Notes

1. Because of the close association between tiller-cum-farmers that received in-kind distribution of land through privatization movements (that is, farmers received control, income, and alienation rights) and those that received control and income rights (but not alienation rights) through in-kind distributions (discussed more below), in fact, in addressing the third question it is difficult to distinguish between the two types of farms. Hence, in the analysis we are actually explaining the difference between these two types of farms and those that received shares as a group. After this analysis, however, we take a detour and ask the question why it is that some nations privatized land by giving land to the tiller and others distributed land in-kind rights to their farmers, giving them only control and income rights, and not alienation rights.

2. Privatization, in this chapter, is used in a specific way and includes land reform transactions that transfer full land control, income, and alienation rights to the new owner who becomes the bearer of the land title. According to this definition, privatization does not cover those groups of farmers that were allocated land shares.

3. When a nation did not opt for privatization, alienation rights to the land typically were held by either the state itself (as in many CIS nations), or the collective, or some local government or village (as in the case of China). Although it is possible that the exact landownership of land that was privatized matters in terms of how the land was ultimately managed, we do not attempt to explain the determinants of alienation rights for nations that did not privatize.

4. In addition, for those nations adopting the share approach, the process typically allowed shares to be identified with a particular piece of land in a second step, giving individuals ultimately control and income rights to specific plots, if individuals chose to exercise those rights. In practice, however, although income rights accompanied the shares, de facto control rights were often bestowed on the former farm manager or some other individual or committee chosen to manage the farm for the shareholders (see Chapter 4).

5. In working on the determinants of land rights and farm restructuring, it is important to recognize the difference between the property rights of the farm and its management. In particular, there is not necessarily a one-to-one mapping between farm operation and ownership, though in some cases there is. For example, in almost all cases, land that is distributed to the tiller households ends up being operated as a family farm. However, it is also possible that a family farm does not own the land it is farming, but is renting it from others. Corporate farms often rent most of their land from households.

6. Also in CIS countries, long-term lease contracts can be important if private land was not recognized. For example, in Kazakhstan, individuals could get individualized land plots if they converted their shares into actual plots. These plots were given under ninety-nine-year leases. (In 2003 these leases were converted into private ownership.)

7. Prior to the Revolution of 1917 a reform experiment was launched to break up the communal land into individual peasant farms—the so-called Stolypin reforms—see Macey (1990, 2003) for details.

8. This opposition continued during the implementation of the restitution process. To overcome the resistance of farm managers and local officials, reform-minded governments in some cases tried to explicitly exclude them from the reform implementation process (Swinnen 1997a). For example, in Bulgaria, when reformers came into government in the early 1990s they brought in outsiders to chair local committees implementing land reform and farm restructuring (the so-called 'Liquidation Councils'). This design of the implementing institutions was explicitly intended to break local resistance to reform implementation by former Communist officials and farm managers who had until then blocked implementation of the reforms by the local institutions responsible for doing thus (Swinnen 1997fc). When the former Communists came back to power a year later, they 'liquidated the Liquidation Councils' and put the local managers and officials back in charge.

9. Another exception to the legal history argument is the restitution of state farm land in Slovenia. Here again, the historical legacy of this land was an important reason, as most of this land prior to the nationalization belonged to medium-sized farmers and not to religious institutions or large estates, as in many other CEECs (Bojnec and Swinnen 1997) and Swinnen (1999) for more details.

10. For example, in both Latvia and Lithuania the first privatization effort was still under FSU and the Communist Party (CP) regime, which gave land on a usufruct basis to rural workers. After anti-Communist coalitions overwhelmingly defeated the CP in the 1990 elections, the new governments restituted land to former owners (all native Latvians and Lithuanians) as a strategy for securing their independence (putting landownership in the hands of native citizens). Interestingly, Latvia's emphasis on a radical and rapid agrarian reform is in stark contrast to its government's reluctance to privatize industry, where restitution to Latvians was impossible. Because most industry was built after 1945, any other privatization policy was likely to give an important share of the capital stock to the management and employees of the industrial enterprises, many of whom are Russians. Thus, while ethnic motivations induced a fast privatization in agriculture, they had the opposite effect in industry (Rabinowicz 1997).

11. A related factor is that in the Soviet Union and in most countries with large-scale collective and state farms, the process of collectivization after the Second World War included massive land consolidation programmes which wiped out entire villages and country roads and created large open fields, and moved farm households to new housing concentrated in farming towns. This 'socialization of the countryside' reduced the demand for decollectivization, and the costs of individualization.

12. In many CEE and CIS countries, after the fall of the Communist Party from power, former managers and officials tried first to block the reform implementation and later to predate on the system. Frye and Shleifer (1997) refer to this attitude as the 'grabbing hand' of Russian bureaucrats in the transition process, in contrast to the 'helping hand' in China where bureaucrats played a more constructive role. However, in CEE and CIS there were also important differences among bureaucratic attitudes. For example, officials in Poland played a much more neutral role than in Russia, where officials' rent seeking seriously harmed the reform process.

13. Land policies in Russia, Ukraine, and Kazakhstan also changed, but only much later, after 2000. In Kazakhstan, the demand for land in kind and individual farming differed strongly by region, reflecting large differences in technology, in particular between the north and the south.

14. In Albania, the government later implemented land legislation which was consistent with the de facto situation: it distributed land in kind to rural households. In Romania, where land was partially restituted due to historical legacy reasons, the government imposed tight maxima on the amount of land for restitution, and distributed the rest of the land in kind. Since many of the rural households also benefited from the constrained restitution process, the legislation was more or less consistent with the grassroots actions in most parts of Romania.

15. Also in Ukraine, Zorya (2003) argues that until 2000 the structure and behaviour of the large-scale farming enterprises did not differ significantly from the structure of Soviet agriculture, primarily because of the continuation of soft budget constraints and major constraints on individuals leaving the farms and enforcing their land rights.

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Part III

Conclusions, Lessons, and New Developments

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