Peasant-farming: is it worth it?

Russian peasant farming dates back to the period of Stolypin's reforms in 1906. It was his ideas that largely formed the basis of the new agrarian policy of perestroika Russia, when domestic agriculture approached a new stage in its development. In 1990, after a long period of collective and state farms, private farms began to be discussed again. At the same time, an appropriate legal framework was established to regulate their work. Today, the legal basis for peasant farms is Federal Law No. 74-FZ of 11.06.2003 (edition of December 25, 2012).

Stimulating the rise of agriculture, the government supports the creation and growth of peasant associations. In many regions, free land is leased for farming, initial subsidies and concessional loans for development are provided. Nevertheless, not everyone who lives by work on the earth decides to officially register their activities. In many ways, obtaining income from a personal plot is more affordable and profitable.

One of the first pitfalls awaiting a young peasant farm is the inadequate status of this association of citizens. Under the terms of the 1990 Law, PFK were registered as legal entities. Today this demand is canceled, only the head of the economy is registered by the entrepreneur, while remaining an individual. But the reporting standards are still valid for legal entities. There is confusion, aggravated by the fact that many previously established farms did not change their status (this is permissible).

Problematic is the division of property shares in a situation where one of the participants leaves the peasant farm. More precisely, such an option is not provided for at all, only monetary compensation is expected, proportional to the contribution to the share. The section of property is only permissible when the peasant farm leaves all its members, completely stopping its activities. Obviously, the risk of losing their property stops potential farmers.

Significant legal difficulties are met by members of the peasant economy in the event of the sudden death of their head. The answers to questions about how, in this case, to be with the deceased's share, how to carry out the re-registration of the economy and its property, in many respects remain ill-conceived.

Another serious problem: social support. On the one hand, members of the PFK are entitled to a full social package. This is work experience, pension accruals, a policy for medical care, payment of hospital and annual leave, payment of pregnancy and childcare, etc. However, in practice, people face problems. For example, a peasant farmer reports once a year. And to confirm income in the USPN, you must provide data for 3 or 6 months. Because of this discrepancy, many members of farms can not receive legal benefits and payments. This is also the reason for the unpopularity of peasant farms among the population.

A lot of questions are also raised by the formulation of the types of activities that a peasant farm can do. According to the text of Art. 19 of Law No. 74-FZ, the main activities should be the production and processing of self-produced agricultural products. However, this gives a relative freedom in the choice of additional activities, which do not always coincide with the main ones. At the same time, their specific enumeration is not regulated anywhere. Consequently, each region is free to interpret in its own way whether it is permissible for a farmer to create, for example, a canning shop, a tailoring shop for fur products or the production of wool yarn. After all, in fact, all such activities can be considered processing agricultural products, and may not be recognized as such.

Because of such shortcomings in the legal norms regulating the activities of farms, many do not dare to officially register business, preferring to extract income only from subsidiary lands that are in personal ownership. Of course, there are fewer prospects, but responsibility is not so terrible.