Advancing a Free Society

Russian Agriculture: The Story No One is Telling

Thursday, August 12, 2010

Drought will cut Russia’s grain harvest by one quarter. Vladimir Putin, in a burst of populism, bans the export of grain. Grain futures rise in world markets. These headlines obscure a much larger story that no one is telling: Russia, twenty years after the collapse of the Soviet Union, is feeding itself with grain left over to export. Prerevolutionary Russia’s black-earth zone was the breadbasket of Europe. Contemporary Russia is on the path to reclaiming this title.

After Stalin defeated his last opponent in 1929 – Nikolai Bukharin, the proponent of private agriculture -- Russian agriculture collapsed. Russian and Ukrainian peasants were forced into collective and state farms, where they had no incentive to produce. The Soviet Union was forced to admit its agriculture was broken in July of 1972, when it began massive purchases of U.S. wheat, driving up agricultural prices worldwide. Russia had to purchase grain abroad despite the fact that it was spending more than four percent of its GDP on agricultural subsidies.

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