Reforming the Farming Sector in Russia

Abstract

Following laws allowing the private ownership of land, a commercial private farming sector has emerged in Russia. The growth of this sector has been constrained by the difficult macro- and agricultural economic climate of the 1990s and mixed political signals over land ownership. These factors together resulted in the authorities continuing to make financial support available to underperforming large-scale enterprises (LSEs) through debt-restructuring programmes. This paper shows that, although stagnant in size, the considerable restructuring within the private farming sector has increased the number of options available to the authorities for maintaining economic activity in rural areas. Using case studies from interviews with farmers, municipal authority employees and agricultural economists, the paper reveals how these options are being implemented. Some possible consequences for the rural economy and communities are considered.