant business income are likely to use some of that income to acquire more land (and the husband is most likely to generate business income). 31. The same weighted labor value was used in Chapter 7. This weighted scale is 0 for persons aged less than 8 years and more than 80; .25 for persons aged 8–11 and 75–79; .50 for persons aged 12–14 and 71–74; .75 for persons aged 15–16 and 66–70; and 1.0 for persons aged 17–65. These figures were then summed for each household. The result is a scale of household labor: 0–1.74, 1.75–2.74, 2.75–3.74, 3.75–4.74, and 4.75. The higher the summed number, the greater the amount of labor in a household. 32. The households in Moscow oblast had one pensioner each, which accounts for 50 percent of the human capital in the household, compared to one-third of the human capital per household in Tatarstan and Leningrad. 33. For the Soviet period, see G. V. Ioffe, Sel’skoe khoziaistvo nechernozem’ia: territorial’nye problemy (Moscow: Nauka, 1990), chap. 3. For the post-Soviet period, see Grigory Ioffe and Tatyana Nefedova, Continuity and Change in Rural Russia: A Geographical Perspective (Boulder: Westview, 1997), chap. 5; Tatyana Nefedova, Sel’skaia Rossiia na pereput’e (Moscow: Novoe izdatel’stvo, 2003), 290–301; Ioffe, Nefedova, and Zaslavsky, End of Peasantry? chap. 4. 34. In the 2006 survey the distribution of household labor values is as follows: 0– 1.74=190 households, 1.75–2.74=335 households, 2.75–3.74=221 households, 3.75– 4.74=117 households, and 4.75=36 households. 35. Household business income had an even stronger causal effect on land expansion than did total monetary household income.

Chapter 9. Russia’s Contemporary Land Reform: An Assessment 1. See Kathryn Hendley, ‘‘Legal Development in Post-Soviet Russia,’’ Post-Soviet Affairs 13, no. 3 (July–September 1997): 228–51; Kathryn Hendley, ‘‘Struggling to Survive: A Case Study of Adjustment at a Russian Enterprise,’’ Europe-Asia Studies 50, no. 1 (January 1998): 91–120; Serguey Braguinsky and Grigory Yavlinsky, Incentives and

Notes to Pages 217–22

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Institutions: The Transition to a Market Economy in Russia (Princeton: Princeton University Press, 2000); Andrei Shleifer, A Normal Country: Russia After Communism (Cambridge: Harvard University Press, 2005), esp. chaps. 5, 8; Andrew Barnes, Owning Russia: The Struggle over Factories, Farms, and Power (Ithaca: Cornell University Press, 2006), chap. 1; Anders Aslund, How Capitalism Was Built: The Transformation of Central and Eastern Europe, Russia, and Central Asia (New York: Cambridge University Press, 2007). 2. See Douglass C. North, Institutions, Institutional Change, and Economic Performance (New York: Cambridge University Press, 1990); Mary C. Brinton and Victor Nee, eds. The New Institutionalism in Sociology (New York: Russell Sage, 1998). 3. Katherine Verdery, The Vanishing Hectare: Property and Value in Postsocialist Transylvania (Ithaca: Cornell University Press, 2003); Caroline Humphrey, Marx Went Away, But Karl Stayed Behind, updated ed. (Ann Arbor: University of Michigan Press, 1998); Jessica Allina-Pisano, The Post-Soviet Potemkin Village: Politics and Property Rights in the Black Earth (New York: Cambridge University Press, 2008). 4. Mark Granovetter, ‘‘Economic Action and Social Structure: The Problem of Embeddedness,’’ American Journal of Sociology 91, no. 3 (November 1985): 482. 5. Gerald M. Easter, ‘‘The Russian State in the Time of Putin,’’ Post-Soviet Affairs 24, no. 3 (July–September 2008): 201. 6. A. Mindrin and O. Leppke, ‘‘Organizatsiia sel’skokhoziaistvennogo zemlepol’zovaniia,’’ APK: Ekonomika, upravlenie, no. 5 (May 2008): 2. 7. Krest’ianskie vedomosti, no. 18 (May 2008), 6. 8. David Stark, ‘‘Recombinant Property in East European Capitalism,’’ American Journal of Sociology 101, no. 4 (January 1996): 1012. 9. L. Kirkorova, ‘‘Krest’ianskie (fermerskie) khoziaistva: transformatsionnye protsessy, problemy zemlepol’zovaniia,’’ APK: Ekonomika, upravlenie, no. 4 (April 2008): 38. The two primary forms of land tenure were lifetime use with rights of inheritance, involving about 57 percent of all unowned private farmland, and ownership, involving about 26 percent of private farmland. Ibid., 38. 10. Ibid., 39. 11. Cited in V. N. Khlystun, ‘‘Zemel’no-ipotechnoe kreditovanie: sostoianie i perspektivy,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 4 (April 2008): 12. 12. A. Ia. Kibirov, E. V. Sergatskova, and L. V. Gubernatorova, ‘‘Vozrozhdenia zemel’noi ipoteki v sel’skom khoziaistve Rossii,’’ Ekonomika sel’skokhoziaistvennykh i pererabatyvaiushchikh predpriiatii, no. 5 (May 2008): 17. 13. For example, in 2006 about 6 percent of Russia’s agricultural land was involved in a land transaction. But if only sales are included, the percentage would be less than 1 percent, and land sale is the primary mechanism for transferring land to the most effective users. See N. Kresnikova, ‘‘Mekhanizm rynochnogo pereraspredeleniia zemel’ sel’khoznaznacheniia,’’ APK: Ekonomika, upravlenie, no. 5 (May 2008): 11. 14. Mindrin and Leppke, ‘‘Organizatsiia sel’skokhoziaistvennogo zemlepol’zovaniia,’’ 3. 15. Ibid., 2. 16. Jerry F. Hough, Democratization and Revolution in the USSR, 1985–1991 (Washington, D.C.: Brookings Institution, 1997), 164–69.

