The Geography of Crisis in Russia's Agriculture

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THE GEOGRAPHY OF CRISIS IN RUSSIA’S AGRICULTURE

Grigory Ioffe Radford University

and

Tatyana Nefedova Institute of Geography, Russian Academy of Sciences

The National Council for Eurasian and East European Research 910 17th Street, N.W. Suite 300 Washington, D.C. 20006

TITLE VIII PROGRAM

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Principal Investigator: Grigory Ioffe

Council Contract Number: 815-7g

Date: May 23, 2000

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* The work leading to this report was supported in part by contract or grant funds provided by the National Council for Eurasian and East European Research, funds which were made available by the U.S. Department of State under Title VIII (The Soviet-East European Research and Training Act of 1983, as amended). The analysis and interpretations contained herein are those of the author.

Executive summary

This article is an attempt to identify the causes of spatial variation in changes in Russia’s agricultural output during the 1990s. It begins by reviewing changes in crop farming and animal husbandry in Russia’s regions over this period, and then considers the importance of the two primary spatial factors that affect agricultural production: natural fertility of the soil and accessibility to major urban centers. The article ends with a discussion of the relative importance of such spatial factors compared to aspatial factors – such as all-Russian market reforms – in determining changes in agricultural performance.

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This article analyzes spatial changes in Russia’s agricultural output over the course of the 1990s.

Most conclusions have been drawn from 1990-1997 regionally structured data, although the data actually probed occasionally extend beyond this time frame. At the time of this writing, the 1999 regionally structured records were not yet available, but the 1998 records reflected a crop failure of the magnitude that usually occurs only once in 40 years. The regional pattern of this crop failure is erratic and warrants a separate article. On the other hand, the 1999 evidence that we do have, however fragmented, reaffirms the 1990-1997 changes.

Although a self-contained publication, this article is the second in a series reflecting our collaborative work on a project, entitled “Vertical Integration in the Russian Food System.”1 In our first publication we made the point that, in the overall amount of spatial variance that characterizes Russia’s agricultural output, two factors matter most: natural fertility of the soil and accessibility to major urban centers. These variables were construed as two components of economic rent as it affects Russian agriculture – in other words, two major components of its differential. This article is an attempt at explicit comparative analysis of the said aspects of economic rent as they affected agricultural output in

Russia during the 1990s.

We first review spatial changes in crop farming and animal husbandry without regard to underlying factors and then offer our partial geographic interpretation that involves soil fertility and urbanization. A discussion follows in which we attempt to relate spatial and aspatial factors of change in

Russian agriculture.

Monitoring change

In 1997, Russia’s agricultural output was 36% below that of 1990, while the output of collective enterprises alone halved, as did the percentage share of agriculture in Russia’s GDP (Selskoye, 1998, p.

32). It became clear that the majority of former collective and state farms accustomed to state subsidies

1 The entire project is funded by the National Council for Eurasian and East European Research.

and state procurement quotas had not succeeded in the new market environment. To make matters worse, state investment in agriculture plunged from 16% of the total in 1991 to 2.5% in 1997 (Table 1).

The drastic overhaul of prices and shrinking working capital have also hurt farming. In all regions, prices of agricultural inputs of industrial origin grew faster than prices of agricultural products.

In most regions the excess was fivefold or more (Sotsial’no-Ekonomicheskoye, 1998). Some economists attributed this growing imbalance to the fact that under the Soviets the input/output price ratio was artificially skewed in favor of farming. So, when state control over prices and many of the subsidies were removed, this ratio abruptly approached that observed in the global economy (Serova and Yanbykh,

1998), whereas a compensating upward swing in food prices was constrained by the low buying power of

Russian consumers.

Crisis in large-scale commercial farming encouraged Russian villagers and most small- and medium-town folk to switch to self-production of food. Even in Russia’s largest cities the percentage share of food produced at suburban dachas has substantially increased. However, this change has been conditioned not only by inflation, but also by the unleashing of people’s pent-up preferences. As was pointed out elsewhere, many Russian urbanites are actually villagers in transition (Ioffe, 2000) who have not lost their skills in working the land and for whom storing food for winter comes from deeply ingrained habits, and not from economic necessity alone. When draconian Soviet-style restrictions on buying and leasing land were removed, many urbanites took advantage of opportunities to acquire the use of rural land and began to flock to traditional rural villages during summer. While some were thereby rescuing themselves from unemployment and lack of money, others were just engaging in a long- cherished activity.

