Agricultural Nomenklatura vs.
Free Market
Ukrainian President Leonid Kuchma has signed the decree On Mortgage. Interfax-Ukraine
reports the document defines, inter alia, the nature and varieties of mortgage,
envisions measures to develop a system of credit based on mortgage, etc.
Hasty introduction of land mortgage during economic ruin and instability
will only lead to artificially-created debts. It will be much easier later
to take the land from collective, rather than private, property.
NO ONE'S PROPERTY
The Communists created huge nameless landowners, driving the meek into
kolhosps (collective farms). Today they scream the word, village, but interpret
it as collective farm, state farm, and vice versa.
The President said at an all-Ukrainian forum that 80% of district administration
heads are agrarians. This is actually the case. In order to retain power,
these agrarian officials founded the Peasant Party in Eastern Ukraine,
making people frightened of democrats, and the Agrarian Party in Western
and Central Ukraine to frighten people of Communists and Socialists. But
both parties defend the same interests.
Their overweening interest is maintaining intact the collective ownership
of land. To this end, the collective agrarians managed to have the President
sign a decree On Apportioning Land Transferred into Collective Ownership,
which substitutes forcible transfer of land into collective property for
voluntary choice of ownership forms.
The so-called denationalization by means of dividing lands transferred
into collective ownership on a large territory (in most cases, these are
several populated areas) ostensibly promotes the voluntary and unrestricted
development of all forms of land property. However, from now on, there
can be no question of decollectivization, for the land is now neither state-owned
nor collective.
Simultaneously, much tumult is being raised about treating land as a
market commodity. What the agrarian nomenklatura needs is the internal
(kolhosp level), rather than free, market of land. This will allow them
to settle payments with hungry and cold pensioners or with recalcitrant
collective farmers for the land shares they own. For a free market ruins
the kolhosp system. And what are they worth without the latter?
If, for example, you have a hectare of arable land which yields 30 centners
(three metric tons) of grain, this raises a question whether you must pay
society for the energy of the soil, water and the sun involved in that
production. This energy is our national wealth, so whoever uses it must
pay a share of his profit. This tax, conditioned by soil fertility and
natural and climatic variations, is what is known as primary rent.
But by demanding, ostensibly on behalf of the common people, an exemption
for the clan of large landowners from paying this rent, the agrarian lobby
strives to rob society as a whole. The existing negligible tax rate on
Ukrainian arable and other farmland as well as selective privileges are
a striking example of how income bestowed by God on all Ukrainian citizens
is being appropriated.
MONOPOLY RENT IS THE GREATEST EVIL
This additional and morally unacceptable income comes about as a result
of selling the produce at monopoly prices which exceed its actual cost,
including labor costs, profitability, and all other rents.
To gain monopoly rent, free competition is being stifled by all means
possible, and artificial obstacles are being put up to prevent other efficient
commodity producers from producing and selling their items on the domestic
and foreign markets. Of course, kolhosps are the main beneficiaries of
this monopoly rent.
However, the nation as a whole derives no benefit from it. The agricultural
market has in fact been devastated. One reason for this is that kolhosps
still enjoy tremendous advantages, while private farmers own only 3% of
cash-crop arable land. Calculations show that if all those working on farms
and in the fields (i.e., those who actually till the land) opted out of
collective farms with a land plot of their own, three fourths of the land,
i.e., about 20 million hectares of cultivated land, including 18 million
of arable land, would remain with the de facto land owner who does not
work the land. Such landowning monopolists constitute a state within a
state. Large landowners keep an unregulated and invisible market of their
own and appropriate rents. This is why they need collective ownership of
the land; it is why they seek negligible taxes and low rentals for shareholders.
Karl Marx once wrote of the amazing vitality of the class of large landowners.
"No other social class," he wrote, "lives so extravagantly as this one
and lays such claims to traditional noblesse-oblige luxury; no matter
where the money comes from; no other class runs up debts so easily. But
it always finds a way out thanks to the capital other people have invested
in the land, which gives it a rent without any connection with incomes
drawn from the land by the capitalist."
KOLHOSP SYSTEM IN ACTION
In Ukraine, this "new capitalist" is represented by the collective commodity
producer or, in Party jargon, the "Communist peasant."
This is why the ordinary and not-so-ordinary kolhosp workers are so
easily being assigned not only their property shares but also the kolhosp's
collective debts: the ever-increasing number of the latter tie the workers
to the new kolhosp for good, as if he were eternal debtors and slaves of
the system. Such a slave has to do what the "majority" says at a meeting,
and he will cast his ballot the way the kolhosp "majority" tells him.
This is why it is necessary to immediately begin to reform the pro-Communist
agrarian system which has usurped power in the countryside and opposes
the private ownership of land.
To do so, one must, first of all, give the many able and hard-working
managers and experts the chance to take up private business, rather than
entering the "new" ruling agro-party system.
By Oleksandr KOVALIV, chairman of the Land Reform Committee, Association
of Ukrainian Farmers, deputy chairman of the Ukrainian Peasant Democratic
Party, Candidate of Sciences in Economics
INCIDENTALLY
"Bringing in the harvest will be difficult this year," Borys Supikhanov,
Minister of the Agro-Industrial Complex, said at a recent ministerial meeting.
He attributed the expected difficulties to the insufficient quantity
of farming machines, shortage of oil products, and the condition of standing
crops.
"This year, we'll have to deal with low-standing and high-standing crops,
weeded lands, and lands with variably mature crops," Mr. Supikhanov said.
The condition of the crops has been assessed primarily as satisfactory
and poor.
The readiness of grain-harvesting equipment averages 54.8% throughout
Ukraine. In southern regions, where harvest begins earlier, readiness is
lower: 42% in Mykolayiv oblast and 39% in Kherson oblast.
Agricultural enterprises had, as of June 1, 174,000 tons of light oil
products, which is below normal. Experts estimate that farms should have
fuel reserves of at least 200,000 tons.
Fuel requirements for June are an estimated 665,000 tons, and that for
the whole harvest period is 1,433,000 tons of diesel fuel and 753,000 tons
of gasoline.
Mr. Supikhanov said that the complaints of farms about the insufficient
funding for equipment maintenance and repairs and inadequate fuel supplies
are all too speculative. The oblasts must search for sources of funding,
including those from local budgets.