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17. Rossiia v tsifrakh (Moscow, Goskomstat, 1995), 231. 18. Rossiia v tsifrakh (Moscow: Goskomstat, 1997), 295. 19. See Stephen K. Wegren, Russia’s Food Policies and Globalization (Lanham, Md.: Lexington, 2005), chap. 5. 20. See Mindrin and Leppke, ‘‘Organizatsiia sel’skokhoziaistvennogo zemlepol’zovaniia,’’ 2–10; Kresnikova, ‘‘Mekhanizm rynochnogo pereraspredeleniia zemel’ sel’khoznaznacheniia,’’ 11–13. 21. See ‘‘Wealth Gap Leaves Rural Russia Behind,’’ BBC, May 29, 2007, in Johnson’s Russia List, no. 122, May 30, 2007; Liubov Ovchintseva, ‘‘The Current State of the Social Sphere in the Village,’’ in World Bank, Local Self-Governance and Civic Engagement in Rural Russia (Washington, D.C.: World Bank, 2003), 38–48. 22. See Sarah Henderson, Building Democracy in Contemporary Russia: Western Support for Grassroots Organizations (Ithaca: Cornell University Press, 2003); Lisa McIntosh Sundstrom, Funding Civil Society: Foreign Assistance and NGO Development in Russia (Stanford: Stanford University Press, 2006). 23. See Alfred B. Evans, Laura A. Henry, and Lisa McIntosh Sundstrom, eds., Russian Civil Society: A Critical Assessment (Armonk, N.Y.: Sharpe, 2006). 24. David M. Kotz and Fred Weir, Russia’s Path from Gorbachev to Putin: The Demise of the Soviet System and the New Russia (New York: Routledge, 2007), 280–81. 25. See Stephen Fortescue, Russia’s Oil Barons and Metal Magnates: Oligarchs and the State in Transition (New York: Palgrave Macmillan, 2006), esp. chap. 7. 26. See Stephen K. Wegren, ‘‘Russian Agrarian Policy Under Putin,’’ Post-Soviet Geography and Economics 43, no. 1 (January–February 2002): 26–40. 27. Rossiia v tsifrakh (Moscow: Goskomstat, 2001), 199. 28. Sel’skokhoziaistvennaiai deiatel’nost’ khoziaistv naseleniia v Rossii (Moscow: Goskomstat, 2003), 20. 29. Krest’ianskie vedomosti, nos. 9–10 (March 1–15, 2001), 2. 30. See Timothy J. Colton and Michael McFaul, Popular Choice and Managed Democracy: The Russian Elections of 1999 and 2000 (Washington, D.C.: Brookings Institution, 2003); Michael McFaul, Nikolai Petrov, and Andrei Ryabov, Between Dictatorship and Democracy: Russian Post-Communist Political Reform (Washington, D.C.: Carnegie Endowment for International Peace, 2004). 31. There is precedent for governors’ channeling resources to favorite-son large farms. As the development of agricultural holding companies became popular after 2003, there was anecdotal evidence that some governors were able to get all the available state support channeled to one farm in a raion or to a handful of farms in the entire oblast. Interview with Allan Mustard, U.S. Embassy in Moscow, May 11, 2006. 32. See Stephen K. Wegren and Andrew Konitzer, ‘‘Prospects for Managed Democracy in Russia,’’ Europe-Asia Studies 59, no. 6 (September 2007): 1025–47. 33. Ibid., 1044–45. 34. For this question, n=734 because 66 respondents either did not answer or said it was too difficult to answer. 35. For this question, n=700 because 200 respondents either did not answer or said it was too difficult to answer. 36. Andrew Konitzer and Stephen K. Wegren, ‘‘Federalism and Political Recentraliza-

Notes to Pages 226–39

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tion in the Russian Federation: United Russia as the Party of Power,’’ Publius 36, no. 4 (Fall 2006): 503–22. 37. See Gerrit Huizer, ‘‘Peasant Mobilization for Land Reform: Historical Case Studies and Theoretical Considerations,’’ Discussion Paper 103 (Geneva: United Nations Research Institute for Social Development, 1999). 38. In September 2007, Putin said he intended to support United Russia in the December 2, 2007 Duma election but added that he was working to develop a multiparty system as well. He noted the formation of A Just Russia, which he described as a ‘‘real, modern, responsible leftist movement,’’ as opposed to the Communist Party, which he described as ‘‘a fragment from the past.’’ RFE/RL Newsline 11, no. 176, pt. 1 (September 21, 2007). 39. Sel’skaia zhizn’, July 12–18, 2007, 9. 40. Krest’ianskie vedomosti, no. 19 (May 2007), 4–5. 41. Ibid., 4. 42. Krest’ianskie vedomosti, no. 24 (June 2007), 4. 43. Krest’ianskie vedomosti, no. 12 (April 2007), 3. 44. Kresnikova, ‘‘Mekhanizm rynochnogo pereraspredeleniia zemel’ sel’khoznaznacheniia,’’ 11. 45. See table 4.2 in this book. 46. Although the primary impact of the program was economic—it provided resources to obtain farm animals or machinery or to build animal sheds—it would be naïve to overlook the likelihood that the Kremlin was mindful of the probable political effects as well: building loyalty to the administration, the government, and the president himself (but in the latter case the support is for the individual who occupies the office, not the institution of the presidency). 47. Vasilii Uzun, ‘‘Adapting to a Market Economy: Changes in Russia’s Farm Structure,’’ BASIS Brief, no. 34 (October 2005), 4. 48. See Stephen K. Wegren, ‘‘The Limits of Land Reform in Russia,’’ Problems of PostCommunism 55, no. 2 (March–April 2008): 17. 49. Toward the end of 2007 Gordeev indicated that government circles gave some consideration to defining private plot users as ‘‘entrepreneurs,’’ which would make the income they earn from food sales subject to taxation. Krest’ianskie vedomosti, no. 44 (November 2007), 3. At this writing, no action had been taken on this idea. 50. See Stephen K. Wegren, ‘‘Typologies of Household Risk-Taking: Contemporary Rural Russia as a Case Study,’’ Journal of Peasant Studies 35, no. 3 (July 2008): 390–423.

Appendix C. The Post-Soviet Land Code 1. Rossiiskaia zemlia, no. 19 (May 2007), 5. 2. Finansovye izvestiia, May 19–25, 1994, 2. 3. V. I. Chernoivanov, ed., Debaty o zemle v Gosudarstvennoi Dume, 1994–2000 gg. (Moscow: Ministry of Agriculture, 2000), 1:62, 65. 4. Ibid., 1:10. 5. Ibid. 6. Ibid., 1:11. 7. Ibid., 1:121.

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Notes to Pages 239–43

8. Ibid., 1:123. 9. Sel’skaia zhizn’, July 7, 1994, 7. 10. Chernoivanov, Debaty o zemle v Gosudarstvennoi Dume, 1:133. 11. Ibid., 1:152. 12. Ibid., 1:150–52. 13. For each of the three votes taken on July 14, a little more than 60 percent of the deputies voted. 14. Sel’skaia zhizn’, July 20, 1995, 2. 15. V. Plotnikov, ‘‘Zemel’nyi kodeks—osnova zemel’nogo prava,’’ APK: Ekonomika, upravlenie, no. 5 (May 2000): 9. 16. Jerry F. Hough, Evelyn Davidheiser, and Susan Goodrich Lehmann, The 1996 Russian Presidential Election (Washington, D.C.: Brookings Institution, 1996), 16, 29. 17. On attitudes toward economic reform and differences between 1993 and 1995, see ibid., 40–42. 18. See Stephen White, Richard Rose, and Ian McAllister, How Russia Votes (Chatham, N.J.: Chatham House, 1997), chaps. 9–11; Ralph S. Clem and Peter R. Craumer, ‘‘The Geography of the Russian 1995 Parliamentary Election: Continuity, Change, and Correlates,’’ Post-Soviet Geography 36, no. 10 (December 1995): 587–616; John O’Loughlin, Michael Shin, and Paul Talbot, ‘‘Political Geographies and Cleavages in the Russian Parliamentary Elections,’’ Post-Soviet Geography and Economics 37, no. 6 (June 1996): 355–85; Matthew Wyman, ‘‘Developments in Russian Voting Behaviour: 1993 and 1995 Compared,’’ Journal of Communist Studies and Transition Politics 12, no. 3 (September 1996): 277–92; William A. Clark, ‘‘The Russian State Duma: 1993, 1995, and 1999,’’ Problems of Post-Communism 46, no. 6 (November–December 1999): 3–11. 19. White, Rose, and McAlister, How Russia Votes, 224–25. 20. Chernoivanov, Debaty o zemle v Gosudarstvennoi Dume, 1:182–83. 21. Ibid., 1:201. 22. Ibid., 1:202. 23. Krest’ianskaia rossiia, no. 28 (July 22–28, 1996), 1. 24. Chernoivanov, Debaty o zemle v Gosudarstvennoi Dume, 1:205. 25. V. I. Chernoivanov, ed., Debaty o zemle v Gosudarstvennoi Dume, 1994–2000 (Moscow: Ministry of Agriculture, 2000), 2:7–15 (for the letter); 2:7, 15 (for the quotations). 26. Ibid., 2:24. 27. Ibid., 2:27. 28. Sel’skaia zhizn’, November 13, 1997, 1. 29. Louis Skyner, ‘‘Political Conflict and Legal Uncertainty: The Privatisation of Land Ownership in Russia,’’ Europe-Asia Studies 53, no. 7 (2001): 987. 30. Chernoivanov, Debaty o zemle v Gosudarstvennoi Dume, 2:30. 31. Rossiiskie vesti, December 27, 1997, 1. 32. Stephen K. Wegren and Vladimir R. Belen’kiy, ‘‘The Political Economy of the Russian Land Market,’’ Problems of Post-Communism 45, no. 4 (July–August 1998): 58. 33. Sel’skaia zhizn’, February 21, 1998, 1. 34. Chernoivanov, Debaty o zemle v Gosudarstvennoi Dume, 2:97. 35. Ibid., 2:98.

