Human capital and Russia's agricultural future

Abstract

Russian agriculture has rebounded from the depths of the 1990s but significant challenges remain. This article documents deficiencies in rural human capital, specifically, a contracting rural labour force, a shortage of skilled workers, and migratory outflow of the rural young. These problems are compounded by emerging budgetary constraints, slower economic growth and de-mechanisation of agricultural labour. State policy prioritises food production but does not allocate sufficient resources to supporting human capital on which food production depends. As a result, the base of human capital will continue to erode, thereby damaging leadership aspirations and Russian competitiveness in the global food market.

Notes

^1. The three federal programmes have varying names but each was or is devoted to multifaceted financial assistance. The first ran 2006–07, the second 2008–12, and the current programme 2013–20.

^2. The contraction in animal herds was dramatic. The number of beef cattle and milk cows declined from 47.1 million in 1991 to 31.1 million in 1995; during the same period the number of pigs fell from 33.3 million to 16.7 million, and the number of sheep and goats contracted from 48.4 million to 18.3 million (Goskomstat 1995, p. 76).

^3. Challenges that exist include: the need for modernisation and improving the material–technical base; significant amounts of unused agricultural land and the need to utilise abandoned land; improving land fertility and addressing ecological degradation; improving the functioning of regional food markets; strengthening rural credit and consumer cooperatives; strengthening the crop insurance system; creating sustainable rural communities facilitated in part through the diversification of household income; alleviating poverty traps and high rates of hidden rural unemployment; improving rural infrastructure, including rural housing; improving rural education; and diversifying the rural economy to increase job creation. This list is not exhaustive.

^4. In the post-Soviet period a sharp divergence occurred between average monthly incomes in the agricultural sector and many other branches of the economy. Agricultural–industrial comparisons are usually used as a proxy for the urban–rural income divide. The average income among agricultural workers may also be compared to the national average. Doing so reveals that average monthly agricultural incomes reached a low of 39% of the national average during 2002–03 and then began to close the gap starting in 2004, reaching about 51–52% of the national average in 2012. The comparison of agricultural incomes to other branches became more complicated after 2005 because statistical sources combine agricultural workers with workers in forestry and the fish industry.

^5. Energy producers were the main supporters of Russia's membership, whereas textile, motor vehicle and agricultural sectors were more wary and expressed concerns about foreign competition. Indeed, in animal husbandry some negative effects were felt, even as Russia remains highly protectionist (Miles 2013).

^6. Russia's rural fertility rate is about 1.5, well below replacement level.

^7. Larger farm enterprises have a separate economic and accounting department consisting of between five and eight persons who are economists and accountants. Smaller farm enterprises have one economist and one accountant.

^8. The definition of ‘rural youth’ varies and may span several age brackets. In this article I use persons aged less than 30 to measure rural youth.

^9. Migratory inflow to rural areas is different today than in the early 1990s, when many ethnic Russians moved back into Russia from Central Asia and were resettled in rural areas by the Federal Migration Service. Today, the rural inflow consists of: (1) children who accompany their parents; (2) ‘rural’ migration that is really movement to suburbs that are still zoned as rural; and (3) and former Central Asian migrants who started off as informal migrants into Russia's south and have since obtained Russian passports.

^10. For rural housing not equipped with gas for heating or cooking, wood is used in the forested north and a combination of wood and coal is used in southern regions.