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Newsline - April 3, 1997




RUSSIAN REACTION TO AGREEMENT ON UNION WITH BELARUS.
Communist Party leader Gennadii Zyuganov has hailed yesterday's Russian-Belarusian agreement but complains that media reports criticizing integration are "sowing hostility" between the Russian and Belarusian peoples, RFE/RL's Moscow bureau reported. CIS Affairs Minister Aman Tuleev, the government member who has the closest ties to the opposition, expressed regret that the original draft of the document was watered down. He said the Belarusian economy is doing better than its detractors suggest and that it was not for Russians to complain about dictatorship in Belarus after the shelling of the Russian parliament in October 1993. Former Security Council Secretary Aleksandr Lebed described the agreement as premature, while Duma deputy Sergei Yushenkov of Russia's Democratic Choice warned that integration could do even more damage to Russian political and economic interests than the war in Chechnya.

CIS PRESIDENTS' REACTIONS TO RUSSIAN-BELARUSIAN UNION.
Ukraine's Leonid Kuchma has called the union agreement "nonsense," while Uzbekistan's Islam Karimov warned "we should not be drawn back to the Soviet Union." Georgia's Eduard Shevardnadze, Azerbaijan's Heidar Aliev, and Turkmenistan's Saparmurad Niyazov were all equivocal. Armenia's Levon Ter-Petrossyan said it is the internal affair of Russia and Belarus. Moldova's Petr Lucinschii predicted that the agreement would strengthen integration within the CIS. Only Tajikistan's Imomali Rakhmonov was unambiguously in favor. He expressed the hope that other CIS states would accede to the agreement. Izvestiya published these comments yesterday. A spokesman for Kazakh President Nursultan Nazarbaev told Interfax he feared the agreement was premature and could "provoke a split within Russia."

RUSSIAN-CHECHEN TALKS DEADLOCKED.
Chechen President Aslan Maskhadov says talks with Russia on the delimitation of political authority between Moscow and Grozny are deadlocked because Moscow is trying to make economic aid contingent on the signing of a peace agreement, Western agencies and Interfax reported. Maskhadov was speaking to journalists in Grozny on 2 April. He said he has rejected four consecutive draft agreements submitted by the Russian side because those documents were against the interests of the Chechen people. But Russian negotiator Vladimir Zorin told Interfax he thought Maskhadov was exaggerating the difference between the two sides. Zorin also said that Maskhadov's proposed appointment of field commander Shamil Basaev as first deputy premier would not affect the ongoing talks.

CHERNOMYRDIN DENIES REPORTS ON MASSIVE WEALTH.
Government spokesman Igor Shabdurasulov has announced that, contrary to newspaper reports, Prime Minister Viktor Chernomyrdin does not hold any shares in the gas monopoly Gazprom and owns no "palaces, dachas or mansions." Shabdurasulov said Chernomyrdin's salary, which averaged about 4 million rubles ($800) per month in 1996, is his only source of income, Interfax reported on 2 April. An article published in the French newspaper Le Monde last week and reprinted in Izvestiya on 1 April claimed that Chernomyrdin's property holdings are worth $5 billion. In an interview with ITAR-TASS, Shabdurasulov dismissed Izvestiya's decision to publish the article as retaliation for the government's recent refusal to lend money to the paper. However, he said Chernomyrdin is not planning to sue Izvestiya for libel.

DUMA FAILS TO PASS LAWS CHANGING NATIONAL SYMBOLS.
The State Duma on 2 April failed to pass federal constitutional legislation that would have changed Russia's national symbols. All three Communist-sponsored measures failed to receive the two-thirds majority required to pass federal constitutional laws. Of the Duma deputies, 239 voted to replace Russia's white, red, and blue tricolor with a Soviet- era red flag, 243 voted to replace the double-headed eagle symbol with a shield depicting a hammer and sickle against a sunrise, and 255 voted to restore the Soviet-era national anthem, RFE/RL reported.

