Isn't pretty. But its end is even uglier.
The collapse of his farm is part of an even larger puzzle – the catastrophic decline of agriculture in the breadbasket regions of the former Yugoslavia. Food imports and prices are rising in countries that once fed themselves comfortably.We've seen this before in East Germany as unwinding collectivization descends into blatant corruption not unlike hyenas at a kill. Usually party apparatchiks get in first, aided by a dysfunctional judiciary and non-existent law enforcement. It seems to take a generation to arrive at something workable.
In the lush plains of Serbia, farmers are getting poorer, while their children migrate to the cities for work. In Croatia, agriculture today accounts for three percent of the Gross Domestic Product (GDP), compared to almost 20 percent two decades ago.
Trade liberalization and the current economic crisis bear some of the blame, as do the conflicts that tore the former Yugoslavia apart. But across the region, experts say it is corruption and mismanagement that have brought agriculture to its knees.
No soldiers traded gunfire over Mr. Zivkovic’s farm in eastern Croatia. Instead, its workers spent the 1990s fighting businessmen and lawyers for their tractors and orchards – the spoils of a privatization deal gone wrong.
“It was like a small war zone,” says Marko Tominac, an insolvency manager who tried to settle the farm’s accounts among Zivkovic and his colleagues. “Everybody was screaming that everybody else was getting the bigger part – including the workers.”
The privatizations of the last two decades were largely – but not universally – disastrous. A handful of the region’s largest collective farms have changed ownership and remained productive.
But most of the small and medium-sized concerns did not survive the transition from socialism. They were treated as the low-hanging fruit of the privatization boom – bought cheap, stripped bare, and discarded – by men who had little interest in agriculture. [More]
Agriculture in Germany continues to bear the hallmarks of the divided country, with small and mainly family-operated farms in the west and south and enormous collectives in the east.I don't have a good feel about the odds, but it interesting to ponder what the aftermath of drastically reducing our peculiar socialized crop insurance safety net. How would the lending industry respond? How many would be priced put of the system by paying 100% of the cost, or ending the government role as backup lender?
Gabel's Torney collective, named after a babbling brook that runs through the village of Pripsleben, is a perfect example, with 1,300 hectares of corn, rapeseed, barley, potatoes and beetroot, plus 300 hectares of pasture.
In addition, Gabel farms hundreds of cows, calves and pigs for meat, sold locally throughout the state of Mecklenburg-Western Pomerania in the form of salamis, hams and cutlets.
After what promises to be long and painful negotiations on the budget in Brussels, Gabel's half-million-euro annual support is likely to be slashed, said Frank Offermann, an agricultural expert from Germany's Thuenen Institute.
While some EU countries want the budget slashed, others want the funds redistributed. "In either case, the transfers to German agriculture will diminish," said Offermann.
If a proposed cap on the handouts per farm is introduced, "it will cost us 200,000 euros," said Gabel.
But he is not without a more modern plan B.
Rather than scrapping with the red tape needed for CAP handouts, he is busy hiring out the roofs of his barns for solar panels and his fields for wind energy turbines. [More]
My guess is crop insurance would be an agonizing decision for most, if not all, producers. That is how accurately underwritten insurance tends to "feel" - just on the borderline of cost and perceived risk. Would producers respond immediately or pay whopping premiums for a couple of years before observing those who didn't had an initial, say $100 to spend for cash rent?
Now factor in the insurance industry's growing recognition of climate change, and the business model for crop insurance could be very different soon. Our fledgling private insurance industry could have a headstart on creating products to fit these new circumstances.
I can imagine individually tailored policies to cover specific risks for specific times, for example. More likely will be the typical insurance market that prompts more high equity/relatively low risk operations to self-insure, which results in higher costs for marginal ground/more leveraged farms. I'm not sure we can fully predict what would happen, but judging from the de-socialization agonies in other countries, it will be very hard on many of us.
If nothing else, the fiscal cliff and spending anger makes the idea of previously unthinkable outcomes for farm policy worth imagining.