OUTLOOK FOR AGRICULTURAL PRODUCTION IN THE SINO-SOVIET BLOC, 1955 (RR IM-412)

Created: 7/15/1955

OCR scan of the original document, errors are possible

memorandum

outlook for agricultural production in the sino-soviet5

CIA/RR55

warning.

affecting the united states within the

sc, secs, tion of

this ma national defen meaning opjhie*fQk the transmission

any manner to an uhaufflkaw.

CENTRAL INTELLIGENCE AGENCY Office of Research and Reports

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FOREWORD

this memorandumreliminary analysis of the condition of growing crops in the sino-soviet bloc. it le based on information available as of ualitative statement. it reflects the prospects for the food supply of the bloc for the consumption year5 through it should be noted that sino-soviet bloc crops are in the making and that the final outcome will depend on developments during june and july. should weather conditions fluctuate, the food situation in the bloc would become worse or improve correspondingly. after the weather conditions during june and july areurther statement on crop conditions will be issuedprobably in septemberand will be followed later by estimates of quantitative production based on acreage as well as

yield.

The memorandum also indicates the general effect that pressures exerted by current governmental programs and policies may have on agriculture developments in the Sino-Soviet Bloc.

The USSR and China sections of this memorandum have beenith the Department of Agriculture.

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Summary

I.

and Crop Conditlona

for Agricultural Production

"Rev Lands"

Corn

Livestock

IT. European

A.

and Crop Conditions

East Germany

5-

C. Outlook for Agricultural Production

III. Communliit

Appendix

outi/xk tor agricultural production in the siho-soviet bloc*

flmmsnry

crop prospects in the sino-sovlet bloc indicate that agricultural production in the bloc will not rise substantially above the4 levels. although the agricultural outlook in the ussr ia somewhat more favorable than it was in june, the european satellites face another year of below-normal food availability, and communist china's agricultural production will be no better than it wasear of near starvation in many areas.

in the ussr the failure of the "new course" to raise agricultural production led soviet officials to launch two rotherhe expansion of grain acreages on "new lands" in which both soil and climate conditions are marginal and the expansion of corn acreages in the ukraine and in other areas of the ussr not well suited to the production of corn.

the first program involves an increase5 of aboutillion hectares, seeded largely to spring wheat and millet. it is probable that this new acreage will increase5 gross production of grain above the prewar average, buter capita basis grain availability will remain below that of the prewar base-

the second program raises the corn acreage5 to almostillionearly fourfold expansion over4 com acreage. production from the additional acreage will increase supplies of grain and todder somewhat, but unless weather conditions arefavorable during june, july, and august, the effect or this increase on the average per capita availability of meat, milk, and other livestock productsill not be large.

estlirAtes and conclusion! tobtmlned

sent the best judgment of orr as of

The European Satellites are facing the prospect of another below-nonnal harvestith no hope of improving food availabilities over theood consumption year. Adverse weather conditions affecting crop growth are primarily responsible for the unfavorable outlook for agricultural production.

The factors necessary to help alleviate the effects of adverse weatherimproved agrotechnics, mechanization, fertilisation, and the peasant'Incentive to raise agricultural productionhave not materialized under the "new course." The present policy ofto socialize agriculture will continue to depress production as it has In the past.

In Communist China, drought conditions reported throughout most of the country threaten the harvest of early rice crops in the south and winter wheat crops In the north. Unless there are above-normal fall harvestsheercent Increase in the production of food crops over the low levels* may not be attained.

Because the Chinese Communists have failed to meet planned goals of food production during theears of the current Five Tear, they have found it necessary to revise7 goals downward. An additional plan failure5 probably will result In harsher rural policies. These policies would be necessary in order for the regime to fulfill its industrial and exportfor agricultural products through increased procurements from ihe countryside.

I. USSR.

A. General.

Unless seriously unfavorable drought or other conditions develop before the harvest is completed, the USSR will garner somewhat more grain5 than The prospects as ofune indicate that small-grain yields will average higher than those There are also

loiicatloci; of an increase of some l6 Billionargely spring wheat and millet, on new lands. There has been, furthermore, on Increase of at5 million hectares of corn,hiefly to produce silage. The corn cropate start, and conditions for early growth in the Ukraine and the North Caucasus areas were not favorable. It Is therefore improbable that the contributions made by corn as grain will add materially to the advances made by small grains. Although the quantity of grain produced In the USSR5 may exceed the prewar productiont is improbable that per capita availability of grain will reach the prewar level.

