Prospects for family farming in Russia

Europe - Asia Studies

Volumn 49, Issue 8, 1997, Pages 1383-1407

  Prosterman, Roy L ^a   Mitchell, Robert G ^a   Rorem, Bradley J ^a  

^a Rural Development Institute   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

AGRICULTURAL PRODUCTION; FAMILY FARMING; FARMING SYSTEM; FUTURE PROSPECT;

RUSSIAN FEDERATION;

EID: 0031427526     PISSN: 09668136     EISSN: None     Source Type: Journal    
DOI: 10.1080/09668139708412506     Document Type: Article

References (60)

1. Rapid rural appraisal techniques are designed to avoid pitfalls common to some rural research, including neglect of interviewees located far from cities and the tendency to meet only with officials and local elites rather than those who are powerless or in distressed circumstances. Rapid rural appraisal assumes that rural people have valuable knowledge regarding subjects that affect their lives. For further discussion, see Robert Chambers, 'Rural Appraisal: Rapid, Relaxed and Participatory', Institute of Development Studies Discussion Paper No. 311 (October 1992); and R. Chambers, 'Shortcut and Participatory Methods for Gaining Social Information for Projects', in Michael Cemea (ed.). Putting People First: Sociological Variables in Rural Development (1991) pp. 515-537.
2. Rapid rural appraisal techniques are designed to avoid pitfalls common to some rural research, including neglect of interviewees located far from cities and the tendency to meet only with officials and local elites rather than those who are powerless or in distressed circumstances. Rapid rural appraisal assumes that rural people have valuable knowledge regarding subjects that affect their lives. For further discussion, see Robert Chambers, 'Rural Appraisal: Rapid, Relaxed and Participatory', Institute of Development Studies Discussion Paper No. 311 (October 1992); and R. Chambers, 'Shortcut and Participatory Methods for Gaining Social Information for Projects', in Michael Cemea (ed.). Putting People First: Sociological Variables in Rural Development (1991) pp. 515-537.
3. The Russian term for family farm is often translated as 'peasant farm'. In this article 'family farm' is used to refer to entities registered in Russia as 'peasant (farm) enterprises' operated by a single family or small group of individuals. 'Agricultural enterprise' is used to refer to larger agricultural producers, including collective farms, state farms, production cooperatives, joint stock companies and large partnerships. 'Agricultural producer' is used to refer to all types of agricultural producers.
4. See, e.g., Roy Prosterman, Leonard Rolfes & Robert Mitchell, 'Russian Agrarian Reform: A Status Report From the Field,' Communist Economies & Economic Transformation, 7, 2, June 1995, pp. 175-193.
5. Goskomstat. cited in Finansovye Izvestiya, 17 December 1996.
6. See, e g., Hans Binswanger, Klaus Deininger & Gershon Feder, 'Power, Distortions, Revolt and Reform in Agricultural Land Relations', in J. Behrman & T. N. Srinivasan (eds), Handbook of Development Economics, Volume III (1995); Johan van Zyl, Bill R. Miller & Andrew Parker, 'Agrarian Structure in Poland: The Myth of Large-Farm Superiority', World Bank Discussion Paper, WPS 1596 (April 1996); Nancy L. Johnson & Vernon Ruttan, 'Why Are Farms So Small?', World Development, 22, 1994, p. 691; Binswanger & Deininger, 'South African Land Policy: The Legacy of History and Current Options', and van Zyl, 'The Farm Size-Efficiency Relationship', both in Policies. Markets and Mechanisms: Agricultural Land Reform in South Africa; William Thiesenhusen & Melmed Sanjak, 'Brazil's Agrarian Structure: Changes From 1970 Through 1980', World Development, 18, 1990, p. 402; R. Prosterman, Tim Hanstad & Li Ping, 'Large-Scale Farming in China: An Appropriate Policy?', RDI Report No. 90, July 1996, pp. 4-11.