Table 1. 1990-1998 Dynamics of Russian Agriculture

Indicator 1990 1993 1995 1996 1997 1998 1999 Agriculture’s % share in the GDP 16.4 8.0 7.9 7.5 7.1 6.0 No Data Agriculture’s % share of domestic investment 15.9 7.9 3.5 2.9 2.5 3.3 No Data Percentage share of unprofitable socialized farms No data 10 55 76 78 No Data No Data Percentage share of subsidiary farming in the total 26 40 48 49 51 57 No Data agricultural output Output as a % share of that in 1990: All farms 100 83 67 63 64 57 59 Ditto: Socialized farms 100 68 49 44 45 38 No Data Ditto: Subsidiary farms 100 121 119 119 118 113 No Data Land under cultivation in millions of hectares: Total 117.7 111.8 102.5 99.6 91.6 81.2 87.4 Grains 63.0 60.9 54.7 53.4 53.6 50.7 46.8 Industrial crops 6.1 5.5 6.5 6.0 5.4 5.9 No Data Potatoes and vegetables 4.0 4.4 4.3 4.3 4.3 4.1 4.1 Grain output in million tons 89.1 99.1 63.4 69.3 88.6 47.9 54.7 Sugar beet output in million tons 24.3 25.5 19.1 16.2 13.9 10.8 15.2 Potato output in million tons 34.3 37.7 39.9 38.7 37.0 31.4 4.2 Vegetable output in million tons 11.2 9.8 11.3 10.7 11.1 10.5 31.2 Production of meat (cattle for slaughter) in million tons 10.1 7.5 5.8 5.3 4.9 4.6 4.3 Production of milk in million tons 55.7 46.5 39.2 35.8 34.1 33.3 32.1 Grain yield in centners per hectare 15.3 16.3 11.6 12.9 16.5 9.4 No Data Milk yield per cow 2781 2252 2007 1950 2061 2233 2284 Head of cattle in millions 58.8 52.2 43.3 39.7 35.1 31.5 28.5 Head of pigs in millions 40.0 31.5 24.9 22.6 19.1 17.3 17.2 Production of fertilizers in million tons 16.0 9.9 9.6 9.1 9.5 9.3 11.4 Application of fertilizers in kilos per hectare 88 46 17 17 18 16 No Data Production of tractors in thousands 214 89 21 14 12 No Data 15 Sources: Selskoye Khoziaistvo v Rossii, Moscow: Goskomstat 1998; Rossiya v Tsifrakh, Moscow: Goskomstat 1999; Serova, 20

All in all, this “urban flight” triggered an increase in the output of household or subsidiary farming, a clearly compensatory change vis-à-vis what happened to the output of collective farms (Table

1). This change thus has not only meant survival for individuals, but also has aided Russian agriculture in general, since its overall production has not shrunk as dramatically as that of industry. The share of subsidiary farming in Russia’s agricultural production skyrocketed from 26% in 1990 to 57% in 1999

(Table 1). And because the urbanites’ contribution to the overall output is grossly under-reported by

Russian statistics, the actual share of household/subsidiary farming may be even higher than this.

For a long time it was generally believed that most of subsidiary production consisted of what

Russian villagers and small-town folks grew in their backyards, which in 1989-97 accounted for 2-5% of

Russia’s agricultural land. However, a symbiotic relationship between subsidiary and collective farms (or what is left of the latter) appears to extend far beyond backyards. When pastures and meadows used in common by households are taken into account, and also grain feed received as in-kind pay and land shares under temporary lease, it turns out that, even in 1990, subsidiary farms used 16% of Russia’s agricultural land. By 1993 their share increased to 21%, and by 1998 to 32% (Poshkus, 1999, p. 11).

So, while subsidiary farms indeed produce higher output per unit of land compared to socialized farms, the productivity gap is not nearly as great as previously thought. The difference is a factor of 1.5, and not 15-18 as usually touted2. Considering that even such modestly enhanced productivity would not exist were it not for a symbiotic relationship with collective farms, no strategist should stake the future on a technologically inferior and oftentimes not independently sustainable mode of farming in a country whose population is 75% urban, with 36% living in urban places with populations over 250,000

(Chislennost, 1999, pp.22-27). Such a heavy reliance on subsidiary farming is nothing but temporary and is rooted in crisis.

If the “success” of subsidiary farming is temporary, which mode of agricultural operations will assume responsibility for Russia’s domestic food supply in the future? Private farms, which, in contrast

2 According to official publications of Goskomstat, in the early 1990s subsidiary farms used 2% of agricultural land and contributed 25% of the total output. Currently it is over 5% of land and over 50% of the output (Table 1).

to subsidiary operations, constitute registered businesses that qualify for bank loans, have hardly measured up to the hopes pinned on them in the early 1990s. By 1993, private family farms’ contribution to food production had peaked at a level of 3% and thereafter declined to 2.2% by 1997 (Rossiya, 1999, p.

203).

Some time ago, when fascination with Russia’s alleged breakthrough in private family farming still captivated Western-trained analysts, we expressed the view that in Russia collective farming has the potential to persist in the foreseeable future regardless of its present state or past failures. Collective farming is not just a vestige of the communist past. In Russia it has much deeper roots and enjoys popular support in the countryside (Ioffe and Nefedova, 1997, 1997a). We still adhere to this point of view.

