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Agriculture in Russia

From Wikipedia, the free encyclopedia

For the period before 1989 see Agriculture in the Soviet Union and Agriculture in the Russian Empire.

Agriculture in Russia survived a severe transition decline in the early 1990s as it struggled to transform from a command economy to a market-oriented system[1]. Following the breakup of the Soviet Union in 1991, large collective and state farms – the backbone of Soviet agriculture – had to contend with the sudden loss of state-guaranteed marketing and supply channels and a changing legal environment that created pressure for reorganization and restructuring. In less than ten years, livestock inventories declined by half, pulling down demand for feed grains, and the area planted to grains dropped by 25%.

The use of mineral fertilizer and other purchased inputs plummeted, driving yields down. Most farms could no longer afford to purchase new machinery and other capital investments. Following a nearly ten-year period of decline, Russian agriculture has experienced gradual ongoing improvement. The transition to a more market-oriented system has introduced an element of fiscal responsibility, which has resulted in increased efficiency as farmers try to maintain productivity while adjusting the resource constraints. The relatively smaller corporate farms and family farms that have emerged and grown stronger in the new market environment are now producing in aggregate value more than the total output of large corporate farms that first succeeded the traditional collectives.

The 2014 devaluation of the rouble and imposition of sanctions spurred domestic production, and in 2016 Russia exceeded Soviet grain production levels, and in that year became the world’s largest exporter of wheat.[2]

Farming machinery plant (Moscow region, July 2019)
Farming machinery plant (Moscow region, July 2019)

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Reduction of arable land

The changes that began at the end of the 20th century have affected on agriculture[1]. Agricultural production has been sharply reduced[3]; аnd there was a significant reduction in arable land in a number of regions[4].

Data on subjects of the Russian Federation:

Farmers are dissatisfied with the poor working and living conditions[9][10]. The number of rural settlements is constantly decreasing due to poor conditions. For example, 721 villages died out (from 18101 to 17380) in 2 years (from 1 January 2017 to 1 January 2019)[11].

Arable land in RSFSR and in Russian Federation:
год 1940 1945 1950[12] 1970[13] 1990 1995 2000[7] 2005 2010 2015[8]
Thousands km² 920,76 670,61 889,52 1219,12 1177,1 1025,4 854,19 758,37 751,88 793,19

Ownership and farm structure

After the Soviet Union  collectivised its agricultural sector during the Stalin years and until the 1980s, most agricultural land in Russia was in state ownership, and the transition to a market-oriented economy had to start with privatisation of land and farm assets.[14] Russia's agricultural privatisation programme can be traced back to 1989–90, when Soviet legislation under  Gorbachev allowed, first, the creation of non-state business enterprises in the form of cooperatives; and second, legalized private ownership of land by individuals (the November 1990 Law of Land Reform). While household plots cultivated by employees of collective farms and other rural residents had played a key role in Russian agriculture since the 1930s, legislation enabling independent private farms outside the collectivist framework was passed only in November 1990.

The Law on Peasant Farms adopted in December 1990 was followed by laws and decrees that defined the legal organizational forms of large agricultural enterprises, the legal aspects of land ownership, and the procedures for certifying and exercising ownership rights. Specifically, agricultural land was denationalized, and its ownership (together with the ownership of other farm assets) legally transferred from the state to the ownership of kolkhozes. But at the same time the government imposed a ten-year moratorium on buying and selling privately-owned land.

The new legal environment created expectations among Western scholars and Russian reform-advocates that family farms would emerge in large numbers and the large-scale collective farms would be restructured. But as it turned out, few  peasants were interested in establishing individual farms, and management- and operating-practices inside large agricultural enterprises remained largely unchanged despite formal reorganization.[14] The lack of enthusiasm for the creation of private farms was attributed[by whom?] to inadequate rural infrastructure, which did not provide processing and marketing services for small producers, and also to the fear that families striking out on their own might lose eligibility for social services that were traditionally provided by the local corporate farm instead of the municipality.[15]

Starting in 1993, privatized kolkhoz and sovkhoz units became corporate farms. These farms were legally reorganized as common-stock companies, limited-liability partnerships, or agricultural-production cooperatives and were turned over, usually in their entirety, to the joint ownership of agricultural workers and pensioners. These farms continued to operate largely as they had done under the Soviet system. Today, the term "corporate farm" is an all-inclusive phrase describing the various organizational forms that arose in the process of privatisation without involving distribution of physical parcels of land to individuals.