7. See, e g., Hans Binswanger, Klaus Deininger & Gershon Feder, 'Power, Distortions, Revolt and Reform in Agricultural Land Relations', in J. Behrman & T. N. Srinivasan (eds), Handbook of Development Economics, Volume III (1995); Johan van Zyl, Bill R. Miller & Andrew Parker, 'Agrarian Structure in Poland: The Myth of Large-Farm Superiority', World Bank Discussion Paper, WPS 1596 (April 1996); Nancy L. Johnson & Vernon Ruttan, 'Why Are Farms So Small?', World Development, 22, 1994, p. 691; Binswanger & Deininger, 'South African Land Policy: The Legacy of History and Current Options', and van Zyl, 'The Farm Size-Efficiency Relationship', both in Policies. Markets and Mechanisms: Agricultural Land Reform in South Africa; William Thiesenhusen & Melmed Sanjak, 'Brazil's Agrarian Structure: Changes From 1970 Through 1980', World Development, 18, 1990, p. 402; R. Prosterman, Tim Hanstad & Li Ping, 'Large-Scale Farming in China: An Appropriate Policy?', RDI Report No. 90, July 1996, pp. 4-11.
8. See, e g., Hans Binswanger, Klaus Deininger & Gershon Feder, 'Power, Distortions, Revolt and Reform in Agricultural Land Relations', in J. Behrman & T. N. Srinivasan (eds), Handbook of Development Economics, Volume III (1995); Johan van Zyl, Bill R. Miller & Andrew Parker, 'Agrarian Structure in Poland: The Myth of Large-Farm Superiority', World Bank Discussion Paper, WPS 1596 (April 1996); Nancy L. Johnson & Vernon Ruttan, 'Why Are Farms So Small?', World Development, 22, 1994, p. 691; Binswanger & Deininger, 'South African Land Policy: The Legacy of History and Current Options', and van Zyl, 'The Farm Size-Efficiency Relationship', both in Policies. Markets and Mechanisms: Agricultural Land Reform in South Africa; William Thiesenhusen & Melmed Sanjak, 'Brazil's Agrarian Structure: Changes From 1970 Through 1980', World Development, 18, 1990, p. 402; R. Prosterman, Tim Hanstad & Li Ping, 'Large-Scale Farming in China: An Appropriate Policy?', RDI Report No. 90, July 1996, pp. 4-11.
9. See, e g., Hans Binswanger, Klaus Deininger & Gershon Feder, 'Power, Distortions, Revolt and Reform in Agricultural Land Relations', in J. Behrman & T. N. Srinivasan (eds), Handbook of Development Economics, Volume III (1995); Johan van Zyl, Bill R. Miller & Andrew Parker, 'Agrarian Structure in Poland: The Myth of Large-Farm Superiority', World Bank Discussion Paper, WPS 1596 (April 1996); Nancy L. Johnson & Vernon Ruttan, 'Why Are Farms So Small?', World Development, 22, 1994, p. 691; Binswanger & Deininger, 'South African Land Policy: The Legacy of History and Current Options', and van Zyl, 'The Farm Size-Efficiency Relationship', both in Policies. Markets and Mechanisms: Agricultural Land Reform in South Africa; William Thiesenhusen & Melmed Sanjak, 'Brazil's Agrarian Structure: Changes From 1970 Through 1980', World Development, 18, 1990, p. 402; R. Prosterman, Tim Hanstad & Li Ping, 'Large-Scale Farming in China: An Appropriate Policy?', RDI Report No. 90, July 1996, pp. 4-11.
10. See, e g., Hans Binswanger, Klaus Deininger & Gershon Feder, 'Power, Distortions, Revolt and Reform in Agricultural Land Relations', in J. Behrman & T. N. Srinivasan (eds), Handbook of Development Economics, Volume III (1995); Johan van Zyl, Bill R. Miller & Andrew Parker, 'Agrarian Structure in Poland: The Myth of Large-Farm Superiority', World Bank Discussion Paper, WPS 1596 (April 1996); Nancy L. Johnson & Vernon Ruttan, 'Why Are Farms So Small?', World Development, 22, 1994, p. 691; Binswanger & Deininger, 'South African Land Policy: The Legacy of History and Current Options', and van Zyl, 'The Farm Size-Efficiency Relationship', both in Policies. Markets and Mechanisms: Agricultural Land Reform in South Africa; William Thiesenhusen & Melmed Sanjak, 'Brazil's Agrarian Structure: Changes From 1970 Through 1980', World Development, 18, 1990, p. 402; R. Prosterman, Tim Hanstad & Li Ping, 'Large-Scale Farming in China: An Appropriate Policy?', RDI Report No. 90, July 1996, pp. 4-11.
