Agriculture in Russia

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. 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, 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.

After the collectivization in the Soviet Union, 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. 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.

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