Belarus Government to Establish Serfdom in Agriculture?
On 27 May Lukashenka announced several radical initiatives that would virtually introduce serfdom into the nation's state-run farms. Two weeks later it remains unclear how serious Lukashenka was but the authorities like to resort to drastic administrative policies to regulate the economy.
In 2012, the government introduced similar measures to wood processing enterprises but they failed to improve the situation in this sector
In recent years Belarus invested $37bn in its agricultural development programme, but the sector continues to fall. The authorities hope that if they are succussefully able to employ old-Soviet methods, they will save their declining agricultural sector, though the likelihood of their success seems improbable at best. The administratively regulated economy actually causes many of the ineffiencies in the economy that bring about their decline, rather than can alleviate them.
The Decline of Agricultural Sector
On 27 May Alikasandr Lukashenka held a meeting on agriculture with the nation's main senior officials working in the sector. Agriculture has always been an issue that has been afforded special attention of Belarusian leader who used to work as a director at a collective farm before he rose to prominence on the political scene in the 1990s.
In recent years the state invested $37bn in its agricultural development programme, but the sector continues to fail to meet the state's planned growth trajectory throughout the country. One example of this general trend can be found in the results gathered over the last three years where all six regions of Belarus were unable to fulfil the nation's development plan for its dairy industry.
Meanwhile, the debts acquired by collective farms continue to grow. Doctoring production rates remains another major problem, since the farms have to fulfil their unique administratively issued plan. As was true during the soviet era - if they cannot fulfil their quotas, they just start making the figures up to meet the projected production volumes. As would be expected, the real production rates and those on paper differ considerably.
According to some estimates, Belarus loses $1.5bn annually due to the poor management of their collective farms. The sector badly lacks qualified managers and workers, and lacks incentives to bring in a qualified work force, as the sector makes only 65% of the average national salary. Due to this and the absence of basic infrastructure, it has unfortunately secured a place in the Belarusian psyche as one of the least desirable fields of employment for Belarusian youth.
Even Subsidies Do not Help
According to the first deputy PM Uladzimir Siamaška, Belarus loses $1.5bn annually due to the poor management of their collective farms. The government also provides subsidies to agriculture in Belarus that account for 49% of the gross value of its total agricultural production.
The sector badly lacks qualified managers and workers, and lacks incentives to bring in a qualified work force, as the sector makes only 65% of the average national salary. Due to this and the absence of basic infrastructure, it has unfortunately secured a place in the Belarusian psyche as one of the least desirable fields of employment for Belarusian youth.
Collective farms enjoy various forms of preferences: they pay lower taxes, buy fuel and fertilisers at a considerable discount than others and receive direct budget subsidies from the state. Moreover, often they simply do not pay off their debts. Given their special status, Belarus pays twice over for their inefficiency, as the government forces banks to write their debts off.
Russia accounts for 90% of Belarus' agricultural exports, but after it entered the WTO in 2012, Belarus has had to compete with an influx of goods reaching Russia's markets coming in from around the world. This has, in turn, made Belarus' weak agricultural even more vulnerable.
According to its Eurasian Economic Union commitments, Belarus has to reduce its subsidies for agriculture to a rate of 10% of its GDP till 2017. The way things are currently going, it can hardly be expected that such a stagnant sector will survive such a heavy blow.
Stalinist Methods for Economic Development
To deal with the growing problem, on 4 February Lukashenka created an inter-agency group of 26 high officials headed by PM Michail Miasnikovič to study the issues facing agriculture and seek viable solutions for them.
The group suggested several measures that would introduce more market-based mechanisms into agriculture's 'managed economy'. The measures were not particularly controversial and were recommended to the Belarusian authorities by international bodies in the past. They included proposals like liberalising prices, boosting private incentives and introducing serious improvements in the sector's management.
The administration, for its part, decided that other measures were needed. On 14 May deputy PM Michail Rusy informed journalists that the government is planning on introducing criminal liability for the somewhat vague concept of 'mismanagement in agriculture'. And on 27 May Lukashenka decided to reveal some more radical initiatives in this vein.
On 14 May deputy PM Michail Rusy informed journalists
I talk about it so forcefully because I have a decree on my table, which suggests we impose, let's speak frankly, serfdom. We vest the regional governors with complete authority. You [agricultural workers – BD] will not be able to quit or change your workplace. You better get a move on, because people will complain that we are suppressing them, but we work ineffectively ourselves. So, in the coming week all powerswill be transferred to the local authorities...Mobilise people, all security services will now be directly subordinate to the regional governors.
The Russian Gazeta.ru online news site managed to get through to a Ministry of Economy official, who asked to remain anonymous. According to him, such this move has been under consideration at the highest level of government for some time now, and after a long wait, Lukashenka finally chose to announce this proposed policy to the broader public.
The problem is that people are simply fleeing from the nation's villages to regional centres and Minsk, which have absorbed almost a third of Belarus' population. One would be hard pressed to find anyone but pensioners and alcoholics remaining in the villages, as all young and capable working people are moving to the cities, according to their official source.
The Soviet authorities used similar methods to restrict the free movement of peasants during collectivisation. They carried out several heavy-handed policies, some as devious as starving the population and others, less brutal, such as giving them wages that were lower than subsistence levels for all their hard labour.
To keep the peasants in collective farms, the Soviet government provided them with the special status of collective farm members - individuals who were, in fact, the state's serfs. They had no right to apply for an internal passport which would allow them to travel or move around the republics. If they had to work beyond their assigned place of residence, they received a document which explained the reason for their move.
Belarus seems to continue to appreciate the legacy of the USSR's economy as evidenced by it resorting to implementing drastic administrative measures which violate basic human rights. In 2012, Lukashenka issued a decree on the wood processing industry, which restricted the resignation of workers at 9 enterprises that were at the time participating in the national lumber industry modernisation programme. A worker could resign only if his boss allowed him to, or should this fail, their only other option was a direct appeal to the region's governor.
It remains unclear the potential form and content of this new wave of serfdom may take. Optimists hope that Lukashenka is simply spouting off more empty rhetoric.
However, regardless of what happens, these issues demonstrate the deep problems that permeate the whole Belarusian governmental system. Decrees and potential decrees like them reveal how the system functions. Administratively rigid, it cannot operate other than by coercion, and yet should their coercive methods begin to gain steam, it will surely lead to further declines in agricultural productivity.
Fear Will not Work
Collective farms have proven to be largely ineffective, but the government still conducts itself in a rather unfriendly, if not hostile, manner towards private farmers who at present account for only 2% of the nation's agricultural production. To this day Belarus does not have a legal framework that establishes land as private property, but is rather subject to 99 year leases, with the best lands usually remaining in the hands of the state.
While billions were dumped into propping up and modernising its ineffective collective farms, private farmers were not subject of even a single programme of state support. It is no wonder then that agriculture has become one of the least attractive sectors for business and has made the idea of becoming a young farmer akin to madness.
To change the situation the government needs to look at fundamental issues like property rights and establishing a market economy. Coercive measures will only postpone the crisis of agriculture and sustain the image of Belarus as the Europe's last dictatorial regime.