Do Communal Farms Still Exist in Russia?

The kolkhoz or collective farm was a voluntary cooperative organization of farmers, created for agricultural purposes. In the Soviet Union, such associations were quite widespread. Their main aim was manufacturing agricultural products, land cultivation, and livestock breeding.

In collective farms, there were created subsidiary enterprises, which worked towards attaining the goals of the farms without interfering with their main activities. The enterprises were responsible before the state for the rational use of land and maintenance of soil fertility. Their operations were carried out according to the Charter, which was adopted during the discussion at the general meeting.

The manufactured products were distributed within the country or were exported. The collective farms provided grains, milk, meat, and various crops to the meet the needs of the country. The extensive experience of running a large collective farm, which was obtained in Soviet times, is used even today.

What Replaced Collective Farms in Modern Russia?

In Soviet times, there existed production-agricultural cooperatives, but they were later replaced by the similar modern commercial associations. We are talking about peasant farms, horticultural cooperatives, and similar associations. Their essence remains unchanged:

  • the products are used for the needs of the country;
  • goods may be sold to private customers;
  • a large percentage of goods is exported;
  • organization is based on the Charter and there also exists a board;
  • the scope of activities is the same (cattle breeding, crop production, etc.)

However, there exist significant differences as well. For example, modern farms belong to private owners and they are free from state control. At the same time, peasant farms receive significant financial aid from the federal budget. There are also tax benefits for agricultural producers.

Many modern peasant farms were created on the basis of former state as well as collective farms. They occupy the same land and conduct similar activities of growing wheat, livestock for meat or making other products. Many organizations have engaged in processing and reprocessing of raw materials.

What does a Farm Enterprise Look Like Today in Russia?

The amount of fertile lands in our country is huge, but not all the land plots are used in a proper way. Many of them are not being used, and the potential for business in this area is wasted. Today, more than 3% of agricultural lands are occupied by peasant farms in Russia. They sell the following:

  • about 6% of the grain crops;
  • 0,8% of poultry and livestock;
  • 0,5% of milk;
  • 1% of vegetable crops.

The numbers are not impressive, therefore, farming is much-needed in the country. Consumer demand grows every year. Apart from that, the demand for organic products is increasing, but modern farming does not cope with meeting it.

Due to lack of awareness, some peasant farms are being closed. But it is just worth applying for a grant, becoming a participant of the state program of agricultural support or switching to a special tax regime, and then the business will become successful. But for this, one needs knowledge that our lawyers have.

We will select an operating business for you, conduct its audit, and agree on the price.