In diametric opposition to corporate farms is the individual farm sector, which consists of the traditional household plots and the newly formed peasant farms.

The land-code reform of 2002, advanced by the administration of President Vladimir Putin, called for the ownership of real-estate objects to henceforth follow ownership of the attached land plot; granted exclusive right to purchase or lease state-owned land to the owner of the attached real-estate object; gave to private owners of buildings on land plots owned by other private parties the preemptive right to purchase the land; and prohibited the future privatization of real-estate objects without the concurrent privatization of the attached plot.

Russian agriculture today is characterized by three main types of farms. Two of these farm types – corporate farms and household plots – existed all through the Soviet period (the former are basically the successors of the Soviet collective (kolkhoz) and state (sovkhoz) farms). The third type – peasant farms – began to re-emerge only after 1990, during the post-Soviet transition. The evolution of Russian agriculture since 1990 shows a significant change of resources and production from the formerly dominant corporate farms to the individual farming sector. During 2006, household plots and peasant farms combined controlled about 20% of agricultural land and 48% of cattle,[16] up from 2% of agricultural land and 17% of cattle in 1990. The share of the individual sector in gross agricultural output increased from 26% in 1990 to 59% in 2005. Producing 59% of agricultural output on 20% of land, individual farms achieve a much greater productivity than corporate farms.

Shares of agricultural land, cattle headcount, and gross agricultural output
for farms of different types (in percent of respective totals)

Indicator Farm type 1990 1995 2000 2005
Agricultural land Corporate farms 98 90 87 80
Household plots 2 5 6 10
Peasant farms 0 5 7 10
Cattle Corporate farms 83 70 60 52
Household plots 17 29 38 44
Peasant farms 0 1 2 4
Agricultural production Corporate farms 74 50 43 41
Household plots 26 48 54 53
Peasant farms 0 2 3 6

During 2004, peasant farms accounted for 14.4% of Russia's total grain production (up from 6.2% in 1997), 21.8% percent of sunflower seed (up from 10.8% five years earlier), and 10.1% of sugar beets (3.5% in 1997). Corporate farms produced the remainder of these crops, with hardly any contribution from the small household plots. However, household plots, with a maximum size of 2 hectares (4.9 acres), produced 93% percent of the country's potatoes and 80% of the vegetables, either for family consumption or for sale in the local markets. They also produced 51% of the milk and 54% of the meat in 2003, with the rest coming primarily from corporate farms (the contribution of peasant farms to livestock production was negligible).[18]

Household plots

A typical household plot in Fedyakovo, near Nizhny Novgorod
A typical household plot in Fedyakovo, near Nizhny Novgorod

As the household plots gained more land in the process of reform, their share in Russia's agricultural production increased from 26% of aggregate value in 1990 to 53% in 2005.[17] According to a survey conducted in three Russian villages,[15] the increase in land holdings and farm production tripled the nominal family income from 512 rubles per month in 1997 to 1,525 rubles per month in 1999 (this includes both cash income and the value of food that the family consumed from its household plot). The change in family income outstripped inflation, increasing by 18% in real terms (the Consumer Price Index grew by 252% between 1997 and 1999[19]). This real growth in family income reduced the percentage of rural households living in poverty from 29% in 1997 to 17% in 1999.[15]

Planting and harvest dates

Young wheat just coming up in June in a field near Nizhny Novgorod
Young wheat just coming up in June in a field near Nizhny Novgorod

The winter-crop planting season stretches over nearly three months. The sowing campaign begins in August in the north and advances southward, concluding in late October in the Southern provinces. Spring grain planting in European Russia usually begins in April and progresses from south to north. The "summer" crops—chiefly corn and sunflowers—are last to be sown, and planting approaches completion by late May or early June. The harvest of small grains (chiefly wheat and barley) moves from south to north and begins in late June in extreme southern Russia. Harvest operations are in full swing by early July and largely finished by mid-to-late August. Corn and sunflower harvest begins in September and continues through October. (View regional crop calendars.)

In the spring wheat region, planting typically begins in May. Oats are sown first, followed by wheat, then barley. Planting is concluded by June. Spring wheat advances through the reproductive stage during mid-July, when temperatures climb to their highest levels and grains are most vulnerable to heat stress. Grain harvest begins in late August and continues through October. It is not unusual for a significant portion of the Russian grain crop—millions of hectares in some years—to remain unharvested, due chiefly to unfavorable weather during the harvest campaign. In an average year, 10 percent of the area planted to spring wheat is abandoned compared to 97 percent of the country's winter wheat area.



