De-Collectivizing Russia and the Prospects for Agriculture

When I read an article like this one in the New York Times about Russia’s collective farms being converted to industrial megafarms:

PODLESNY, Russia — The fields around this little farming enclave are among the most fertile on earth. But like tens of million of acres of land in this country, after the collapse of the Soviet Union, they literally went to seed.

Now that may be changing. A decade after capitalism transformed Russian industry, an agricultural revolution is stirring the countryside, shaking up village life and sweeping aside the collective farms that resisted earlier reform efforts and remain the dominant form of agriculture.

The change is being driven by soaring global food prices (the price of wheat alone rose 77 percent last year) and a new reform allowing foreigners to own agricultural land. Together, they have created a land rush in rural Russia.

“Where else do you have such an abundance of land?” Samir Suleymanov, the World Bank’s director for Russia, asked in an interview.

As a result, the business of buying and reforming collective farms is suddenly and improbably very profitable, attracting hedge fund managers, Russian oligarchs, Swedish portfolio investors and even a descendant of White Russian émigré nobility.

I’m of decidedly mixed mind.

On the one hand I can envision an optimistic future in which China abandons its policy of food self-sufficiency and opens its markets to food imported from abroad to a much greater degree than it has done so far. The vast under-utilized, under-capitalized, and under-producing agricultural areas of Eastern Europe including Russia, Ukraine, Poland, and Romania receive the infusions of foreign capital they need to modernize and they, along with the great agricultural areas of the United States, Canada, Australia, Brazil and many others all prosper from access to the new market.

But on the other hand I recall the blunders we made in the early 90’s, pushing and enabling Russia to de-collectivize its economy too fast and before the country’s other institutions were ready for the reform laying the foundations for the kleptocracy that overtook Russia during that period and Putin’s Russia as it is now.

Russia had little tradition of the independent yeoman agriculture that formed the basis of democracy in America. Collectivization came just about two generations after serfdom was abolished. Stalin crushed what little independent agriculture there was in the 1930’s.

Now, if still-collectivized Russian agriculture is supplanted by industrial farming, often foreign owned, hope of yet another independent institution for a country poor in democratizing and liberalizing institutions will vanish with it.

Note: the picture above, taken in 2007, comes to us courtesy of Reuters. It shows two signposts, one pointing to the Stalin collective farm, the other to the Putin collective farm. Sadly emblematic of the new Russia, I’m afraid.

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Dave Schuler
About Dave Schuler
Over the years Dave Schuler has worked as a martial arts instructor, a handyman, a musician, a cook, and a translator. He's owned his own company for the last thirty years and has a post-graduate degree in his field. He comes from a family of politicians, teachers, and vaudeville entertainers. All-in-all a pretty good preparation for blogging. He has contributed to OTB since November 2006 but mostly writes at his own blog, The Glittering Eye, which he started in March 2004.