Mapping the Rural Problem in the Baltic Countryside

Transition Processes in the Rural Areas of Estonia, Latvia and Lithuania

Ilkka Alanen

• Publisher: Routledge
• Year: 2017
• Print ISBN:
  9781138356474
• eBook ISBN:
  9781351153263
• Topic: Physical Sciences
• Subtopic: Geography
• Index: Geography

The agricultural privatization strategy adopted in Estonia, Latvia and Lithuania was based on the premise that family farms are the most effective alternative to socialist large-scale agriculture. In addition, international organizations, particularly the World Bank, made recommendations concerning reform speed, synchronization and ownership rights that would facilitate transferring resources from large-scale producers to family farmers. This book provides a critical and comparative analysis of the implementation of this policy, and in particular the strategy promoted by the World Bank. The preservation of large-scale production is the key to Estonia's success while its eradication from Latvia and Lithuania did not produce a family farm system. Work productivity and the extent of plot farming are the indicators of success or failure. Research findings on deindustrialization, the hardships faced by new enterprises, rural tourism, increasing poverty, and problems in the civil society as presented in this book shed new light on these and other key issues in transition strategy.

Chapter 1
Rural Problematics in the Baltic Countries

Ilkka Alanen

More Specific and Detailed Information Needed on the Baltic Countries

The Baltic States of Estonia, Latvia and Lithuania remain relatively unknown not only to the general public, but even to scholars in rural studies. Their struggle for independence in the late 1980s and early 1990s did bring them into the focus of world attention for a moment, and their accession to NATO and the European Union in 2004 has certainly brought them back into the Western sphere of influence, but even in post-socialism research there is still a tendency to slot them somewhere in the ‘grey zone, ’ in-between Central Europe and NIC countries, and indeed to lump them together under one heading. It is often overlooked that despite the features that they share in common, these three countries are in fact very different from one another. These differences have their roots in the countryside and in agriculture.

Common Features

At the beginning of the eighteenth century all three Baltic countries, with the exception of a narrow strip of coastland that belonged to East Prussia, were part of the Russian Empire. However in the provinces where the majority of the people were Estonian, Latvian and Lithuanian speakers, local power was in the hands of an ethnically and linguistically foreign landowner class; mostly German for the Estonians and Latvians, and Polish for the Lithuanians. The breeding ground for national movements and a civil society based on the language and culture of the rural population in the mid-1800s was provided by independent peasant farm production that developed gradually alongside the production by landlords. Because both small-scale production and national culture developed in this struggle against a foreign elite, the national identities took shape mainly on the basis of peasant virtues. Independence wars were waged against the Russians and the Bolsheviks, but also against the domestic landowner class. Independence brought in its wake radical land reforms as well as smallholdings, which had been virtually eliminated by large-scale land ownership. Three independent states were born, each of them a culturally and economically true republic of small farmers. Later, the coups d’etat by the extreme right made it easier to force the Baltic countries to join the Soviet Union. After German occupation, the Soviet Union collectivized the local agriculture by force, and the wealthiest and most active part of the rural population was accused of being kulaks and deported to Siberia. The countries also lost much of their intelligentsia (either voluntarily or through deportation), and the process of forced collectivization also destroyed the former point of anchorage for national identity. This is why collective farms (kolkhozes) and state farms (sovkhozes) were considered an explicit expression of the occupation force. It also goes some way towards explaining why national movements in all the Baltic countries and especially their humanist leaders embraced a nostalgic trend that idealized petty production in agriculture. Indeed, the primary aim of the restitution of agricultural property was not to prevent the small Russian minority from owning land,¹ but rather to legitimize the original relations of ownership from the times prior to forced collectivization. In some respects, these politics also included a power struggle, although that was not directed against the Russians, but the native ‘red barons’ (a rural elite composed of nationalist kolkhoz and sovkhoz leaders) who were part of the titular population. Because most of the rural population consisted of titular population, its support was decisive in Estonia and especially in Latvia, where the Russian population was concentrated in the capital city and other major towns. Although the more educated and skilled agricultural employees were certainly not keen on the idea of returning to family farm production, power in the newly independent countries was initially entrusted to an elite who had been committed to the family farm ideology and whose thinking was closely in line with the family farm strategy recommended by the World Bank. In all three countries, decollectivization was characterized by close adherence to these policies.

The Baltic countries continued to make progress during the Soviet era: their level of education rose, they became industrialized and urbanized and their agriculture was mechanized. In a comparison with the other former Soviet republics and the former socialist countries of East Central Europe, Estonia and Latvia have been the best performers among the former Soviet republics and are comparable mainly with Hungary and Slovakia; while Lithuania can be compared to Poland. In terms of agricultural production they all rank among the elite of the socialist camp (see the article by Alanen in this volume).