11. See, e g., Hans Binswanger, Klaus Deininger & Gershon Feder, 'Power, Distortions, Revolt and Reform in Agricultural Land Relations', in J. Behrman & T. N. Srinivasan (eds), Handbook of Development Economics, Volume III (1995); Johan van Zyl, Bill R. Miller & Andrew Parker, 'Agrarian Structure in Poland: The Myth of Large-Farm Superiority', World Bank Discussion Paper, WPS 1596 (April 1996); Nancy L. Johnson & Vernon Ruttan, 'Why Are Farms So Small?', World Development, 22, 1994, p. 691; Binswanger & Deininger, 'South African Land Policy: The Legacy of History and Current Options', and van Zyl, 'The Farm Size-Efficiency Relationship', both in Policies. Markets and Mechanisms: Agricultural Land Reform in South Africa; William Thiesenhusen & Melmed Sanjak, 'Brazil's Agrarian Structure: Changes From 1970 Through 1980', World Development, 18, 1990, p. 402; R. Prosterman, Tim Hanstad & Li Ping, 'Large-Scale Farming in China: An Appropriate Policy?', RDI Report No. 90, July 1996, pp. 4-11.
12. See, e g., Hans Binswanger, Klaus Deininger & Gershon Feder, 'Power, Distortions, Revolt and Reform in Agricultural Land Relations', in J. Behrman & T. N. Srinivasan (eds), Handbook of Development Economics, Volume III (1995); Johan van Zyl, Bill R. Miller & Andrew Parker, 'Agrarian Structure in Poland: The Myth of Large-Farm Superiority', World Bank Discussion Paper, WPS 1596 (April 1996); Nancy L. Johnson & Vernon Ruttan, 'Why Are Farms So Small?', World Development, 22, 1994, p. 691; Binswanger & Deininger, 'South African Land Policy: The Legacy of History and Current Options', and van Zyl, 'The Farm Size-Efficiency Relationship', both in Policies. Markets and Mechanisms: Agricultural Land Reform in South Africa; William Thiesenhusen & Melmed Sanjak, 'Brazil's Agrarian Structure: Changes From 1970 Through 1980', World Development, 18, 1990, p. 402; R. Prosterman, Tim Hanstad & Li Ping, 'Large-Scale Farming in China: An Appropriate Policy?', RDI Report No. 90, July 1996, pp. 4-11.
13. Soviet grain yields for 1986-91 averaged 1841 kilograms per hectare, while yields in Finland averaged 2918 kilograms per hectare and yields in Canada averaged 2522 kilograms per hectare. Yields in the United States averaged 4481 kilograms per hectare during the same period. See Food and Agriculture Organization, FAO Production Yearbook, 42, 1988, table no. 15, and 45, 1991, table no. 15.
14. Total cropland in Russia is 133,900,000 hectares (Food and Agriculture Organization, FAO Production Yearbook, 48, 1994, table no. 1), of which 7 900 000 is worked by family farmers, according to the Russian State Statistical Survey (Survey of Private Farmers), Reuters Textline Novecon, 1 June 1995. The remaining 126 000 000 hectares are worked by Russia's 26 000 former (and still existing) collective and state farms, which equates to an average size of just over 4800 hectares per agricultural enterprise. RSFSR Law on the Peasant Farm (as amended 5 January 1991); Presidential Decree No. 323, 'On Urgent Measures for Implementation of Land Reform in the RSFSR' (27 December 1991); Government Resolution No. 86, 'On the Procedure for Reorganisation of Collective and State Farms' (29 December 1991); Government Resolution No. 708, On the Procedure for Privatisation and Reorganisation of Enterprises and Organisations of the Agro-Industrial Complex' (4 September 1992), as amended by Government Resolution No. 969 (11 December 1992); Presidential Decree No. 1767, 'On the Regulation of Land Relations and the Development of Agrarian Reform in Russia' (27 October 1993); Government Resolution No. 96, On Procedure for Exercising Rights of Owners of Land and Properly Shares' (1 February 1995); Presidential Decree No. 337, 'On Realisation of Citizens' Constitutional Rights to Land' (7 March 1996).
