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Russia: Private Farmers Slowly Come Into Their Own

Chapaivo, Nizhny Novgorod, 22 April 1998 (RFE/RL) -- Lydia Rusina was chief economist on the Chapaivo collective farm when she retired a few years ago, but the now 60 year old woman didn't want to be just another pensioner. She wanted to be a family farmer.

"What's important is to work on your own land," she says resolutely. The Russian constitution of 1993 grants the right to buy and sell farm land, but with little law to define or support that right, the practical impact has been minimal.

Except in Nizhny Novgorod and 10 other Oblasts where a farm privatization model was first worked out in 1993-94 by the International Finance Corporation (IFC), the World Bank's private sector arm. Implementation has been slow, although 386 collective or state farms have been reorganized into 664 new farming enterprises and 650 new family farms since then, according to the IFC.

Chapaivo collective farm is about average for the Sokorskoy region 170 kilometers north of Nizhny Novgorod city. It encompasses 1,781 hectares, numerous outbuildings, and a small village where the farm's 212 workers and pensioners live. It's mix of grain fields, cattle, pigs and chickens apparently did no better or worse than other collective farms in the region, although the IFC says productivity on Soviet farms was generally ten times lower than those in the west.

Under the model privatization plan, Lydia Rusina and everyone else living on Chapaivo received a land entitlement certificate worth 6.9 hectares. She also received property entitlement certificates representing her share of the farm's trucks, tractors, harvesters and animals. The property certificates have varying values based on individual tenure and salary history.

With those certificates in hand, Rusina and her 36-year-old son told the farm's leadership they wanted to break off their own family farm. Forty-year-old Nicholi Leschov and six members of his extended family said they wanted out too.

The rest of the 83 workers and 120 pensioners said no, they wanted to keep the farm together.

To resolve this seeming impasse, the model farm privatization plan kicked in. Since each person could sell, trade or lease their certificates to anyone else on the farm, or give them to a family member, they could technically have formed any number of groups to bid for the farm's assets.

But with most of the farm's certificate holders wanting to stay together under the leadership of 31-year-old chairman Sergei Metronin, the bargaining involved only the main group and the Rusina and Leschov families.

The bidding or auctioning is organized into three rounds. The first is where each group outlines the specific plots of land it wants and sits around a table to negotiate with the others. If there are disagreements -- different groups wanting the same parcel -- then the second round becomes a real auction as each party bids more and more land shares (or traded off property shares) to get the plot. The highest bid wins.

The third round is to auction off those pieces of land no one wanted in the first two rounds, usually making them much cheaper. The same three round process applies to the farm's property.

This auction process is called a distribution meeting and when the Chapaivo farm got together recently in the brightly decorated community center, there was an air of excitement as residents filed in -- many in their best-dress clothes -- to watch the proceeding.

Before it began, Chairman Metronin took the floor to say this is all about finding a way for bettering the lot of Chapaivo's farmers. "It's all about the future," he said.

But a former director of the farm rises to disagree. "I know all the ins and outs of this farm and I don't like the reform that has taken place," he says. Still, he adds, he hopes for the best.

Another member rises to point to neighboring farms where reorganization has given good results and one has actually stopped its decline. "Let's hope for a renewal of our own partnership," he adds.

Then the bidding process begins -- Metronin, Leshov and Rusina sit at tables in the front row facing a meeting chairman/auctioneer appointed by the local raion who presides from the center's small stage. Quickly, the chairman calls out the land parcels in the first round as each one of the three confirms his or her bid. Then moving quickly to the second round, the chairman calls out the plots as the three bid until only one is left. It takes only minutes.

Then each goes to a large map on the wall and confirms for the assembled farm members the parcels "purchased."

Next the farm's equipment -- trucks, tractors, the hostel (apartment building) in the village, a storage shed, a barn for cows -- comes under the auctioneers hammer. No money is exchanged, only property certificates.

Metronin, with 239 property shares, buys most of the equipment, although Leshov, with seven property certificates, is able to get a truck, a tractor and some other equipment.

Rusina doesn't bid on the equipment -- she says she couldn't afford to buy any, but plans to rent all the machinery her family farm needs, some perhaps from the big farm. She used her property certificates to bolster her bid on the property she wanted.

The 11.5 hectares Rusina "bought" for her family farm is at an extreme end of the old collective, but she chose that spot on purpose. Her brother lives on the next collective farm and he's bidding on the parcels which abut those she just acquired.

The official statistics say that the Rusina family farm will have just two workers, but by combining with her brother next door, the Rusina family farm will be a whole new operation. Her son and two daughters will work the farm with her, she says, learning to "love and appreciate the land and the labor it takes."

The bulk of the old collective, over 1,700 hectares, went to the new agricultural enterprise Chapayev. It has 83 workers and 120 pensioners and Metronin says he hopes to see a new spirit infuse them because they now better understand they are the owners. "Most people in the collective farm were not very enthusiastic about their work," he says, "and if people don't work hard, there won't be any results." He knows that many of the people in his new enterprise have serious doubts about the whole thing. Four women, ranging in age from 21 to 72, sit at the back of the room with unsmiling faces and murmuring to each other. "We're just not ready for this," says one to a visiting foreign journalist. "It's the uncertainty that scares us the most," adds another. "We don't know what will happen to us."

The other family farm breaking off from Chapaivo, the one headed by Nicholi Leshov, acquired nearly 48 hectares to start their operation. With seven family members participating, it might one of these days be looking to buy some land from the main farm. So far, there is no way in Russia to actually sell a piece of land to anyone who might want to buy it.

But the pressure is on. Just last week, the Saratov oblast in southwestern Russia held the country's first private land auction -- selling 20 plots of land, including farmland, to the highest bidders for money. The deputy chairman of Saratov's land committee, Vladimir Prokapchuk, said the auction "sets a precedent for other regions to follow." And several other oblasts have sent delegations to learn.

Communists and nationalists in the Duma have railed against allowing private land sales, saying it would be like "selling your mother."

But President Boris Yeltsin's personal representative in Nizhny Novgorod, Yuri Lebedev, calls that "nonsense." "What do they think people will do? Carry land off to Poland or America?" he says with a laugh. Lydia Rusina won't take her land anywhere. But she's sure, even at 60, that while there is a lot of hard work ahead, she is doing the right thing.