Notes to Pages 243–47

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36. Ibid., 2:137, 140. 37. Plotnikov, ‘‘Zemel’nyi kodeks—osnova zemel’nogo prava,’’ 17. 38. Ibid., 18. 39. Ibid. 40. Chernoivanov, Debaty o zemle v Gosudarstvennoi Dume, 2:180, 182. 41. Sel’skaia zhizn’, December 24, 1999, 1. 42. See Stephen K. Wegren and Vladimir R. Belen’kiy, ‘‘Change in Land Relations: The Russian Land Market,’’ in Rural Reform in Post-Soviet Russia, ed. David J. O’Brien and Stephen K. Wegren (Washington, D.C.: Woodrow Wilson Center Press; Baltimore: Johns Hopkins University Press, 2002), 95. 43. Thomas F. Remington, ‘‘Putin, the Parliament, and the Party System,’’ in Putin’s Russia: Past Imperfect, Future Uncertain, 3d ed., ed. Dale R. Herspring (Lanham, Md.: Rowman and Littlefield, 2007), 54–55. 44. For an analysis of the 1999 Duma election, see Ralph S. Clem and Peter R. Craumer, ‘‘Regional Patterns of Political Preference in Russia: The December 1999 Election,’’ Post-Soviet Geography and Economics 41, no. 1 (January 2000): 1–29; Sarah Oates, ‘‘The 1999 Russian Duma Elections,’’ Problems of Post-Communism 47, no. 3 (May– June 2000): 3–14; Timothy J. Colton and Michael McFaul, ‘‘Reinventing Russia’s Party of Power: ‘Unity’ and the 1999 Duma Election,’’ Post-Soviet Affairs 16, no. 3 (July– September 2000): 201–24; Richard Rose, Neil Munro, and Stephen White, ‘‘Voting in a Floating Party System: The 1999 Duma Election,’’ Europe-Asia Studies 53, no. 3 (2001): 419–43; Christopher Marsh, Russia at the Polls: Voters, Elections, and Democratization (Washington, D.C.: Congressional Quarterly Press, 2002), 86–93. 45. For a list of early legislative accomplishments, see Remington, ‘‘Putin, the Parliament, and the Party System,’’ 58. 46. Sel’skaia zhizn’, February 16–20, 2000, 2. 47. Krest’ianksie vedomosti, no. 8 (February 21–27, 2000), 2. 48. Sel’skaia zhizn’, March 16–22, 2000, 1. 49. RFE/RL Newsline, vol. 4, no. 82, pt. 1 (April 26, 2000). 50. E. Ivankina, ‘‘Osobennosti zemel’nogo zakonodatel’stva v Rossiiskikh regionakh,’’ Voprosy ekonomiki, no. 7 (July 2000): 77–78. 51. Krest’ianskaia rossiia, no. 17 (May 1–7, 2000), 2. 52. Sel’skaia zhizn’, June 22–28, 2000, 2. 53. Sel’skaia zhizn’, July 11, 2000, 1. 54. Sel’skaia zhizn’, August 17–23, 3. 55. Sel’skaia zhizn’, August 22, 2000, 2. 56. Sel’skaia zhizn’, November 9–15, 2000, 2. 57. Krest’ianskie vedomosti, nos. 3–4 (January 15–28, 2001), 2. 58. Sel’skaia zhizn’, January 23, 2001, 1. 59. Thomas F. Remington, ‘‘Russia’s Federal Assembly and the Land Code,’’ East European Constitutional Review 11, no. 3 (Summer 2002): 100; Radio Free Europe/Radio Liberty Political Weekly 1, no. 10, March 26, 2001. 60. Sel’skaia zhizn’, June 19, 2001, 1. 61. Sel’skaia zhizn’, July 3, 2001, 2. 62. Sel’skaia zhizn’, June 19, 2001, 1.

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Notes to Pages 247–52

63. Remington, ‘‘Russia’s Federal Assembly,’’ 100–101. 64. Sel’skaia zhizn’, July 17, 2001, 1. 65. Remington, ‘‘Russia’s Federal Assembly,’’ 101. 66. Moscow Times, September 21, 2001, 1. Two votes were taken because some deputies complained about discrepancies in the version they voted on the first time. Remington, ‘‘Russia’s Federal Assembly,’’ 101. 67. This is not to say it was without criticism. The 2001 Land Code was criticized as not well conceptualized, written in haste by inexperienced authors, and contradictory or confusing in terminology and in what it covers. Moreover, article 2, point 1 of the Land Code states that future land relations may be governed by presidential decrees, as long as they do not contradict the Land Code. Likewise, points 3 and 4 of article 2 allow regional executive organs and organs of local government to issue legal acts that support existing land law. 68. ‘‘Zemel’nyi kodeks Rossiiskoi Federatsii,’’ Sobranie zakonodatel’stva Rossiiskoi Federatsii, no. 44 (October 29, 2001): 9175–9236. 69. Quoted in Andrei Medushevsky, ‘‘Power and Property in Russia: The Adoption of the Land Code,’’ East European Constitutional Review 11, no. 3 (Summer 2002): 116. 70. Zemel’nyi kodeks Rossiiskoi Federatsii (Moscow: OS-89, 2006); S. A. Bogoliubova, ed., Zemel’noe pravo (Moscow: Prospekt, 2006). 71. Eugenia Serova, ‘‘Results of Transformation of Russian Agri-Food Sector,’’ in Reflecting Transformation in Post-Socialist Rural Areas, ed. Maarit Heinonen, Jouko Nikula, Inna Kopoteva, and Leo Granberg (New Castle, U.K.: Cambridge Scholars, 2007), 14. 72. Article 33 stipulates that maximum and minimum plot sizes for defined uses of land are established by local organs of government. 73. Articles 278–87 of the Civil Code discuss the reasons why and procedures by which privately owned land may be withdrawn from its owner.