15. Total cropland in Russia is 133,900,000 hectares (Food and Agriculture Organization, FAO Production Yearbook, 48, 1994, table no. 1), of which 7 900 000 is worked by family farmers, according to the Russian State Statistical Survey (Survey of Private Farmers), Reuters Textline Novecon, 1 June 1995. The remaining 126 000 000 hectares are worked by Russia's 26 000 former (and still existing) collective and state farms, which equates to an average size of just over 4800 hectares per agricultural enterprise. RSFSR Law on the Peasant Farm (as amended 5 January 1991); Presidential Decree No. 323, 'On Urgent Measures for Implementation of Land Reform in the RSFSR' (27 December 1991); Government Resolution No. 86, 'On the Procedure for Reorganisation of Collective and State Farms' (29 December 1991); Government Resolution No. 708, On the Procedure for Privatisation and Reorganisation of Enterprises and Organisations of the Agro-Industrial Complex' (4 September 1992), as amended by Government Resolution No. 969 (11 December 1992); Presidential Decree No. 1767, 'On the Regulation of Land Relations and the Development of Agrarian Reform in Russia' (27 October 1993); Government Resolution No. 96, On Procedure for Exercising Rights of Owners of Land and Properly Shares' (1 February 1995); Presidential Decree No. 337, 'On Realisation of Citizens' Constitutional Rights to Land' (7 March 1996).
16. Total cropland in Russia is 133,900,000 hectares (Food and Agriculture Organization, FAO Production Yearbook, 48, 1994, table no. 1), of which 7 900 000 is worked by family farmers, according to the Russian State Statistical Survey (Survey of Private Farmers), Reuters Textline Novecon, 1 June 1995. The remaining 126 000 000 hectares are worked by Russia's 26 000 former (and still existing) collective and state farms, which equates to an average size of just over 4800 hectares per agricultural enterprise. RSFSR Law on the Peasant Farm (as amended 5 January 1991); Presidential Decree No. 323, 'On Urgent Measures for Implementation of Land Reform in the RSFSR' (27 December 1991); Government Resolution No. 86, 'On the Procedure for Reorganisation of Collective and State Farms' (29 December 1991); Government Resolution No. 708, On the Procedure for Privatisation and Reorganisation of Enterprises and Organisations of the Agro-Industrial Complex' (4 September 1992), as amended by Government Resolution No. 969 (11 December 1992); Presidential Decree No. 1767, 'On the Regulation of Land Relations and the Development of Agrarian Reform in Russia' (27 October 1993); Government Resolution No. 96, On Procedure for Exercising Rights of Owners of Land and Properly Shares' (1 February 1995); Presidential Decree No. 337, 'On Realisation of Citizens' Constitutional Rights to Land' (7 March 1996).
17. Total cropland in Russia is 133,900,000 hectares (Food and Agriculture Organization, FAO Production Yearbook, 48, 1994, table no. 1), of which 7 900 000 is worked by family farmers, according to the Russian State Statistical Survey (Survey of Private Farmers), Reuters Textline Novecon, 1 June 1995. The remaining 126 000 000 hectares are worked by Russia's 26 000 former (and still existing) collective and state farms, which equates to an average size of just over 4800 hectares per agricultural enterprise. RSFSR Law on the Peasant Farm (as amended 5 January 1991); Presidential Decree No. 323, 'On Urgent Measures for Implementation of Land Reform in the RSFSR' (27 December 1991); Government Resolution No. 86, 'On the Procedure for Reorganisation of Collective and State Farms' (29 December 1991); Government Resolution No. 708, On the Procedure for Privatisation and Reorganisation of Enterprises and Organisations of the Agro-Industrial Complex' (4 September 1992), as amended by Government Resolution No. 969 (11 December 1992); Presidential Decree No. 1767, 'On the Regulation of Land Relations and the Development of Agrarian Reform in Russia' (27 October 1993); Government Resolution No. 96, On Procedure for Exercising Rights of Owners of Land and Properly Shares' (1 February 1995); Presidential Decree No. 337, 'On Realisation of Citizens' Constitutional Rights to Land' (7 March 1996).
