Agriculture in Russian Federation: Policies, Issues and Results

By Bălan, Emilia Mary | Global Economic Observer, January 1, 2018 | Go to article overview

Agriculture in Russian Federation: Policies, Issues and Results


Bălan, Emilia Mary, Global Economic Observer


1. Introduction

The Russian Federation's agriculture is integrated into the agricultural glabal value chains, and the problems ahead affects directly or indirectly the economies of neighboring countries, but also those interacte with it.

The transformation stages of Russian agriculture influenced the trend of regional and global trade, especially that of the EU, as a result of the economic sanctions imposed by the international community to the Russian Federation after the annexation of the Crimea Peninsula in 2014.

In this analysis have been used the most representative international databases, as well as the official publications of the Russian Federation's specialized institutions. Furthermore, we based our analysis on a series of specialized articles in the field.

The country remains one of the world's greatest powers, and the its agricultural sector has the potential to become an important segment of the world agriculture, despite the Russian Federation's economy has been subjected to the many transformations. The challenges that Russia's agriculture has been subject to have been an impetus to officials from Moscow to reduce the country's dependence on agricultural products imports and to cover consumption needs exclusively from domestic production.

Vladimir Putin's decision to annex the Crimean Peninsula to the Russian Federation in March 2014 surprised the entire international community. The recognition of national sovereignty and inviolability of borders are essential elements of the international law system, and since 1991 the Russian Federation has positioned itself in the international arena as a supporter of these principles.

After Moscow's action to take over the Ukrainian territories of the Crimean Peninsula by military force, Western officials imposed economic sanctions upon the Russian Federation. The economic sanctions were a coercive instrument commonly used in international diplomatic disputes to put pressure on the governments concerned (Drăgoi&Pop, 2016), without risking the escalation of an armed conflict.

Moscow's decision to stop imports of agricultural products outside the country required the granting of government financial incentives to agriculture, which led to a significant increase in the domestic agricultural production of the Russian Federation.

2. An overview of the Agriculture Reforms in the Russian Federation

2.1. Before 1991: The Soviet period

During the Soviet period, the Stalin's government implemented the communist policy of collectivisation in agricultural sector, and the system set up was very bureaucratic. The collectivisation project consisted in the land, machineries, livestock confiscation as well as the peasant grain trading units. According to communist policies, about 99% of the agricultural space was organized in the state collective farms.

The collective farm system has proven ineffective, as the Russian Federation agricultural production was only 10% of USA production. In the collective system of agriculture, all production was delivered to the government institutions, and it required quotas that had to be carried out and then distributed to governmental institutions in the field that held a strict control over the whole activity of the agricultural sector.

In the second half of the 1980's, Gorbachev's agricultural administration reforms affected the granting of incentives to improve production. The policy of the reform was supposed to increase of the labor productivity through the organization of workers' brigades on a contractual basis, consisting of 10-30 employees in farms, which administered a lot of agricultural land rented from a farm of the state. The brigade was responsible for the efficiency of the cultures and was remunerated according to it. After 1987, the government validated the form of organization as contractual family brigades, as well as the long-term lease of land, abandoning the restrictions on the size of the private and public agricultural land of agricultural holdings. …

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