In the first half of the 1990s, agricultural decline affected all of Russia, and the best-endowed regions of southern Russia sustained the biggest losses (Nefedova, 1996). In the second half of the 1990s, new trends appeared. The year 1997 looked like a turning point not only in agriculture, but in all of

Russia’s economy. A second wave of economic crisis triggered by the 17 August 1998 devaluation of the ruble brought yet another setback. However, 1999 already showed renewed improvement; and although agricultural output declined yet again, some favorable trends commenced in animal husbandry, the most crisis-ridden branch of Russian agriculture. We therefore believe that the favorable trends that first showed up in 1997 are being maintained.

In 1997, many regions saw growth in the agrarian sector, total output grew for the first time since

1991, and collective/socialized farms increased production. The surveys and research of other specialists

(Wegren, 2000) show that a period of confusion and misunderstanding of the emerging market by farm managers and rank-and-file villagers is coming to an end. Two-thirds of socialized farms expect growth in the near future (Selskoye, 1998, p.89). It is not only a question of mastering survival skills. Drastic devaluation of the ruble caused steep hikes in agricultural prices and discouraged importation of food. As a result, domestic producers got a chance to fill the vacated niches. In 1998, for the first time in most

regions of Russia, agricultural prices grew faster than industrial ones (Regiony Rossii, 1998, p. 755).

The full scope of favorable consequences of this change will most probably be revealed in the near future.

In 1997, growth was especially pronounced in crop farming. Prior to that, in 1990-97, crops of the average Russian region declined 15%. Against this backdrop, in 1997, as many as 30 regions rebounded and showed production increases above the 1990 baseline. Former collective and state farms seemed to have acquired the ability to respond to market signals. For example, a shortage of buckwheat, archetypical for the Soviet period, was eliminated for the first time in decades, and land under the most profitable crops, like sunflower, expanded. The structure of production began to better reflect demand.

Following the 1998 crop failure, growth in crop farming resumed in 1999, when both yields and total output of most products significantly increased (Serova, 2000).

Animal husbandry’s twofold decline over the 1990s was more profound than that of crop farming.

The production of meat was especially hard hit, while setbacks in milk were “only” 20-30% in most regions (Table 1). The bulk of livestock production decline was in the socialized farm sector. That downward trend, however, was offset somewhat by a rising share of subsidiary farms. Through the

1990s, the latter’s contribution to overall meat output increased from 30% to 55%, and to milk production, from 26% to 47% (Selskoye, 1998, p.34). In 1998, the downward slide of animal husbandry slowed (1998 production was 99.1% of that in 1997 (Rossiya, 1999, p.31)), attributable in part to August

1998. In 1999 pig and poultry populations began to rebound; and although the number of cattle continued to decline, milk yield per cow increased 2.3%. Meat production grew 7.2%; milk, 3.5%; and eggs, 1.6%

(Krestyanskiye, 2000; Serova, 2000).

Growth occurred in both subsidiary and socialized farms. It is not by accident that a favorable change in the meat production dynamic commenced in the pork and poultry subdivisions, as there the production cycle is the shortest. They are thus the first able to react to demand (Serova, 1999). The factors that continue to hold back livestock production in general, but especially in the beef cattle sector, have been persistent in Russia for a long time. These are a deficit of grain feed, currently about 10 million tons (Babayeva, 2000); poor quality stock, and backward practices in cattle rearing.

Regional pattern of agricultural dynamics

As mentioned above, in 1997 thirty Russian regions showed growth in crop farming. They were led by Tatarstan, whose combined crop yield was 63% greater than in 1990! Yaroslavl and Novgorod oblasts trailed Tatarstan Overall, most Non-Chernozem regions and the northeastern part of the

Chernozem regions, from Tambov to Samara, were areas with significant improvements in crop farming

(Figure 1). Incidentally, in the early 1990s, these same areas had escaped significant setbacks (Ioffe and

Nefedova, 1997, pp. 161, 167).

Figure 1. Output of Crop Farming in 1997 as a Percentage of Output in 1990

140-170 80-100 No Data

120-140 60-80

100-120 30-60

Two factors seem to explain this pattern. First, these areas, and the Non-Chernozem Zone in particular, had experienced a profound and protracted regress for at least the 30 years preceding the 1990s

(Ioffe, 1990). When grain yields are about ten centners per hectare and the average cow yields milk on a par with a sheep, there is hardly any room to decline; so the downward trend had bottomed out. Second,

the more diversified production in the Non-Chernozem provinces is aimed at local self-sufficiency, is more self-contained and is, therefore, more viable than the specialized commercial agriculture of the south. In Non-Chernozem regions subsidiary farming was able to significantly increase its output of vegetables, including potatoes. By 1997 these crops were almost completely monopolized by subsidiary farming. The best-endowed regions of Russia’s south suffered the greatest setbacks in crop farming, having lost over one half of their pre-crisis output volume (Figure 1).