18. Total cropland in Russia is 133,900,000 hectares (Food and Agriculture Organization, FAO Production Yearbook, 48, 1994, table no. 1), of which 7 900 000 is worked by family farmers, according to the Russian State Statistical Survey (Survey of Private Farmers), Reuters Textline Novecon, 1 June 1995. The remaining 126 000 000 hectares are worked by Russia's 26 000 former (and still existing) collective and state farms, which equates to an average size of just over 4800 hectares per agricultural enterprise. RSFSR Law on the Peasant Farm (as amended 5 January 1991); Presidential Decree No. 323, 'On Urgent Measures for Implementation of Land Reform in the RSFSR' (27 December 1991); Government Resolution No. 86, 'On the Procedure for Reorganisation of Collective and State Farms' (29 December 1991); Government Resolution No. 708, On the Procedure for Privatisation and Reorganisation of Enterprises and Organisations of the Agro-Industrial Complex' (4 September 1992), as amended by Government Resolution No. 969 (11 December 1992); Presidential Decree No. 1767, 'On the Regulation of Land Relations and the Development of Agrarian Reform in Russia' (27 October 1993); Government Resolution No. 96, On Procedure for Exercising Rights of Owners of Land and Properly Shares' (1 February 1995); Presidential Decree No. 337, 'On Realisation of Citizens' Constitutional Rights to Land' (7 March 1996).
19. Total cropland in Russia is 133,900,000 hectares (Food and Agriculture Organization, FAO Production Yearbook, 48, 1994, table no. 1), of which 7 900 000 is worked by family farmers, according to the Russian State Statistical Survey (Survey of Private Farmers), Reuters Textline Novecon, 1 June 1995. The remaining 126 000 000 hectares are worked by Russia's 26 000 former (and still existing) collective and state farms, which equates to an average size of just over 4800 hectares per agricultural enterprise. RSFSR Law on the Peasant Farm (as amended 5 January 1991); Presidential Decree No. 323, 'On Urgent Measures for Implementation of Land Reform in the RSFSR' (27 December 1991); Government Resolution No. 86, 'On the Procedure for Reorganisation of Collective and State Farms' (29 December 1991); Government Resolution No. 708, On the Procedure for Privatisation and Reorganisation of Enterprises and Organisations of the Agro-Industrial Complex' (4 September 1992), as amended by Government Resolution No. 969 (11 December 1992); Presidential Decree No. 1767, 'On the Regulation of Land Relations and the Development of Agrarian Reform in Russia' (27 October 1993); Government Resolution No. 96, On Procedure for Exercising Rights of Owners of Land and Properly Shares' (1 February 1995); Presidential Decree No. 337, 'On Realisation of Citizens' Constitutional Rights to Land' (7 March 1996).
20. Total cropland in Russia is 133,900,000 hectares (Food and Agriculture Organization, FAO Production Yearbook, 48, 1994, table no. 1), of which 7 900 000 is worked by family farmers, according to the Russian State Statistical Survey (Survey of Private Farmers), Reuters Textline Novecon, 1 June 1995. The remaining 126 000 000 hectares are worked by Russia's 26 000 former (and still existing) collective and state farms, which equates to an average size of just over 4800 hectares per agricultural enterprise. RSFSR Law on the Peasant Farm (as amended 5 January 1991); Presidential Decree No. 323, 'On Urgent Measures for Implementation of Land Reform in the RSFSR' (27 December 1991); Government Resolution No. 86, 'On the Procedure for Reorganisation of Collective and State Farms' (29 December 1991); Government Resolution No. 708, On the Procedure for Privatisation and Reorganisation of Enterprises and Organisations of the Agro-Industrial Complex' (4 September 1992), as amended by Government Resolution No. 969 (11 December 1992); Presidential Decree No. 1767, 'On the Regulation of Land Relations and the Development of Agrarian Reform in Russia' (27 October 1993); Government Resolution No. 96, On Procedure for Exercising Rights of Owners of Land and Properly Shares' (1 February 1995); Presidential Decree No. 337, 'On Realisation of Citizens' Constitutional Rights to Land' (7 March 1996).
