Twenty years ago, the fall of the Berlin Wall marked the beginning of a monumental shift in the agri-food sector across the former Eastern Bloc. As the world watched the collapse of the Soviet Union and the reunification of Germany, few could have predicted the sweeping changes that would ripple through the agricultural landscapes of Central and Eastern Europe (CEE) and the former Soviet Union (FSU). Today, as we stand on the precipice of another agricultural revolution, it’s crucial to reflect on the past to understand the future.
The transformation of the agri-food sector in these regions has been nothing short of extraordinary. From the ashes of state-controlled economies, new market-oriented systems have emerged, each with its unique challenges and successes. Gertrud Buchenrieder, lead author of a comprehensive study published in the German Journal of Agricultural Economics, now translated to English as the Journal of Agricultural Economics, delves into the intricate web of reforms that have shaped the agri-food sector over the past two decades.
The journey began with the dismantling of centrally planned economies, a process that was far from smooth. “The challenges of transition were formidable,” Buchenrieder notes. “Private and public market-oriented institutions were absent, and historical trading paths were interrupted.” The collapse of state-owned enterprises and the underdevelopment of the private sector led to deep economic distortions, setting the stage for a complex and often messy transition.
One of the most significant reforms was the privatisation of land. In the Commonwealth of Independent States (CIS) and Albania, the ‘land to tiller’ strategy was adopted, allocating land to cooperative workers without payment. In contrast, most CEE countries chose to restitute land to former owners, often with an upper limit on the amount of land that could be claimed. This process was driven more by a sense of justice than economic concerns, leading to a varied mix of small and large farm holdings, a structure that persists today.
The impact of these reforms on the agri-food sector has been profound. Today, the agricultural sector and its marketing chain are of much higher importance in the former Eastern Bloc than in Western Europe. One-third of the approximately 500 million people in these regions live in rural areas and depend on the agri-food sector for a living. However, the share of agriculture in GDP and employment has been decreasing, reflecting the overall economic development and reform progress.
The prospect of EU accession played a pivotal role in accelerating reforms. Countries at the cusp of EU membership drove reforms to meet the Copenhagen criteria, which included adopting the acquis communautaire and its 2683 legal rules and regulations. The EU implemented financial support programs to aid sustainable rural development, focusing on restructuring demands and the characteristic farm dualistic structure.
However, the benefits of these programs were not evenly distributed. Larger units, with better access to information and financing, often benefited more than small and medium-sized units. This disparity highlights the need for more inclusive policies that support all farm sizes.
Looking ahead, the future of the agri-food sector in these regions is poised for further transformation. The Common Agricultural Policy (CAP) reflects a shift towards a New Rural Paradigm, emphasizing regions over sectors and investments over subsidies. This shift, coupled with the need for adequate social safety networks, calls for a concerted effort from national and international stakeholders.
As we stand on the brink of another agricultural revolution, driven by technology and innovation, the lessons from the past two decades are invaluable. The transition process has shown that reforms must be tailored to specific countries, taking into account their unique historical, economic, and political contexts. The future of the agri-food sector in the former Eastern Bloc will likely be shaped by a continued focus on market-oriented reforms, land consolidation, and inclusive policies that support all farm sizes.
The research published in the German Journal of Agricultural Economics, now translated to English, provides a comprehensive overview of the transition process and its impact on the agri-food sector. As we look to the future, it is clear that the lessons learned from this transition will be crucial in shaping the next phase of agricultural development in these regions. The journey has been long and complex, but the resilience and adaptability of the agri-food sector in the former Eastern Bloc offer a beacon of hope for the future.