Figure 2. 1997 Output of Animal Husbandry as a Percentage of Output in 1990.

40-

No Data 70-90 40-50

60-70 30-40

50-60 8-30

In animal husbandry the 1990-97 setbacks were significant all across Russia, although Povolzhye,

Volgo-Viatka, and Urals fared better than other regions (Figure 2). The 1998 rebound of animal

husbandry was especially pronounced in Moscow, Leningrad, Yaroslavl, Vologda, and Kaliningrad oblasts, where meat production increased. The production of milk grew even more. Besides the just mentioned oblasts, milk output in socialized farms increased within a band of regions stretching from

Belgorod to Komi.

Of all the spatial shifts in Russia’s agricultural output it is the shift to the east that has been most distinct (Table 2). In this regard agriculture has behaved much like industry (Treivish and Zubarevich,

1998). For specific products the situation is more complicated. Thus, according to Table 3, the middle

Volga-Ural zone has increased its share in grain output, while the North Caucasus, Center, and the North reduced their shares. In meat production, the Ural and West Siberia have been the major benefactors of the ongoing changes (Table 3), as have been Moscow and Leningrad oblasts. As for products that are primarily produced by subsidiary farms, the spatial shift has been not only toward the east but also toward the Non-Chernozem Zone.

Table 2. Percentage Shares of Macro-Economic Regions in Russia’s Population and Gross Agricultural Output

Regions Population Agricultural Output 1990 1998 1990 1997 Russia Total 100 100 100 100 North 4.1 3.9 2.9 2.9 Northwest and 6.2 6.1 4.1 3.5 Kaliningrad Oblast Center 17.0 20.2 15.7 14.5 Volgo-Viatka 5.7 5.7 6.8 6.3 Central Black Earth 5.2 5.3 7.7 8.0 Volga 11.2 11.5 13.5 14.3 North Caucasus 11.5 12.0 15.0 12.4 Ural 13.9 13.7 13.3 15.3 West Siberia 10.2 10.3 10.5 11.3 East Siberia 6.2 6.2 5.8 7.2 Far East 5.4 5.0 4.8 4.2 Sources: Narkhoz RSFSR in 1990, Moscow: Goskomstat 1991; Selskoye Khoziaistvo v Rosii, Moscow: Goskomstst 1998.

Table 3. Percentage Shares of Macro-Economic Regions in Russia’s Total Production of Selected Agricultural Products Regions Grain Potatoes Vegetables Meat Milk 1986-90 1997-98 1990 1997 1990 1997 1990 1997 1990 1997 Russia Total 100 100 100 100 100 100 100 100 100 100 North 0.4 0.4 2.4 3.9 1.3 2.3 2.6 2.1 2.9 3.1 Northwest and 0.8 0.6 4.0 4.0 4.0 5.0 4.3 2.8 4.5 4.3 Kaliningrad Oblast Center 9.8 8.4 23.0 19.9 17.8 20.5 13.8 12.6 17.1 18.4 Volgo-Viatka 5.1 5.9 10.0 8.8 5.1 8.7 6.3 7.1 7.1 8.5 Central Black Earth 11.7 11.6 8.2 9.0 7.8 7.1 9.6 8.4 9.0 7.3 Volga 17.3 20.5 9.3 9.1 14.4 12.5 14.3 14.2 12.9 13.8 North Caucasus 21.8 18.4 5.6 6.2 23.7 10.6 15.6 13.1 11.2 8.2 Ural 14.0 15.8 15.1 15.7 10.1 14.9 13.3 16.7 14.1 17.2 West Siberia 12.5 12.6 12.9 12.5 8.5 9.2 11.4 13.5 13.0 13.3 East Siberia 5.5 5.2 6.0 8.0 3.6 5.9 5.7 7.1 5.3 4.6 Far East 1.1 0.8 3.6 3.9 3.8 3.4 3.5 2.3 2.8 1.4

Sources: Narkhoz RSFSR in 1990, Moscow: Goskomstat 1991; Selskoye Khoziaistvo v Rosii, Moscow: Goskomstst 1998.

Regional change and some well-tested predictors of differential productivity

What factors underlie these shifts? Obviously there have been many factors, and a highly variable pace of reform may be among them. Our previous research, however, showed that there are certain background factors in differential productivity that have been around much longer than current reform. One of these factors, natural fertility of the soil (Fig. 3) is, of course, of universal significance in all agriculture, although the actual geography of farm productivity may not be closely correlated with it at any given time, because productivity is conditioned by societal factors as well. Evidently most important in the Russian context has been accessibility to major urban centers, long shown to be instrumental in differential productivity at sub-regional levels (Ioffe, 1990). Both factors – natural fertility of the soil and accessibility to urban areas – were persistent components of Soviet agriculture’s spatial basis (Ioffe,

1990a); and there is no reason to believe that reform has nullified them. Note that the estimate of natural fertility in Figure 3 is based upon long-term records of yields on specially designated, regionally representative parcels of land that do not use irrigation or other sophisticated cultivation methods – that is, they reflect natural conditions of soil type, heat, and moisture (Prirodno-Selskokhoziaistvennoye 1983).

