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ANALYSIS-Fight begins for Russia farm land reform
By Aleksandras Budrys
MOSCOW, Dec 13 (Reuters) - Russia took a revolutionary step in October, giving its citizens the right to buy and sell real estate, and now agricultural producers are battling to have that right extended to farm land.
Officials and agricultural producers will hold talks in the coming months, including parliamentary hearings on December 24, aimed at reconciling differences over farm land laws.
A draft bill should be in parliament next year.
Agricultural producers say the Russian farming sector is in desperate need of capital, but investors -- including foreigners -- will not part with cash without laws providing guarantees of a return on their capital.
Plots of land, once they can be traded, could provide such guarantees.
"If a law setting reasonable rules for transactions with farm land is passed, Russia will have a great number of private farms and foreign investments will follow," said Vadim Moshkovich, general director of the Rusagro group, one of a new brand of post-Soviet farming conglomerates.
Large Russian companies, such as the Interros financial and banking group, have turned thier attention to agriculture on expectations of reform.
Interros head Vladimir Potanin said the group planned to invest $100 million in farming by the end of 2002 and would use every opportunity to promote farm land reform.
FROM COLLECTIVES TO PRIVATISATION
"We are going to lobby for general changes in the legal environment in the direction of a more modern and, if you wish, a more liberal attitude towards agriculture," Potanin said.
Farm land is a delicate issue in Russia, where all land since the 1917 Bolshevik revolution belonged to the state. Farms were subject to forced collectivisation.
Now Russians can own farm land in a restricted way as people who lived on collective farms were given common ownership but it cannot be bought, sold, mortgaged or leased.
President Vladimir Putin signed a new Land Code into law in October, covering trade in around two percent of Russia's total land area of 1.7 billion hectares (4.2 billion acres). It did not include 406 million hectares of farm land.
Some regions allow trade of farm land at a local level, but it can be only be legalised by the adoption of a federal law.
The pro-reform Union of Right Wing Forces has presented a draft law to the State Duma, the lower house of parliament, proposing extending the Land Code to all land.
The proposal met strong opposition from some left-leaning Duma members.
Others are less rigid. The head of the Duma Committee for Agrarian Issues, Vladimir Plotnikov, proposed allowing owners limited trade on the land after a period ranging from three to 10 years.
A draft of a bill prepared by members of an agri-industrial group proposes a ban on the sale of over 50 percent of existing farm land but allows restricted trade in the remainder.
The centrist Fatherland group in the Duma is to hold parlimentary hearings on a farm land bill on December 24 and has invited all parties to participate.
GOVERNMENT READY TO DISCUSS VARIOUS CONCEPTS
The pro-reformers hope that freeing land for sale will increase investment and allow Russia to boost crop output.
The country has this year harvested some 83 million tonnes of grain, but as recently as 1998 it received food aid from the European Union and the United States after a bad harvest and currency devaluation, which made commercial imports too dear.
Recent output compares with the over 100 million-tonne harvests that the old Soviet agriculture system used to produce.
The Agriculture Ministry is also working on a draft law and has invited political parties and organisations to debate the issue.
But it is also insisting on restrictions.
"Farm land should only be owned by farmers and used exclusively for agriculture. Farm land can be leased only for long-term investments," a ministry statement said.
"We will discuss several drafts of the bill and will hear all the proposals," Agriculture Minister Alexei Gordeyev said. "We will try to stay away from purely political discussions."
Gordeyev said the ministry planned to present a draft of the law for discussion at the State Council, a presidential advisory body, early next year. It will then need government approval before being sent to the Duma.
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