In 2016 Russia gained and exceeded Soviet Grain Production levels,[20] and in that year became the world’s largest exporter of wheat.[2]

Farm credit

While agricultural policy in Russia had been poorly structured and largely unsuccessful, some basic trends have helped to create forces for change. The first is that state tax revenues have been falling, and hence the spending capacity for agricultural policy has been falling. Total federal transfers to agriculture fell from 10% to 4% of GDP from 1992 to 1993, and budgeted transfers for 1994 are about 5% of GDP.

There has been improvement in the agricultural credit situation in Russia over the past five years – for some farms, at least – due largely to subsidies from the federal government. The national project for agriculture has given impetus to the growth of small farms. During 2006, 36 billion rubles in credit were given to more than 100,000 recipients (as compared to 3.4 billion rubles in credit to 2,500 borrowers in 2005). Traditional farms and personal plots play an important role in the sector, providing more than 87 percent of all production.

The State offers in-kind credits, whereby seed, fertilizer, and other inputs are provided in exchange for grain harvested at the end of the season, though the use of in-kind credit is reportedly decreasing. The government also provides subsidies for the purchase of plant-protection chemicals and fertilizers, and subsidizes two-thirds of the interest rate on loans from commercial banks, which provide the majority of farm credit. Banks remain cautious and insist on certain farm management practices and minimum levels of input use before granting loans (a policy which, according to some observers, has had a significant positive effect on overall efficiency in the agricultural sector), but banks’ confidence is boosted by increasingly reliable guarantees from regional administrations who see stability of food production as a high priority. Banks recognize the inherent risk in agricultural financing but also see agriculture as less risky than other industries and are generally willing to lend money to solvent, well-managed farms.

Over fifty percent of Russia’s farms, however, are already saddled with considerable debt, due in part to the disparity between grain prices and production costs, and few farms are able to offer sufficient collateral to secure a loan. As a result, many farms are forced to rely on outside investors to guarantee loans. These investors, frequently referred to as holding companies, typically are large, cash-rich, traditionally non-agricultural companies that became involved in agriculture over the past five years. Some viewed crop production as a potentially highly profitable venture, and others were working to guarantee raw materials for vertically integrated food-processing operations.

Holding companies possess assets that satisfy banks’ demand for collateral, and a farm that receives a commercial loan with the help of a holding company is still eligible for the federal interest subsidy. Many holding companies, particularly those who were attracted to agriculture by the high grain prices during 2000, have lost interest in crop production following two years of low prices and are bailing out. Investments in crop production don’t pay off quickly, in contrast to investments in trade. Although some holding companies remain comfortable with the variable profitability of agriculture and will continue to work with farms, several prominent commodity analysts feel that the overall involvement of big companies in agriculture is declining.

This means that current prospects for significant, long-term investment in agriculture – particularly the purchase of agricultural machinery and grain-storage facilities – are somewhat dim. Land reform has been evolving in Russia since the basic right to own farmland was established in 1993, but "landowners" are still unable to use land as collateral in securing a loan. The situation, however, is not one that can be resolved quickly or easily through legislation alone.

There is no mechanism currently in place to enable banks to evaluate the value of land based on its productivity before issuing loans, and banks likely would be reluctant to use land as collateral regardless of legislation. Furthermore, there are restrictions against non-agricultural use of land that is currently used for agriculture: if land is used for other purposes, the owner loses the title to the land. This imposes a limit on the land’s "re-sellability," and, in turn, its value. The use of land as collateral appears to be a remote prospect.[21]


Investments in fixed capital within the agricultural sector were 10.17 billion USD in 2010, which is 3.3% of total investments in the national economy of Russia. Most investments occurred in corporate farming, where about 47.2% of the investments were allocated to production buildings and 36.4% in machinery and technological equipments. Financing of investments was shared by own financial means (49%) and by external means (51%).

State investment program

In December 2006, the State Duma passed a law requiring a state program for investment in agriculture to be passed every five years. This is the first of those programs. Between 2003 and 2007, agriculture received 37.1 billion rubles' support per year.

