National Level Events

Minister of Agriculture Khlyustun has forwarded an official letter to senior management at the British Know How Fund and IFC indicating a desire to form a closer relationship with the IFC/KHF program in order to address areas of mutual interest. Expressing not only his appreciation for advances made by the land reform pilot program, the Minister noted several goals of the current season including reorganization work in 10 oblasts, development of a bankruptcy model, and the design of appropriate cooperative units. Pledging his assistance in coordinating Ministries and departments to facilitate work in all of these areas, the Minister specifically offered to help organize a Fund for rural sector reforms that in the future could take over the major functions of the current IFC/KHF program.

Monitoring

The Monitoring team has completed analyses from the farm surveys conducted in Rostov, Oryol, Nizhny Novgorod and Ryazan. Responses from the survey supported hypotheses that farm reorganization would provide incentives for managers to use human and material resources more efficiently while also fostering conditions for improved work behavior. The survey was designed to capture a broad range of economic and social indicators, including aspects of management strategies, worker motivation, the impact of reorganization on social services and land market activity.

Results from the survey show that farm management undergoes significant restructuring as a result of reorganization. The management system is usually less centralized, with the opinions of workers and specialists playing a greater role in the decision-making process. Responses to the survey also revealed that managers of reorganized farms are becoming more profit-oriented and are strategizing to increase profits through use of new distribution channels, value-adding storage and food processing.

After reorganization, managers demand better performance from workers, resulting in less theft and drinking on the job and the perception by managers and workers alike that they are working harder. Wages are generally higher on reorganized farms as compared to non-reorganized farms in the same region, and workers on reorganized farms indicated they put more effort into their farm jobs and less into private plots, suggesting a greater commitment to the farm work than is found on non-reorganized farms. This was further supported by responses from workers on non-reorganized farms that they continue to rely more heavily on income from their private plots than from their jobs.

The results of the survey varied by region and according to the strength of the farm. Financially strong farms with dynamic leaders responded more quickly to market incentives provided by reorganization. In Rostov, this was especially visible. Indicators showed overwhelming evidence that farm management and worker discipline has improved on reorganized farms in this region. This is attributed to a number of factors that require further study, however, it is suggested that the relative financial strength of these farms enabled them to quickly take advantage of the private ownership incentives provided by reorganization. It is believed that weaker farms, such as those in Ryazan, are also showing increased efficiency in resource allocation and production, but that they will take longer to exhibit improved economic results and overcome the obstacles stemming from the macro-economic decline in Russia.

In Oryol and Nizhny Novgorod, the survey results showed similar trends, but farms in these regions were generally more diverse and varied according to available resources and the financial strength of the farms. The survey in Nizhny Novgorod was especially interesting in that it provided the first opportunity to look at reorganized farms over the course of three years. This will be increasingly important to more sophisticated analyses in the coming years.

In Russia, land liquidity has been slow to develop in the current legal and economic environment and it is difficult to measure rural land liquidity by conventional indicators such as land sales. However, lease contracts, which are considered a first step toward the development of land liquidity, are more generally accepted as enforceable and, over time, are increasingly customized to meet the needs of individual farm members. This trend is especially apparent on pilot farms in Nizhny Novgorod where farms have three years of experience in negotiating contracts.

In October, the monitoring team completed economic reports using Department of Agriculture statistics for Nizhny Novgorod and Rostov. The team is currently working to refine the database that includes over 1,500 observations with information on the performance of reorganized farms before and after reorganization as well as information on non-reorganized farms located in the same raions.

The team is currently analyzing the influence of factors such as farm size, ownership type, and initial farm conditions on the performance of the enterprises after reorganization. The monitoring team is also cooperating with its counterpart in Ukraine to develop a common list of variables to evaluate the financial strength of farms before reorganization.

Case studies based on representative farms in each of the four pilot regions plus Volgograd are being developed by the Moscow monitoring team in cooperation with regional specialists. These will be assembled into a library which will be available for monitoring, training and public relations. Several of the studies have already been integrated into a new brochure describing the various types of enterprises resulting from the reorganization process and have been used successfully in recent training seminars in Rostov and Oryol.

Training

The rector of Russia's foremost agricultural academy, Timiryazev Academy, has recently approved a plan for offering project training seminars to the Academy's graduating seniors beginning next spring. The support of this well-regarded educational institution in Moscow is expected to further help institutionalize the training component in other agricultural academies and universities across the country.

The IFC/KHF training seminars in farm reorganization have now been accepted at the national level for use in both educational institutions of the Ministry of Agriculture: the Russian Academy of Management and Agribusiness (RAMA), which focuses on training practicing professionals and the Timiryazev Academy, which includes all the academies and universities for undergraduate education. In July, the first accredited training course in farm reorganization according to the federally approved model was co-sponsored and co-taught by the Russian Academy of Management and Business at RAMA's training facilities near Moscow. In October, Timiryazev Academy, the leading agricultural academy in Russia, agreed to offer training in the model program to its graduating seniors beginning in spring 1997.