Note also that in our analysis urban population density serves as a proxy for accessibility to urban areas

(Figure 4).

Figure 3. Bio-climatic potential (sustained grain yields on regionally representative parcels under natural conditions of soil type, heat, and moisture) in centners per hectare. Source: Prirodno-Sel’skokhoziaistvennoye 1983.

30-35 15-20 No Data

25-30 10-15

20-25 6-10

Mapping 1997 regional shares of all major products but grain reveals dual gravitation to the best- endowed and the most urbanized regions. Production of vegetables is a case in point (Fig. 5). [Grain production, on the other hand, continues to gravitate to most fertile regions (Fig. 6)] Earlier we reported that the same variables, soil fertility and urban population density, underlie the current attitude to quality of agricultural land in Russia. This finding was supported by the fact that the normative land tax is a linear function of the so-called bio-climatic potential and of urban population density (Ioffe and

Nefedova, 2000).

Figure 4. 1998 Urban Population Density in People per Square Kilometer

50-115 10-20

30-50 2-10

20-30 0-2

Figure 5. 1997 Regional Percentage Share in the Total Output of Vegetables

N o Data 4.0-4.7 1.0-2.0

3.0-4.0 0.5-1.0

2.0-3.0 0-0.5

Figure 6. 1997 Regional Percentage Share in the Total Grain Output

No Data 4-7 1-2

3-4 0.5-1

2-3 0-0.5

We have calculated the percentage shares of agricultural output contributed by the ten and twenty most urbanized and, separately, best naturally endowed regions in 1980, 1990, and 1997. Table 4 shows that the effect of natural fertility has been declining, a re-confirmation of an earlier trend spanning the

1960s, 1970s, and early 1980s (Ioffe, 1990a). That earlier trend, however, was more complex and did not just reflect a diminishing (but still significant) impact of natural soil fertility. The pull of urbanization was part of the picture as well; and in contrast to that of fertility, its strength was on the rise. In other words, heavily urbanized regions accounted for an ever-increasing share of agricultural production.

Apparently, at present, this is still the case, but only when the most urbanized regions are concerned.

Table 4 clearly shows the progressive concentration of output in the ten, but not in the twenty, most urbanized regions.

Table 4. Percentage Shares of Best-Endowed and Most Urbanized Regions in Russia’s Gross Agricultural Output

1980 1991 1997 Ten Regions with the Highest Bio-Climatic Potential 19.4 17.8 15.7 Ten Regions with the Highest Urban Population Density 12.6 15.4 15.7 Twenty Regions with the Highest Bio-Climatic Potential 33.0 30.5 27.8 Twenty Regions with the Highest Urban Population Density 37.7 33.8 33.1

Sources: Prirodno-Khoziaistvennoye Raionirovaniye Zemelnogo Fonda RSFSR, Moscow: Kolos 1983; Demographic Yearbooks of the Russian Federation, Moscow: Goskomstat 1993 and 1997; Selskoye Khoziaistvo SSSR, Moscow: Finansy i Statistika 1988; Selskoye Khoziaistvo v Rosii, Moscow: Goskomstst 1998. Note: Ten best-endowed regions in descending order are Krasnodar Krai, Republic of Adygeya, Belgorod, Voronezh, Kursk, Kaliningrad, and Rostov Oblasts, Karachai-Circassian Republic, Primorskii Krai, and Tula Oblast; Ten regions with the highest urban population density in 1980 were), Tula Oblast, North Ossetian Republic, Samara, Ivanovo, Kaliningrad, Vladimir, and Nizhnii Novgorod Oblasts, and Chuvash Republic. Ten regions with the highest urban population density in 1997 were Moscow Oblast (with the city of Moscow), Leningrad Oblast (with the city of Leningrad), North Ossetian Republic, Tula, Samara, Kaliningrad Oblasts, Chuvash Republic, Vladimir, and Ivanovo Oblasts, and the Republic of Tatarstan.

