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degree that there is a cause for optimism, it is these commodity ex- 

 changes. 



I personally think that we'll see a gradual but steady increase in 

 the percentage of marketings that are channeled through commod- 

 ity exchanges, because, once again, you go back to the rational 

 peasant. You're forced to sign a contract with the state, the prices 

 have been raised once again, and the/re pretty decent prices, but, 

 again, if you can get a higher price through the commodity ex- 

 change, well, why not? Why not? I mean, once again, the center is 

 weak and the coercion to make you sign a contract is no longer 

 there. They simply can't go in and take the grain like they did dur- 

 ing Stalin. So now farmers are given a true choice of what to do 

 with their produce, and I think they will opt for whatever terms 

 are most advantageous for them. 



Mr. POMEROY. Dr. Van Atta, you have perhaps even been more 

 pessimistic this morning. Do you have a comment on the commod- 

 ity exchange as maybe a glimmer of hope? 



Mr. Van Atta. I'm pessimistic, sir, because I study politics, and 

 politics, unfortunately, is like the three laws of thermodynamics: 

 You can't win, you can't break even, and you can't get out of the 

 game. But I think the fact is that one should not be pessimistic. 

 The designers of the Russian agrarian reform are very bright and 

 know what they're doing. The agrarian reform is working in the 

 sense that those institutions were changed in 1990, and those 

 changes are beginning to work in the countryside, which is why 

 you have the enormous political fights you do. In a sense, if there 

 weren't a political fight going on, I would be much more pessimis- 

 tic. 



In the short run, I don't think things are going to look bright, 

 but in the long run, simply because the Russians don't have the re- 

 sources to continue the old system, something will chsinge, and the 

 change is going to almost certainly be in the direction of a more 

 productive, privatized kind of agriculture. The reason why the fight 

 is so intense right now is because everybody on the other side real- 

 izes that if things aren't changed very shortly, it will be too late. 



The land reform mechanisms are beginning to operate. They 

 were designed to operate in areas that were not very productive. 

 The idea was, '*We'll take the land that nobody wants and give it 

 away, but we'll keep the system and, therefore, improve it around 

 the edges," just as the Chinese reform was designed to do. And just 

 as in China, there are beginning to be major demands for reform 

 not on the unproductive farms, but on the productive ones. 



In the Russian Iowa, Krasnodar Province, people are saying, "We 

 want our land," and the farm managers and the local authorities 

 are saying, 'Tou can't have it. This is about power, and we're not 

 giving you any land." In fact, the provincial and district authorities 

 in Krasnodar are now taking the land back from all the private 

 farmers who have started operations since the land reform began 

 in 1990. This is, in the short run, very pessimistic, indeed, a 

 human tragedy, but in the longer run it's a sign that things are 

 changing, and I think they will indeed work to the best. 



The commodity exchanges have to be supported just as the pri- 

 vate farmers do, and in the long run they will function. Moscow 

 streets now are full of kiosks, and state stores are empty. The rea- 