Major Country Differences

There are also some noteworthy differences between Estonia, Latvia and Lithuania – which upon closer scrutiny are often found on the same dimensions where the similarities are seen. It is no coincidence that the nationalist movement started in Estonia and only there proceeded to formulate economic programmes (e.g. Panagiotou, 2001). Soviet companies had a less prominent role in the Estonian economy than in Latvia and Lithuania, and Estonian industry was also lighter than in its southern neighbours; this allowed the country to retain more of its R&D work within local companies (Paasi, 2000; Nørgaard, 2000, 175–176). Access to Finnish television and the kinship between the languages of Finnish and Estonian meant that Estonia had a window to the west. In addition, a regular ferry service between the Finnish capital of Helsinki and Tallinn since the 1960s provided a steady stream of tourists from Finland. Finnish-Soviet agreements on science and culture, for instance, gave Estonian experts various opportunities to visit Finland. Although this was still limited to a handful of Estonians and although those who did have access were closely monitored, some Estonian innovations even in agriculture, for instance, can be attributed to Finnish influences. At the same time, a network of personal contacts was established between Finns and Estonians that was to become hugely significant later on. For these and other reasons, Estonia was in many ways better prepared for a new way of thinking and for reform programmes than Latvia and Lithuania, which were both linguistically and geographically more isolated.

In terms of rural background, too, the three Baltic States not only share similarities but also differ significantly. Before the Soviet era, Lithuania was less industrialized and Lithuanian agriculture lagged far behind Estonia and Latvia. While the small-scale landowner class in Estonia and Latvia began to differentiate internally between the world wars, the Lithuanian rural structure was much more rigid. The only Baltic country where community structures analogous to the Russian MIR community were preserved until the 1800s was Lithuania. This also explains why some Lithuanian cooperatives were very different from Estonian and Latvian ones between the world wars (cf. Ruutsoo’s discussion in this volume). This background, which has its origins deep in the history of Lithuania, was probably reflected during the Soviet era in more widespread private farming and a more peasant way of life (see the article by Alanen).

In the late nineteenth century civil societies in Estonia and Latvia were also more developed than in Lithuania, which had a lower literacy rate. We cannot discount the impact of differences in cultural backgrounds either: very much influenced by Germany, Estonia and Latvia belong to the sphere of Protestant culture, while Lithuania is a Catholic country, heavily influenced by Poland. Bearing in mind Lithuania’s past as a major political power, it is understandable that Lithuanian culture is characterized by state-centrism to a greater extent than the two other Baltic countries. This also helps to explain why Lithuanians often display a greater tendency to reforms organized from the top down (see the article by Ruutsoo). Perhaps the state-centrism of the process of rural de-collectivization in Lithuania can also be explained by reference to historical facts. However, although legislation on de-collectivization is very similar in Estonia and Latvia, the outcomes of these processes are very different. Even though all three countries have an abundance of raw material for the wood processing industry, this industry is by far the most developed in Estonia; Latvia ranks second in this comparison, while Lithuania is the least developed (see the articles by Nikula in this volume). In most cases the rank-order of the countries can be predicted from an historical point of view. However, not every explanation can be found in history: it is important to remember that in practice, explanations are generally mediated by structural factors. In many cases the two dimensions are intertwined and the immediate structural factor only assumes its full meaning when examined against its historical background (such as the extent of plot farming by private households). Anyone who is inclined to look upon the Baltic countries as a single block should study the historically sensitive works of Lieven (1994) and Ruutsoo (2002).

The Importance of Research on the Baltic Countryside

A brief historical overview should suffice to make it clear that agriculture and the countryside are crucial to our understanding of all the Baltic countries. In these three countries, more than in any others, an in-depth understanding of the countryside is essential to deepening our knowledge of the nations as a whole. The three Baltic countries provide a fruitful research frame. Paradoxically, the many features that these countries share in common also highlight the significance of the historical differences that set them apart. Because similar policies produce different results in different countries, it is clear that those policies must be tailored according to local needs and circumstances; witness the agricultural reforms in Estonia, Latvia and Lithuania, which have failed to meet the expectations of both national elites and international institutions. Any attempts to explain the success of agricultural reforms by reference to their adherence to certain patterns (individualization of agriculture, the rapidity of the process, synergy, legal characteristics of different types of corporation, liberalization of the national economy) are bound to fail. Also the failures and partial successes of decollectivization in the Baltic countries prove that good rural policies cannot be based upon dictation from above to below. Instead, those policies have to be adapted to the circumstances prevailing in each country. In addition, the rural population must be involved both in making the decisions on those reforms and in their execution.