DUMA OPPOSES LENIN REBURIAL.
The Duma has passed a resolution denouncing as "vandalism" proposals to remove the body of Vladimir Lenin from the mausoleum on Moscow's Red Square. Deputies voted 241 to 11 in favor of the resolution. A similar motion failed on 21 March. Yeltsin backed off from plans to remove Lenin's body in 1993 but again proposed moving Lenin to a St. Petersburg cemetery last month. Meanwhile, Interfax reports that a previously unknown organization calling itself the Red Army of Workers and Peasants has claimed responsibility for blowing up the only Russian monument to Nicholas II earlier this week. The group released a statement saying the attack on the statue, which was located in a Moscow suburb, was a reprisal against those who wanted to "profane a national shrine" by removing Lenin's body from the mausoleum.

KORZHAKOV JOINS DEFENSE COMMITTEE.
Former Presidential Security Service chief Aleksandr Korzhakov is now a member of the Duma Defense Committee, ITAR-TASS reported on 2 April. Korzhakov, a former lieutenant general, won a by-election for the State Duma in February. He asked to be assigned to the committee, which is chaired by Lev Rokhlin of Our Home Is Russia. The same day, Korzhakov's appeal against the presidential decree removing him from the armed forces last October was transferred to the Supreme Court, but no date for hearings was set. Korzhakov was fired as Yeltsin's top bodyguard last June, shortly after the first round of the presidential election.

MOSCOW TO ACQUIRE CONTROLLING INTEREST IN CAR MANUFACTURER.
Yeltsin has issued a decree ordering the federal government to transfer its controlling shares in the car manufacturer Moskvich to the Moscow city government, Rossiiskie vesti reports. Yevgenii Panteleev, the city's minister of industry, told ITAR-TASS that the transfer is not a "gift," since Moskvich is about 3 trillion rubles ($520 million) in debt. Under the presidential decree, the federal government will provide some state support for the restructuring of Moskvich, but the city authorities must guarantee that the company will pay off its debts to the federal budget and Pension Fund within two years. Last year, the Moscow government acquired a 60% stake in the automobile manufacturer ZIL and Moscow authorities reached agreement with several banks to finance that company's restructuring.

INFLATION CONTINUES TO FALL.
Inflation fell to 1.4% in March and to 5.3% for the first quarter of 1997, according to data released by the State Statistics Committee, AFP reported on 2 April. In 1996, inflation reached 10% in the first quarter and 21.8% for the whole year. Critics maintain that the Russian government artificially holds inflation low by not paying wages and pensions on time, thereby keeping money out of circulation.




DE CHARETTE IN TRANSCAUCASUS.
French Foreign Minister Herve de Charette says a settlement of the Karabakh conflict is one of France's foreign policy priorities, Russian and Western agencies reported. He also expressed the hope that agreement can be reached by the end of this year. De Charette met earlier this week with Azerbaijani President Heidar Aliyev and Armenian President Levon Ter-Petrossyan. De Charette and Aliyev pledged support for expanding bilateral relations, particularly in the exploitation of Azerbaijan's Caspian oil.

NEW REVELATIONS ON RUSSIAN ARMS SHIPMENTS TO ARMENIA.
Moskovsky komsomolets has published the results of its investigation into the clandestine deliveries of Russian arms to Armenia, including a detailed list of the hardware involved. Lev Rokhlin, chairman of the Russian State Duma Defense Committee, told a closed Duma session on 2 April that the shipments cost Russia more than $1 billion. The Azerbaijani news agency Turan quoted Georgian Minister of State Niko Lekishvili as telling a Georgian newspaper that the arms were channeled through Georgia, but Defense Minister Vardiko Nadibaidze denied this was the case.