Table 5. Descending Regional Order of Russia’s Major Agricultural Producers

Regions Rank Percentage Share in Gross Agricultural Output 1997 1991 1980 1997 1991 1980 Krasnodar Krai 1 1 1 4.41 4.92 6.16 Rep. of Bashkortostan 2 4 3 4.10 3.04 3.75 Rep. of Tatarstan 3 7 6 4.02 2.69 2.95 Moscow Oblast 4 3 8 3.00 3.31 2.80 Stavropol Krai 5 5 5 2.79 2.96 3.27 Rostov Oblast 6 2 2 2.71 3.46 4.21 Krasnoyarsk Krai 7 16 12 2.69 1.96 2.52 Saratov Oblast 8 8 9 2.53 2.42 2.64 Sverdlovsk Oblast 9 14 20 2.42 2.00 1.76 Altai Krai 10 6 4 2.36 2.77 3.56 Volgograd Oblast 11 9 13 2.33 2.38 2.47 Novosibirsk Oblast 12 12 10 2.26 2.08 2.63 Voronezh Oblast 13 13 7 2.24 2.08 2.81 Omsk Oblast 14 — 11 2.23 1.65 2.60 Chelyabinsk Oblast 15 18 16 2.22 1.82 2.06 Samara Oblast 16 15 18 2.21 2.00 1.90 Orenburg Oblast 17 10 14 2.09 2.31 2.41 Irkutsk Oblast 18 — — 2.07 1.38 1.21 Perm Oblast 19 19 — 1.84 1.69 1.48 Nizhnii Novgorod 20 11 17 1.83 2.23 1.93 Oblast Cumulative % Share of 31.0 30.2 34.8 Ten Leaders Cumulative % Share of 52.3 49.7 56.5 Twenty Leaders Sources: Official publications of the Goskomstat

Ranking Russian regions in descending order of their percentage shares of agricultural production

(Table 5) reveals that only two regions hold the ranks they had acquired by 1980, namely, Krasnodar (No.

1) and Stavropol (No. 5), even though their shares in the total output have been declining steadily (Table

5). Krasnodar’s share had been so high (6.2% in 1980) to begin with that even its pronounced decline (to

4.4% in 1997) did not deprive this region of its primacy.

Regions that have slipped down the ranking order include such major grain producers as Rostov oblast, Altai krai, and Orenburg oblast, as well as Lipetsk and Kursk oblasts of the Chernozem center.

They are no longer even on the list of leaders, nor is Leningrad oblast.

On the other hand, there are regions that have advanced, greatly increasing their percentage contribution to output either in 1980-90 or in 1991-97, or both. Indeed, “advanced” only refers to ranking order, because in absolute terms everywhere there has been a decline in gross agricultural output. Such regions of relative advancement fall into two groups.

One group includes regions of “early start,” that is, regions whose contribution to the total output had begun to increase before – sometimes long before – 1980, when farm production was slowly but steadily increasing. These include mostly urbanized regions, such as Moscow, Sverdlovsk, Samara, and

Nizhnii Novgorod oblasts. Some continued their upward trend in the 1990s, but Moscow and, especially,

Nizhni Novgorod with its widely acclaimed (mostly in the West) experiments in agricultural private entrepreneurship have sustained major setbacks in the 1990s (Table 5).

The other group includes regions of “late start” like Tatarstan and Bashkortostan. These regions have made the most impressive strides in the 1990s, and their relative advancement during this period has no match in the rest of Russia. As noted above, Tatarstan’s crop farming output actually increased in absolute terms, while Bashkortostan is virtually the only region that has managed to retain its pre-crisis population of cattle. It is noteworthy that neither of these regions is known for any noticeable market reforms. Quite the opposite, they have been noteworthy for preserving their socialist, interventionist style agricultural management. Other regions that have been relatively successful in the 1990s are the Siberian regions of Krasnoyarsk, Irkutsk, and Chelyabinsk. They managed to increase their food self-sufficiency

in response to growing transportation rates that made inter-regional food exchange much more expensive than before. On the whole, the spatial concentration of agricultural production weakened in 1980-91, but strengthened once again in the 1990s (see two bottom rows of Table 5).

Discussion

The above results do not lend themselves to easy interpretation. For one thing, Russian agriculture is in flux and trends revealed so far may be reversed. So it is important not to be carried away by fleeting or insignificant developments (glorification of private farmers by well-meaning Westerners in the early 1990s is a case in point). Our experience monitoring Russian agriculture since the early 1970s may be helpful in this regard.

In any case, much depends on one’s perspective. For example, one of the authors has long been interested in the relative effects that spatial versus aspatial (or blanket, spatially undifferentiated) factors have on Russian agriculture (Ioffe, 1990a). At least at first glance, the major aspatial factor that may be expected to impact Russian agriculture’s productivity today is the current market reform. Collectivization had similarly been an aspatial factor. And just like collectivization in its time, the current reform has been launched from above (Wegren, 1998, p. 15). As a top-down measure, reform indiscriminately targeted all of Russia. It was aimed at reorienting agricultural production towards private family farming and changing the economic behavior of all production units. Yeltsin’s Decree of 1991 transferred the property of collective farms to their members and called upon the new owners to disband socialized farm units and distribute land and property shares among individual shareholders. Collective farm members were also accorded the right to sell their land entitlements to other shareholders at freely negotiated prices.

Succeeding decrees reinforced and broadened these rights. Beginning in the early 1990s, federal institutions stopped issuing production quotas, federal procurement agencies stopped being guarantors of sale, and federal investment dried up. No spatial differentiation was inherent in these and other reform changes nor in the Land Code that has been deadlocked in the Russian Duma for about six years.

