Key feattures of the agrarian transformations in the former GDR

Abstract

The article considers the agrarian transformations (primarily privatization and structural adaptation to the domestic and international markets) in the former GDR that are often presented as a success story due to the growth in agricultural productivity and competitiveness of new types of agricultural enterprises. First, the author identifies the main tasks of these transformations: (1) privatization of the “socialist property” and its distribution between (a) those who contributed capital and land to the agricultural enterprise when it was established, and (b) its employees at the moment of restructuring; (2) adaptation to new market conditions. Both tasks were extremely difficult and challenging for they required large investments in better breeds and machinery, and a significant reduction of agricultural workforce. Second, the author considers the legislative basis for privatization and the real practices of the reorganization of the former agricultural enterprises (proposals for the distribution of the assets, land restitution as prior to compensation, the successor large-scale enterprises forced land leasing contracts, manipulations with the balance sheets to obtain hidden reserves necessary for survival by underestimation of the existing assets, etc.). The author believes that the Kohl government did not foresee that privatization would be so complicated, and made many mistakes while striving to keep agricultural production in the new countries, especially to restrain the growth of unemployment. Therefore, the contemporary research of the agricultural economy is very critical of the regulations and frameworks set by the German government that is blamed for being responsible for many serious development constraints (short-term leasing contracts, paying off old debts, the lack of state subsidies for large enterprises, etc.). The final section of the article reveals the meaning of the land property in the agrarian transformations in the GDR. The author relies on the statistical data for more than two decades, monitoring data on the still ongoing transition and his own studies of agricultural enterprises in different regions (1992, 1997, 2002 and 2016).