KURDS PROTEST IN ALMATY.
Ethnic Kurds marched through downtown Almaty earlier this week to protest the municipal authorities' decision to withdraw permission for a celebration marking the spring holiday Nowruz, RFE/RL reported. The Yakbun association, which represents Kazakstan's 35,000 ethnic Kurds, organized the march. Participants carried Kurdish flags and portraits of Kurdish Workers' Party leaders. Some 5,000 ethnic Kurds from Moscow, Central Asia, and Western Europe had been invited to attend a celebration in the city's sports palace on 31 March. One city administration official said the celebration was cancelled because of purerly technical considerations, but another told Interfax that the celebration had an "anti-Turkish character which infringes on the interests of friendly Turkey."

KAZAK PRIVATIZATION CREATES "GHOST TOWNS."
Leonid Solomin, chairman of Kazakstan's Independent Trade Unions' Confederation, says the sale of leading industries to foreign investors has created 'ghost towns' throughout the country, Reuters reported. Solomin notes that in 56 towns that were busy industrial centers during the communist era, enterprises have closed under new ownership. He adds that these companies are mainly in the energy sector and have been sold off at 'give-away prices.' In 1996, privatization revenues totaled 31.1 billion tenge ($414 million) or 4.3 times the previous year's figure, Interfax reported. Also in 1996, over 4,000 state enterprises and organizations were sold to private owners, bringing the total of private enterprises in Kazakstan to some 20,000.

UYGHURS CALL FOR COORDINATED ACTION.
Representatives of the Uyghur diaspora in Kazakstan, Kyrgyzstan, Russia, Turkey, and Uzbekistan, have called for concerted action to oppose China's policy toward the Xinjiang/Uyghur Autonomous Republic, ITAR-TASS reported. The call was made at a recent meeting in Moscow of Uyghurs, a Turkic group of Muslims. Uyghurs and ethnic Chinese have recently clashed in several cities in Xinjiang. China's Uyghurs are seeking their own independent state.




VIOLENT DEMONSTRATIONS IN MINSK.
RFE/RL correspondents in Minsk report that calm has returned to the streets of the Belarusian capital this morning, following clashes between baton-wielding police and several thousand demonstrators yesterday. An unspecified number of people were hurt and about 100 detained in what are described as the most violent demonstrations over the past six months. Led by members of the opposition National Front, demonstrators called for the ouster of President Alyaksandr Lukashenka. The demonstrations followed the signing yesterday in Moscow of the agreement on union between Russia and Belarus. Several hundred supporters of the union gathered in a park in central Minsk.

UKRAINIAN DEPUTY PREMIER RESIGNS...
Viktor Pynzenyk, deputy prime minister in charge of economic reforms, has submitted his resignation, RFE/RL's Kyiv bureau reported on 2 April. Spokesman Dmitri Markov says President Leonid Kuchma has not yet decided whether to accept his resignation. The move follows Kuchma's criticism of the government for failing to resolve delays in wage and pensions payments. Kuchma has warned he will sack the government if the situation does not improve. Prime Minister Pavlo Lazarenko said last week that once a "realistic budget" is approved, the government will pay back wages within six months. The parliament has refused to pass the government's proposed 1997 budget. A $3 billion loan from the IMF is conditional on the passage of the budget and tax reforms.

...WHILE PRESIDENT PLANS TO GET TOUGHER WITH GOVERNMENT.
Meanwhile, Kuchma is working on what he calls a "revolutionary decree" providing for a tougher line toward Lazarenko's cabinet and the government's executive branch, spokesman Yevgeny Kushnarev told journalists in Kyiv yesterday. No further details were given. Kushnarev said Kuchma decided on the decree after meeting with leaders of various parliamentary factions who expressed dissatisfaction with Lazarenko's cabinet.

U.S. AMBASSADOR TO NATO ON BUFFER STATES.
Robert Hunter says that the phenomenon of "buffer states" has lost its significance and that NATO can now cooperate with all interested countries. Speaking to journalists in Tallinn on 2 April, Hunter stressed the importance of including Russia in the military alliance's activities. The Estonian news agency ETA reports that in a meeting with Estonian President Lennart Meri today, Hunter said the U.S. will continue to pursue close relations with Estonia.