21. Raion norms are calculated by dividing the amount of agricultural land in the raion by the entire rural population, rather than using the smaller denominator of agricultural workers and pensioners in the raion. The raion norm is used to establish the maximum size of land shares, as well as the maximum amount of land that can be allocated free of charge to the ownership of a family farmer who receives land from the land fund rather than withdrawing land shares from an agricultural enterprise.
22. Presidential Decree No. 1767 also gave land plot owners the right to sell, bequeath, gift, mortgage, lease, exchange or contribute their land. Unfortunately, no implementing regulations have been adopted to allow most land plot transactions to be completed.
23. Although most land share certificates had been issued prior to enactment of Presidential Decree No. 337 the oblasti visited were making a concerted effort to complete the task of issuing all land share certificates to the rightful land share owners by the Decree No. 337 deadline. In Samara ablast' 96% of the 223 000 land share owners had received their certificates by September 1996. In Vladimir ablast' 93% of the 98 000 land share owners had received their certificates.
24. In May 1996 the Government issued model agreements for bilateral and multilateral lease of land shares.
25. This provision abrogates the allocation procedure that was contained in Government Resolution No. 96, On Procedure for Exercising Rights of Owners of Land and Property Shares' (1 February 1995), which required a land share owner to go to court if he could not obtain the agreement of all land share owners regarding location of the land share to be allocated as a land plot in kind. The reference to 'compact location' has been interpreted by officials in at least one raion we visited to give them authority to allocate land plots contiguous to existing family farms which lease in land shares.
26. RDI is presently advising a small legal aid office in Vladimir ablast'.
27. A possessor of land in lifetime inheritable proprietorship may use the land and bequeath it to heirs, but may not sell the land.
28. A September 1996 exchange rate of 5400 rubles per dollar is used throughout this article.
29. Ten times the land tax was the special 'normative price' adopted in May 1995 for sale of government-owned land which is located under the buildings of privatised enterprises in the non-agricultural sector.
30. USDA, 1992 Annual Agricultural Land Survey.
31. Seven hectares × 0.23 tons of grain per hectare (average rent paid by family farmers) × 700 000 rubles per ton (average wheat price) = 1 127 000 rubles. That number of rubles divided by 180 000 rubles (average monthly pension) equals 6.26 months' equivalent of pension payments.
32. Another former Soviet republic, Kyrgyzstan, which faces similar issues of determining location when land share owners withdraw, is considering a unique 'negotiated selection' procedure. In this procedure, the individual wishing to withdraw land and the remaining co-owners of the land take turns proposing a field on which the withdrawing owner's land share will be demarcated in kind. If one side rejects the other side's proposal of a particular field, that field is removed from the negotiation. The process continues until one side accepts the other side's proposal, or until only one field is left. At that point, the plot or plots are demarcated in a contiguous area on the edge of that field by the raion land committee (interviews with Kyrgyzstan's Deputy Prime Minister Bekbolot Talgarbekov, July 1996 and January 1997).
33. A lively market appears to have developed for purchase and sale of small plots (dacha plots, garden plots and household auxiliary plots) since Government Resolution No. 503 ('Rules of Purchase and Sale of Land Parcels by Russian Federation Citizens', issued 30 May 1993) set forth the procedures and form of contract. In Samara oblast', for example, there were 13 500 registered sales of such plots in 1995, and a further 8600 sales in the first half of 1996. (Figures gathered at the federal level indicate a total of 200 000 registered small plot sales in 1995, but the Samara figures suggest that this total may be too low.)
34. The normative price of land is 200 times the land tax. Government Resolution No 1204, 'Rules for Determining the Normative Price for Land', 3 November 1994.
35. ; Since the normative price is 200 times the land tax, which in Rostov oblast' is 4500 rubles per hectare, the normative price for a 20-hectare land share would be 200×4500 rubles per hectare=900 000 rubles per hectare ×20 hectares=18 000 000 rubles.