There hasmall increase in sugar beet acreage, and production of sugar5 may exceed theevel, but the Increase will not be sufficient to affect per capita availability materially.

Cotton haa run into difficulties this year. Cold weather killed sprouting plants' and necessitated considerable replanting in certain important areas. Danger from insect pests is also reported. 5 cotton production may be expected to be about the same as that

Soviet officials are stressing the need for increase of livestock numbcra and productivity. The corn expansion program is directed toward this end. The program initiated this year, if successful, cannot be expected to Increase to any materialhe availabilities of meat, milk, and other livestock products duringonsumption year.

B. Weather and Crop Conditions.

On the basis of information available asoviet crop prospects for the current year are Judged to be relatively favorable. As yet there are no indications of droughts such as' plagued the Ukraine and the Volga area in the summer The new lands area of West Siberia and Kazakhstan had favorable fall and winter precipitation, but the spring rainfall has been somewhat Icbs than that of

For serially numbered source references, see the Appendix.

In the rollost of the USSR had relatively favorable weather for the sowing and growth of fall-sown grains for harvest There were, however, some areas In the southern Ukraine and North Caucasus where rainfall was lighta continuation of4 suaner drought. Temperatures were above normal in soot areas, the first frosts coming much later than they did in the fall The plan for seeding fall-sown grains was reported to have been overby/ light increase In the total acreage of fall-sown grains was also reported, 4/

The precipitation for the winter months was normal, or above normal for almost all areas of the USSR, &ome of the major grain areasespecially favorable amounts. There have boon several recent Soviet press articles referring to the favorable fall and winter precipitation in portions of the new lands area of West Siberia and Kazakhstan.he only winter kill report to date has case from an observer in Moscow who indicates that "severe winter kill of fall-sown grains was noted along the route traveled In the'western oblasts of the central black-soil region. Many fields were being partly or entirely replanted to spring/

March precipitation was generally somewhat below normal in the southern half of the European USSR and in some areas of the region of grain expansion Inerla and northern Kazakhstan. In April the rainfall in most areas was greater than it bad been during the previous month. Most of the Important agricultural areas of the European USSR received near-normal or above-normal precipitation. In the new lands area of Wect Siberia and Kazakhstan, wide variations In precipitation continued through April, and many stations In Kazakhstan reported below-normal rainfall. It should "be noted, however, that even normalin this area'Id March and April is scanty. RalDrall andin May, June, and July are far more cruelal in determining crop yield potential.

Rainfall data for Hay are incomplete, but preliminary estimates indicate relatively light precipitation in some regions of the Ukraine, the North Caucasus, and the new lands area of Vest Siberia and northern Kazakhstan. In early May there were press reports from two regions of the new lands area urging that spring sowing be done promptly because worm steppe winds were rapidly drying the soil. J/

M&^r

Field work in the Tranecaucasus this spring beganonth earlier than in the spring- 8/ In much of the USSR, however, spring field work was delayed by cold weather. In the cotton-growing regions of Central Asia the cold weather necessitated some replanting of cotton, and in the central and northern regions of the European USSR there were complaints about delays in spring seeding. In May, however, considerable progress in the sowing program apparently was made. peech at the Ail-Union Conference of Industrial Workers on l8 May, Khrushchev stated: "Despite the fact that spring is late this year, Bpring sowing is progressingbetter than last year. By Mayhe collective and state farms had3 million more hectares to grain than by the same date Later in the same speech, Khrushchev commented on the moisture situation: "Climatic conditions in most districts this year are good, and there is sufficient moisture everywhere. Should no unforeseen circumstances arise however, nature often acts unexpectedlythere is every reason toood harvest this In mid-June', Khrushchev reported that the total sown area on collective and state farms had increasedillion hectares

During the first half of May, observers In Moscowrip through part of the Ukraine and reported crop conditions, "mostly good tooil moisture being marginal or slightly submar-ginal in the southern Ukraine but not yet causing serious crop damage. Preliminary indications are that the southern Ukraine received light to moderate rainfall during the latter part of May. Preliminary estimates indicate light rainfall in May for the Rorth Caucasus area, but any shortage probably was offset by above-normal rainfall in the previous month of April. In the new lands area of Siberia and Kazakhstan, spring rainfall appears to have been generally below that of last spring, and there are indications that in May the rainfall was relatively light in many of the areas of expansion of spring wheat and millet.

