Introduction

One of the brightest memories of my childhood is when my father and me, a five-year-old boy, were standing in a long line for bread. It was 1963. It was explained that this was a temporary difficulty caused by unfavorable weather conditions. We were also told that our country is a superpower which is successfully advancing communism, and then, there will be plenty of goods, and lines will disappear. True, my father joked that there is nothing more constant than temporary difficulties. And when in the middle of 1990s, on the threshold of the passing of the century, my five-year-old son is standing with me in long line for bread (if there is any in the shop), I no longer have ideological illusions about potential abilities of our economic system. I am absolutely convinced the system which was built on command methods and coercion will never allow food lines to disappear even in Ukraine, in the country with the best soils, at least, in Europe.

But besides convictions, people sometimes need bread. This motivates them to choose the shortest and the cheapest way to the desired result. So the faith in instantaneous effect is being born. A new decision of Communist party, a decree of government, a new agrarian program, a new reorganization and management, a new centralized increase of procurement prices, thousands of new specialists annually, new state investments, credits and other resources (when it still was possible), etc. -- with all of them the hopes of fundamental changes were associated. For a moment it was actually working, and gave even more confidence in the correctness of the chosen path. But it was only for a moment. After that there was again a new agrarian crisis, a new aggravation of food deficit, and a new need for governmental intervention in agriculture.

Was there another way for collectivized agriculture? Probably not. The experience of former communist countries demonstrated a certain variety of productivity and efficiency in agriculture, but generally each country was faced with the same set of collective farming problems:

dependance on state control and support;
depersonalization of property;
command methods of ruling and bureaucratization;
inefficient use of resources;
lack of management motives;
loss of individual labor incentives;
environmental problems.

These features of collective farming could not be considered as only shortcomings or imperfect practices. They are the fundamental characteristics installed in the system. It was impossible to eliminate them because for that it was necessary to change fundamentally the political system of the country and to terminate the supremacy of communist ideology. Fortunately, these unbelievable events had already occurred. The collapse of communist regime and the establishment of the independent Ukrainian state gives an incredible opportunity to progress in agrarian sphere. The problems of restructuring in agriculture of Ukraine moves from a political plane to an economic one.

The dysfunctional character of the existing system of collective farming in Ukraine is an essential obstacle for the new independent country to create a plentiful and desirable food supply. Ukraine is poised to not only accomplish this desirable domestic objective but to take its rightful place in the World economic community and play more important role for the World food balance and the international agricultural market. Ukraine is generously endowed with natural resources, a convenient geographical location, an early tradition of private farming, and a relatively well educated population.

There are no doubts that the first steps of a market economy transformation in Ukrainian agriculture must include privatization and the creation of equal legal rights for the development and competition of all reasonable forms of farming. These are the main problems which Ukrainian agroeconomists are currently addressing. Unfortunately, because of the immediate nature of the economic crisis, the question of a long-term perspective is yet to be fully considered. This means that there is little understanding of the mechanism by which independent agricultural producers coordinate their economic activities. This mechanism should totally replace current system of governmental control.

The cooperative initiative of independent producers can withstand organizational and economic chaos in agriculture. Real cooperatives (in contrast to the special phenomenon of communist collective farms or pseudo-cooperatives) are antithetical to the nature of a command economic system. That's why during the Soviet period this important direction of agrarian economics was not developed. Several generations of Ukrainian scholars have had a very slight comprehension of the Western type of agricultural cooperatives and the principles of their operations.

This study is an attempt to bring more understanding of cooperative fundamentals in agriculture. It will be done through comparing pseudo- and real cooperative ways in formation of organizational structure in agriculture. Such contrast presents an opportunity to illustrate the advantages of real cooperatives, and to re-examine some false values of collective farming. This assessment will be done within the context of the fundamental changes Ukrainian agriculture is presently undergoing, paying special consideration to the unique obstacles and difficulties of that transformation.

And finally, some notes on transliteration. All Ukrainian geographical and personal names are presented according to their Ukrainian spelling with only two exceptions for such world known names as Kiev and, unfortunately, Chernobyl. Russian names and places are given in their Russian or usual international spelling. Also Ukrainian and other non-English words were designed by cursive. Cyrillic soft sign was everywhere omitted.