Note

¹ This unfounded view is repeated in many of the works by Swinnen et al. (see for example Mathijs and Swinnen, 1997, 18–19).

References

Lieven, A., (1993), The Baltic Revolution: Estonia, Latvia, Lithuania and the Path to Independence, Yale University Press, Newhaven.

Mathijs, E. and Swinnen, J. F. M. (1997), The Economics of Agricultural Decollectivization in East Central Europe and the Former Soviet Union, Policy Research Group Working Paper No 9 (Revision of Working Paper No 1), Policy Research Group, Department of Agricultural Economics, Katholieke Universiteit Leuven.

Nørgaard, O. (2000), Economic Institutions and Democratic Reform: A Comparative Analysis of Post-Communist Countries, Cheltenham, Edward Elgar, Cheltenham.

Paasi, M, (2000), Restructuring the Innovation Capacity of the Business Sector in Estonia, European Bank for Reconstruction and Development, Blackwell, Oxford.

Panagiotou, R. A, (2001), ‘Estonia’s Success: Prescription or Legacy?’ Communist and Post-Communist Studies, vol. 32, no. 2, pp. 261–277.

Ruutsoo, R, (2002), Civil Society and Nation Building in Estonia and the Baltic States, Acta Universitatis Lapponienses 49, University of Lapland, Rovaniemi.

Chapter 2
The Transformation of Agricultural Systems in the Baltic Countries – A Critique of the World Bank’s Concept

Ilkka Alanen

Introduction

It is only quite recently that the effects of the political choices made during agricultural decollectivization in East-Central Europe have begun to take clearer shape; the publication of new agricultural and population censuses has also very much facilitated the analysis of their outcomes. At the time of writing, however, only some of the results of agricultural censuses were available, and they were confined to Estonia and Latvia. This article is therefore mainly based on ordinary public statistics, earlier research, as well as interview data collected in the course of my previous research projects.¹ Since the results of agricultural decollectivization have fallen well short of expectations, I hope this present article will inspire new critical debate while we wait for new data to come out. The Baltic countries may have a special role in this debate, since their national elites have – at least at the theoretical level – quite faithfully followed the decollectivization strategy promoted by the World Bank, IMF, OECD, EBRD and a number of other international organizations. Despite their differences, the paths pursued by these countries clearly indicate the problems involved in die line advocated by international organizations, even when there are some successes, such as in Estonia. My argument is that the failures are mainly due to two untenable premises: first, politics have been formulated and carried out overwhelmingly according to the top-down principle, with little or no regard for the opinions of the agricultural population, and second, they have been too firmly anchored to the family farm system as the ideal organization of agricultural production. Instead of maximal utilization, the doctrinal policy of decollectivization followed in the transformation of the agricultural system has led to vast amounts of material and human resources being lost and ruined.

Decollectivization and the World Bank

The general principles lying behind the reconstruction of agricultural systems in Estonia, Latvia and Lithuania can be found, first, in official World Bank sources that include recommendations issued to the new countries created after the collapse of the former Soviet Union (WB, 1992, 1993b, 1993c and 1993d); and second, in an unofficial Internet publication written by three leading World Bank researchers, Zvi Lerman, Csaba Csáki and Gershon Feder (‘Agriculture in Transition’, 2001). Both of the sources are marred by similar contradictions that probably arise from the authors’ differing opinions as well as political pres...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• List of Figures
• List of Tables
• List of Contributors
• Foreword
• 1 Rural Problematics in the Baltic Countries
• 2 The Transformation of Agricultural Systems in the Baltic Countries – A Critique of the World Bank’s Concept
• 3 Rural Communities in the Baltic States and Post-Communist Transition
• 4 Constructing Capitalist Firms: Former Socialist Industrial Complexes and their Struggle for Survival
• 5 Networks, Skills and Trust: The Necessary Ingredients of Rural Entrepreneurship in the Baltic Countries?
• 6 From Agriculture to Tourism: Constructing New Relations Between Rural Nature and Culture in Lithuania and Finland
• 7 Trends in Development in Lithuanian Agricultural Policy
• 8 Means of Subsistence and Welfare in a Small Rural Community in South Estonia
• 9 Rural Community Initiatives in the Latvian Countryside
• 10 The Adjustment of the Elderly to Socio-Economic Change in Rural Estonia
• 11 The Significance of the Research Results
• Annex Tables and Figures
• Index