ESTONIAN FOREIGN MINISTER ON NATO ENLARGEMENT.
Toomas Hendrik Ilves says "there is no clarity yet as to a possible second round of NATO enlargement, as the first round is consuming all the attention of the alliance's members." Ilves was speaking to journalists yesterday on returning from the U.S. Ilves said this was the reason why his proposal that Estonia should be admitted into the alliance in the second round--and preferably as early as in 1999--was not the subject of broader discussion. He added that Estonia has better opportunities to work toward membership in the EU than in NATO since in the case of the EU, more depends on the country itself.

EU COMMISSIONER IN BALTICS.
Hans van den Broek, EU commissioner responsible for relations with Eastern Europe and the CIS, is on a three-day visit to Lithuania and Latvia to explain the EU's current assessment of those countries, EU officials in Brussels told RFE/RL on 2 April. Van den Broek will inform Riga and Vilnius of areas where increased efforts are needed if they are to be admitted to the EU. RFE/RL's correspondent in Brussels reported that Van den Broek will also urge Lithuania not to re-start two of the Chornobyl-style reactors at the Ignalina nuclear power plant until urgent safety measures recommended by international experts are implemented. The two reactors are due for shut-down this year for routine maintenance.

LITHUANIAN POLITICIAN ON ESTONIAN NATO INITIATIVE.
Lithuanian parliamentary chairman Vytautas Landsbergis says a NATO initiative outlined by Estonian Foreign Minister Toom Henriks Ilves in Washington last week is "worth discussing." Ilves proposed a meeting of the presidents of the Baltic States and the U.S. in Washington in 1999 to discuss a new wave of NATO expansion. Landsbergis suggested that it may also be worth discussing whether expansion should occur in waves or should be incremental. Landsbergis made those comments after meeting with members of the Estonian parliamentary Foreign Committee.

POLISH NATIONAL ASSEMBLY APPROVES CONSTITUTION.
The National Assembly has approved the much-debated constitution by an overwhelming majority, an RFE/RL correspondent reported from Warsaw on 2 April. It accepted most of the 41 amendments to the constitution proposed by President Aleksander Kwasniewski, including the presidential right to nominate the heads of the country's top judicial bodies and military leaders. But the assembly rejected limiting deputies' immunity. Kwasniewski has decreed that the constitution will to be put to a nationwide referendum next month.

FRENCH PRESIDENT IN PRAGUE.
Jacques Chirac ends his official visit to Prague today by addressing both houses of the parliament. In talks with Czech President Vaclav Havel yesterday, Chirac promised France's "unreserved support" for the Czech Republic's candidacies for membership in both the EU and NATO. Chirac said he believes and hopes the Czech Republic will enter the EU in the year 2000 and that it will be truly integrated into NATO one year earlier, RFE/RL's correspondent reported. He also said France wants NATO's scheduled summit meeting in July to approve the candidacies of the Czech Republic, Hungary, Poland, and Romania.

SLOVAKIA TO COMPLAIN TO NATO OVER PROPERTY DISPUTE WITH CZECHS.
The Slovak government says it will complain to NATO about the division of the former Czechoslovakia's assets, RFE/RL's Bratislava bureau reports. Slovakia says the Czech Republic is unlawfully holding Slovak gold reserves, among other assets. The Czechs say Slovakia has failed to pay its debts to the Czech Republic. The Slovak government noted yesterday that one of the conditions of NATO membership is clearing up misunderstandings with neighboring countries. "The Czech Republic is not fulfilling that condition," the Slovak government said. Slovak Prime Minister Vladimir Meciar has postponed his visit to Prague, complaining of a negative campaign against him in the Czech Republic.