Appendix D. Survey Methodology and Description of Villages, 1995–2006 1. See Joseph R. Berliner, ‘‘The Harvard Project and the Soviet Interview Project,’’ in Post-Communist Studies and Political Science: Methodology and Empirical Theory in Sovietology, ed. Frederic J. Fleron Jr. and Erik P. Hoffman (Boulder: Westview, 1993), 177–82; James R. Millar, ed., Politics, Work and Daily Life in the USSR: A Survey of Former Soviet Citizens (New York: Cambridge University Press, 1987). 2. For a discussion of survey types and methods, see Janet Buttolph Johnson and Richard A. Joslyn, Political Science Research Methods (Washington, D.C.: Congressional Quarterly, 1986), chap. 9. 3. I did not participate in the 1993–99 surveys conducted by David O’Brien and Valeri Patsiorkovski, who started the first wave of the panel survey in 1993. The 1993 survey was not designed to investigate land reform and contained very few questions concerning land. Moreover, the 1993 survey pre-dated Yeltsin’s October 1993 decree legalizing private landownership and establishing the foundations of a land market, and it predated the December 1993 Constitution and the 1994 Civil Code, both of which codified private landownership. For these reasons, the 1993 wave of the panel is not referred to in

Notes to Page 261

327

the present book. The 1995 and 1997 data are publicly available from the ICPSR at the University of Michigan, and I was able to access the data from that source. The 1999 data were made available to me by Professor David O’Brien of the University of Missouri. 4. Grigory Ioffe, Tatyana Nefedova, and Ilya Zaslavsky, The End of Peasantry? The Disintegration of Rural Russia (Pittsburgh: University of Pittsburgh Press, 2006), 58–66; Stephen K. Wegren, David J. O’Brien, and Valery V. Patsiorkovsky, ‘‘The Economics of Rural Households in Russia: Impact of Village Location,’’ Eurasian Geography and Economics 49, no. 2 (March–April 2008): 200–214. 5. See Stephen K. Wegren, The Moral Economy Reconsidered: Russia’s Search for Agrarian Capitalism (New York: Palgrave Macmillan, 2005), 142–43. See also David J. O’Brien, Valeri V. Patsiorkovski, and Larry D. Dershem, Household Capital and the Agrarian Problem in Russia (Aldershot, U.K.: Ashgate, 2000), chap. 8. 6. The distances of the villages from raion centers in the 1993–2003 panel surveys and the 2001 survey are taken from Valeri V. Patsiorkovski, Sel’skaia Rossiia, 1991–2001 gg. (Moscow: Finansy i statistika, 2003), 357–60. For the 2006 survey, the location of the villages was calculated by the author from official regional maps that were purchased in Moscow.

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Index

(page numbers in italics indicate tables) Activity fragmentation, 118. See also land fragmentation adaptation: by households, xiii, 6–7, 8, 110, 129, 138, 146, 160, 219; by large farms, 68, 125 Agrarian Party of Russia (APR): and the Communists, 293n37; and the Land Code (2001) debate, 237, 238, 239, 245, 246, 247; in State Duma elections, 67, 225, 240; and Yeltsin’s land legislation, 66 A Just Russia, 225, 323n38 AKKOR. See Association of Peasant Farms and Agricultural Cooperatives in Russia (AKKOR) Albania, 15, 76, 136 All-Russian Agrarian Institute, 149, 171, 228 Altai krai: household income in, 196; human capital in, 209; labor value in,

209; land enlargement in, 200, 205, 207, 211, 212; land fragmentation in, 202, 203; land holdings in, 196, 199, 202, 203; land privatization in, 19; land share size in, 114, 134; population trends in Pervomaiskii raion, 259, 260; as survey region, 253, 259, 263 Amur oblast: food sales in, 198; household income in, 196, 197; human capital in, 208, 209; labor value in, 209; land enlargement in, 200, 205, 207, 211, 212; land fragmentation in, 202, 203; land holdings in, 196, 198, 202, 203; land privatization in, 18, 19; land shares in, 114, 134, 135, 198, 201; population trends in Zeiskii raion, 259, 260; as survey region, 253, 259, 264 Armenia, 14, 15 Association of Peasant Farms and Agricultural Cooperatives in Russia (AKKOR), 40, 45–46, 75 Azerbaijan, 14, 15

329

330

Index

Bashmachnikov, Vladimir, 45, 75 Belarus, 14, 15 Belgorod oblast, 95, 227, 253, 255, 257– 58, 261–62 Bolshevik Revolution (1917), ix, 12, 17 Bolsheviks, ix, 69, 306n49 Brezhnev, Leonid, 33, 63, 173 Buinskii raion: population trends in, 259, 260; villages surveyed, 265–66. See also Republic of Tatarstan Bulgaria, 15, 268n8, 286n61 Buriatiia, 169–70, 314n102 capital stock, 152, 153, 154, 155, 161 Chernomyrdin, Viktor, 56, 238, 240, 281n6 Chernyshev, A., 239, 240, 241 China, 17, 226 Chuvashia. See Republic of Chuvashia Chuvash Republic. See Republic of Chuvashia Civil Code (1994), 62, 89, 241, 242, 246, 249, 250, 326n73 class, 139, 152. See also class consciousness; class structure class consciousness, 153, 155–58, 159, 161 class structure: development of rural, 152–53, 153–59; profile of upper and lower classes, 159–60; in Soviet society, 143, 151. See also class coefficient of differentiation, 147, 148, 154, 196, 197, 305n36. See also differentiation collective farms, 29–31, 40, 113, 144. See also state and collective farms Collective Farm Statutes, 30, 31 collective fruit orchards (sadovodstvo), 20, 21, 32, 298n9 collective vegetable gardens (ogorodnichestvo), 20, 21, 32, 298n9 collectivization, ix, 13, 59, 66 Communist Party: in elections, 225, 240, 244, 245, 293n37; and Gorbachev, 33, 35, 37, 38; and the Land Code (2001) debate, 237, 238, 239, 243–44, 247;

Putin description of, 323n38; support for, 163, 225, 293n37; temporary ban after October crisis, 283n36; and Yeltsin, 38, 53, 66 Constitution: of 1993, 62, 246, 248, 249; of the Russian Republic, 41, 279n60; Soviet, 28, 303n17 corporate farms, 20, 226. See also large farms Cuba, 17, 226 Czech Republic, 15, 290n103 ‘‘Development of Agriculture’’ (program), 172, 177. See also ‘‘On the Development of Agriculture’’ (2006 law) ‘‘Development of the Agroindustrial Complex’’ (program), 80, 81, 172, 176, 220, 229 differentiation: economic, 142–43, 146, 151, 153–55, 159; income, 145, 149– 50, 151, 167–68; land, 148, 149; in post-Soviet period, 146, 151; in Soviet period, 142–43, 145, 146. See also class structure; coefficient of differentiation; stratification Dovator, 227–28 Duma. See State Duma economic differentiation. See differentiation: economic economic stratification. See stratification: economic education, 124, 126–27 egalitarianism, 142–43, 144, 145, 151 Estonia, 14, 15, 136 farm managers: attitudes toward land, 112; land holdings of, 125, 127–28; resistance to land reform by, 65–68, 288n86; and rural unemployment, 170. See also large farms farm workers: attitudes toward land, 112; food consumption and sales by, 128–29; land holdings of, 125, 126. See also large farms

