Under the Soviet Union, agriculture in Azerbaijan was collectivized in large state farms. Collectivization meant taking the land from owners of all farms and joining it into large farms run by the government. After the collapse of the Soviet Union, economic reforms took place, which led to the rapid changes in the agricultural sector as well, including privatization. After the "Law on Land Reforms" was passed in 1996, land has been given to individuals who are now allowed to own small private farms and sell their farm products. Nevertheless, Azerbaijan's agricultural sector still needs a lot of modernization, if it is to realize its vast potential. Prices for agricultural products are below the cost of labor, because the Soviet-era communist collective farm system discouraged private initiative; equipment in general and the irrigation system in particular are old, and modern technology is still not widespread, especially in small private farms.