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Sale of Russian Cropland Imminent

Reform: A bill would allow private ownership for the first time in more than eight decades. Foreigners would be able to lease.

June 22, 2002|JOHN DANISZEWSKI | TIMES STAFF WRITER

MOSCOW — A compromise on the issue of sales to foreigners smoothed the way Friday for a sweeping bill that would allow Russian farmland to be bought and sold for the first time since the Bolsheviks came to power more than eight decades ago.

Giving its preliminary approval on the second of three required readings of the bill, which is backed by President Vladimir V. Putin, the lower house of parliament said foreigners could not buy farmland but could lease it for up to 49 years at a time.

"Common sense has prevailed,'' Agriculture Minister Alexei V. Gordeyev said. "In my opinion, both farmers and the state will benefit from this law.''

Private land sales have been a goal among supporters of economic reform in Russia almost since the collapse of the Soviet Union more than a decade ago, but it has taken successive governments this long to overcome entrenched opposition from Communist Party stalwarts and agricultural interests linked to the old collective farm system.

Lawmakers backed the bill to permit land sales 245 to 150. Earlier, however, they amended the draft to say that foreigners and foreign-owned organizations could only lease farmland.

In a bow to populist fears of the reemergence of giant land magnates such as existed in Russia in past centuries, the deputies also voted to limit to 10% the proportion of farmland a buyer could acquire in a single rural district.

Final approval of the bill on the third reading is expected to be a mere formality and could come as early as next week. After passage by the State Duma, or lower house, the bill then has to be approved by the Federation Council--the upper house, made up of regional leaders--and signed by Putin to become law. Both are expected to give their OK.

Communist and Agrarian Party deputies had long balked at private ownership of farmland, arguing in part that Russians would in effect lose control over the motherland if wealthy foreigners were allowed to buy up former collective farms, most of which are now technically bankrupt.

"This law has been written and passed first and foremost in the interests of big capital and the upper bourgeoisie.... The investor and the oligarch will come in and decide everything,'' said Nikolai Kharitonov, leader of the Agro-Industrial deputies group.

In the run-up to Friday's vote, economic reformers and advisors to Putin denied that there were hordes of Europeans, Americans or Chinese waiting in the wings to purchase and operate farms here.

To the contrary, reformers are more concerned about shady insider dealings involving Russian businesses with close links to local authorities and say foreign participation in the farmland market would help ensure greater openness in transactions.

But Putin, sensitive to the populist sentiment against selling land to foreigners, had begun to back away from the idea of a free market in land.

Private ownership of farmland would stand as one of Putin's main economic reforms, completing a package begun last year when the State Duma approved the sale of nonagricultural land.

Reformers argue that if farmland was privately held, owners would have an incentive to invest in it. It also could be used as collateral for loans to rebuild the agricultural infrastructure.

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