Index Federation Council, 87, 241, 242, 243, 247. See also State Duma food consumption, 111, 128–29, 166, 301n52 food imports, 67, 222, 224, 291n3, 291n7 food production: effect of household labor value on, 210; by households, 70, 111, 166; by large farms, 166, 189, 291n3, 308n6; by private farms, 65, 81, 224, 308n6; by private plots, 166; under Putin, 81–82, and rental land enlargement, 129; state policies to increase, 172, 175, 177, 229 food sales, 30, 128–29, 144, 166, 198, 308n6 food security, 175, 177, 189, 224 France, 9–10, 17 gender, 124, 126, 180 Georgia, 14, 15 Gini coefficient, 145, 304n25 giving reforms, 13, 66, 96 Gorbachev, Mikhail: agrarian reforms of, 33–35, 38; and land leasing, 35–36; and land reform, xi, 17, 34, 36, 49, 216; and rural socioeconomic problems, 173; and the state and collective farm system, 34, 36, 49; and Yeltsin, xi, 37–38 Gordeev, Aleksei: and agricultural policy, 79, 80, 174, 176, 224, 291n7; on land relations, 93, 97, 98, 228, 230, 246, 323n49 household demographics, 124, 127 household income: and class structure development, 152, 153, 154; effect of household labor on, 184, 187–88, 210; effect on land enlargement, 192– 93, 204–7; effect on land holdings, 109, 124, 220; effect on land share rental, 133–35; effect on rental land enlargement, 109, 126, 129, 130, 131, 132, 198; and land fragmentation,

331

202; regional variation in, 195–97; and rural stratification, 142, 150 household labor: effect of rural demography on, 164; effect of rural socioeconomic conditions on, 178, 184; effect on household income, 184, 187–88; effect on land enlargement, xiii, 165, 183, 186–87, 189; effect on land holdings, xiii, 165, 183, 185–86, 189. See also household labor value; human capital household labor value: effect on food production, 210; effect on household income, 210; effect on land enlargement, 192–93, 208–12, 213; effect on land holdings, 193, 210; of households, 183–84; regional variation in, 208, 209, 213. See also household labor; human capital households: adaptation to reform by, xiii, 6–7, 8, 110, 129, 138, 146, 160, 219; agricultural land use by, 16, 20; food consumption by, 166; food production by, 166, 224; food sales by, 129, 166; land enlargement by, 129–32; land holdings of, 113–15, 116, 124–26; land market participation by, 121–23; and land plot regulation, 142, 303n18; land rental by, 126–28; land shares holdings of, 116, 217, 218; land shares rental by, 133–36; land transactions by, 118, 120; state assistance to, 81 human capital: effect on land enlargement, 165, 189, 192–93, 208–12, 213; effect on land holdings, 122, 165, 183, 189; effect on land shares rental, 135; effect on rental land enlargement, 127; effect of rural socioeconomic conditions on, 165; regional variation in, 208, 209, 213. See also household labor; household labor value Hungary, 14, 15, 290n103 income differentiation. See differentiation: income

332

Index

income stratification. See stratification: income inequality, 156–58 institutionalism, 3–4, 10, 217. See also reform institutions institutions. See institutionalism; reform institutions International Finance Corporation (IFC), 60, 61 juridical persons, 26, 60, 71, 87, 94, 249 Khasbulatov, Ruslan, 52, 59 Khlystun, Viktor, 49, 54, 56, 289n95 Khrushchev, Nikita, 173 kolkhoz. See collective farms Kolomenskii raion: population trends in, 259, 260; villages surveyed, 265. See also Moscow oblast Komov, Nikolai, 59, 61 Krasnodar krai: household income in, 196, 197; human capital in, 208, 209; labor value in, 209; land enlargement in, 200, 205, 206, 207, 210, 211, 214, 320n28; land fragmentation in, 203; land holdings in, 196, 197, 200, 202, 203; land privatization in, 19; land shares in, 114, 134, 201; population trends in Kushchevskii raion, 257–58; population trends in Labinskii raion, 259, 260; poverty in, 197; protests in, 227; as survey region, 253, 259, 262, 264 Krasnogvardeiskii raion: population trends in, 258; as survey region, 257; villages surveyed, 261–62. See also Belgorod oblast Krasnoyarsk krai: household income in, 196; human capital in, 209; labor value in, 209; land enlargement in, 199, 200, 205, 206, 207, 210, 211; land fragmentation in, 203; land holdings in, 196, 197, 203; land privatization in, 18, 19; land shares in, 114, 134, 135, 198, 201; population trends

in Minusinskii raion, 259, 260; as survey region, 253, 259, 264–65 kulaks, 69, 139, 142, 143 Kurgan oblast: household income in, 196; human capital in, 209; labor value in, 209; land enlargement in, 200, 204, 205, 207, 211, 212; land fragmentation in, 203; land holdings in, 196, 197, 198, 202, 203; land privatization in, 19; land shares in, 114, 134, 135, 201; out-migration trends in, 181; population trends in Shadrinkskii raion, 259, 260; survey region, 253, 259, 264 Kushchevskii raion: population trends in, 258; as survey region, 257; villages surveyed, 262. See also Krasnodar krai Labinskii raion: population trends in, 259, 260; villages surveyed, 264. See also Krasnodar krai land auction, 60–61 Land Code (1922), 28 Land Code (1991), 44, 50, 237 Land Code (2001): adoption of, 83, 84, 85, 102; debate in the first Duma (1994–95), 237–39; debate in the second Duma (1996–99), 240–44; debate in the third Duma (2000–2003), 244– 47; impact on land transactions, 94; major provisions of, 248–50; and Putin, 244–47; and the regions, 194, 238, 242, 246, 247; and Yeltsin, 240– 44. See also Law on Agricultural Land Transactions (2002) land differentiation. See differentiation: land land disposal: through renting out of land, 132; through renting out of land shares, 133–36, 201; restrictions under Putin, 78, 92–93; restrictions under Yeltsin, xi, 42, 47, 50, 52, 75, 78, 243 land distribution: under Gorbachev, 36; under Yeltsin, 44, 47, 48, 50, 53, 54, 57. See also land funds; land shares

Index land enlargement: attitudes toward, 112– 13; effect of household demographics on, 126–32; effect of household income on, 192–93, 204–7, 212, 214, 320n35; effect of household labor on, xiii, 165, 183, 186–87, 189; effect of household labor value on, 192–93, 208–12, 213; effect of human capital on, 192–93, 208–12, 213; and land fragmentation, 217; and land holdings, 200; regional variation in, 199–201, 212, 214. See also land fragmentation; land holdings; land rental land fragmentation: defined, 117, 202; and household income, 202; impact of, 109, 117–18, 121, 217, 319n26; regional variation in, 201–4, 212 land funds, 25, 30, 31, 39, 40, 46, 70. See also redistribution funds land holdings: and class structure, 152, 153–55; effect of household labor on, xiii, 165, 183, 185–86, 189, 193, 210; enlargement of households’, 126–28, 129–32, 200; household income and, 113, 129–32, 212, 220; by households, 113–15, 124–26; regional variation in, 194, 195, 196, 197–99; and rural stratification, 147–49, 150, 161 land leasing. See land rental land market: attitudes toward, 84, 112; constraints on, 98–102, 120–23; development of, 24–25, 61, 70–71, 73, 75, 93; and the Land Code (2001) debate, 84, 238, 239; and land mortgaging, 95–96; and land shares dispossession, 96–98; as a leasing market, 24, 73–74, 119; under Putin, 93, 95–96, 96–98; types of, 71; under Yeltsin, 61, 70–71, 73, 75, 242–43. See also land rental; land transactions land mortgaging: and the Land Code (2001) debate, 241, 246; and the land market, 95–96; limitations on, 123; under Putin, 81, 83, 90, 91, 220; under Yeltsin, 47, 59