36. US statistics based upon M. E. Wirth & Larry Burt, 'Farmland Values in the Pacific Northwest: 1960-1992', Kansas State University, Department of Agricultural Economics, Staff Paper No. 92-201 (July 1992). Canadian statistics based upon telephone interviews with appraisal consultant Brian Gettel of Edmonton, Canada, 26 April 1996, and real estate appraiser Barry Baker of Regina, Canada, 1 May 1996.
37. Article 584 of the Civil Code calls for notarisation of all annuity contracts, while Decree No. 337 appears to contemplate issuance of a model form for annuity contracts involving land shares.
38. Notarisation is required for certain other land transactions. Section 2 of the Law 'On the Right of Citizens of the Russian Federation to Acquire as Private Property and to Sell Tracts of Land to Conduct Private Subsidiary Farming and Dacha Economies. Horticulture, and Private Housing Construction' (23 December 1992), requires notarisation of sales of small plots. Articles 339 and 584 of the Civil Code require notarisation of, respectively, mortgages and annuity contracts.
39. Oblast' officials questioned the validity of such permanent contributions since they have not been notarised. They estimated that notarisation would cost roughly 1 million rubles ($185) per contribution.
40. Article 13 of the Law 'On Introduction Into Operation of Part I of the Civil Code of the Russian Federation' provides that Chapter 17 of the Civil Code shall not be operative until a Land Code is adopted.
41. At least two other laws address the consequences of violation of land use laws. Article 11 of the Law on Peasant Farms lists the duties of individuals operating family farms, which include using the land effectively, increasing its fertility, performing conservation measures, and preventing deterioration. If there is a violation of these duties, the head of the family farm 'is accountable under current legislation'. Article 53 of the 1991 Land Code provides that land plot owners, possessors, users and lessees shall have similar obligations to those listed in the Law on Peasant Farms, and article 125 specifies fines for 'administrative and criminal responsibility for violations of Land Legislation'.
42. Article 243 of the Civil Code authorises administrative confiscation, while article 286 (not currently in force) provides that the 'land legislation' shall identify the agency of state or local government that is empowered to adopt decisions concerning withdrawal of land plots. Article 286 also provides that, with the consent of the owner, withdrawn land will be sold at a public sale, but does not provide where the proceeds shall go.
43. Law 'On Introducing Amendments and Addenda to the Law of the Russian Federation on the State Duty' (31 December 1995), art. 4.4(1).
44. Ibid.
45. The fee for notarising the right of succession is 1% of the 'cost' of the inherited property for near relatives, and 2% in other cases, Ibid., art. 4.4(19).
46. One regulatory proposal under discussion by policy makers in Moscow would seek to mitigate this fear by dividing enterprise assets into four separate categories (machinery, buildings, livestock and inputs) and requiring a departing member to claim their property share in equal parts from each asset category.
47. Although RDI researchers conducting fieldwork did not find any family farmers (or prospective family farmers) interested in acquiring buildings from agricultural enterprises, lawyers from the Centre for Land Reform Support in Vladimir ablast' encountered a family farmer who sought and ultimately acquired a cow barn as part of her instalment purchases of 31 property shares from departing members of a large agricultural partnership. It should be noted that any person who acquires such a building shall also receive, without payment, the land beneath the building, under Presidential Decree No. 198, 'Right of Ownership of Citizens and Legal Persons to Land Parcels Under Real Estate in Rural Localities' (14 February 1996). Consolidation of the ownership rights to structures and the land beneath them may increase the collateral value of the buildings and simplify the process of lending against them. If long-term credit becomes available for repair of old structures or construction of new ones, more family farmers or departing property share owners may find allocation of buildings to be beneficial.
48. Sections 8 and 9 of Government Resolution No. 86, On the Procedure for Reorganisation of Collective and State Farms' (29 December 1991), provide that 'the value of the fixed assets and working assets of the collective and state farm...shall comprise the total shared property of the members...All members...including those who have retired, shall have the right to free land and property entitlements in the total shared property'. Section 13 of the 'Regulations on Reorganisation of Collective and State Farms and Privatisation of State Agricultural Enterprises', approved by Government Resolution No. 708 (4 September 1992), provides: 'individual property entitlements shall be calculated on the basis of estimating the value of the entire property of the reorganised enterprise. The total entitlement fund shall be calculated as the difference between the assets and liabilities of the enterprise's balance sheet'.
