Perestroika in the Countryside: Agricultural Reform in the Gorbachev Era: Agricultural Reform in the Gorbachev Era by William Moskoff

Author:William Moskoff [Moskoff, William]
Language: eng
Format: epub
Tags: Games & Activities, Political Science, General, Video & Mobile
ISBN: 9780873327671
Google: j66oDwAAQBAJ
Goodreads: 10511810
Publisher: Routledge
Published: 1990-09-30T00:00:00+00:00

Terms of Contracts

The contractual process under current conditions inhibits the spread of lease contracting. Managers are under little pressure to sign contracts, and face no competition from neighboring farms in retaining their best workers. Productive workers have most to gain from leasing. The farm manager may, however, drive a much harder bargain with them than with shirkers whom he would like to get off the payroll, but who are reluctant to leave.

Productive workers cannot in practice negotiate with the manager of a neighboring farm unless they are willing to forfeit their homes and investment in household plots. Owner occupied housing and household plots are important assets for many rural families, and their disposition under leasing or individual proprietorship has not been clearly addressed. In the past, a family retained the right to occupy an owned home and farm a household plot only if a family member was a current or retired employee of the farm. If the family severed relations with the farm, the household plot was usually reassigned and the house sold or abandoned. Leaseholders or individual proprietors might want to quit their employment with the farm, but retain housing and the household plot. If they do not have the right to do so, some will opt for targeted intra-farm leaseholds simply to keep their housing.

As long as the lessee and lessor are expected to negotiate contracts in the absence of competitive markets, the process will be one of bilateral monopoly, with most of the power on the side of the farm manager. There are no systematic reported data yet on terms of leases, but reports from the agricultural press suggest that farms are exacting high rental fees from leaseholders. In an example reported from Tselinograd oblast, a leaseholding brigade sold wheat to the parent farm for seven rubles per centner, and the farm resold it to the procurement agency for thirteen (Sel’skaia zhizn’, 29 January 1988). It is unclear from the account who paid for seed, fuel, fertilizer, and other purchased inputs, but these are usually paid in full by the lessee. The leaseholder’s share (54 percent) in this case seems quite low if it includes both labor and purchased inputs, but high if it is only labor. Another set of contractual prices reported from Orlovskaia oblast is also quite low (see Table 1).

These contract prices are very low, and suggest a share of at least 40 percent for the parent farm, although the full parameters of the contract are not reported. The share is probably even higher, since bonus payments raise farm prices above base procurement prices.

Concern about the level of rental payments has had two consequences. The leasing law and the draft law on land both assign the rural Council of People’s Deputies the power to secure a land allotment (either leasehold or proprietorship) for any applicant qualified to work it. Workers dissatisfied with terms offered by their farm manager can apply to the Council of People’s Deputies, but the extent to which the Council will be able to offset the manager’s monopoly power has not yet been tested.

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