Chapter One. The Roots of the Poverty
1.1. A look to the earlier history
The subject of this study is not directly connected with history but without a certain historical context it is difficult to follow the background of the present situation in Ukrainian agriculture. History presents an opportunity to observe some analogies and thereby gives lessons for future reformers. It can also punish those who neglect these lessons. Let's remember as examples the "collectivizators" who absolutely ignored the social psychology of peasantry, national traditions, and objective development of historical process, or the critics of "the cult of personality" who continued to preserve the same style of ruling for agriculture, or "new thinkers of perestroika" who wanted to build market-oriented agriculture on the foundation of command economic system, and so on. Unfortunately it is Ukrainian farmers who still have to pay for this baggage of history.
Another important argument for including the historical review in this economic study is the fact that numerous previous studies of both Eastern and Western scientists in most cases paid attention to Russia, meaning the Russian Empire as a whole or later Soviet Union, without special consideration for clearly pronounced particularities of Ukrainian agriculture's history. As for Ukrainian contributors, their attention was directed mainly to the political and cultural parts of the history, and development of the national idea. That's why it is worth while to look at the historical process in Ukraine from the point of view of agricultural economics, focusing on such notions as ownership, productivity, investments, incentives, distribution, market, holding, individuals, collective, community, etc. Because of special purpose of this study the coverage of historical periods will seem too perfunctory and schematic.
According to the historical evidences the first farming communities which cultivated agricultural crops and bred domestic animals existed within the territory of Ukraine as early as the Age of Tripol'e Culture (ca.3000-2000 B.C.) [Smith, P.l04]. In the fourth-sixth centuries of the current chronology the agriculturalists already broadly used field farming and animal husbandry. The rural communities were relatively homogeneous and stable but agriculture remained quite primitive. The system of farming was founded on frequent movement to new areas which were easy available. That's why the question of private property on land was not so important. There was no conquest nor enslavement of the natives in that time [Hubbard, p.io].
During the ninth-twelfth centuries when the first Ukrainian state (Kievan Rus) appeared, some attempts for the centralized regulation of economic relations were undertaken. The adoption of the earliest legal code (Russkaya Pravda) would be considered as the most important for legitimation of private ownership on land and the beginning of the system of land tenure. This was a step to more a civilized organization of agriculture but led to the heterogenous rural society. The enriched landlords spent their income on consumption rather than investing it in agriculture. Agricultural exports, excluding honey and furs, was too insignificant because of low productivity of farming and problems of safety of transportation.
Being generously endowed with the natural resources and convenient geographical location, Ukraine was always very attractive for numerous invaders. As a result during a prolonged historical period the considerable part of the ethnic territory of Ukraine appertained to the different foreign states. That's why agriculture and the formatting of rural communities in Ukraine developed under dissimilar historical, political, and cultural conditions.
The new occupants and their rotation as a rule brought nothing but the bondage to the alien landowners, humiliations, and finally impoverishment to the Ukraine's rural people, which were the biggest part of the population up to the present century. During the twelfth-fourteenth centuries peasants lost their property, were faced with heavy debts, who became either slaves or indebted workers. Small farms were gradually replaced by large estates owned by princes and nobles [Hrushevsky, p.85]. The few Ukrainians, who were landlords, tried to hide their national background by having foreign appearance. The peasants only were the carriers of ethnic originality. Their struggle for economic freedom also was the struggle for national independence.
In the fifteen-sixteenth centuries the system of slavery had gradually disappeared because of its low productive capability but the standing of peasantry remained extremely bad. For instance, they were deprived of all civil rights even the right to leave the estate where they were born. Landlords could dispossess of their property and also kill them [Hrushevsky, p.172]. From the end of sixteenth century the fatal dependence on landlords, mainly Polish, ones led Ukrainian peasants to the serfdom which was their biggest trouble until the second half of the last century. They couldn't reconcile themselves to the situation: they refused to fulfil the duties, killed the landlords, escaped to less populated territories and incited the rebellions.
The origin of serfdom was connected with the extension of the agricultural market as a consequence of the increasing demand for Ukrainian grain and livestock in Western Europe. The expansion of acreage under grain crops and use of devaluated peasants' labor became more profitable for landlords than payment of dues in the form of agricultural products. At that time the seizure of peasants' holdings reached the biggest scale: a peasant family had only a little strip of land for maintenance of its existence. The peasants accepted replacement of dues for a payment by work at landlord's estate because they valued their labor less than goods and money [Hrushevsky, p.174]. The spreading of serfdom brought noticeable enrichment to the landlord's but they were not interested in using this opportunity for improving agriculture, preferring to live in luxury and excesses.
Such social injustice caused many dramatic events in the seventeenth century especially connected with Ukrainian Cossacks. They started a struggle against Poland and raised the enthusiasm of the peasantry. Many Polish landlords were killed or forced to leave their estates in Ukraine. But the Polish King obtained a compromise with the Cossacks' leadership and the serfdom came back to Ukraine together with both old Polish lords and new Ukrainians ones. Many serfs escaped from Western Ukraine, where the serfdom had its origins and where the influence of Poland was stronger, to sparsely populated Eastern areas belonging in that time to Russia. For a short period, Ukrainian peasants felt the spirit of freedom.
