Yeltsin’s Plans to Privatize Agriculture in Russia

Boris Yeltsin, who led Russia after the fall of the Soviet Union, directed all state agencies involved to submit suggestions on how to reform Russian agriculture. This was part of his effort to privatize agriculture. His 1991 decree guaranteed Russian farmers the opportunity to become independent of the state agricultural system. This decree led to a decline in agricultural production and caused chaos in rural Russia. In January 1994, nearly 500,000 former state and collective farmworkers owned land. By the end of the 1994 agricultural year, at least 150,000 independent Russian farmers went bankrupt. The proposed model for breaking up collective farms rested upon three principles:

  1. Farmers must be free to choose how to reorganize the farm.
  2. Redistribution of land and assets must be open and honest.
  3. Outsiders must be excluded from the first stage of a farm breakup.

The transition to a free-market economy has generally hurt agriculture. Rural dwellers have suffered more than any other segment of the economy. The old system of socialized agriculture was irrational, but Yeltsin's new system exhibited a frustrating lack of a system. To make matters worse, Yeltsin entrusted agricultural reform to an administrator who later emerged as the leading opponent of change in the agricultural system. An even larger obstacle is the sheer complexity of turning 8 million people who depend on collective and state employment into private farmers. The agricultural crisis has resulted in regional and urban food shortages. Urban quality of life has declined because of the food shortages and the increased cost of food available.