07/01/2002
EDITORIAL NUMBER=0-09978

LAND REFORM IN RUSSIA

It looks as if meaningful land reform may finally be coming to Russia. A decade after the collapse of the Soviet Union, the Russian government is preparing to dismantle the nation’s collectivized farms. The lower house of parliament has adopted a bill to create a legal system that will permit Russians to buy and sell Russia’s agricultural land for the first time since the Bolshevik revolution of 1917.

While Russia has made progress since 1991, agricultural reform has lagged. As a result, production of most crops and livestock has plummeted. As Russian President Vladimir Putin said, it is critical to the country’s economic development to privatize farmland.

Currently, individuals own less than ten percent of Russian farmland. The rest remains under the control of the state or of former collectives. According to Yevgeniya Serova of the Institute of the Economy in Transition, there is virtually no trade in land in Russia.

The new legislation would seek to stimulate land sales and generate greater tax revenue by establishing guidelines for the transfer of titles to agricultural property. If passed, the legislation would also establish guarantees for the property rights of the nearly thirteen-million Russians who own shares in collective farms. In addition, the bill would extend considerable power to local authorities to zone the land and limit the amount a single owner could purchase.

There is ample reason for ordinary Russians to be wary of privatization measures. Earlier efforts to transfer state enterprises to private ownership often put a few individuals in control of vast wealth, while ordinary Russian shareholders were left with little. But it is not inevitable that past mistakes be repeated.

A fundamental right in a democracy is the ownership of land. It gives individuals a stake in their society and promotes economic growth. Changes in the land ownership system in other countries have resulted in vast gains in productivity and farm incomes. President Putin is right to recognize that Russia will not reach its economic -- or democratic -- potential until land can be freely bought and sold.