The influence of Russia on Ukraine was getting stronger, especially after the conclusion of the Union treaty in 1654 and the Russian-Polish agreement about the spheres of influence in Ukraine reached in the end of seventeenth century. The Russian tsar legalized the land property of the Cossacks' leadership and presented new lands for them supporting the establishment of big estates. Ukrainian landlords were given the same rights as Russian ones, for example, a monopoly on grain grinding, distillation, and sale of tar and saltpetre. It was the price for displacement of local self-government. Serfdom came very quickly: the migration of peasants was forbidden; landlords required labor, products and a kind of rent from peasants. Ukraine became more and more oriented to Russian market.
The eighteenth century didn't bring any positive changes in the economic relations in agriculture. It was marked by reinforcement of exploitation of serfs in both Western and Eastern Ukraine and by the numerous peasants' disturbances sometimes erupting to a full rebellion. Russian tsar Peter the Great, who was a well-known reformer, in order to increase the productivity of agriculture and improve fiscal stability of the state replaced the old system of state taxation with a poll tax unrelated to the amount of cultivated land. The new tax was especially heavy for large families because it was paid by every man in spite of his age. It also reduced peasants who were not serfs to dependence on the state, taking their tax in form of money or labor duties [Seton-Watson, p.22]. To support the growing industries Peter gave permission to merchants to acquire villages with bonded peasants; that was previously the exclusive right of the nobility, so long as industrial enterprises benefited [Hubbard, p.19].
Serfdom reached its apogee in the second half of the eighteenth century, especially under Catherine the Great, who abolished the official institution of Cossacks and extended the harshist Russian regulations to Ukraine. The landlords were the supreme court and executioner for serfs. They could arrange their marriages; buy and sell serfs with or apart from land, with family or separately; and relocate their serfs any time they preferred. In the Western part of Ukraine landlords tried not to resort to the extreme methods of exploitation because they feared the mercilessness of the peasants' rebellions. But in the very end of the century the part of Ukraine controlled by Poland was divided between Russia and Austria as a result of the weakening Polish state. It reinforced the supremacy of Russian regime. The peasants' life in Western Ukraine under Austrian regulation was a little better than in the rest of Ukraine.
In the first half of nineteenth century, serfdom obviously became both the biggest economic and social problem. From the economic point of view serfdom was an obstacle to further development of agriculture production because the possibility to increase productivity of agriculture at the expense of intensity of serfs' labor and expansion of their dues was exhausted. Influenced by the achievements of science and engineering in the West European countries and America, as well as the extension of internal and external markets, the Ukrainian landlords were about to understand the necessity of structural changes and more efficient investments. Their attention gradually was turning to the market economy. Some of them increased the acreage of technical crops (sugar beet, sunflower, flax) and developed their own processing facilities like woolen mills, sugar plants, distilleries, factories for glass, paper, saltpetre production, etc. Growing heavy industries and mines also needed a stable source of hired labor. In the central Ukrainian provinces where the size of land strips was small, the labor force was more than enough. The problem was how to destroy the connection of peasants with the land. But solving the problem was possible only after for two principal questions were answered: how much land might be given to the peasants and under what conditions; and what was to be a new system of justice and local administrative authority. Reform was urgently needed, especially in Ukraine, where the percentage of the population who were serfs was roughly 42%, compared to an imperial average of about 35% [Subtelny, p.258].
The anachronism of the serfdom damaged the prestige of the Russian state in international affairs. It was extensively criticized by moral oriented sections of society within the Empire. Public opinion also strongly supported the abolition of serfdom. Several liberal measures were undertaken but they only delayed resolution of the problem. In 1861, after long preparation, tsar Alexander II signed the emancipation for peasants. The essence of the reform could be summarized,as follows:
- peasants no longer dependent on
- land remained property of landlords;
- peasants were given certain plots but they had to pay for them;
- a new system of local government and justice was introduced.
The land around the peasant's house in all cases was transferred to his property without any landlord's consent. But the land cultivated by the peasant under serfdom could become his property only under agreement with landlord. Until the final payment for this land the peasants were given the legal status of "temporary dependent" on landlords.
De jure peasants became free farmers but de facto were put into a very embarrassing situation. They were given even less land than they cultivated for their own consumption under serfdom, especially in more populated provinces of Ukraine where the black soils predominated. The exception was in Western provinces, where Russian government discriminated against Polish landlords for political reason. As for absolute size of the plots, Ukrainian peasants were given the smallest allotments [Timoshenko, p.52]. The better arable lands, as well as forest, meadows and ponds were owned by landlords. Redemption payments didn't correspond to the income level of peasant economy. Very often the fixed market prices on land were bigger that its real value. The arbitrators were representatives of landowners class and their decisions were often for their convenience.
Even after the reform of 1861, peasants remained dependent on landlords. They had to rent land under disadvantageous conditions, often paying rent with labor. Obviously the reform was not favorable to peasantry. Its imperfection was first that dependence on landlords was solved only partially, and second, that other new, not less severe problems were created for semi-liberated peasants. There was no way for them to acquire money, and as a result they could not acquire land. But formally it was the beginning of new page in agrarian history of Ukraine.