COUNCIL OF EUROPE CRITICIZES SLOVAK POLICE.
The Council of Europe says in a report published yesterday that the Slovak police are using brutal methods against detained criminal suspects. The report was drawn up by the council's Committee for the Prevention of Torture and is based on a fact-finding mission to Slovakia in summer 1995. Investigators say they found some suspects handcuffed to radiators for several hours, while others were beaten or bitten by police dogs. A Slovak government statement included in the report says two police officers were disciplined in 1995 for unlawful treatment of prisoners. But the statement also said suspected lawbreakers had to expect a certain degree of forcefulness from police.

HUNGARIAN PREMIER, PARTY LEADERS AGREE NOT TO SEND TROOPS TO ALBANIA.
Gyula Horn and parliamentary party leaders have agreed not to dispatch Hungarian soldiers as part of an international peacekeeping force to Albania, the Hungarian press reported. They say nothing justifies the participation of a Hungarian contingent. Horn consulted with party leaders following the Italian government's request that Hungary contribute 250 troops to an international force. He stressed that tensions in Albania were caused neither by ethnic nor international conflict but by an internal political crisis. He argued this was a matter for Albanian politicians to resolve.

HUNGARIAN POLITICIAN CALLS FOR UNITY AMONG EUROPE'S NATIONALIST PARTIES.
Istvan Csurka, leader of the Hungarian Justice and Life Party, has called for cohesion among European nationalist parties and the harmonization of their goals in order to oppose the "impending alliance" of what he called left-wing and liberal forces. Csurka attended the congress of the French National Front in Strasbourg last weekend. He said that, like the front, his party rejects charges of extremism, anti-Semitism, and racism. He added that its aim is to protect national interests against "invading foreigners," Hungarian media reported.




PRESSURE MOUNTS TO SEND INTERVENTION FORCE TO ALBANIA.
The Italian and Albanian prime ministers have agreed to work quickly to get troops to the strife-torn country. To ease tensions between the two neighbors in the wake of last Friday's maritime disaster, Italy has agreed to raise the sunken vessel and compensate families of the victims. OSCE representative Franz Vranitzky said in Rome yesterday that the "indispensable" force should be on the ground within 10 to 14 days. He added that "the United Nations have given us three months" and stressed the international community must not repeat the mistakes it made in dealing with the former Yugoslavia. Vranitzky argued that "Albania has need of aid, of restoring public order, of economic reconstruction, and [of] restoring confidence in its political system."

GREECE TO HELP ALBANIA.
Athens is also interested in helping its neighbor restore its economy, police, and army, Prime Minister Kostas Simitis told his Albanian counterpart, Bashkim Fino, in Athens yesterday. Once the situation has stabilized, Greece will provide $74 million in aid, including compensation to those who lost money in failed pyramid schemes. Greece fears an influx of refugees and ultimately regional destabilization unless Albania becomes stable and reasonably prosperous. In Tirana, police were deployed outside the U.S. embassy to control crowds of youths following the spread of false rumors that the U.S. will admit those wanting to flee the anarchy. Meanwhile, the Socialists have agreed to end their 11-month boycott of parliament in order to help the country "emerge from the crisis," party leader Fatos Nano said.

ALBANIA LETS KING COME HOME.
King Leka's office in Johannesburg, South Africa, says the Albanian government decided Tuesday to let the heir to the throne return to the country he last saw in 1939 as a newborn baby. The son of the late King Zog I has not yet decided when to take up the offer, but he has been paying increasing attention to Albanian affairs in recent years, AFP reported on 2 April. He will have to work hard if he wants to become a serious political player, however. The tiny monarchist parties are given to fighting among themselves, and the regionally-based House of Zogu never had a chance to develop into a national institution during Zog's shaky decade-long reign.

BOSNIAN, CROATIAN UPDATE.
In Pale, a police spokesman said the Croats are blocking the return of Serbian refugees to Drvar, RFE/RL reported. The west Bosnian town had a 97% ethnic Serb population before the breakup of Yugoslavia, but the Serbs fled during the 1995 Croatian offensive. Meanwhile, in the Slavonian region of Hrvatska Dubica, identification begins today of the remains of 56 Croats massacred by the Serbs in 1991.