Governance and economy of Russian agriculture

As non-agricultural sectors grew more rapidly after the collapse of the Soviet Union, the share of agriculture in total GDP in Russia decreased from 14.3% in 1991 to 4% in 2011. The agricultural sector accounted for 6.71% of total employment in 2015.[22]

In early 2014, Russian lawmakers including State Duma agricultural committee deputy chairman Kirill Cherkasov, proposed equating GMO-related activities that may harm human health or even cause death to terrorist acts and to impose criminal liability on producers, sellers and transporters of genetically modified organisms.[23][24]

See also


  1. ^ a b Gordeev, A.V (2004). "Agricultural industry [Агропромышленный комплекс]". Great Russian Encyclopedia (in Russian). Russia [Россия]. Scientific publishing house "Great Russian Encyclopedia". pp. 535–544. ISBN 5-85270-326-5. Retrieved 16 July 2019.
  2. ^ a b "Russia has emerged as an agricultural powerhouse". The Economist. 1 December 2018. Retrieved 15 August 2019.
  3. ^ Buzdalov, I.N (2015). "Agricultural sector [Сельское хозяйство]". Great Russian Encyclopedia (in Russian). 29. Scientific publishing house "Great Russian Encyclopedia". pp. 708–709. ISBN 978-5-85270-366-8. Retrieved 16 July 2019.
  4. ^ Isaev, Nikita (4 July 2018). "Russia lost one fifth of its territory [Россия потеряла пятую часть территории]". (in Russian). Moscow, RF: Автономная некоммерческая организация «Интернет-Пресса». Retrieved 16 July 2019.
  5. ^ No data on Ingushetia (separately) for the time it was merged with Chechnya
  6. ^ Госстатиздат ЦСУ СССР (1960). "Main parameters of agriculture by republics, territories and regions [Основные показатели сельского хозяйства по республикам, краям и областям]". Agriculture of the USSR. Statistical compendium (1960) [Сельское хозяйство СССР. Статистический сборник (1960)] (in Russian). Moscow, RF: State Statistics Committee [Государственный комитет по статистике]. p. 667. Retrieved 16 July 2019. Areas of agricultural land and arable land (pages 500-503) Площади сельскохозяйственных угодий и пашни в обработке, находящиеся в пользовании сельскохозяйственных предприятий и хозяйств
  7. ^ a b c "Plant growing. 14.1 Acreage of all agricultural crops [Растениеводство. 14.1 Посевные площади всех культур]". Regions of Russia. Social and economic indicators. 2016 [Регионы России. Социально экономические показатели. 2016] (in Russian). Moscow, RF: State Statistics Committee [Госкомстат России]. 2016. p. 863. ISBN 5-89476-108-5. Retrieved 16 July 2019. Arable land (on page 490)
  8. ^ a b c "Plant growing. 14.5 Acreage of agricultural crops [Растениеводство. 14.5 Посевные площади сельскохозяйственных культур]". Regions of Russia. Social and economic indicators. 2002 [Регионы России. Социально экономические показатели. 2002] (in Russian). Moscow, RF: Federal state statistics service [Федеральная служба государственной статистики]. 2002. p. 1326. ISBN 978-5-89476-428-3. Retrieved 16 July 2019. Arable land (on page 726)
  9. ^ Iyu, Vsevolod (16 July 2019). "The bureaucrats hate farmers [Чиновники ненавидят простого жителя] (speech at the Moscow economic forum)". (in Russian). Moscow, RF: Writers' Union of Russia [Союз писателей России]. Retrieved 16 July 2019.
  10. ^ Iyu, Vsevolod (10 March 2019). "Why are the Russians running away from the Far East? / How did China buy the Primorsky Krai? [Почему все бегут с Дальнего Востока? / Как Китай купил Приморский край?]". (in Russian). Moscow, RF: Видео Дня. Retrieved 16 July 2017.
  11. ^ Russian Federal State Statistics Service (16 July 2019). "Database of municipal entities' indicators by regions [База данных показателей муниципальных образований - Число муниципальных образований по субъектам Российской Федерации]". (in Russian). Moscow: Russian Federal State Statistics Service. Retrieved 16 July 2019. Information for individual years: 2017; 2018; 2019. Since 1991, more than 20,000 villages have disappeared, exceeding the Wehrmacht invasion during the World War II.
