MOSCOW — MOSCOW -- Striking down one of communism's last legacies, President Boris N. Yeltsin opened the way to private land ownership yesterday with a decree that would implicitly eliminate the old Soviet system of huge, inefficient collective farms. The move, designed to foster a true free market, has been perhaps the single most contentious issue in Russia since the collapse of the Soviet Union in 1991. It was at the heart of Mr. Yeltsin's struggle with the Parliament, a struggle that culminated in their violent showdown earlier this month and the introduction of direct presidential rule. Twice in the past two years, Mr. Yeltsin tried to organize referendums on land ownership, and both times he was thwarted by a legislature that had heavy representation from collective farm leaders. Collectivization had been one of the foremost ideological achievements of the Communist government -- an achievement reached through tremendous bloodshed and at a terrible cost in efficiency -- and the heirs to the system were determined to hold onto it. Russia's 26,700 state and collective farms occupy 93 percent of the country's 425 million acres of cultivated land. They are often ruled like personal fiefdoms by their managers, and they are notoriously unproductive. Only last week the government agreed to channel 1.45 trillion rubles (about $1.2 billion) into new agricultural subsidies to help keep them afloat. Mr. Yeltsin's supporters say that through privatization Russia's farms not only could become profitable again but could once more turn the country into an agricultural exporter, as it was 80 years ago. Although small holdings, with severe restrictions on their resale, were already legal here, it was only when Mr. Yeltsin smashed the parliamentary rebellion on Oct. 4 that he could finally open the way to a real system of private property. It has been tried only once before -- briefly -- in Russian history. In the 12 years preceding the Communist revolution of 1917, the czarist government pursued an often successful effort to replace the traditional system of communal farms with new individual farmsteads. But the experiment was short-lived, and those who prospered the most suffered the most after the Communist takeover. Yesterday's decree was reportedly signed after sharp arguments within Mr. Yeltsin's Cabinet over the restrictions it would impose on the uses of agricultural land. The decree itself does not contain a mechanism for the sell-off of state land, but a pilot project that has gotten under way in the region around Nizhny Novgorod is likely to become a model for the rest of the nation. There, workers on six state farms are being given land and equipment certificates, which they can then use for the purchase of farm property at auction. The workers can go it alone, get together with relatives who also hold certificates, or join in small or large partnerships with other workers. The choice on how to organize themselves is theirs. Under the new decree, they can now mortgage the land, pass it on to their heirs, rent it, or turn around and sell it. Foreigners cannot buy the land, but a company with foreign investment could. There are important restrictions, though. Agricultural land must remain in cultivation, and it cannot be farmed by hired labor. "Those who till the land should be the primary owners of the land," said the minister of agriculture, Viktor Khlystun. Exemptions, however, can be arranged with the agreement of local authorities -- and this provision has proved worrisome to many, in a country where cronyism and bribery are commonplace. In fact, opposition to land reform is widespread among the ordinary farm workers who are supposed to benefit from it, but who assume that they will be exploited by well-connected speculators. Boris Nemtsov, the young, reformist governor of Nizhny Novgorod, said this week that the government must provide "post-privatization" support to farmers so that they can survive the transition. He also said that political stability in Moscow is desperately needed, so that people who choose to set themselves up as private farmers don't need to worry that the "Reds" will take everything away again. "But one of the biggest problems we face today," he said, "is the lack of motivation for work." Too many people on the collective farms, he said, don't want to take on responsibility and don't want to work hard. Privatization, he suggested, would sort out the dedicated and ambitious from the rest. Alexander Zaveryukha, a vice premier in charge of agriculture, said yesterday that earlier moves to turn state farms into joint-stock associations had done little to increase efficiency or create true owners out of the workers. He said real privatization was the only answer -- but he said it would be perfectly plausible to retain collective farms as private entities if that's what their workers wanted. The decree did not address the issue of urban property.