Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

First Sale of Farm Land Held

Hundreds of farmers in the Nizhny Novgorod region have become private landowners as Russia's first auction of communal land was concluded successfully, an official from the International Finance Corporation said Thursday.

Under a pilot project designed to provide a model for privatization of Russia's 26, 700 state and collective farms, the IFC and Nizhny Novgorod authorities auctioned land at the Pravdinskaya farm to its workers and inhabitants Tuesday. A second auction of the farm's buildings, machinery and other non-land property is scheduled to begin next week.

Gretchen Wilson, who manages the project for the IFC, called the sell-off a "big success".

"There were a lot of people who were nervous that they wouldn't get what they wanted", she said. "But everybody came out very pleased".

Last month, the project's organizers issued 634 land certificates and 723 certificates redeemable for machinery and other property to the farm's workers and pensioners. While each land certificate had a nominal value of six hectares, the property certificates were issued in varying values according to the recipient's tenure, position and salary on the collective farm.

The certificates entitled their holders to bid at separate auctions for Pravdinskaya's 3, 592 hectares of land and 140. 93 million ruble's worth of non-land property.

Before Tuesday's land auction, certificate holders could pool their buying power in business units, sell their certificates or lease their entitlement to other individuals or business units.

Wilson said that despite their skepticism about the process, none of the participants sold their certificates outright, although some did sign leases for an average of five years or bequeath their certificates to relatives. All but six of the 634 land certificates issued were used at Tuesday's auction. The largest business unit, headed by the farm's former director, bid 189 certificates to garner 30 percent of the original farm. The smallest unit, one farmer, turned in his certificate for 4. 7 hectares of better-than-average land. Out of 209 total plots of land, 11 attracted more than one bidder, and 11 went unwanted.

In preparation for the upcoming property auction, one worker has amassed 95 property certificates worth 18. 34 million rubles, with which he intends to buy equipment and real estate for a private repair center.

Under President Boris Yeltsin's latest land decree, the new landowners can now freely sell their plots, but Wilson said that she doubted they would do so anytime soon.

"It's their livelihood, it's what they know", she said. "Land here is an emotional issue".