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STATEMENT OF STEPHEN K. WEGREN, ASSISTANT PROFES- 

 SOR, DEPARTMENT OF POLITICAL SCIENCE, SOUTHERN 

 METHODIST UNIVERSITY, DALLAS, TX 



Mr. Wegren. Thank you. I would like to first thank you for the 

 opportunity to speak before you. I also am a political scientist, gind 

 I share much of what Don has to say, but I take a little bit dif- 

 ferent view as well. I presently am holding a post-doctoral fellow- 

 ship from the Social Science Research Council, which allows me to 

 travel to Russia two or three times a year, and I, as opposed to 

 doing work in Moscow, go out in the Provinces and see what's going 

 on, talking to people on the farm and also in the land reform com- 

 mittees there. 



I would like to start by saying, first of all, the goals of reform, 

 as I see them, were twofold. Agrarian reform fundamentally was 

 designed to create a stratum of strong peasant farmers, peasant 

 farmers who would differentiate themselves for the first time from 

 others, peasants who enriched themselves. This is based on private 

 property, a multiplicity of ownership, and the goal was to get more 

 food in the stores, better selection, and better quality. That was 

 goal one. 



The second goal was to address the subsidy issue. As late as 

 1990, agricultural subsidies were taking up to 20 percent of the 

 yearly budget. So enormous subsidies were being devoted to agri- 

 culture, and, of course, that means that there's less money for 

 other things. 



So those are the goals of agriculture. What I see when I go out 

 in the countryside is a basic strain of egalitarianism continuing. In 

 the paper that I presented to you, I say that there are three main 

 reasons for this continued egalitarianism. In other words, you're 

 not getting the differentiation, you're not getting the stratum of 

 strong peasant farmers that the reform had intended. 



Why are you getting this continued egalitarianism? The first rea- 

 son is a consequence of price liberalization. After Yeltsin liberalized 

 prices, you had enormous disparity. The terms of trade turned 

 against agriculture so that inputs — fertilizer and machinery — went 

 up a factor of maybe 40 times or more, and procurement prices 

 maybe went up only a factor of 10. So you had an enormous price 

 disparity. 



Yeltsin started off on the right foot, trying at least to initiate dif- 

 ferentiation in the countryside, but this enormous price disparity 

 started to impoverish the agricultural sector just like it has the 

 Russian consumer, and so very early on, literally within 6 months 

 of his December 1991 decrees, in my view, he abandoned his dif- 

 ferentiation and started giving blanket subsidies, zonal prices, 

 making credit available to anyone irrespective of ability to farm, 

 and so forth. 



So the first reason for basic egalitarianism is the consequence of 

 price liberalization and this urban-rural disparity that arose. The 

 second is a political reason, and that is you look at the way the in- 

 stitutions are defined, and you find that the institutions are de- 

 fined so that egalitarianism will continue. What do I mean by this? 

 I mean you have norms so that everyone, if they leave the farm, 

 gets the same amount of land. You can be a pensioner, 65 years 

 old, or you can be 25 years old and strong as an ox, and you all 