Considering the USSRhole,the June and July weather has assumed greater importance this year than in previous years because the wheat crop in the new lands area passes through its critical stages of developmentater date than docs that of the

traditional wheat areas of the USSR, and because corn,5 acreage of which has been increased by more than three times the acreage, requires substantial rainfall and warm weather if

it is to develop satisfactorily.

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1. General.

During the pastears the USSR has been unable to increase its agricultural production to keep pace with its expanding population. The present consumption level. In terms of average per capita foodis below that of the later years of the precollectlvlcation period.

Within the last yearalf, Soviet loaders have gambled on the successful development of two projects: (a) the needing of cropslargely spring wheat and milletonillion toillionillion toillion acres) of new crop land eastward from the Volga River and through southern Siberia and northern Kazakhstan, where farming Is highly precarious, and (b) the expansion of the acreage of corn into areas not well suited to growing corn and particularly not suited to the production of corn asther crops much better adapted for growing in the latter area, both for silage and grain, are available.

The USSR is faced with four major problems related to food

supply:

Is increasing at the rate of abouta year, and it will require ever-increasing amounts ofto feed the populace, even at the present low levels of '

people in the city and country alikethe rapidly growing numbers of industrial workersmore meat, milk, and butter to maintain efficiency.

supplies withdrawn from stockshen the USSR was forced by poor crop yieldsInto reserves to meet home needs, must be replaced.

USSR may require large tonnages of grainto exchange for other types of goods. In the past.exported as much asillion tons ofear.

At first glance the tremendous land area of the USSR would not suggest that lack of land In itself couldause of continuing agricultural problems. The crucial point, however, is the fact that climatic features of one sort or another place critical limitations on the profitable usearge part of this land mass.

In theountain range intervenes between the best farming areas and the western deserts. In the USSR there is no barrier between the Asiatic desert and the farm lands of northern Kazakhstan, West Siberia, the Volga drainage basin, the North Caucasus, and the Ukraine. Grain and other crops may flourish in the spring only to be withered by hot desiccating winds sweeping across the Caspian Sea, up the Volga River, or north into the region east of the Ural Mountains. Later in the season, cold air from the Arctic may flow southward,rain or even snow at harvest time into the northern European USSR, West Siberia, and northern Kazakhstan. Grain often rots in the field before it can be harvested.

Despite these and other natural limitations on land resources, it seems certain that the USSR could provide food for many more millions of people at present levels of consumption and could possibly ralae food consumption, both quantitative and tfualitative, to even higher levels. The failure to attain such goals has been,ery large extent, the result of the system under which Soviet agriculture has been forced to operate, with its attendantiencies and general policy of complete unconcern for the plight of-the peasant.

The morale of the Soviet peasant is low, and under the collective farm system there Is little incentive for farmers to exert themselves to more than the minimum of effort. It is difficult to conceive of any very rapid Increase in agricultural production until adequate incentives have been provided.

The primary incentives at present apply only to the Communist officials who are in control. They live better than their fellows, they have more privileges, and they enjoy power and prestigeype.

Beginning in the fallhe collective farmers were granted some so-called material incentives, including somewhat higher prices for produce sold, tax adjustments, the reduction of some delivery quotas, and money advances during the year, andmost recentlya portion of the com crop has been promised as an inducement for proper planting and harvesting of the crop. To date, however, there appears to have been no significant change in the peasants' lack of enthusiasm for the collectivized system.

The operation of collective farms theoretically is in the hands of the collective farmers themselves, but actually there hasremendouu amount of high-level centralized planning, and the farm operations have been under the indirect, or even direct. Influence of local party and government officials. Inecree was issued calling for more local initiative and less detailedirection* In subsequent months the government has Insistedwift implementation of this decentralized planning program which, on paper at least, delegates greater responsibility to local officials. This Insistenceapid uhlft toward decentralised planning has led to further confusioneason which even normally is busy and rather confused.

