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Return to co-operative farming prevents poverty in former socialist countries

Collective farming systems in most former communist countries were dismantled after the break up of the Soviet Union. Private farms are now the main form of ownership for land management. However, rural poverty remains high, particularly in Central Asia. What type of farm system is preferable?

A team from the Institute of Development Studies and the World Bank used comparative research in Romania and Kyrgyzstan to look at the types of collaboration employed by farmers with limited resources working in uncertain rural environments. The break-up of collective farming is usually considered positive because it allows land and labour to be allocated more efficiently. The researchers argue that although privatisation is being encouraged, various forms of co-operation that are emerging locally may be a better system of farming in the medium term.

When small to medium sized farmer groups co-operate, they can provide poor families with reliable income options and enable them to cope with unexpected changes in the market. The research finds that farms managed by small groups based on family and social ties can be more productive than individual farms as well as act as safety nets. Factors such as land reform measures or the type of co-operation, however, can influence the success of co-operative action.

The researchers also found that:

Small family and neighbourly groups come together to share assets, exchange skills and labour and lower the risks of individual farming.
Groups that are based on social ties are stable in membership over time as they are non-hierarchical and trust and support each other.
As groups increase in size the nature of co-operation changes: smaller groups usually co-operate for production activities but larger groups tend to co-operate to provide services.
Large co-operatives provide an important safety net for pensioners and absent land owners
Groups based on familial ties may not progress or can become limited to subsistence farming strategies if they lack assets, financial resources or any long term investments.

The researchers argue that future policy decisions must be sensitive to the different types of farming options. Although collective farms have been dismantled in the former communist countries, group farming can be supported on grounds of poverty alleviation and agricultural growth. Governments of post-socialist countries can encourage agricultural growth and ensure stable incomes for poor farmers by:

encouraging group farming as a temporary and transitional form of organising agricultural systems
stimulating land markets, including land rental and consolidating farm land
making more machinery available to help farmers reduce labour costs
assisting land owners to produce raw materials to feed back into the farming sector
prioritising support to small farms to help them overcome the problem of farming for subsistence only
changing laws and regulations that discriminate against small and medium sized farm groups.

Source(s):
‘Asset-pooling and efficiency in uncertain times: a quantitative analysis’, Institute for Development Studies, IDS Working Paper #239, by Rachel Sabates-Wheeler and Malcolm D Childress, 2005 Full document.
‘Comparative Perspectives on Small-Scale Co-operatives in Kyrgyzstan and Romania’, Institute for Development Studies, by Rachel Sabates-Wheeler and Malcolm D Childress

Funded by: UK Department for International Development (R8172)

id21 Research Highlight: 5 August 2005

Further Information:
Rachel Sabates-Wheeler
Poverty and Social Policy Team
Institute of Development Studies
University of Sussex
Brighton BN1 9RE, UK

Tel: +44 (0)1273 877007
Fax: +44 (0)1273 621202
Contact the contributor: r.sabates-wheeler@ids.ac.uk

Institute of Development Studies

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