333

landownership: attitudes toward, 112; and the Civil Code (1994), 249; and the Constitution (1993), 249; distinguished from land shares, 23–24; distinguished from land use, 22–23; by foreigners, 92, 243, 249; forms of, 41; by households, 116; introduction of private, 16, 40; under the Land Code (1991), 44, 50, 237, 243; and the Land Code (2001) debate, 238, 239, 243, 245, 249, 250; Marxist view of, ix; under Putin, 78, 87, 92; regional variability in rights of, 62–63; revocation through use violations, 61–62, 75, 250; in Saratov oblast regional land law, 242; during Soviet era, 16, 28; under Yeltsin, xi, 40, 52, 78. See also land shares; land use rights; ‘‘On Land Reform’’ (1990) land reform: distinguished from agrarian reform, 269n19; characteristics of Russian, 108, 216, 217; communist, 141; as a giving reform, 13, 66, 96; goals of Russian, 5, 7, 13, 76, 221; illiberal elements of Putin’s, 91–93, 102; illiberal elements of Russian, 11, 108, 217–18; illiberal elements of Yeltsin’s, 52, 56, 74–76; institutional design of, ix, 52, 74, 223–26; and large farms, 6, 221; liberal elements of Russian, 52, 74, 91, 109, 139, 217, 219–20; periods of Russian, 12–13, 17, 267n1; in postcommunist countries, 13–15; regional responses to, 191–92, 194–95; and subsistence security, 110–11; as a taking reform, 66, 96; types of 11, 17, 140–41; winners and losers in Russian, 214–15, 219. See also institutionalism; land disposal; land distribution; land enlargement; land holdings; land market; landownership; land rental; land restitution; land shares; reform institutions; resistance to land reform land rental: and food production, 129; and food sales, 198; to foreigners, 87,

334

Index

land rental (continued ) 247, 249; under Gorbachev, 35–36; and household income, 109, 126, 129, 130, 131, 132, 198; and household land holdings, 113, 115, 116, 126–28; under the Land Code (1991), 44; and the Land Code (2001) debate, 240, 247, 249; and land differentiation, 149; land disposal through, 132; land enlargement through, 118, 129–32, 200, 220; in the Law on Agricultural Land Transactions (2002), 88–89; under Putin, 88–89, 295n63; regional variation in, 196, 198, 200; under Yeltsin, 59, 73–74, 295n63. See also land shares; Law on Agricultural Land Transactions (2002); Law on Land (1990); leasing market land restitution, 10, 14, 74, 216, 222, 286n61 land sales: experimental in Moscow oblast, 55; to foreigners, 86–87, 245, 246; and the Land Code (2001) debate, 84, 237, 239, 240, 241, 243, 245, 247; under Law on Agricultural Land Transactions (2002), 87–88, 93; moratorium on, 41–42, 46, 50, 55; under Putin, 85–86, 92, 100, 101; in the Saratov oblast regional land law, 242; under Yeltsin, 47, 55–56, 59, 60–62. See also Law on Agricultural Land Transactions (2002); ‘‘On the Regulation of Land Relations and the Development of Agrarian Reform in Russia’’ (1993) land shares: certificates for, 59–60; dispossession of, 96–98; distribution in former communist countries and Soviet states, 14–15, 23, 222; distribution in Russia, 14, 16, 20, 44, 53, 54, 114, 227; as household land holdings, xii, 113–15, 116, 198–99, 217, 218; insecurity of, 73, 108, 218; land disposal through renting out of, 47, 133– 36, 201; and land enlargement, 126,

200; under the Law on Agricultural Land Transactions (2002), 84–85, 88– 89, 89–90, 91, 92; leasing of, 63, 73, 115, 221; by region, 114, 194, 198– 99; sales of, 60, 91, 242. See also land fragmentation; ‘‘On the Regulation of Land Relations and the Development of Agrarian Reform in Russia’’ (1993) land taxes, 29, 32, 40, 61, 82, 98 land tenure, 40, 321n9 land transactions: formal, 109, 119–20, 136; by households, 118, 120; informal, 119, 136; and the Land Code (2001) debate, 238, 241, 243, 246, 247; in the Law on Agricultural Land Transactions (2002), 92; under Putin, 91, 92, 93–95; trends in, 24, 25–26, 71–73, 94, 95, 321n13; types of, 24, 71, 119–20; under Yeltsin, 71–73. See also land market; land sales; Law on Agricultural Land Transactions (2002) land use rights: as distinguished from landownership, 22–23; and the Land Code (2001) debate, 246, 249; means of obtaining, 22; in the Soviet era, 29– 32; as household land holdings, 113, 115, 116. See also landownership land wars, 83, 96–97, 218. See also raiders large farms: adaptation to reform by, 68, 125; agricultural land use by, 16, 20; debt of, 79, 168, 308n6; employment contraction on, 168–69, 169–70; family assistance for, 122; food production by, 166, 189, 222, 291n3, 308n6; land share distribution process for, 53, 54, 70, 114; land share leasing by, 221; poverty on, 171; under Putin, 79, 224; reform’s failure to restructure, 221; reorganization of, 48–49, 54, 60, 68, 70; resistance to land reform on, 66; and rural infrastructure, 172; wages on, 167. See also collective farms; Law on Agricultural Land Transactions (2002); new agricultural operators

Index (NAO); ‘‘On the Procedure for the Reorganization of Collective Farms and State Farms’’ (1991); state and collective farms; super-large farms latifundia, 56, 84, 95, 112, 160, 238, 239 Latin America, x, 16, 69 Latvia, 14, 15 Law on Agricultural Land Transactions (2002): background to, 83–84; land leasing under, 88–89; and the land market, 94, 102; landownership under, 87; land shares under, 88–89, 89–90; land transactions under, 25, 87–88, 92, 93, 228; passage of, 84–87, 91; provisions of, 85, 87–90, 100. See also land market Law on Land (1990), 36, 42 leasing market, 24, 69, 71, 73, 109, 119. See also land market Leningrad oblast: food sales in, 198; household income in, 196; human capital in, 209, 320n32; labor value in, 209; land enlargement in, 200, 205, 206, 207, 210, 211, 212, 320n28; land fragmentation in, 203; land holdings in, 196, 198, 199, 203; land privatization in, 19; land shares in, 114,134, 199, 201; population trends in Luzhskii raion, 259, 260; as survey region, 253, 259, 265 lichnoe podsobnoe khoziaistvo. See private plots life expectancy, 179–80 Liskinskii raion: population trends in, 259, 260; villages surveyed, 266. See also Voronezh oblast Lithuania, 14, 15 livestock holdings, 130–31, 132 Luzhskii raion: population trends in, 259, 260; villages surveyed, 265. See also Leningrad oblast managed democracy, 11, 79, 92, 224–26, 229 Matveevo-Kurganskii raion: population

