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Russian Land Law Bans Foreigners
June 26, 2002
By ANGELA CHARLTON
MOSCOW (AP) - Russia's lower house of parliament on Wednesday passed a bill that would allow the sale of Russian farmland for the first time since the days of the czars, but would bar foreigners from buying it.
By a vote of 258-149 with five abstentions, the State Duma approved the bill in the third and final reading and sent it to the upper house for approval. It is widely expected to pass there and be sent to President Vladimir Putin, who has supported the bill, for signing.
The farmland in the world's largest country is estimated to be worth $80-100 trillion, a large share of Russia's collective wealth. Much of it is now controlled by struggling, debt-laden collective farms, where the structure and production technology have changed little since the Soviet era.
``Private ownership of farmland is the most important condition for increasing the participation of several layers of society in the economy,'' said Vladimir Pekhtin, leader of the pro-Kremlin Unity party in parliament. ``Without this, no country in the world can make market reforms successful.''
Lawmakers from the Communist Party and Agrarian Party opposed the bill, insisting that the state should retain control over land.
The debate over foreign buyers has been a thorn in a decade of post-Soviet efforts to free up land nationalized after the 1917 Bolshevik Revolution. Many lawmakers and local officials have voiced fears that free land sales would allow rich foreigners to snap up Russia's best agricultural land from impoverished farmers.
The original version of the bill, passed last month, barred foreigners from buying farmland in border areas, but left it up to local authorities to decide whether foreigners could buy land elsewhere.
Before passing the bill in its second reading last Friday, the Duma overwhelmingly approved an amendment to the bill banning the sale of all agricultural land to foreigners. The amendment would allow foreigners and foreign-owned companies to lease farmland but not purchase it.
Boris Nadezhdin of the pro-reform Union of Right Forces party called the amendment ``stupid'' because foreign companies could still purchase Russian land through subsidiaries that are majority Russian-owned. He also said the bill may have little impact on the economy because demand for farmland among Russian buyers is minimal.
Reform supporters have long said that the heavily subsidized agriculture sector needs streamlining. Putin has called land sales crucial for Russia's economic growth.
While Russia's 1993 constitution allows land sales, Communist Party members and other hard-liners who controlled the previous parliament blocked legislation needed to put the provision into force.
Last year the new parliament passed a Land Code that permitted limited land sales but did not address the specific - and more contentious - issue of farmland.
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