Restructuring land relations and ownership of land in modern Russian realities

Aslanova Ol'ga Aleksandrovna ORCID: 0000-0001-9766-7909 PhD in Sociology Associate Professor; Department of Fundamentals of Russian Statehood; Armavir State Pedagogical University 159 Rosa Luxemburg str., Armavir, Russia, 352901 aslanova.ol@yandex.ru

Bondarenko Irina Alekseevna ORCID: 0000-0001-8188-4917 Doctor of Economics Professor; Department of Business Processes and Economic Security; Academy of Marketing and Social and Information Technologies – IMSIT (Krasnodar) 350010, Russia, Krasnodar region, Zipovskaya str., 5 bonir55@mail.ru

Introduction

The process of denationalization and privatization of land remains one of the most relevant topics in Russian and international legal practice and economic policy. Denationalization, as a process of transferring state assets into private hands, includes many aspects that relate not only to economic efficiency itself, but also to legal protection, social responsibility, and respect for constitutional rights.

The privatization of land in Russia has gone through several key stages since the collapse of the USSR and continues to have a significant impact on the development of various sectors of the economy, such as agriculture, construction, industry and recreational resources.

The relevance of the research topic is also due to the significant impact of denationalization of land on the economic development of the state and the well-being of citizens. Despite the fact that land privatization can contribute to more efficient use of land resources, it also raises a number of issues related to the availability of land for various categories of citizens, environmental protection and the problem of excessive concentration of land in the hands of large owners. Therefore, research in the field of land privatization is aimed at finding compromises between private and public interests, which requires a comprehensive and multifaceted analysis.

Denationalization and privatization of land are the most important processes ensuring the transfer of land resources from state ownership to private ownership. The concept of denationalization of land in the theory of state regulation of the economy is interpreted as the transfer of the functions of ownership, use and disposal of land resources from the state to private entities. Land privatization, in turn, is part of the denationalization process and involves the acquisition of land by individuals or legal entities on the basis of legislation.

Discussion

According to E.V. Melnikova, denationalization is a systemic restructuring of property relations aimed at developing the institution of private property and increasing the efficiency of economic activity of business entities ^[2]. A similar point of view is expressed by A.I. Gordon, noting that privatization is "a tool for adapting national economies to market realities" ^[3].

Table 1. The main approaches to the definition of denationalization and privatization of land

The importance of land privatization lies in increasing the economic return on land use, stimulating investment in the agricultural sector, as well as developing legal regulation and ensuring citizens' rights to land.

The process of denationalization involves the weakening of state control over land and its use on the principles of a free market. Denationalization of land marks the beginning of land reform and, in a broader context, reflects the transition of the economy from centralized planning to market regulation. Denationalization de jure permits the formation of private property, while privatization involves the de facto transfer of land to private ownership, when previously state or municipal lands become the object of private rights. In the legal context, privatization is the full ownership and disposal of these sites.

Denationalization and privatization of land are becoming key elements of economic and social reform, as land in a market economy becomes a capital asset that can be used to generate profits, as well as serve as a basis for creating new jobs and developing small and medium-sized businesses.

At the present stage, theoretical approaches to denationalization are based on the economic theory of property rights and institutional economics. According to Douglas North, land privatization helps reduce transaction costs and stimulates economic growth ^[4]. At the same time, the works of Russian authors such as A.N. Tatarkin emphasize the need to take into account national characteristics and social justice when conducting privatization reforms in land use ^[5]. In international practice, the principles of denationalization of land are based on UN documents ^[6], such as the Principles of Land Use Management. In EU countries, land privatization is regulated at the level of national Constitutions and legislative acts, for example, the Grundgesetz in Germany and the French Constitution.

One of the main problems that arose in the process of denationalization of land was the imperfection of the legal regulation of land relations. Land reform in Russia began in the 1990s, and since then the legislation has been repeatedly changed. The Constitution of the Russian Federation enshrines the right of private ownership of land (art. 36), while ensuring that the use of land should not damage the environment and violate the rights of others. The legal foundations of denationalization in the field of land use in Russia are developing in the context of Federal Law No. 101-FZ "On the turnover of agricultural Land"^[7]. This Law establishes the procedure for the sale of State-owned land and regulates the issues of their further use. The legal regulation of land privatization in Russia is carried out through the Land Code of the Russian Federation, which defines the categories of land allowed for privatization and the procedures for transferring land to private ownership. Thus, according to Rosreestr data, from 2014 to 2024, more than 1.2 million hectares of agricultural land were transferred to private ownership^[8].

International experience shows that different denationalization mechanisms are used in different countries. In Germany, privatization is carried out through auctions, in China state control remains, however, elements of long-term lease, similar to private property, are introduced everywhere. Table 2 compares the mechanisms of legislative regulation of individual countries and Russia^[9].

