- The Washington Times - Sunday, May 19, 2002

MOSCOW Members of Russia's lower house approved the first reading last week of a controversial bill allowing the sale of farmland for the first time since the 1917 Bolshevik Revolution, but Communists warned of a fierce battle ahead.
President Vladimir Putin backs the new legislation, which the State Duma approved 256 to 143. But his left-wing critics fear it will see big business and non-Russians snap up land owned by defunct Soviet-era collective farms.
"The government's reform will speed up the transfer of Russian land into the hands of foreigners," said Deputy Vladimir Plotnikov of the Agrarian party, which is linked to the Communists.
And Communist leader Gennady Zyuganov warned Mr. Putin that the sale of farmland was "a question of war and peace."
Mr. Putin wants to accelerate the privatization of agricultural land, but has sought to disarm opposition by giving Russia's regions leverage to curb foreign ownership.
Reformers argue there is an urgent need to boost private ownership of Russia's billion acres of farmland a quarter of its total land area in order to boost productivity in the inefficient agricultural sector.
But a decade after the collapse of the Soviet Union, land ownership remains an emotional issue in Russia, where many still believe land should not be traded as a commodity.
Mr. Zyuganov denounced the land privatization as "pillage," adding: "The policy of the current government only serves the interests of [business tycoons] and swindlers."
"For us it's not just about land, it's a question of war and peace," Mr. Zyuganov said, warning that Cossacks in the south of Russia could take up arms to protect their homeland from carpetbaggers.
Some 200 protestors draped in red Communist flags demonstrated outside the Duma building, waving placards that said, "Selling land is a crime," and demanding the government's resignation.
In a sign of how divisive the issue has become, a right-wing, pro-free-market party, the Union of Rightist Forces (SPS), staged a pro-privatization counterdemonstration a few dozen yards away, chanting "Forward with the reforms."
Russia's farmland is worth roughly between $80 trillion and $100 trillion, Agriculture Minister Alexei Gordeyev said.
"The government-proposed draft foresees rigorous state control of the sale of farmland, with the levers of such control in the hands of regional authorities," Mr. Gordeyev said.
Regions would have the right to decide "how much farmland one person will be allowed to buy, and whether farmland should be sold to foreigners," he added. The authorities will also have priority in buying land at the asking price, and will be able to set the timetable for selling off land still owned by regions or municipalities.
Analysts warned that a fierce battle lay ahead when key details are debated at the second reading stage. The legislation also needs to be approved on a third reading. Approval by the Federation Council, the upper legislative house, is needed as well.
"It goes without saying how important this law will be," said Alexei Moisseev of the Renaissance Capital investment group.
"Once the free market in agricultural land is approved, big business will no doubt jump in to buy land from the Soviet collective farms, and build Western-style agricultural companies," Mr. Moisseev added.
Small farmers would also be able to obtain financing from banks thanks to the new law because they would be able to put up the land, now legally owned, as collateral, he added.
Private farmers currently own just 6 percent of agricultural land in Russia but account for more than 40 percent of production.
Russia's 1993 constitution opened the way for land sales, but the legislation was held up by Communist deputies who dominated the Duma until the December 1999 elections.


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