Policy Reform and Agricultural Adjustment in Transition Countries

After the fall of the Berlin Wall at the end of the 1980s, dramatic institutional and economic reforms took place in countries in Eastern Europe and the former Soviet Union. Agriculture was dramatically affected by these changes in policies. There are significant differences among reform policies in transition. However, most implemented substantial reforms in price and trade policies; privatization of property rights of land, farms, and agri-food businesses; and reforms of the institutions governing exchange. In this paper, we review key reforms and adjustments and discuss the causes of the differences between countries. In most cases changes in output, input use, and productivity were caused by a combination of initial conditions and reform policies. These interactions are particularly important in understanding the changes in productivity and labor adjustment patterns.

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