Agricultural Cooperative Enterprise 1 Agricultural Cooperative Enterprise in the Transition from Socialist Collective Farming

Cooperative enterprise has appeal as a means of filling gaps in the economic institutions of the rural sectors of the transition economies of Central and Eastern Europe and the former Soviet Union. But in addition to problems that have faced cooperatives in the West because of their inherent characteristics, the Soviet-era legacy created cultural burdens that cooperatives will have to overcome. A review of countries ’ experiences since 1989 indicates some commonalities in attempts to create “new cooperatives, ” but also instructive differences across countries. The evidence so far is unfavorable for cooperatives in agricultural production. In marketing and input supply the current situation is more promising. In both production and marketing, the economic institutions remain in flux. Unique approaches involving cooperatives may take permanent root, but their long-term prospects are in doubt. The collapse of the command economy of the Soviet Union and countries within its sphere of influence in 1989-91 provided the opportunity for many economic adventures. One of these was the opportunity for new roles for cooperatives. The collapse created an institutional vacuum surrounding large “farm enterprises” – the dominant organizational form in former socialist agriculture – in which basic economic functions were not being performed. While the idea of rural cooperation has had a mixed history in the world’s market economies, conditions in the former Soviet Union and other formerly collectivized farm sectors in Central and Easter