Table 2. The mechanism of legislative regulation of land privatization

Analysis

The denationalization of land in Russia significantly changes the structure of the land market. Land privatization promotes the activation of market mechanisms, increases competitiveness and attracts investments in the agricultural sector. With the transfer to private ownership, land plots become objects of free purchase and sale, which affects the market value of the land. Research shows that denationalization of land increases its market price by increasing liquidity^[10]. Land privatization makes it possible to optimize the use of resources, which contributes to a more efficient distribution of land between business entities. Land plots can be transferred to private ownership on the basis of various legal mechanisms. In Russia, several instruments provide the opportunity to transfer land into private hands.:

1. Auctions and contests.

2. Sale of land to private ownership.

3. Individual selections.

4. Inheritance.

Many factors, such as the location of the site, its area and quality, affect its market value. The effect on prices can be illustrated using the following data presented in Table 3, which shows the change in the value of land plots before and after privatization ^[11].

Table 3. Changes in the value of land plots in Russia (2010-2020)

According to S.V. Ivanov, the privatization of land helps to strengthen the institution of private ownership and improve economic performance in agriculture, which, in turn, has a positive effect on the standard of living in rural areas ^[12]. At the same time, according to M.I. Popov, denationalization is accompanied by problems such as the growth of land speculation and the creation of barriers for weaker market participants ^[13].

The financial consequences of the denationalization of land can be assessed through an analysis of changes in budget flows and revenues received by the State. In the short term, privatization leads to an increase in tax revenues, as land plots transferred to private hands begin to be used for the creation of new businesses, infrastructure development and construction^[14].

In the long term, denationalization of land makes it possible to reduce the financial burden on the budget by reducing the cost of maintaining state land funds. Privatization provides an opportunity for the redistribution of state land capital in favor of more efficient owners, which contributes to the growth of the economy as a whole. The transition from state ownership to private ownership makes it possible to significantly improve land management, as land owners can make more flexible use of resources depending on market conditions.

However, the mechanism of private land use faces a number of difficulties. Firstly, many land plots were transferred to private ownership without proper legal registration, which leads to legal disputes. Secondly, private land owners often do not have sufficient experience and knowledge for the rational use of land, which can lead to a decrease in its value^[15].

However, the experience of many countries shows that with a properly structured education and support system, private land use can significantly improve the quality of land use. For example, in EU countries, private landowners receive not only the right to use land, but also certain government subsidies that help increase productivity and improve the condition of the land ^[9].

An example of a successful organization of private land use in Russia can be a project on the transfer of agricultural land into private hands in the Krasnodar Territory, where a system of support for farmers and agricultural producers through preferential loans and subsidies was built ^[16].

An example of successful implementation of land reforms and optimization of budget expenditures is the experience of China, where the process of denationalization of land has significantly increased the incomes of local authorities, as well as improved the standard of living in rural areas ^[17]. In Russia, there are successful examples in some regions where land privatization processes have helped create jobs and improve infrastructure, which in turn has increased tax revenues to budgets at various levels.

Table 4. Income from land privatization in Russia^[18]

Since 2014, there has been a steady change in the structure of land ownership in Russia. The privatization of land and the transition to private ownership had a significant impact on changes in the distribution of ownership.

1. Private property

2. State and municipal property

3. Collective and cooperative ownership

To visually present statistics on land ownership in Russia over the past 10 years, we can present a table that will show the dynamics of changes in the share of each category of land ownership.

Table 5. Dynamics of changes in the structure of land ownership over the years^[18]

Despite the 30-year period of privatization and denationalization in the field of land use, many problems still require their full-fledged legal and financial-economic resolution. These include: the lack of a clear legal mechanism and procedures for registration of land plots after their privatization, the redistribution of land resources causes economic instability in some sectors of the economy, such as agriculture and the construction industry, many citizens in rural areas who do not have sufficient experience in land management, face problems in land management, which This leads to a decrease in their productivity and a deterioration in the quality of life ^[16,17].

Table. 6. The main legal and economic problems of the process of denationalization and privatization of land

Conclusions and recommendations

The analysis made it possible to conclude that the 25% decrease in the number of land shares from the 90s to the mid-2000s means that the owners of these shares have not used the right to privatized land transferred to them, rather than a decrease in the number of unclaimed land shares. The same unclaimed shares include those whose owners have died, but no one has entered into inheritance rights. The restructuring of private land ownership consists, among other things, in identifying unclaimed shares and recognizing them by court as municipal property.

Legal restriction (for foreign citizens and organizations, stateless persons and organizations in the authorized (pooled) capital of which the share of foreign citizens, foreign organizations and stateless persons is more than 50%, may own agricultural land, and, therefore, privatize these objects – clarification of the author) It acts as a barrier to investment investments by foreign citizens, which could significantly contribute to the sale of agricultural land.

The main problems of land relations are now related to the regulation of relations between subjects of shared ownership – the transfer of rights from citizens to legal entities, as well as to municipalities (unclaimed shares).

Thus, the prospects for the development of land relations and land-use relations in Russia can be formulated as follows:

1. Creation of a system of long-term lease relations, which will allow individuals and legal entities to effectively use land without incurring the risks associated with its purchase.

2. Development of a digital technology system for land accounting. This will significantly simplify the privatization process and reduce the number of bureaucratic procedures.

3. The current problems of effective land use are related to the enlargement of agricultural enterprises, therefore it seems advisable to recommend that farms form cooperatives with the creation of a production chain from the stages of the beginning and end of the production of final products to organize a progressive crop rotation system.