Social assessment guides policies on rural land reform in Moldova

S 2 1266 OCIAL DEVELOPMENT NOTES ENVIRONMENTALLY AND SOCIALLY SUSTAINABLE DEVELOPMENT NETWORK Note No. 42 December 1998 Social Assessment Guides Policies on Rural Land Reform in Moldova Moldovan collective-farm enterprises have been perspectives, interests, and needs of different evolving since the late 1980s, even before indepen- stakeholders. The SA aimed to provide information in dence in 1991. The restructuring of collective and state support of the formulation of rural social policies farms, however, has proceeded unevenly. In 1991 the capable of cushioning the difficulties that transition first phase began with the distribution of 0.30 hectare poses for farmers and non-farmers and ensuring them, (ha) household plots. The second phase began in 1992, more equitable access to resources in post-socialist with the adoption of the Land Code and the Law on farming communities. Peasant Farms. Land and other collective and state Several basic steps were followed in carrying out the farm assets were distributed as paper shares, or SA. First, based on previous studies of the agricultural certificates of entitlement, that could be exchanged for sector and consultations with the Agricultural land and non-land assets. By November 1994 some Reconstruction Agency (a Moldovan NGO established 14,000 families had withdrawn their land from with interational donor support), World Bank staff collective farms to establish individual "peasant involved in agricultural projects, and national and farms," and an additional 40,000 to 50,000 familes foreign experts in Moldovan agriculture, the SA team had submitted applications to do so. selected representative communities, in which collective The large number of households wishing to exit farms (restructured as joint stock companies, from collective and state farms and privatize their land agricultural associations, or agricultural cooperatives), stirred conservative opposition to land reform and led formal and informal peasant farming associations, to the November 1994 Law on Suspension of Some independent farmers, and individual non-farm Articles of the Land Code, which practically halted the enterprises coexisted. Second, formal and informal process of privatization. Then in November 1995 the interviews were conducted with the full range of Constitutional Court of Moldova declared the limita- stakeholders to identify factors that appeared to tions on "exit" unconstitutional, and the process of encourage or impede effective land reform at the village privatization again accelerated during 1996. level. By October 1996 some 90,000 independent farmers This note summarizes the social development were farming alone or in groups on 130,000 ha, concerns and institutional issues identified by the SA representing 5 percent of Moldova's total arable land. process, and raises important issues for consideration in The remaining farm population still works on collec- the design of future development activities in the tive farms that have been nominally restructured, or in Moldovan agriculture sector. "new" farm associations and cooperatives that have split from the collective farms, but essentially function Key Social Development Concerns as slightly smaller collective farms. A number of social development concerns emerged Social Assessment from the SA. First, it identified the most important factors that have slowed and confused the process of The social assessment (SA) on Moldovan land privatization and restructuring. These factors include: reform was undertaken as economic and sector work struggles between different interest groups, different to study farm communities; assess the impact of land conceptions of how to create a profitable and viable reform on stakeholder groups; and identify the agricultural sector, issues of entitlement and access to This note was prepared by Nora Dudwick and Deborah Youssef of the World Bank. For more information on the social assessment, contact Nora Dudwick, The World Bank, 1818 H St., NW, Washington, DC, 20433, USA, Fax: 202-522-2510, E- mail: ndudwick@worldbank.org. To view other Social Development Notes on social assessment, please visit the World Bank's website at: http:/ / www.worldbank.org, and click on the "Social Assessment" section in "Development Topics." The views expressed in titis note are those of thze aut1hor(s) and do not necessarily reflect the official policies of tile World Bank.  credit, and inadequate dissemnination and clarification * The SA also revealed the emerging role of individual of information. entrepreneurs in providing employment to the local Second, it found that despite problems with the population. While such employment is well- oRectives many farmers chose to stay duetoaremunerated in comparison to meager collective-farm collechives, many farmers chose to stay due to a combination of intimidation; the difficulties of wages, these entrepreneurs have become centers of establishing and running independent farms; power in the village and are gaining the potential to competition from former collective farms, some of which intimidate smaller entrepreneurs or farmers. still receive subsidies; preferential access to irrigation; Next Steps and other benefits. Third, it found that pensioners, who The SA makes a number of recommendations that form a very large percentage of village populations, have should be given consideration in the design of future become subject to manipulation because their long work development initiatives in the Moldovan agricultural tenure entitles them to relatively greater shares of non- sector. These include the need to modify eligibility land assets, and because many are less well informed criteria for obtaining land; simplify land titlng and less physically able to farm. procedures; implement a public-works program; and The SA also identified a serious unemployment support increased social services, including low-fee problem in rural areas, particularly for youth and childcare facilities. women, that has emerged as a result of the reduction in The SA findings also suggested a number of state sector employment, shrinking rural social services, actions that should be specifically targeted to and the closing of food processing and other enterprises stakeholders in the design of future development once operated by collective farms. Many young people initiatives and considered in a participation expressed a desire to find other professions and have framework. These targeted actions should include, for migrated in large numbers to urban areas, while women example: are excluded from some employment opportunities because of traditional gender-based divisions of labor * Supporting the mayoralty, as a key local-level or the closing of childcare facilities. institution, to become more responsive to local Finally, the SA pointed out the that the drastic constituents contraction of social services once offered by collective- Providing some form of assistance to villagers who farm enterprises has intensified the impact of the crisis wish to form purchasing and/or marketing on the rural population, particularly the most cooperatives vulnerable -the aged, disabled, or those temporarily * Preparing an information/ communications plan for unable to work. Women also suffer from the reduction in independent farmers and collective-farm workers social services, and now find childcare responsibilites that provides access to timely, low-cost extension competing with their ability to seek employment. services and to information about procedures for Institutional and Organizational Issues withdrawing land and property from collective-farm A number of institutional and organizational issues enterprises, taxation, importing and exporting were raised in the SA: regulations, and other legal information * The SA found that the rural landscape that has Ensuring women's access to credit, extension emerged as a result of restructuring is still courses, and legal advice characterized by top-down management practices, Increasing the access of rural youth to education and lack of accountability, and tense, hostile worker- employment management relations. Targeting small entrepreneurs for credit, tax breaks, * The SA identified ways in which farmers cooperate and incentives as a means to revive the off-farm informally in the use of agricultural equipment and economy and provide off-farm employment. harvesting, but noted that they rarely plan as a group, The SA also recommended that future development hold meetings, or assist each other in cultivating land initiatives include a set of indicators to monitor and or marketing. evaluate the transition-related difficulties experienced * Changing relations of power and authority in farming by farmers, non-farmers, and vulnerable populations communities, with the gradual break-up of the large and their access to resources in post-socialist farming collective-farm enterprise, was another observation communities. In addition, indicators should be noted in the SA. This power shift has created tensions developed to assess the evolving role of local-level for villagers and former collective-farm management, institutions, such as inayoralties, and of potential since budgets have not been restructured to reflect conflicts among former collective-farm managers and new responsibilities. villagers. Social Developrnent Notes are published informally by the Social Development Family in the Environmentally and Socially Sustainable Development Network of the World Bank. For additional copies, contact Social Development Publications, The World Bank, 1818 H Street, NW, Washington, DC 20433, USA, Fax: 202-522-3247, E-mail: sdpublicationsEworldbank.org. W Printed on Recycied Paper