It is another thing altogether that regional responses to reform were not even. While some regional administrations resisted reform and became the de facto central planners within their respective domains, others went along with market conversion. The issue of whether or not there is any distinct spatial order in this regard will be taken up below.

In contrast to blanket reform initiatives, the traditional controls of agricultural variance, natural fertility of the soil and urbanization, are inherently and vividly spatial components of Russian agriculture’s broadly defined environment. This is underscored by spatial continuity and relatively smooth gradients pertaining to both of these components, as Figures 3 and 4 testify.

How do regional productivity trends compare with the pace of market conversion and with spatial distribution of urban population and natural conditions for agriculture? Although more explicit analysis is needed to answer this question, an analysis that would invoke measuring market conversion in the first place, some tentative conclusions are possible on the bases of our description of regional change. These conclusions are as follows.

a) Upward productivity trends have occurred in reform-resistant and reform-prone regions, alike, and the same holds true in regard to downward trends. There is, therefore, little or no indication that reform has been instrumental in determining agricultural productivity trends across Russia. While a local scale of analysis occasionally furnishes such evidence, primarily to the Russian media, multi-regional analysis does not. This, of course, may change in the future.

b) Upward trends have been more pronounced in the most urbanized regions, whereas the agriculturally best-endowed regions have seen pronounced setbacks. The impact of natural setting has declined in overall terms, yet it is still significant (especially in grain production) and, considering the intrinsic prerequisites of farming, will never be reduced to naught.

Earlier (Ioffe and Nefedova, 2000), we posited that three major developments are likely to generate favorable trends in Russian agriculture. These developments are demographic revival (however partial), vertical integration of farms and food processors (whereby the former appear to boost the survival of the latter), and contraction of cultivable land (to prop up “diminishing returns” of too thinly

spread and deficient capital and labor). It has been our observation that there is a high degree of spatial coincidence between each of these three developments and urbanization.

(We intend to show in a separate publication how food processing advanced during the 1990s in

Moscow, Moscow oblast, Saint Petersburg, Samara, and Nizhnii Novgorod, while the best-endowed agricultural oblasts sustained a significant setback in this regard. We will also show how essential this development is for the future of Russian farms.)

However, at least one of the above-mentioned vehicles of agricultural rebound – the demographic revival spurred by the migratory inflow from Central Asian and other post-Soviet states – is vigorously unfolding in the regions with higher natural soil fertility. In fact, regions of southern Russia showed signs of demographic revival first, as net migration inflow to these regions began to outweigh the excess of rural deaths over births in the early 1990s (Ioffe and Nefedova 1997, pp. 186-87). Apparently chances for revival increase in regions that are both well-endowed for agriculture and heavily urbanized, as measured by urban population density. Krasnodar and Belgorod are cases in point.

It seems that the traditional spatiality exemplified by Figures 3 and 4 lies at the heart of current changes in farm productivity, while the advancement of agrarian reform has not shown clear signs of being instrumental in Russia’s agrarian recovery. Elements of continuity on the Russian agrarian scene thus warrant no less scrutiny than elements of systemic political and economic change, however profound they may seem or indeed be. Having said this, we are not suggesting that the portrayal of change has been inflated in Western literature on Russian agriculture. Instead we are trying to redirect attention to a different and perhaps more efficient way of generating change, in which change is selectively accelerated by broadly defined environmental factors, not just indiscriminately bestowed upon everybody by fiat- based reform.

But, indeed, is the way in which reform actually unfolds in the Russian countryside as aspatial as the way in which it is administered? Is there perhaps some meaningful spatial order in regional responses to reform and, thus, in the speed of market conversion?

Recent observations have shown that such order may, in fact, exist. The heart of the matter is that, in Russia, regional responses to reform may indeed be predictably structured in space. Better- endowed regions continue to demonstrate a more interventionist, neo-Soviet style of agrarian management, while more poorly-endowed regions by and large show a more laissez faire style. If ethnic republics are excepted from this observation, it becomes even more accurate.

Here are some tentative causal links that may uphold this observation. The first of them (a) draws from our own earlier research, while the others (b and c) are inspired by research by Maria Amelina of the

World Bank. Her case studies include just one raion in Leningrad oblast and one in Saratov oblast, but her insights into the current fabric of agrarian management and cost accounting (Amelina, 2000a, 2000b) allow for broader generalizations that are in line with our own observations.

a) Russian regions with natural settings more favorable for agriculture (better-endowed regions) have not been affected by rural depopulation to the extent the less well-endowed (particularly Non-

Chernozem regions) have. Communal spirit is more intact and has been upheld by the higher quality of communal amenities and by productive household farming dependent on collective farms. These collective farms fared well in the seventies and eighties; hence people had a higher level of satisfaction, and communal susceptibility to administrative control lingered.

b) Better-endowed regions have a higher share of agriculture in their economic output, and agriculture tends to be more productive per unit of land. These facts create more temptation for administrative control; and more productive subsidiary farms are more tightly linked to the parental socialized farm.

c) Better-endowed regions for the most part specialize in grain. Higher concentration on one product means fewer sales and procurement channels, which thus lend themselves more easily to control by regional bureaucrats.