STRIKE HITS MONTENEGRO.
Some 1,800 workers at the Radoje Dakic big metallurgical enterprise are on strike to demand back wages and that management be punished, RFE/RL reported. The aging communist-era plant was crippled by economic sanctions against federal Yugoslavia, and most of its workers are now either laid-off or underemployed. Also in Podgorica, President Momir Bulatovic's office yesterday denied reports that he is in poor health. The president is engaged in a battle of wills with Prime Minister Milo Djukanovic and other government officials opposed to close ties to Serbian President Slobodan Milosevic.

MACEDONIAN MINISTER RESIGNS.
Macedonian Prime Minister Branko Crvenkovski has accepted the resignation of Construction Minister Jorgo Sundovski, Nasa Borba reports today. Sundovski was eased out of office as part of Crvenkovski's anti-corruption campaign following the recent collapse of the TAT pyramid scheme. Media in the former Yugoslavia have linked Sundovski and other prominent figures to TAT, but Sundovski earlier denied charges of wrongdoing.

VAN DER STOEL ON HUNGARIAN MINORITY IN ROMANIA.
Max van der Stoel, OSCE commissioner for national minorities, says his meeting yesterday with Bela Marko, chairman of the Hungarian Democratic Federation of Romania (UDMR), was 'the most encouraging' he has ever had with a Hungarian minority leader in Romania. He added that the government's line on minorities was 'courageous.' Marko told Van der Stoel that the UDMR's participation in the governing coalition may lead to a resolution of the Hungarian community's problems. But he added that legal solutions are still being sought to enable the implementation of national rights. Van der Stoel also met with Premier Victor Ciorbea, with whom he discussed primarily inter-ethnic relations. Ciorbea assured the commissioner of the government's good- will on the issue of minorities, RFE/RL's Bucharest bureau reported.

ROMANIA TO RETURN JEWISH PROPERTY?
Senate Chairman Petre Roman says the restitution of Jewish property nationalized by the fascist and communist regimes is 'no particular problem.' Roman was talking yesterday in Bucharest to Menahem Ariav, head of an association representing Israelis of Romanian origin. Roman noted the restitution of nationalized property belonging to individuals must be settled through legislation that applies to all those forced to leave the country. He said he opposed 'hasty solutions' that might trigger 'tensions' but stressed that the 'illegality' of the property confiscation must be made clear, RFE/RL's bureau in Bucharest reported. Earlier this week, Foreign Minister Adrian Severin said the restitution of Jewish property is a necessary act of justice that would help Romanians come to terms with their history, the independent news agency ARPress reported.

ROMANIAN CONSTITUTIONAL COURT REFUSES TO RULE ON NATIONALIST POLITICIAN'S IMMUNITY.
The Constitutional Court says it is not within its competence to rule on the appeal by 43 senators contesting the parliamentary procedure used to lift the immunity of Greater Romania Party Chairman Corneliu Vadim Tudor, Radio Bucharest reported. Nevertheless, the court said immunity is renewed if a deputy is re-elected and that lifting it requires the whole procedure to be repeated. The parliamentary majority last month ruled that the decision to lift Tudor's immunity, taken by the previous legislature, was still in force.

OECD ON BULGARIAN REFORMS.
The Organization for Economic Cooperation and Development says Bulgaria needs to follow a comprehensive reform course to overcome its current crisis, an RFE/RL correspondent reported from Paris. An OECD economic survey says the reform process begun in Bulgaria some years ago has foundered and that the country is mired in crisis when much of Central and East Europe is achieving stability and growth. The OECD proposes a 14-point program designed to help the Bulgarian economy, including the reform of the banking sector, the closure of loss-making enterprises, and the introduction of measures to restore foreign and domestic confidence in the economy. The report says Bulgaria will not be able to do everything alone and calls on the international community to offer generous support to Sofia.

