From 1990 to 1994 the economic and political process of disintegration within the Russian Federation halved the domestic trade of grain between the various regions and caused significant reductions in the production. From European economic history and the experience of several developing countries follows that there is a strong correlation between the formation of domestic markets and sustainable growth in agricultural output. During the process of developing highly integrated agricultural domestic markets many European economies and Third World countries had to struggle with problems, similar to those of the Russian Federation. An investigation of completed market-oriented transition processes can help to find strategies to remedy the existing difficulties and ease understanding the highly complex integration processes. It becomes evident that economic reforms (Ordnungspolitik) and a deregulation of the agricultural trade can only generate positive effects on agricultural production if the infrastructure is greatly improved. Such reforms and an overall modernization of the infrastructure can however only be implemented if the central power can establish a consistent market conform economic and agricultural policy all over Russia despite particularistic and market hostile tendencies in many oblasts and republics. Since the development of private marketing institutions covering great geographical areas is based on economically potent agglomerations, the growing supply of these important markets with imports is no constructive contribution to the development of domestic market structures in Russia. At the same time it becomes obvious that the main obstacle to the formation of an efficient domestic market is caused by the unwillingness to implement reforms in all parts of the Russian agricultural sector and not by foreign influences.


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