Inecree was issued which, in effect, called for the replacement of one-third of the present collective farmwith workers from the Party, local government offices, and economic enterprises. The large-scale turnover of farm chairmen probably Is aimed* at removing not only incompetents but also those chairmen not completely loyal to the present agricultural program. The new chair-ten will take over their new dutiesraining period ofonths. Because many of the replacements will have primarily urban backgrounds. It is likely that there will be furtherconfusion, creating another major hindrance to increasing current agricultural output.

It is true that agriculture in the USSR has been mechanized, but although mechanization has released manpower for the development of industry. It has not as yet given to agriculture the definite benefits that, have been achieved in the US.

One of the means by which Soviet authorities hope to Increase agricultural output is by extending production to virgin and abandoned lands.* Nothing so gigantic in the field of agricultural expansion has been attempted before by the USSR or, probably, by any other nation. This "new lands" program envisages expanding6 the total Soviet sown area by aboutercent, an area larger than the total sown area of Canada.

This new area will be seeded to "grain and other crops i" As much asercent may be in spring wheat, and most of the remainder will probably be seeded to millet. It does not follow, however, that Increasing breadgraia production Is the only aim of the program. Although some increase in the breadgraln area will result, the expansion of the wheat acreage on the new lands mayecrease of the acreage in breadgrains on the old lands and permit the expansion of acreage and output of feed grain, vegetable crops, roughages forindustrialnd the like. In principle, these shifts are rational. If the Soviet government could relyarge part of its breadgraln procurements on the sparsely populated areas of Sibcriu und Kazakhstan, it could ease its pressure on collective farms in old areas to deliver grain. The government must be aware that its procurements took toohare of grain production, that consequently not enough was left on the farms to feed animals or peasants, and that sometimes the pressure on supplies was suchot enough remained for seeding.

* It should be noted that the good landshat is, those lands thut have been found profitable to cultivateare already under cultivation.

Khrushchev has stated that more grain is needed for better feeding of the people and animals as well as for reserves and export. There can be little difficulty in dcmonstrotlng the need for greater production. The Soviet leaders ore placing great reliance on the "new lands" program to satisfy this need.

, hUBotching which It new in degree,

if not in kind, l0 agricultural policy in the USSR. It must be borne in Bind that in the USSR most of the major pronouncements previously made about agricultural policy changes have led to little or no sub-

hl"nCV laod6"however,airly rapid rate with the necessary inputsabo7 machinery, petroleum, and transportation.

h 6 frequently made that imply that the new lands program is likely to fail. First, it is argued that two decades ago much of this land was plowed and seeded without success. Second, it Is stated that the climate fluctuates so areatlyelatively low level of moisture availability that crop failure will occur otears out of 5.

In tho iantdecades there have been substantialin power machinery and equipment that make it possible to form

Ot haVC betfD fanoed earlier. The success of the new lands program, as far as mechanization is concerned depends on

the degree of effectiveness with which hastily trained mechanics can operate machines that are unfamiliar and are difficult to keep in adjustment.

The success or failure of the "new lands" program may also depend more on the average long-term yields that the USSR will consider acceptable than on Tairly frequent crop failures. This new lands areaelatively small part of the total cultivated area of the USSR. If the USSR follows Joseph's Egyptian policy and erects facilities ror storing grain during the "fat" years it may be possible to maintain workers in the area despite two or more consecutive years of croprovided the average lonp-term yield is high enough.

If this program is maintained, it is bound to moke come contribution to the wheat and millet supply of the USSRutigh cost. Soviet officials may decide, nevertheless, thus to augment production even though the program is highly uneconomical. It maybe found that the combined resources costet yieldentners per hectareushels per acre) in the new areas may be bb high as or even higher than that ofentner yield In the old areas.

Khrushchev hu been quoted as saying that the "new lands" program will break even with average yields no higherentners per hectare For official planning purposes, however, yields ofentners per hectare have been used.

In view of the Inputs being placed on the new lands and the top-level becking the whole program is receiving, it is difficult to believe that the project will be quickly abandoned or even seriously curtailed In the eventerious crop failure.

Preliminary studies indicate, however, that naturalparticularly climate, may interfere with the long-term success of the "new lands" program.

3- Corn Program.