BULGARIAN PRESIDENT TO VISIT RUSSIA?
Petar Stoyanov has raised with the Russian ambassador to Sofia the possibility of visiting Moscow, RFE/RL's correspondent in the Bulgarian capital reported. The President's Office said the visit depended on Moscow. Stoyanov's scheduled visit to Moscow in late January was canceled because of President Yeltsin's illness. Caretaker premier Stefan Sofiyanski is scheduled to visit the Russian capital before the end of this month. In other news, Stoyanov has invited Pope Paul John II to visit Bulgaria. Foreign Minister Stoyan Stalev told BTA before departing for Turkey earlier this week that the most important issue on his agenda is Turkish support for Bulgaria's quest to join NATO.




Russia's Farms: Still Collective and Far Less Productive


by Robert Lyle

Russia's 1996 grain harvest would have been 150 million tons, instead of 69 million tons, if only Russian farms were as efficient as Finnish ones, according to a study by a private non-profit organization focusing on the problems of land reform in countries in transition. The Urban Development Institute of Seattle, Washington, adds that the situation in Russia compared with Finland and other countries has in fact deteriorated since the days of heavy subsidies. Even then, state funding was far below levels of agricultural systems in similar agro-climatic settings.

The report, entitled "Prospects for Peasant Farming in Russia," says Russia's 26,000 giant agricultural enterprises, "still collectives in all but name," produce even less today than they once did. The old Soviet yields were terrible, it comments, producing 35% less grain per hectare than Canadian farms and 60% less than Finnish family farms. Despite the great benefits to be expected from a system of peasant farms, "there has been no net increase in the number of peasant farms in Russia since the beginning of 1994."

The report says that although most collective and state farms have been privatized and re-registered as joint-stock companies and in other forms, they "continue to function as inefficient behemoths whose hundreds of members have little incentive to maximize production, reduce production costs or preserve capital assets." They also still suffer from the inefficiencies of collective agriculture: "World experience demonstrates that smaller farms operated by single families and small groups consistently outproduce collective farms."

Based on an on-the-ground survey conducted by three experts from the institute, along with two experts from the Agrarian Institute in Moscow, the report asserts that prospects for the growth of peasant farming are now "substantially more encouraging than at any time in the past three years." At present, only about 6% of Russia's agricultural land is in peasant farms, but those farms are already producing far better yields than the large collectives.

The land of the old collectives and state farms is being distributed as land shares, but in most places it is being leased back to the collective at rates equal only to the amount of land tax. Even at the least productive, the report says, this land yields 100 times more than that value. It says this availability of cheap rental land depresses the lease value of land shares and interferes with the emerging land share rental market.

Still, there is a potential positive aspect of this, the report argues. Peasant farmers are paying "about four times as much per hectare in land share lease payments as agricultural enterprises." Even though Russian lease payments per hectare are "quite low" by world standards, the peasant farmers' higher payments may force agricultural enterprises to offer better leasing terms to compete successfully. For example, while Russian peasant farmers are paying 11-15% of total yield in rent and large enterprises are paying around 3%, similar rents in the U.S. are equivalent to 25% of yield.

At the same time, lease payments are a valuable income supplement for land owners--especially pensioners, who generally own around 40% of land shares. The report urges the Russian government to undertake an intensive program to inform pensioners and other land owners about their rights and options. Now, it says, most continue to lease back to the old enterprises because it seems least risky and they want to make sure they don't offend old leaders who might cut their pensions. However, the report argues, this is merely a continuation of collective farming and the government should make sure land owners know what they are legally allowed to do with their property and set rules that make their rights clear.

The report also says that another major impediment to peasant farmers is the unavailability of machinery. Peasant farmers in Rostov and Samara, among other places, are exchanging machinery for short periods or even renting a combine and driver for 20% of the product harvested, paid in kind. The biggest difficulty is a worsening shortage of machinery available to share in many areas.

The report concludes that there is a potential for "very substantial growth of peasant farming" in Russia, but that much remains to be done.


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