Osamu Ieda (Ed.), The New Structure of the Rural Economy of post-Communist Countries (Sapporo: Slavic Research Centre, Hokkaido University, 2001). 161 pp. ISBN: 4-938637-24-3.
1/2008
This book reflects a serious approach by researchers from Japan and East Europe who collaborated over three years to study the structural changes in the rural economies of post-communist countries. It is a collection of papers from a workshop held to examine new aspects of rural economic transformation after the post-communist privatization of agriculture in mid-1990s, discussing these aspects from a Eurasia-wide, interdisciplinary perspective. The book’s nine chapters draw attention to the challenges faced by the changes taking place in post-socialist rural spheres.
Osamu Ieda, in his paper titled “The Rural Cooperatives and Members’ Liability from a Historical Perspective” focuses on Hungary’s experience in the post-communist area. His paper touches on the regulations concerning liability in rural cooperatives and relationships between members. The broader focus looks at cooperatives economic performances that are influenced in the long run by the internal structure – namely, the rights and responsibilities of its members. Referring to vagueness of the past, Ieda reminds readers that the cooperative laws in the communist era gave no description of members’ liability, since the communist agricultural cooperatives were based not on members’ capital contribution but on members’ labor contribution. The end of the communist regime brought fundamental changes to rural cooperatives. In the process of agriculture’s privatization the dominant concern was on the division of land and cooperative assets. Are things any different now? Ieda examines the present nature of rural society in Hungary through the prism of the current cooperative disciplines. These disciplines prioritize labor over capital, a diminishing community of active members, and no personal liability. From the viewpoint of management, the cooperatives are in a critical situation. This is not surprising, explains Ieda, because the cooperatives have no possibility of credit from internal or external sources due to lack of liability among the members.
An article titled “The End of the ‘Agricultural Miracle’ and Property Reform in Hungary” by Paul Juhasz recalls that in the Hungary of 1980s agriculture products (primarily the sugar beet and potato cultivation) had “no opportunity to become competitive, as the market for horticulture products had no mechanism that could have driven it to develop profitable work-systems. The products, which could be exported, were needed and the state had no tools with which to implement the transformational strategies” (P. 17). Listing the agrarian crisis that evolved following the change of regime in 1989-1990, Juhasz cites factors like the change to private ventures, the reduction in consumer support, and the suspension of guarantees of export-subsidies that rendered inherent structural problems more visible. A swift transformation of work-systems, applied technologies, co-operational forms and integral mechanisms became inevitable.
Tadayuki Hayashi’s paper, “Politics of the Agriculture Transformation in Czechoslovakia: 1990-1991” raises a set of pertinent questions revolving around the transformation of farm land and its transfer including, whether a former cooperative member was entitled to a transfer, how net property should be divided among entitled persons, and who should decide if cooperatives are sub-divided or transformed into business enterprises.
In their co-authored article “Farm Transformation and Restructuring in Czech Agriculture,” Tomas Doucha and Emil Divila take stock of how things have evolved over the ten years since 1991. Both authors assert that key differences in farm structure development in transitional counties are derived from four crucial factors, namely:
1. historical background and heritage, which could not be overcome in ten years;
2. applied agricultural policies;
3. the development of the institutional framework in the society;
4. the development of the national economy.
“Agricultural Reform in Slovakia: Changing Institutions and Structure” is the title of Gejza Blaas’ paper, which reminds us of common challenges experienced elsewhere. Blass lists the six adverse conditions that accompanied the restructuring process: (1) the scant reward for doing business in agriculture due to unfavorable trade terms; (2) the restricted availability of loan capital and liquidity problems; (3) fragmented ownership of land and underdeveloped markets for land; (4) highly ineffective laws relating to bankruptcy procedures; (5) growing unemployment in rural areas; and (6) comparatively high levels of social dependency of the rural population on joining collective farming as their main source of subsistence.
“Transition in Eastern German agriculture: Lessons to be Learned for the EU-enlargement Process” is a paper by Klaus Reisberg and Steffen Abele who conduct an analysis of the comparative strengths and weaknesses between East and West German agriculture sectors. Their paper results in a number of noteworthy conclusions for regional relevance:
In Eastern Germany, besides the institutional framework provided by state authorities, human and social capital must have played a decisive role in development. This can be seen in the structure of firms that are due to social capital, and in the quick economic recovery that was also fostered by human capital and the capacity to exploit the institutional framework.
The second conclusion is the fact that the structural adjustment in agriculture caused major social and economic distortions in rural areas. Though policies were efficient in creating functioning markets for land capital and assets, labor markets still need to be developed. These problems cannot be solved without social capital and the integration of local interest groups. Therefore, even the statement of problems should be left to participatory approaches. This finally requires a decentralized structure of administration, policies, and local organizations that can act as interest groups and therefore as the agents of rural development, especially by lowering transaction costs and by ensuring the proper articulation of demands for support.
The aforementioned issues suggest that all the steps of the process are woven together. Privatization cannot function without market structures, markets need money and capital, and the adjustment of enterprises cannot be done without the mobility of labor. This suggests that the efficiency of the restructuring process is proportional to the number of restructuring initiatives that can be implemented simultaneously.
The contribution by Yoshino Etsuo (“The Polarization Process of Polish Agriculture in the Latter Half of 1990s”) observes several trends taking place in other post-socialist settings such as in parts of present-day Central Asia. One trend is that as farms fail to sustain livelihoods, the number of farm workers drops while unemployment steadily rises in rural districts. The number of farmers below 44 years of age decreases as younger men move out of their localities in search of better wages. This leads to a decline in the youth population owing to their out migration to other sectors or other places. In many rural areas the total production is sufficient or suitable only for local needs, leaving little chance to earn from export and trade. Many farmers with smaller pieces of land neither have nor find enough resources to acquire input for getting adequate yield. This leads to a decline in real investment in the private agricultural sector. Introduction of the market mechanism makes the situation difficult for farmers, causing deterioration in their living standards. In urban areas, improved commercial logistics brings imported food products to clients causing a shift away from local products. If the demand for domestic agricultural products expands or develops into an export market, it will bring improvement to the rural economies.
Combined with the accompanying volume Transformation and Diversification of Rural Societies in Eastern Europe and Russia, this book helps readers have a cross-country, comparative picture of how changes have evolved in rural parts of post-socialist societies. Rural transformation is a dynamic, on-going process of which many pertinent and significant elements can be still observed in Central Asia for example. There is a need to multiply such intellectual collaboration that will further enrich our understanding of how and why the lives of the millions engaged in the rural sector in post-socialist societies is undergoing changes and how they cope with them.