Agriculture

AGRICULTURE

Agriculture is that sector of an economy concerned with the production of food and food products both for domestic use, in (industrial) production and (household) consumption, and for export to external markets. Although it is often difficult to define

the sectoral boundaries of agriculture with precision, agriculture is critical to the process of economic growth and economic development. Less developed economies are typically primarily agricultural in terms of output and resource usage and, appropriately, focus on institutions and policies that encourage the modernization of agriculture as a sector to support the growth of industry and services.

As economic growth and development occur, the relative importance of the major producing sectors changes, usually with a declining relative importance for agriculture and a growing relative importance of industry and services. This means that, in the early stages of economic development, agriculture is an important sector in which productivity growth sustains the growth of output. This process involves the substitution of capital for labor and changes the role of agriculture itself as economic growth and development proceed.

In the Russian case, the agricultural sector has always been surrounded by controversy. The reasons for this controversy are best understood within the context of the individual periods of Russian and Soviet economic growth and development, although there are common threads throughout. Not only are policies and institutions important, but ideology has played a major if not always constructive role in this essential sector.

Prior to the legal end of serfdom in 1861, the Russian rural economy was organized on a communal basis (the mir). The premodern agriculture under this feudal-manorial system was characterized by limited mechanization, archaic modes of land usage, and the limited development of human capital.

With the formal end of serfdom in Russia and the emergence of significant economic growth after 1880, attention focused on the extent to which a modern agriculture (emerging market institutions, market policies, investment in both human and physical capital, and so forth) was emerging in Russia and could therefore serve as the under-pinning of industrialization. From an ideological perspective, this would mean the development of capitalism. Two major schools of thought, the agrarian crisis view and the revisionist view, address this issue in different ways. The agrarian crisis view argues that backwardness was sustained prior to the Bolshevik revolution in 1917, while the revisionist view sees significantly greater change in the agricultural and other sectors. These interpretations have both been important for our understanding of the level of economic development in 1917, the ideological options available to Lenin and the Bolsheviks, and the subsequent discussions regarding agriculture during the New Economic Policy (NEP) period.

The second important era in which agriculture became controversial in Russia is the NEP of the 1920s and its termination through mass collectivization. While the role of agriculture in Russian economic development was an issue of major importance in the 1920s, the implementation of collectivization by Josef Stalin in the late 1920s radically changed the institutional arrangements: It attempted to create a mechanism to support rapid industrialization, while at the same time imposing the ideology of collectivism. It has been argued that, from a strategic point of view, the policies and institutions established did not in fact finance Soviet industrialization. Worse, it has also been argued that the legacy of these institutions and related policies, and especially their manner of implementation, led to serious negative long-term consequences for the necessary but unachieved long-term growth of agricultural productivity. In these respects, collectivization has been viewed, in broad perspective, as a mistake.

The third important era for Russian agriculture is the post-collectivization experience through the end of the 1980s. In spite of continuing attention to and controversy surrounding agriculture in this era, it is agreed that agricultural productivity declined from the 1950s through the 1980s to such a degree that significant grain imports became necessary beginning in the 1960s. Thus agriculture became increasingly expensive (an effect of poor productivity performance) and was artificially sustained by large state subsidies. From a structural point of view, agriculture in this era failed in the sense that agricultural productivity change could not support necessary structural change, a legacy that would await the reformers of the transition era.

Finally, when the Soviet system collapsed and Russia faced economic transition to capitalism, agriculture as a sector was largely neglected. Whereas it was commonly predicted that agriculture would be a leading sector in transition economies, this was not the case in Russia. From a twenty-first-century perspective, it is evident that during transition agriculture has been a low-priority sector, one in which institutional change has been at best modest. Although markets have emerged and trade patterns have changed, the most fundamental element of market agriculture, namely the pursuit of private property rights along with appropriate institutional support, remains controversial and elusive.

See also: agrarian reforms; collective farm; collectivization of agriculture; country estates; economic growth, imperial; economic growth, soviet; new economic policy; peasant economy; serfdom; sovkhoz

bibliography

Gregory, Paul R., and Stuart, Robert C. (2001). Russian and Soviet Economic Performance and Structure, 7th ed. New York: Addison Wesley Longman.

Volin, Lazar. (1970). A Century of Russian Agriculture. Cambridge, MA: Harvard University Press.

Robert C. Stuart