Agrarian reform and transition: what can we learn from ‘the east’?

Abstract

During the past two decades agrarian (‘land and farm’) reforms have been widespread in the transition economies of Eastern Europe, the Caucasus and Central Asia (EECCA), following earlier ones in Asia (China and Vietnam). However, independent family farms did not become the predominant sector in most of Eastern Europe. A new dual (or bi-modal) agrarian structure emerged, consisting of large farm enterprises (with much less social functions than they had before), and very small peasant farms or subsidiary plots. The paper compares five case studies, looking at agrarian actors, property rights, state influence, and rural poverty. These are Russia, Armenia, Moldova and Uzbekistan in the EECCA region, and China's Xinjiang province in Asia. The paper concludes that state influence is still substantial, property rights regimes are quite diverse and rural poverty remains medium to high. State-led agrarian reform, in particular where a redistributive (or restitution-based) land reform was implemented led in some cases to land-based wealth redistribution, but policies and institutions were lacking to support the individual farm sector. More often the outcome was a rapid transfer of land in the hands of corporate farm enterprises, reversing the initial process of ‘re-peasantization’. It seems that the old ‘Soviet dream’ of mega-farm enterprises in the ‘transition to capitalism’ has regained prominence, with huge agro-holdings ‘calling the shots’, providing an insecure future for agricultural workers, peasants and farmers.

Keywords:

• agrarian reform
• transition
• Eastern Europe
• land
• rural poverty

Notes

¹With a few exceptions, such as Poland and Yugoslavia.

²For a recent review of the ‘agrarian question’, see Akram-Lodhi and Kay (2010a, 2010b). The classic analysis of the ‘agrarian question’ can be found in Bernstein (1994, 1996/97).

³Borras (2006, 73) states that: ‘Thus, what is essentially meant here by ‘reform’ is not simply ‘change’ in production relations in a given agrarian structure. The latter (‘change’) can happen in multiple directions and both within and between social classes, as it may include elite-to-elite or even poor-to-elite transfer of effective control over land resources'. In Russia for example, land and farm reform has caused the transfer of large parts of state-owned agricultural land to privately owned corporate farm enterprises, hence in effective control approximating an ‘elite-to-elite’ transfer.

⁴A gender analysis presented by Holzner (2008) shows that when workers become peasants or small farmers, land titles nearly exclusively go to men.

⁵It will be shown for Moldova that this is the case in spite of a redistributive land reform that took place in the late 1990s. Land concentration followed soon after that land reform, mostly through land rental markets, but also through sales.

⁶In the article the third category is actually named ‘individual and corporate’ as well, but this is adjusted here, to do justice to the dominance of the corporate sector in agriculture.

⁷Nearly all of the EECCA countries first showed a very large contraction of their economies, including the agricultural sector. The latter mostly resumed growth after these redistributive land reforms.

⁸We use the FSU, rather than the CIS (Commonwealth of Independent States) as the abbreviation.

⁹The source is Rosstat: http://www.gks.ru/bgd/regl/b08_12/IssWWW.exe/stg/d02/15–01.htm, with thanks to Oane Visser who provided the data.

¹⁰See: http://www.gks.ru/bgd/regl/b09_12/IssWWW.exe/ stg/d02/15–02.htm.

¹¹However, peasant farmers also increasingly look to migration of themselves or their children to improve their livelihoods.

¹²One of the reviewers pointed out that this reform is not a pre-condition for the improvement of rural poverty. In Russia, for example, the growing importance of the subsidiary plots had a similar influence.

¹³Armenia is included under the first pattern distinguished by Swinnen et al. (2009), although there was first a generalized crisis, followed by recovery.

¹⁴Other mitigation effects have been the increase of the Armenian diaspora, and the related flow of remittances, very often into rural areas.

¹⁵During fieldwork undertaken by the author in Armenia (2004–05), a farmer showed him the land title, with a small map. His property consisted of a strip of land 500 meters long and 10 meter wide (0.5 hectares) which could not be reached by machinery. Others had various plots, distributed over a large area. However, land consolidation was difficult to undertake, as any programme with that title was seen as a concealed attempt to concentrate land in the hands of the rural elite or the government (Fieldnotes, Armenia, 2004).

¹⁶In 2006 Armenia won a large grant (US$ 235 million) from the Millennium Challenge Account (MCA), an initiative of the G.W. Bush administration, largely to be used for an upgrade of the irrigation system, with as overall goal to broadly reduce rural poverty (www.mca.am, accessed 26 July 2010).

¹⁷Household plots represented 14 percent, state-owned lands 9 percent, and there was a land reserve of 18 percent of agricultural land (Spoor and Izman 2009, 105).

¹⁸The poverty headcount in this case measures the share of the population that has an income below the internationally comparable poverty line of US$ 2.15 PPP/day.

¹⁹With my colleagues Andrea Giovanni Cornia and Terry McKinley, several discussions about this topic were held with the Deputy Minister of Economics, Dr. Galina Karimova Saidova, in which we argued that: (1) there was no such thing as an optimal size of the farm, and (2) that a redistributive land reform will contribute to a reduction of rural poverty, even without jeopardising the national level of cotton production. This was particularly the case because of high density of rural dwellers in the most important agricultural regions, such as the Ferghana valley, having limited possibilities in non-farm labour and migration. However, the Uzbek government was convinced that small producers were inefficient and, without saying this directly, could more easily control the surplus produced by medium-sized farms rather than that of millions of small peasant farms.

²⁰Although the state procurement quota for cotton and wheat were diminished between 1991 and 2002 (from resp. 100 to 50 percent and from 95 to 30 percent, and further reduced in the following years), but the grip on markets by state agencies in Uzbekistan remains so large, that it is nearly impossible to export cotton without a state, or a state-licensed channel. As cotton is ‘king’ there is quite some state capture in this sector.

²¹In this case much of the harvest work is done by children, school youth and students, in often deplorable circumstances and being paid very low wages, an issue for which Uzbekistan has been criticized very often by international organization. Malnutrition and child poverty are also widespread in these areas (Spoor 2007b).

²²It remains as yet unclear what this will mean for the vast majority of peasants, as the traditional system of land reallocation (on the grounds of changing demography at local levels) is still in force. The Chinese government would want to avoid a rapid land concentration as is taking place in Russia, taking into account the possible consequences of massive migration and growing asset inequality.

²³Fieldwork in a joint research project financed by the Royal Netherlands Academy of Arts and Sciences (KNAW) in late 2008 in the southern Aksu prefecture in Xinjiang province confirmed this observation, although more and more of the processing companies (cotton gins) had become private.

²⁴One may of course wonder whether Russian farm workers were still ‘peasants’, as was clearly the case in China and in most of the Central European countries where collective agriculture was only introduced in the period after World War II. Nevertheless, the subsidiary household plots always had an important function for the rural household in terms of production and consumption, occupying a symbiotic relationship with collective or state farm work (see also Kitching 1998, although his expectations about the role of the peasantry were different). See also van der Ploeg (2010) for a discussion on the role of peasants and their current re-emergence.