335

trends in, 257; as survey location, 255; villages surveyed, 261. See also Rostov oblast Medvedev, Dmitri, xii, 79, 103, 177, 230, 244, 292n7. See also ‘‘Development of Agriculture’’ (program) Mexico, x, 17, 69, 226 Minusinskii raion: population trends in, 259, 260; villages surveyed, 264–65. See also Krasnoyarsk krai Moldova, 14, 15, 117 monetary stratification. See stratification: monetary moral economy, 110, 146, 206. See also subsistence security Moscow oblast: food sales in, 198; household income in, 196; human capital in, 208, 209, 320n32; labor value in, 209; land enlargement in, 200, 205, 206, 207, 210, 211, 212, 320n28; land fragmentation in, 202, 203; land holdings in, 196, 198, 199, 202, 203, 208; land market process in, 101; land privatization in, 19; land sale experiments in, 55; land shares in, 114, 134, 198, 201; large farms in, 169; population trends in Kolomenskii raion, 259, 260; population trends in Volokolamskii raion, 259, 260; protests in, 227; as survey region, 253, 259, 265 National Project, 80, 91, 99, 229, 312n80–81. See also ‘‘Development of Agriculture’’ (program); ‘‘Development of the Agroindustrial Complex’’ (program) natural increase coefficient, 178. See also rural population coefficient Nazarchuk, Aleksandr, 238, 239 new agricultural operators (NAO), 95, 102 New Economic Policy, 69, 143 new institutionalism, 3, 4, 10, 217. See also reform institutions Nicholas II, 11, 69

336

Index

Nizhnii Novgorod: model of farm privatization, 67, 95; oblast, 60, 84 Novgorod oblast: population trends in Okulovskii raion, 257–58; as survey region, 253, 263 occupational status, 125–26, 127–28 October 1993 decree. See ‘‘On the Regulation of Land Relations and the Development of Agrarian Reform in Russia’’ (1993) October crisis, 58–59, 62 ogorodnichestvo. See collective vegetable gardens Okulovskii raion: population trends in, 258; as survey region, 257; villages surveyed, 263. See also Novgorod oblast ‘‘On Agricultural Cooperatives’’ (2006), 91 ‘‘On Agricultural Land Transactions.’’ See Law on Agricultural Land Transactions (2002) ‘‘On Land’’ (Saratov oblast, 1997), 242 ‘‘On Land Reform’’ (1990), 39, 40–41 ‘‘On Land Surveying’’ (2001), 90 ‘‘On Peasant Farms’’ (1990), 38–39, 41 ‘‘On Personal Subsidiary Farming’’ (2003), 81 ‘‘On State Land Cadastre’’ (2000), 90 ‘‘On State Registration of Rights of Real Estate and Real Estate Transactions’’ (2006), 91 ‘‘On Supplementary Measures for the Allotment of Land Plots to Citizens’’ (1993), 57–58 ‘‘On the Course and Development of Agrarian Reform in Russia’’ (1992), 53–54 ‘‘On the Development of Agriculture’’ (2006 law), 80. See also ‘‘Development of Agriculture’’ (program) ‘‘On the Further Development and Increase of Effectiveness of Agriculture and Other Branches of the AgroIndustrial Complex of the Non-Black

Earth Zone of the RSFSR during 1986–1990’’ (1985), 173 ‘‘On the Priority of Supplying MaterialTechnical Resources to the Agroindustrial Complex’’ (1991), 174 ‘‘On the Priority Tasks for the Realization of Land Reform’’ (1991), 36 ‘‘On the Procedure for Establishing Norms for the Free Transfer of Land Plots to Citizens’’ (1992), 53 ‘‘On the Procedure for the Privatization and Reorganization of Enterprises and Organizations in the Agroindustrial Complex’’ (1992), 54 ‘‘On the Procedure for the Reorganization of Collective Farms and State Farms’’ (1991), 46–47, 48–49 ‘‘On the Program for the Revival of the Russian Countryside and Development of the Agroindustrial Complex’’ (1990), 41–42 ‘‘On the Realization of the Constitutional Rights of Citizens Concerning Land’’ (1996), 63 ‘‘On the Regulation of Land Relations and the Development of Agrarian Reform in Russia’’ (1993), 24, 58–62, 70 ‘‘On the Rights of Citizens of the Russian Federation to Receive Land as Private Property and to Sell Land Plots in Order to Conduct Personal Subsidiary and Dacha Farming, Gardening, and Individual Housing Construction’’ (1992), 56 ‘‘On the Social Development of the Countryside’’ (1990), 39, 41, 174 ‘‘On Urgent Measures for the Implementation of Land Reform in the RSFSR’’ (1991), 46–47 Orel oblast, 95, 245 peasant farms, 36, 38, 44. See also Association of Peasant Farms and Agricultural Cooperatives in Russia (AKKOR); ‘‘On Land Reform’’ (1990); ‘‘On Peasant Farms’’ (1990)

Index Pervomaiskii raion: population trends in, 259, 260; villages surveyed, 263. See also Altai krai Petrikov, Alexandr, 149, 171 Poland, 14, 15, 290n103 population: decline in, 178, 180, 181; increase in, 313n94; trends in survey raions, 254–60. See also rural outmigration; rural population coefficient population coefficient, 178, 181. See also rural population coefficient poverty, 122–23, 167, 171, 196, 197, 222 price supports, 79, 80 private farms: agricultural land use by, 16, 20, 21; attitudes toward land by, 112; employment in, 169; evaluating creation of, 44–45, 76; food production by, 65, 81, 224, 308n6; under Gorbachev, 36; guidelines for creation of, 42–44; and land fragmentation, 319n26; land holdings of, 125, 127– 28, 220; mortgaging by, 220; under Putin, 81, 90, 176; state assistance programs for, 81, 176, 220; trends in, 70, 133, 319n25; Yeltsin’s creation of, 38– 40, 41, 46–47, 53, 54 private plots: agricultural land use by, 21; differentiation among households, 146, 149–50; employment in, 169; food production by, 166, 167; food sales from, 30; as household land holdings, 113, 116, 118, 200, 298n9; under Putin, 81, 90, 91–92, 176; regional variation in size of, 196, 197–98, 200, 202, 203; and rural poverty, 122–23; and rural stratification, 147; size regulation of, 20, 122, 142, 194, 202, 306n45; during Soviet era, 29–31, 142; state assistance for, 81, 91–92, 176 productive capital, 142, 147, 150 Putin, Vladimir: executive-legislative relations of, 244–45; food production under, 81–82; and the Land Code

337

(2001) debate, 244–47; land disposal restrictions by, 78, 92–93; and the land market, 93, 95–96, 96–98; and land mortgaging, 81, 83, 90, 91, 220; and landownership, 78, 87, 92; land reform of, xi–xii, 91–93, 102; and land rental, 88–89, 295n63; and land sales, 85–86, 92, 100, 101; and land transactions, 91, 92, 93–95; and large farms, 79, 224; and private farms, 81, 90, 176; and private plots, 81, 90, 91–92, 176; response to rural socioeconomic problems by, 174–77; and the State Duma, 78, 85–86; state interests of, 223–24; state support for agriculture by, xii, 79, 80–81, 82–83, 102, 166, 176–77. See also ‘‘Development of the Agroindustrial Complex’’ (program); Gordeev, Aleksei; Law on Agricultural Land Transactions (2002); Medvedev, Dmitri; National Project; United Russia raiders, 97, 103, 117, 218. See also land wars Rakitianskii raion: population trends in, 255, 257; villages surveyed, 261. See also Belgorod oblast redistribution funds, 57, 70. See also land funds reform institutions: defined, 8–9; effects on land reform, 7, 26–27, 191, 195, 216–17. See also institutionalism regional governors, 225, 294n38 regional land laws, 7, 18, 62–63, 122, 194, 242, 246, 248 Republic of Chuvashia, 114, 199, 253, 257–58, 263 Republic of Tatarstan: food sales in, 198; household income in, 196; human capital in, 208, 209, 320n32; labor value in, 209; land enlargement in, 199, 200, 204, 205, 206, 207, 210, 211, 212; land fragmentation in, 203; land holdings in, 196, 198, 199, 202, 203; land

