4.1 Entrepreneurship and Property
4.1.6 Projected Privatisation of Collective
and State Farms
We propose agricultural privatisation, based
on a definition of its scale, timeframes, and most importantly,
targets. Most of all, one must elaborate a balance of production
and consumption for each type of the region's agricultural
produce. On this basis, farms may be grouped according to
the cost of their agricultural produce, fixing the growing
volume of production, i ncluding commodity production, during
the transition from one group to another. On the level of
regions and individual farms, this grouping enables a clear-cut
distinction of highly efficient farms from the point of
view of expenses, and the role of agric ultural produce
in production and supply to the population.
This approach is based on the fact that
the lower the production expenses on farms, the greater
the role they play in the volume of commodity production
in agriculture. In Russia about 30% of the most effective
farms provide up to 50% of plant output and 65% of livestock
production.
The choice of the optimal correlation between
efficient agricultural production and its marketability
determines, inter alia, the limits of compulsory privatisation.
Farms, where production expenses and sale expenditure exceed
the level set by the oblast administration, fall within
these limits. Those farms not subject to compulsory privatisation
(i.e., those which are highly effective and marketable)
may carry out partial privatization and commercialisation,
as long as technological integrity, specialization, and
production volumes are retained. In certain cases, provisional
administrative restrictions on reorganization are possible.
The remaining farms should not be subject to "voluntary"
privatization, but rather actual bankruptcy and change in
property relations, with the establishment of the same price
proportions and terms for purchase of their produce as for
highly efficient far ms. At the moment, meat and dairy production
subsidies are paid to all farms, and judging by current
developments, mutual debts will be written off. This will
prevent a realistic isolation of bankrupt farms.
Conflicts
in the privatization of agricultural enterprises
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As of July 1, 1992, a total of 1,941 private
farms were
registered in the oblast, covering 39,200 hectares, or an
average of 20 hectares each. On average, there is one tractor
for every two such farms, one truck for every four farms,
and
one combine harve ster for every 24 farms (data as of March
1992).
In 1991-1992, a considerable redistribution
of areas under crop
occurred between collective and state farms, on the one
hand,
and private farms and subsidiary small-holdings on the other.
The total sown area on collective and state
farms was reduced
by 36 7,000 hectares (by 20.6%), while over the same period,
the areas under crop on subsidiary small-holdings and private
farms grew by 366.8 hectares (by 275.5%). Analysis of the
progress of privatisation and land reform indicates that
it is
encountering serious conflicts and difficulties on the
republican and oblast levels, and in individual farms.
The major problems involve:
- conflicts between the need to guarantee
a steady supply of
agricultural produce, and the genuine danger of disruptions
in
its production, owing to large-scale privatisation and
reorganisation of collective and state farms;
- the uncontrollable nature of privatisation
and land reform,
its fragmentariness, and potential "reorganisation"
without
genuine changes in socio-economic relationships;
- a general deterioration in the economic
situation in rural
areas, putting the vast majority of collective and state
farms,
and a significant portion of private farms, on the verge
of
bankruptcy; and
- the ineffectiveness of mechanisms to support
new
entrepreneurial structures in agriculture.
As indicated by experience both in Nizhni
Novgorod oblast and
in Russia overall, the greatest successes in privatisation
and
increased agricultural production are observed in the
development of subsidiary small-holdings, and horticultural
and
market-garde ning plots of land. For the third year in a
row,
the country is witnessing a rapid growth in privately owned
agricultural areas and the numbers of livestock and poultry.
The Nizhni Novgorod authorities are making all possible
efforts
to assist this proces s via special-purpose allocations
of
mixed fodder and massive allotment of suburban land for
horticultural and market-garden plots and residential
construction. Here one should not be deluded
by the high rates
of growth in the numbers of private farms during the first
half
of 1992, and the large number of applications to set up
such
farms. The areas of arable lands in reserve, especially
in
suburban regions, are rapidly being reduced, and will remain
extremely limited if a realistic resolution of the issues
of
privatisation of collective and state farms is not found.
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