Natalia Mamonova: Rural population doesn’t oppose, but often welcomes large-scale land investments in Russia and Ukraine

03 December 2018

One of the main characteristics of agriculture in the post-socialist countries is its dualistic structure - large and small farms coexist in countries such as Russia or Ukraine beside each other. But how has the relationship between these two forms of farming been? Do they cooperate or compete against each other? In an attempt to answer these questions, has interviewed Dr. Natalia Mamonova, Research Fellow at the Russia and Eurasia Programme, Swedish Institute of International Affairs (UI).

Why is the structure of agricultural production in most post-socialist countries dualistic, where large and small producers coexist side by side?

The contemporary bimodal agricultural structure is rooted in the Soviet past, particularly, in the failure of collective agriculture to provide enough food for everyone. In order to deal with food shortages and the peasant unrest after the cruel collectivization campaign of the 1930s, the Soviet government allowed rural dwellers to cultivate their household plots for personal consumption. Since then, the so-called ‘personal subsidiary farming’ has been playing an important role in the Soviet and, later, post-Soviet agriculture. Just prior to the USSR’s collapse in 1990, rural households contributed to 27 % of the gross agricultural product, while kolkhozes and sovkhozes (collective and state farms) produced the rest.

Today, this bifurcation has become even stronger. For example, the share of personal subsidiary farming in Russia and Ukraine is about 40 % of the total output, while large-farm enterprises contribute to nearly 50 %. There are many explanations for why the bimodal agricultural structure was preserved and even reinforced in these countries. The main reason is the failure of the post-socialist land reform to create commercially-oriented private family farms. After the collapse of the Soviet Union, the land of kolkhozes and sovkhozes was distributed among rural dwellers by means of land share certificates. However, rural dwellers were unable to use them. The distributed land was concentrated in the hands of local rural elites, and later, in the early 2000s, domestic and foreign land investors accumulated it.

How do you explain this peaceful coexistence from the economic and governance perspectives?

The rural households are not completely independent food producers. Their phenomenal productivity is partly a result of their symbiosis with large farms. In the Soviet time, kolkhozes and sovkhozes used to help rural dwellers with various farm inputs and outputs (such as seeds, fertilizers, machinery, etc.). Moreover, rural dwellers could take some ‘for free’ without any permission. The contemporary large agribusiness often continues practicing such productive symbiosis under their corporate social responsibility programs. In general, lots of former Soviet structures and networks remain vital in the contemporary post-Soviet countryside, which largely influenced the societal attitudes towards large-scale agricultural development.

Another reason for the peaceful coexistence of large-scale industrial agriculture and smallholder farming in the post-Soviet countryside is a division in agricultural markets. Large-scale agribusinesses are specialized in monocrop export-oriented agriculture (predominantly grain) and have more recently started to invest in industrial style meat (poultry and pork) production. In contrast, rural households engage in labor-intensive and time-consuming production of potatoes, vegetables, milk and meat for family consumption and sale in local markets. Until these two forms of farming do not compete with each other for land and markets, they are able to coexist side by side.

What about the attitudes of small landholders toward large scale investors?

Some critical researchers and journalists call the post-Soviet land accumulation process as an instance of land grabbing. Indeed, the land redistribution was often accompanied by deprivation of land rights of local population and various frauds. However, I would not necessarily use the term ‘land grabbing’ because of the lack of resistance to land deals among the rural population. I conducted a lot of interviews with Russian and Ukrainian villagers – the majority of them do not oppose large-scale land accumulations. Contrarily, they often welcome land investors in their villages. Why? The answer is in bimodal agricultural structure.

To be continued