49. For example, some agricultural enterprises report that old machinery is recorded in the books as more valuable than newer machinery because of changes in accounting or depreciation rules applied at various times.
50. In Rostov ablast', the only ablast' in which RDI researchers obtained detailed information on this point, Agroprombank is reportedly the dominant bank lender, accounting for 82% of bank loans to agricultural producers.
51. In the United States, for example, commercial interest rates are typically 2% above prime rate, at the time of writing 8.25% (Business Week, 16 December 1996, p. 143), while annual inflation was approximately 3.5% in the first half of 1996 (Federal Reserve Bulletin, 82, 9, September 1996, p. 811 ). Thus, real interest rates for US commercial loans (commercial rate minus inflation, or 10.25% minus 3.5%) currently run about 6-7%.
52. In the United States, for example, commercial interest rates are typically 2% above prime rate, at the time of writing 8.25% (Business Week, 16 December 1996, p. 143), while annual inflation was approximately 3.5% in the first half of 1996 (Federal Reserve Bulletin, 82, 9, September 1996, p. 811 ). Thus, real interest rates for US commercial loans (commercial rate minus inflation, or 10.25% minus 3.5%) currently run about 6-7%.
53. The preference for land as collateral is surprising in that agricultural land is not regularly being used as collateral. The preference could be theoretical, or could relate to mortgage of developable land.
54. In late 1995 the Russian Government and regional authorities reportedly reached an agreement with the Rostselmash combine maker to implement a programme to make instalment financing available to agricultural producers through the manufacturer. The programme was considered an experiment that could lead to development of further government assistance programmes for commercial enterprises. Interfax Food and Agriculture Report, IV, 51-52, 15-29 December 1995, p. 3.
55. The Rostov ablast' AKKOR representative also reported that AKKOR purchased machinery from manufacturers' sales offices in Moscow on an instalment basis.
56. RDI attorneys conducting field research in Voronezh ablast' in 1995 also noted the popularity of credit in kind. In Voronezh, farmers were obtaining credit in kind through the Voronezh Agro Contract Organisation (VACO). Farmers who entered into a contract with VACO agreed to sell a portion of their crop after harvest at a set price. VACO then advanced them 25% of the credit prior to sowing, and another 25% prior to harvest. Advances were made in the form of inputs. After farmers delivered their product, they were paid the final 50% of the contract amount in cash. Farmers who entered into contracts with VACO indicated that the price they were paid for their crops was much lower than market price, and that they could have bought the same inputs supplied for less than the amount charged as an advance. Nonetheless, they entered into the contract because it provided the least onerous means of securing the necessary inputs for sowing and harvesting their crops.
57. Another major source for credit in kind is the Federal Food Corporation, which is the main procurement agent of the federal government. Interfax Food & Agriculture Report, V, 42, 11-18 October 1996, pp. 2-3.
58. Farm reorganisation projects primarily utilise the following laws: Government Resolution No 324, On the Experience of Agrarian Reform in Nizhny Novgorod Province' (15 April 1994); Government Resolution No. 874, 'On Reorganisation of Agricultural Enterprises Based on the Experience of Nizhny Novgorod Province' (27 July 1994); and Government Resolution No. 96, On the Procedure for Exercising the Rights of Land and Property Entitlement Owners' (1 February 1995).
59. Farm reorganisation projects primarily utilise the following laws: Government Resolution No 324, On the Experience of Agrarian Reform in Nizhny Novgorod Province' (15 April 1994); Government Resolution No. 874, 'On Reorganisation of Agricultural Enterprises Based on the Experience of Nizhny Novgorod Province' (27 July 1994); and Government Resolution No. 96, On the Procedure for Exercising the Rights of Land and Property Entitlement Owners' (1 February 1995).
60. Farm reorganisation projects primarily utilise the following laws: Government Resolution No 324, On the Experience of Agrarian Reform in Nizhny Novgorod Province' (15 April 1994); Government Resolution No. 874, 'On Reorganisation of Agricultural Enterprises Based on the Experience of Nizhny Novgorod Province' (27 July 1994); and Government Resolution No. 96, On the Procedure for Exercising the Rights of Land and Property Entitlement Owners' (1 February 1995).