338

Index

Republic of Tatarstan (continued ) legislation in, 194, 242; land privatization in, 19; land shares in, 114, 134, 201; population trends in Buinskii raion, 259, 260; poverty in, 197; as survey region, 253, 254, 259, 265–66 resistance, to land reform: ineffectiveness of, 67, 68–70, 217, 284n60, 297n3; theories of, 7, 64–65, 65–66, 68, 69, 286n68, 288n86 ‘‘Revival of the Russian Countryside’’ (1992), 174 Romania, 10, 14, 15, 286n61 Roskomzem (Russian Committee on Land Reserves and Land Tenure), 59, 61 Rossel’khozbank, 79, 81, 91, 96, 220, 305n35 Rostov oblast, 82, 100, 253, 255, 257, 261 rural birth rate, 173, 179, 184, 313n97 rural death rate, 173, 179, 181, 184 rural demographic trends: effect on household labor, 164; effect of rural socioeconomic problems on, 165, 177–78, 184; trends at the household level, 181–84; trends at the national level, 178–81, 313n96 rural infrastructure deterioration, 99, 171–72, 222 rural labor contraction, 168–69 rural medical services decline, 172–73, 178 rural migration, 181, 314n116. See also rural out-migration rural mortality rates, 179. See also life expectancy rural outflow, 174, 178, 181. See also rural out-migration rural out-migration: effect on rural population, 178, 180–81, 208; effect of rural socioeconomic problems on, 177, 184; motivations for, 173, 182, 188; Soviet efforts to stem, 173–74 rural population coefficient, 178–79, 180, 181

rural poverty. See poverty rural socioeconomic conditions: effect on household labor, 178, 184; effect on land reform, 165, 189–90; effect on rural household demographics, 165, 177–78, 184; government responses to, 173–77, 188–89; in the post-Soviet period, 167–173; in the Soviet period, 166–67 rural unemployment, 168, 169–71 rural wage deterioration, 167–68 Russian Committee on Land Reserves and Land Tenure. See Roskomzem Russian Land Union, 91, 228 Russia’s Choice, 238, 239, 240 Rutskoi, Alexandr, 53, 54, 58, 59 sadovodstvo. See collective fruit gardens Samara oblast, 242, 274n88 Saratov oblast, 62, 227, 242, 274n88 Semenov, Viktor, 79 Shadrinkskii raion: population trends in, 259, 260; villages surveyed, 264. See also Kurgan oblast shared attitudes and values, 153, 158– 59, 161–62 shock therapy, 46, 56, 110–11, 268n13 ‘‘Social Development of the Countryside to 2010’’ (2002), 175 sovkhozy. See state and collective farms Stalin: collectivization by, ix, 13, 59, 66; destruction of the kulaks, 142, 143 state and collective farms: under Gorbachev, 34, 36, 49; land distribution from, 16, 20, 39–44, 54–55; land use rights during Soviet period, 31–32; reorganization of, 48–49, 54–55; reregistration of, 47. See also large farms; ‘‘On the Course and Development of Agrarian Reform in Russia’’ (1992); ‘‘On the Procedure for the Reorganization of Collective Farms and State Farms’’ (1991) State Duma: Committee on Agrarian Policy, 86, 91, 238, 239, 240, 243, 245,

Index 247; elections to, 67, 85, 225, 240, 245, 293n37, 323n38; Land Code (2001) debate in the first (1994–95), 237–39; Land Code (2001) debate in the second (1996–99), 63, 240–44; Land Code (2001) debate in the third (2000–2003), 244–47; Law on Agricultural Land Transactions (2002) in, 85–87; legislative process in, 237–38; Putin support in, 78, 85–86. See also Federation Council Stavropol krai, 33, 94, 171 Stolypin reforms, ix, 11, 12, 69 stratification: compared to class, 139, 152; economic, 141–42; income, 147, 157, 161, 193, 197, 198; monetary, 150; in the post-Soviet period, 144–45, 146–47, 161; sources of rural, 147– 50; in the Soviet period, 141–43, 146, 152. See also class structure; differentiation structural household factors, 130, 132 subsistence security, 110–11, 146. See also moral economy super-large farms, 95 taking reforms, 66, 96 Tatarstan. See Republic of Tatarstan Torzhokskii raion: population trends in, 257; as survey location, 255; villages surveyed, 261. See also Tver oblast Tsivil’skii raion: population trends in, 258; as survey region, 257; villages surveyed, 263. See also Republic of Chuvashia Tver oblast, 253, 255, 257, 261 Ukraine, 5, 14, 15 Union of Right Forces (SPS), 84, 225, 245 United Russia, 85, 225, 226, 293n37, 294n38, 307n56, 312n81, 323n38. See also Unity Unity, 225, 244, 245. See also United Russia

339

Uriupinskii raion: population trends in, 258; as survey region, 257; villages surveyed, 262. See also Volgograd oblast use rights. See land use rights Volgograd oblast, 114, 253, 257–58, 262 Volokolamskii raion: population trends in, 259, 260; villages surveyed, 265. See also Moscow oblast Voronezh oblast: household income in, 196, 197; human capital in, 209; labor value in, 209; land enlargement in, 200, 205, 207, 210, 211, 214; land fragmentation in, 203; land holdings in, 196, 199, 202, 203; land privatization in, 18, 19; land shares size in, 114, 134; population trends in Liskinskii raion, 259, 260; poverty in, 197; as survey region, 253, 266 Yabloko, 238, 239, 240, 244 Yeltsin, Boris: and the Communist Party, 38, 53, 66; executive-legislative relations of, 57–59, 63, 240; and Gorbachev, xi, 37–38; impeachment efforts against, 57, 58; and the Land Code (2001) debate, 240–44; land disposal restrictions by, xi, 42, 47, 50, 52, 75, 78, 243; land distribution by, 44, 47, 48, 50, 54; and land leasing, 73–74, 295n63; and the land market, 24, 70– 73, 75, 242–43; and land mortgaging, 47; land reform of, xi, 52, 56, 74–76; and land sales, 47; land shares policy, 44, 47, 53, 54, 63; land transactions under, 71–73; and large farms, 48–49, 53, 54, 60, 67, 70; and managed democracy, 11; price liberalization by, 281n6; private farms’ creation by, 38– 44, 46–47, 70, 76; response to rural socioeconomic problems by, 174; and shock therapy, 46; and state and collective farms, 41, 47, 48–49. See also October crisis; ‘‘On the Regulation of Land Relations and the Development

340

Index

Yeltsin, Boris (continued ) of Agrarian Reform in Russia’’ (1993); ‘‘On the Social Development of the Countryside’’ (1990)

Zeiskii raion: population trends in, 259, 260; villages surveyed, 264. See also Amur oblast Zorkin, Valeri, 59, 283n35 Zyuganov, Gennadi, 244, 247