To deepen the experience of newly trained trainers from Timiryazev Academy and the Russian Academy of Management and Business, it is hoped that hands-on work with reorganizing farms can be provided this season. Discussions have therefore begun with two farms and their relevant raion administrations in Moscow Oblast that have shown interest in reorganizing under the federally approved model.

Timiryazev Academy hosted a 6-day training seminar in late October for 57 representatives of the project's four new oblasts, Krasnodar, Tula, Voronezh and Samara. Opening the seminar, the new director of MOA's Department of Personnel Policy and Education encouraged the IFC/KHF program to increase efforts to train university students, as they are the future leaders of agriculture and have fewer ties to the previous systems. Echoing concerns expressed last summer by Minister of Agriculture Khlyustun, he also urged new oblast working groups to study the economic and social effects of reform and report the results. Each oblast team was provided materials for conducting the training independently as well as advice on how to organize their work and specific training in communications.

Seminars in communication and presentation skills have been delivered to approximately 60 IFC/KHF staff in Nizhny Novgorod, Oryol and Rostov who deal frequently with the public. The 2-day seminars were taught by senior communications and training staff who had been trained previously in seminars conducted by an international training firm. This training opportunity may be extended to local teachers in Kirov and Volgograd as well as to the trainers from RAMA or Oryol Academy who are conducting seminars in farm reorganization.

More than 400 officials and farm members were trained in project-sponsored training seminars during September. In order to determine the depth of training, seminar data from all project-assisted oblasts are assembled by month and analyzed by the training team in Moscow.

The new director of MOA's education institutes brought his deputies to the project's Moscow office to observe a demonstration of the new web page and will distribute information about it to all the institutions across Russia under his direction. A recent press release on the web site included instructions on the computer hardware and software requirements, how to access the site, and how to organize email conferencing.

Communications

Institutionalizing the project's information campaign at the federal, regional, and local levels continued to be the communications team's focus in October. Strides were made in the creation of journalist associations in both the southern and the northwestern regions of Russia. IFC/KHF has offered to assist the Rostov Association of Agrarian Journalists in designing and implementing a conference for journalists from throughout southern Russia to discuss the creation of a regional association and to define the organization's structure and purpose.

An article written by the project's senior Russian agricultural economist was published in the national newspaper, Sovietskaya Rossiya, on 24 October. This marks the first time a positive article on the program has appeared in this publication. Positive publicity of the program such as this is rare in any of the communist-leaning newspapers-publications that allow the program to communicate to an otherwise difficult to reach audience.

A manual for new leaders has been developed to provide relevant, detailed information about each stage of the reorganization process to leaders who have decided to form enterprises for the first time. Specifically, the manual outlines the types of enterprises that may be formed, the contract signing process, the preparation for and participation in the auction, and post-auction issues. It will be distributed at the meetings held on each farm undergoing reorganization to assist farm members who are interested in forming their own enterprises.

Legal

The Moscow legal team has broadened its contacts in Russia's legal community, gathering the support for the program by well-known legal experts. The team has also found it beneficial to exchange information with legal experts and individuals and develop joint strategies to influence federal legislature.

On 11 October, the KHF/IFC legal team met with drafters of the Russian Federation Civil Code to discuss the drafting process and questions about how the Code addresses rights to land ownership.

On 23 October, a roundtable discussion on the types of legal entities and individual activities in the farming sector was held at the Institute of State and Law of the Russian Academy of Sciences. Present were over 30 scholars in the field of agrarian and land law, including the leading Russian specialists involved in developing land and property law. Participants made presentations on different types of legal entities and the implications these legal forms have for contracts and the broader legal framework.

The roundtable was so beneficial that the group has agreed to meet on a monthly basis. It is envisioned that five project lawyers and five leading scholars from the Institute of State and Law will participate regularly to discuss current legal issues in the project. A roundtable discussion on the theory and practice of legal transformations on farms is tentatively scheduled for December. The Institute of Comparative Law and Jurisprudence associated with the Russian Federation Government and the State Academy of Law have also been invited to participate. The journal, State and Law, has undertaken publishing the project legal materials that are currently being developed by the Moscow legal team.

In the regions, the KHF/IFC lawyers are working closely with the Intra-farm Commissions and RWCs to spot-check legal procedures and provide extra support where necessary to ensure the transfer of expertise to these bodies overseeing reorganization.

Project lawyers are currently completing the final edit to the legal handbook, which will codify the legal procedures for farm reorganization. The handbook is expected to be completed by end-November.