Transition from state-socialism to market economy; Estonia and Latvia

Arild Holt-Jensen 4.5.2015

Restitution and why it was needed• 1991: Transition from Soviet SSR to independent state.• 1990s: Restoration of national identity and denationalisation of

property were closely linked political aims.• Restitution: return of, or compensation for, property to former

owners /their heirs who owned it before it was unlawfully expropriated in the course of nationalisation and collectivisation.

• Restitution was carried out for housing built before WW2 and farmland in collective or state farms. Claimants had to make an application to become restitutees on basis of information provided on their rights.

• In 1940 only 8% of the 1,1 mill. population (1945:0.85 mill!) was of Russian ethnicity while in 2007 it was 27% of the 1,3 mill. due to massive inmigration under Stalinist rule.

• Restitution benefited thus mainly ethnic Estonians (including Swedish-Estonians) and had a role in nationbuilding.

Ideal and reality in agriculture• ’Land restitution was to strengthen the bond between the

people and the land, indicating that the ideal of the small farm had survived throughout the Soviet period. It was believed that there was a specific Estonian way of life, deeply connected with a rural lifestyle. (Peil & Soovali 2005)

• Reality was, however, that Estonians from medieval times to 1816 had been serfs under a nobility mainly of German-Baltic origin and the towns were Hansa towns ruled by Germans.

• The German-Baltic local rule was only gradually broken 1816-1920 and land finally in the hands of Estonian farmers from 1920; freeholding farms only a short period till 1945.

• The Estonian government after 1991 carried out restitution, but gave no agricultural support, all was left to the free market.

• WE HAVE STUDIED THE RESULTS ON PRODUCTION AND LANDSCAPE IN SOME CASE STUDIES.

Some photos 2008-2009

Restitution in ’Swedish Estonia’ ; Vormsi (Ormsö)(the 3000 Swedish speaking fled in 1944)

Hullo Church and graveyard

The Swedish-Estonians, mainly living in Sweden, got the right to get back the small fishing-farming

village land of their forefathers in the1990s

• Problem: Each farm only 20-30 ha of which 2-3 ha arable.

• Farm buildings from 1940s in ruins.

• Collective farm buildings too big and now falling apart.

• Summer house and small ’Swedish tourism’ the result

• Little of the arable land is used by some farmer hiring land from restitutees.

Kärrslet village: 300 inh. 1940

Kärrslet 2014

Case studies in Sauga, Surju and Tori municipalities in Pärnumaa based on mapping and interviews with active farmers and key informants

Sauga, suburban municipality to Pärnu town• The county agricult.

authorities did not like us to study Sauga.

• Only 10% of arable in proper use. Collective farms and older farm buildings in ruins.

• Only two farmers could be regarded as professionals (1 and 2 on map)

• Most of their land hired. ’At least 300 ha needed to survive’ (Farmer 2) He had to produce only grains as he could not afford to build cattle sheds.

Surju, collective farm continued as Surju Farm1991: Modern collective farm

w/ 1000 dairy cattle. Forest in state ownership

2009: Surju Farm w/ 1000 dairy cattle own some land, but most hired by restitutees that joined as partners in the farm. Forest still in state ownership.Only 4 small restituted units (red) did not join the big unit.

Workforce reduced from 230 in 1991 to 42 in 2009.

Milk is the main productImpression: The arable land

could be used more intensively, now mainly used as pasture and for grass production

Tori; 3 collectives, restituted by 2 400 catastre units• 1991: 3 collective farms. 2009:

most of the arable land is used, but mainly by 7 active farmers. The active farmers own some land, but hire much land from other restitutees.

4 ’production units’ mapped:• 1 (green) Selja Farm based in

Selja collective. Cattle farm. Own 13% hire 87% also in other municipalities 1 734 ha.

• 2 (lilac) Piistaoja Farm use 899 ha (18% owned) cattle farm belong to Agricult. University

• 3.(yellow) Ritsu Farm private (625 ha 31% owned), scattered land, no animals

• 4 (grey) Tori horse breeding station at old manor (1856)

Some conclusions on Estonian agriculture• After a short period of optimism and belief in private, small

scale farming, large agrobusiness now gardually take over. Number of small holdings drastically reduced 2001-2010.

• Agricultural production has dropped and sown crop area decreased by 50% since 1990 (small increase 2001-2010)

• Current EU policies favour large scale production units• Small resituted farms can not survive. In ’Swedish Estonia’ they

may be kept in limited scale as summer house properties.• Start for restituted farms in 1990s difficult: Buildings from 1940

in ruins, location and size of collective farm buildings not useful for small producers.

• Around cities restituted land could be sold to housing or industrial developers: this was seen as the best option (Sauga)

• Active farmers fear that their hired land may be taken over by international agrobusiness. Much of their land scattered.

Latvian agriculture after 1991

The influence of EU agricultural payments (Nikodemus et al 2010)

• Since 1991 Latvia (and Estonia) has had widespread abandonement of agricultural land and re-colonisation of forest

• EU common agricultural policy aim to (?) stop the abandonement of agricultural land

• Aim of study to map landscape changes from beginning of 20th century to beginning of 21st

• In 4 case studies with different land qualities the results of the EU support per field block was mapped

Vec-saulespagast

Zaubes pagasts

Nau-trenu

-

Krimuldaspagasts

+Siguldasnovads

Effects of EU support very much depends on land quality

• Most payments are going to larger farms in good agricultural areas, but not to those in the landscapes most at risk

• Payments are not reaching semi-subsistence farmers in marginalised areas

• Mosaic types of cultural landscapes is mostly endangered in undulating uplands and river valleys such as Gauja (and in Estonia on the islands and around cities with strong urban sprawl)

Some photos of urban spawl

Urban sprawl in the Tallinn region• Registered housing

settlement after 1991 include clusters of 3 new houses or more, but not rebuilt ’dachas’.

• Studies done in Harku, Saku, Rae and Viimsi municipalities

• In 1990s only 1/5 of those moving to suburbs settled in new housing, 4/5 were lower social strata moving to cheap housing in suburbs.

Reasons for urban sprawl

• Choice of housing not possible in the Soviet system, from 1991 people started dreaming of their own house.

• 1990s privatisation /restitution opened for an anarchic housing market, some got rich and built ’castles’, many moved to cheaper housing in suburbs (collective farm apartments, ’dachas’ and housing left by Russian military).

• After 2000 interest on bank loans for housing was reduced substantially (15% to 4%) through established Nordic banks, wages rised and many could afford new housing.

• Restitution of farmland: Restitutees around the cities wanted to sell their land to real estate developers. A land market developed and was dominated by real estate developers.

• Even though master plans were required, local politicians, 3rd sector and planning knowledge in suburbia were weak. Real estate developers got the leading hand.

Thanks for listening!