  12. ^ [ttp://Народное_хозяйство_СССР/1960/Сельское_хозяйство/Земледелие#.D0.9E.D0.91.D0.A9.D0.90.D0.AF_.D0.97.D0.95.D0.9C.D0.95.D0.9B.D0.AC.D0.9D.D0.90.D0.AF_.D0.9F.D0.9B.D0.9E.D0.A9.D0.90.D0.94.D0.AC_.D0.A1.D0.A1.D0.A1.D0.A0_.D0.98_.D0.A0.D0.90.D0.A1.D0.9F.D0.A0.D0.95.D0.94.D0.95.D0.9B.D0.95.D0.9D.D0.98.D0.95_.D0.A1.D0.95.D0.9B.D0.AC.D0.A1.D0.9A.D0.9E.D0.A5.D0.9E.D0.97.D0.AF.D0.99.D0.A1.D0.A2.D0.92.D0.95.D0.9D.D0.9D.D0.AB.D0.A5_.D0.A3.D0.93.D0.9E.D0.94.D0.98.D0.99_.D0.9F.D0.9E_.D0.97.D0.95.D0.9C.D0.9B.D0.95.D0.9F.D0.9E.D0.9B.D0.AC.D0.97.D0.9E.D0.92.D0.90.D0.A2.D0.95.D0.9B.D0.AF.D0.9C_.D0.BD.D0.B0_1_.D0.BD.D0.BE.D1.8F.D0.B1.D1.80.D1.8F_1960.C2.A0.D0.B3._.28.D0.BC.D0.B8.D0.BB.D0.BB.D0.B8.D0.BE.D0.BD.D0.BE.D0.B2_.D0.B3.D0.B5.D0.BA.D1.82.D0.B0.D1.80.D0.BE.D0.B2.29 Agriculture of the USSR. 1960 [Посевные площади СССР]] (in Russian). Moscow, RF: Central Statistical Department of the USSR [Госстатиздат ЦСУ СССР]. 1960. pp. 20, 21.
  13. ^ "The main indicators of crop production [Основные показатели развития растениеводства]". Agriculture of the USSR. 1988 [Сельское хозяйство СССР. 1988] (in Russian). Moscow, RF: Federal state statistics service [Федеральная служба государственной статистики]. 1988. ISBN 5-279-00165-1. Retrieved 16 July 2019. Acreage of agricultural crops in the Soviet republic, Autonomous republics, territories and regions (with distribution on economic areas); in all categories of households; thousand hectares (on page 56) Посевные площади сельскохозяйственных культур по союзным республикам, автономным республикам, краям и областям (с распределением по экономическим районам); во всех категориях хозяйств; тысяч гектаров
  14. ^ a b Privatisation began in the late 1980s and within a short time most Soviet food was being grown on about 5% of the land that had been freed up for private farming. Lerman and K. Brooks (1996). "Russia's Legal Framework for Land Reform and Farm Restructuring", Problems of Post-Communism, 43(6):48-58.
  15. ^ a b c O'Brien, David J.; Wegren, Stephen K (2002). Rural Reform in Post-Soviet Russia. The Woodrow Wilson Center Press. p. 126. ISBN 0-8018-6960-9.
  16. ^ Exporting Red Meat to Russia: Understanding the Context Archived 2014-12-10 at the Wayback Machine, 7 October 2010. Retrieved on 2010-10-22.
  17. ^ a b Statistical Yearbook of the Russian Federation 2007, Rosstat – Federal State Statistical Service, Moscow (2008), Chapter 14, p. 445 et seq. Download from > Публикации > Электронные версии публикаций > Российский статистический ежегодник, 2007г. (in Russian).
  18. ^ Agriculture in Russia 2004, statistical yearbook, Rosstat – Federal State Statistical Service, Moscow, 2004 (in Russian).
  19. ^ Statistical Yearbook of Russia 2001, State Statistical Committee of the Russian Federation, Moscow, 2001, p. 583 (in Russian).
  20. ^ "Russia Becomes a Grain Superpower as Wheat Exports Explode". Retrieved 4 May 2017.
  21. ^ Shagaida, Natalya. (2005). "Agricultural Land Market in Russia: Living with Constraints," Comparative Economic Studies, 47(1): 127-140.
  22. ^ "worldbank". Retrieved 4 May 2017.
  23. ^ "Russian Lawmakers Want to Impose Criminal Liability for GMO-related Activities" 15 May 2014
  24. ^ "Russian lawmakers want to impose criminal liability for GMO-related activities" 15 May 2014

Further reading

  • Ioffe, Grigory and Nefedova, Tatyana. Continuity and Change in Rural Russia: A Geographical Perspective. Westview Press or Basic books or Lightning Source Inc (1997 or 1998), trade paperback, 328 pages, ISBN 0-8133-3634-1
  • Wegren, Stephen K. Agriculture and the State in Soviet and Post-Soviet Russia. University of Pittsburgh Press (1998), hardcover, 293 pages, ISBN 0-8229-4062-0

External links

This page was last edited on 15 August 2019, at 10:59
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