Agriculture Land Market in Russia: Living With Constraints

Transcription

1 Agriculture Land Market in Russia: Living With Constraints Rural transition in Russia (MMTAL15) Christoph Geil 07/02/2013 1

2 Table of contents Introduction Law Reforms Graphic: Sources of land Land Market Activity Graphic: Land User s Intention Conclusion Discussion 07/02/2013 2

3 Introduction Statistical data obtained by questionaire surveys 3 regions: Rostov (high developed agri.) Ivanovo (low developed agri.) Nizhnii Novgorod (medium developed agri.) 3 organizational forms Farm enterprise Peasant farms Household plots 07/02/2013 3

4 Introduction 07/02/2013 4

5 Law reforms Land reform (1989) Right for permanent/temporary use On land reform (1990) On Peasant Farms law (1990) form of free entrepreneurship Did not involve distribution of land plots Status of joint shared ownership On Agric. Land Transactions law (2003/2004) Mortgage of land legally allowed In practice: most of land is used by non-owners 07/02/2013 5

6 Sources of land in the survey 07/02/2013 6

7 Land Market Activity Land transactions about 5% of overall agri. Land But: mainly leasing Outside the scope of official statistics Leasing payment = 440/450 roubles / ha Varying demand for land Rostov high demand for land Ivanovo & Nizhnii low demand for land Trend: Farm enterprises want to reduce Absorption by Peasent farms (but: not same amount) 07/02/2013 7

8 Land user s intention 07/02/2013 8

9 Constraints on Land Transaction Low demand for agri. land Lack of market information High registration costs & complex procedures Effect of rezoning (cottage-example) Effect of mortgage Weak competitiveness of traditional farms Cash accumulation of other industries 07/02/2013 9

10 Lack of market information Biggest problem: Land price information Transaction registration procedures Response rate was higher, where the interest of enlarging was bigger no established prices for land no benchmark to orientate 07/02/

11 High registration costs & complex procedures Barrier for land transactions Numerous administrative/organizational restrictions 3 organizational (1998) levels involved in the registration process New registration of land requires full registration of the previous rights (documents issued 10years ago) Therefore: Agroholdings hire professional help But: weak player no chance 07/02/

12 List of organizations 07/02/

13 Effect of mortgage Mortgage Law (2004) Only for land plot (most joint-shared-ownership) Only owned land Procedure takes time and money Impeded by low demand for land Limited potential in the future 07/02/

14 Competitiveness & cash accumulation High investments from non-agri. organizations Lessors demand for the same interest rate of land payments (traditional agri. producer cannot afford it) Reasons: Dollar/ rouble exchange rate Less attractive bank deposits 07/02/

15 Composition of land owners Agric. wages are low (40% of the average) 51% earn less than 1000 roubles/month Minimum price of land in Moscow Oblast = roubles/ha Only 15% would refuse to sell their land Dead people own 30% (2004) of the land reason: no registration because of the avoiding tax 07/02/

16 Conclusion Many constraints on land transaction Difficult situation for weak market participants Especially: for low developed agriculture Trend of non-agricultural use Dangers: Secure of food production Secure of Living environment Waste of potential 07/02/

17 Thank you for your Attention 07/02/

18 Discussion 1) What could be improved to higher land transactions? 2) Why should land transactions be improved? 07/02/