Year after year, while the main indices of agricultural production decline, household plots in Russia are registering consistent gains. There are 16 million such plots, and they produce more than half of the total gross harvest in Russia, including 91 percent of all potatoes, 76 percent of all vegetables and fruits, and 55 percent of all meat.
Household plots represent a cautious, transitional step toward independent private farming, an important development in the Russian Federation's efforts to move to a market economy. Surveys conducted by the RosAgroFund show that household plots have now become the chief source of income for 90 percent of all farm families and that food consumption indicators for rural areas now exceed those of urban areas.
CIPE, in cooperation with local partner organizations, has been encouraging privatization in Russia. CIPE has already held one roundtable discussion on private farming, a meeting that attracted scholars, representatives of government agricultural agencies that support the operation of household plots, and reform-oriented foundations in Moscow and such regions as Orel, Rostov-on-the-Don,and Volgograd. Participants in the roundtable came from as far away as Siberia, Tyumen Province, and the Aga-Buryat Autonomous Region.
One CIPE partner, the Institute of State and Law, has played a key role in the battle for legal guarantees of the right to own land. CIPE has also worked with two other think tanks, the Center for Political Technologies and the Institute for Economic Analysis (IEA), in advocating strong market reforms. (The head of IEA, Andrei Illarionov, has since become the Economic Advisor to the Russian President.) In addition, CIPE has engaged in a multi-year partnership to strengthen the Russian Chamber of Commerce and Industry at the national and local levels. (See Clinton Speech And Letter)
Land reform is one of the basic building blocks in establishing an open market economy. Another building block is corporate governance, and CIPE has worked with national and regional grass-roots groups advocating shareholder rights throughout Russia. These include the Investors Protection Association and the Ekaterinburg Public Committee on Shareholders Rights, as well as the Paris-based Organization for Economic Cooperation and Development (OECD) and the World Bank, with which CIPE has co-sponsored a series of roundtables.
Freedom of the press is another building block of a market economy, and Globe Press Syndicate, a CIPE partner that deals with media issues, has reached out throughout Russia to give business and economic journalists key information needed to combat myths about market reform.
A presidential decree in 1996 allowed 11 million farm employees to attach their collective farmland shares to their household plots - an especially important landmark for residents of rural areas where collectives have collapsed and millions of farmers have found themselves with no official place of employment. Because household plots serve as de facto private farms, they effectively demonstrate the advantages of private land ownership.
But if Russian farmers want access to open markets on a daily basis, they will need to resolve a number of institutional issues.
For example, there are virtually no specialized supply organizations to provide farmers with high-quality seed, fuel and lubricants, or even parts for their agricultural machinery. Vital services required for consulting, supply, sale, and loans for the farmers who work solely on household plots are still embryonic.
While Russia's federal government has moved slowly to modernize the farming industry, regional leaders are generating creative solutions for problems once brought on by Russia's stultifying and sometimes corrupt bureaucracies. Experts at the CIPE roundtable highlighted several successful case studies.
Vologda Province, for example, has made a decisive move by liquidating its disintegrating collective and government farms, transferring all the lands to private farmers and creating a department to handle farmers' affairs.
Tyumen Province passed a regional law that legalized title to the land and assets of household plots, and has created production and consumer cooperatives. Today, such cooperatives meet 70 percent of the private farmers' needs for various types of services.
In Volgograd Province, the first credit cooperatives made it possible for the owners of household plots and private farmers to obtain loans. And in the Aginsk-Buryat Autonomous Region, the local administration has extended loans through the banks to more than 800 owners of household plots and has revived family farming traditions.
This move to "think nationally and act locally" has led to farms now stocking urban food markets with thousands of tons of vegetables, milk, meat and other food products that were once in short supply.
Household plots may not provide all the answers but, with assistance from CIPE partners in Russia, they are encouraging fundamental reforms that could turn the Russian countryside into a landscape of prosperity.
For more information on programs in Russia, contact Stephen Deane, CIPE Senior Program Officer for NIS, at sedeane@cipe.org.