In Amelina’s case studies, the role of in-kind payments in Saratov-based joint-stock companies

(incarnations of socialized farms) and the role of subsidiary production in overall peasant earnings are substantially higher than in Leningrad-based companies (Amelina 2000a). In-kind payments and

transfers constitute a crucial link between socialized (parental) farms and subsidiary (individual) farms.

Grain fodder and fertilizer are some examples of input-provision by a parental farm.

In a country with long traditions of state paternalism and a communal ethos, the above combination (a, b, and c) works to perpetuate interventionist management practices. Their pivotal component is the so-called elastic budget constraint (Amelina 2000b). The latter means that there is no imperative to repay farm loans, which can be written off at will by regional administrators if a collective farm is “well-behaved.” Thus socialized farms are protected from the vicissitudes of the market – that is, from the necessity of making cost-cutting and restructuring decisions. In less well-endowed regions budget constraints are more rigid, hence these regions’ more advanced market conversion.

It is unclear at the moment whether the productivity effect of market conversion in non-

Chernozem regions will outdo the combined effect of higher soil fertility and habitual command economy practices in Russia’s Chernozem provinces, which comprise the notorious Red Belt. There has been some evidence that this, indeed, is happening, at least in the more accessible parts of less well-endowed regions.

The evidence includes not only numerous examples of farms being revived through cooperation with financially solvent food processors (“Mafiya,” 1998), but also cases of genuine credit cooperation at the raion level (Filippov 2000). The latter is especially promising as it invokes survival mechanisms that neither top-down reform measures nor regional administrations – let alone corrupt Russian banks – have been willing or able to tap.

Russia’s less well-endowed regions may indeed be at the forefront of successful market conversion, in which “successful” means better agricultural performance, not merely some sort of restructuring insisted upon by Western sponsors under a self-righteous assumption that “private” is always better than “collective.” (This, in our judgment seems to have been the case in Nizhnii Novgorod and elsewhere.) Such a course of events, favorable for non-Chernozem regions, may be fostered by accelerated land abandonment in their outlying segments, which precludes deficient investment from being spread too thinly. In these regions, center-periphery gradients in agricultural land-use intensity have been getting steeper over recent decades, so much so that peripheral land abandonment (under way

for decades) currently resembles the pruning of trees by cutting off rotten and decaying twigs, a process that stimulates renewed growth.

The recovery of non-Chernozem agriculture began at subsidiary farms. Although their productivity may not be spectacularly higher than that of collective units, as previously believed, still it is higher, and this may provide an additional boost to the overall agricultural output of an area. If non-

Chernozem regions do come to lead Russia’s regions in productivity, it will not be an altogether unique development in Russian agrarian history. During the brief (1921-27) Bolshevik flirtation with market principles, livestock productivity (e.g., milk yields per cow) and even yields in crop farming were actually higher in non-Chernozem regions than in Chernozem (Ioffe 1990, pp. 25-30). In the latter, lethargic and overpopulated rural communes were ill-disposed to accept technology and management improvements.

Ironically, only collectivization blazed the trail for these improvements, and many Chernozem agricultural areas for the first time ever succeeded only under Soviet-style arrangements. Many Western- trained analysts tend to turn a blind eye to this, both in their analyses of Russian agriculture and in their explanations of the Red Belt phenomenon. In fact, collectivization was a true anathema only to Non-

Chernozem Russian regions, regions of dispersed settlement where tracts of arable land were islands in a forest vastness, each requiring an individualized approach. Many local peasants there were decent entrepreneurs who opted out of their communes. The land use and social order that collectivization imposed were much more in line with large fields, nucleated villages, overpopulation, and the strong communal ethos in Russia’s south.

True, the steamroller of collectivization succeeded in leveling the societal and managerial playing field all across rural Russia, and did it so impeccably that only the natural fertility of the soil failed to be erased as a productivity differential. No wonder that fertility or “bio-climatic potential” (a calque from

Russian) remained the most important controlling factor of output per unit of land for decades to come

(Ioffe 1990a); and rural depopulation of the less well-endowed regions, which were also those most disaffected by collectivization, only reinforced the correlation between fertility and output.

The newly acquired spatiality of Russia’s top-down reform appears to once again favor less fertile regions and may or may not give them a chance to lead this time around. Even if they succeed, though, the better-endowed regions will not be sidelined for very long. A “contagious diffusion” mechanism, aided by generational change, will not let Russia’s south stand apart.

References

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