The Soviet plan calls for an Increase In corn acreageillion hectares3 toillion hectares The increase amounts toillion acres, about two-thirds or the total corn acreage or the US. For the most part, the proposed acreage Ilea in an area having growing conditions similar to those In the northern half of Wisconsin and Minnesota and in northern South Dakota. Hence any expansion will have to occur in an area where the climate and soils are relatively unfavorable for corn. Furthermore,mall part of the acreage can be relied upon to produce grain.

Khrushchev proposes to plant almost one-third of the total planned corn acreage on land formerly sown to other grain crops, mostly oats and barley. The remainder of the corn is to be planted on land formerly sown to other fodder crops, root crops, and grasses; on pastures and abandoned land; and also, presumably, on summer fallow land. Theretrong probability that the replacement of other grains by corn will have an adverse effect on total grain production.

Compared with other grains, corn requires more knowledge and care on the part of the producer anduch greater expenditure of Labor, machinery, and fertilizers. In most countries it has been found that the risks are less and the rewards greater in producing other grains on what in the case of the Soviet cornmust be considered to be more or less marginal lands.

In order to evaluate the com program, studies on farm management covering parts or all of the states of Wisconsin, Minnesota, and the Dakotaa must be made. In this area the production of corn for silage as well as for grain is important. In the USSR, much of the proposed corn acreage will be harvested for silage.

In the UShole, in recent years, the laborper acre of corn have been more than three times the labor required per acre of wheat. In Wisconsin, Minnesota, and the Dakotas the production of corn for grain requiredan-hours of laborractor-hours per acre. Equally if not more important is the fact that corn growers used Ik short tons of manureounds offertilizer per acre. Some areas also required varying amounts of

The production of corn for silage required almostan-hours of labor andractor-hours per acre. Each acre also received an averageI/J4 short tons 'of manureounds of commercial fertilizer.

Assuming that soils and climate are similar, the Soviet corn program, if it is to operateasis comparable with USwouldillionillion man-hours draft power equivalentillionillionillion metric tons of manure,illionillion metric tons of commercial fertilizerto say nothing of other farm equipment, cribs for storing corn, and silos for curing silage.* The availability of seed corn of any sort iseal problem, and the development and production of sufficient hybrid seed for such an acreage are taskB that would require many years.

* Tt should also be borne in mind that in the USSR two or three times as much manpower is required toimilar farm operation as in the US. This would be especially true in the case of corn because of the lack of know-how on the part of Soviet farmers unfamiliar with corn culture.

Soviet plans callentners of silage per hectare. Thisetric tons per acre, compared with the US national average of aboutetric tons and that in the US north central states oro 6

metric tone per acre. It must ne remembered that the latter obtained only through the generous application of manure and liter, two Items which are unlikely to be available toarmer in any appreciable quantities.

It is likely that without major Inputs of lime, and fertiliser, average Soviet yields of silage corn may be than theU state-farm average of onlyentne hectarea) Instead of the presenta. a the fodder units per hectare, according to Khrushchev's win be no more than that obtainable from an oat yield ofven considering the full value of both tho oat grain and th-Furthermore, the labor, machinery, and material input for th. would be significantly greater.

B extremely doubtful that withinhe corn expansion program willignificant locremr hectare above that already being produced-on the same land, fact, it is not Improbable that the whole program will fall disrepute along with the previously abandoned projectsrass rotation program in dry areas.

Livestock Program.

The ultimate goal of the corn program la. of coui increase livestock production and thereby to Increase the suiand milk. Without an increase in the supply of feedstul livestock program cannot be fulfilled. Assuming, however,major part of the feed program is carried out, some increase and milk can be achieved, but it is difficult to see how the stock and meat goals set by the government can be attained.

The plan for pork production, for example, calls centnersectares of arable land, aboutounds per Pork production In the US25 billion pound* an arable land or crop acreage of9 millions equivalent to an average of aboutounds of pork per ac and in doing this the US utilized aboutillion acresest corn-growing land in the world.

II. European Satellites. A. General.

The European Satellites, as indicated by information available as ofre once more facing the prospectselov-normal harvest. This isesult of spring weather conditionsfor the seeding and development of crops. Rumania and Bulgaria are the only European Satellites for which5 outlooklightly better grain harvest thanUprimarily the result of an expansion of breadgraln acreage.

An early spring would have enabled an increase in the cultivated area in the European Satellites, and an Increase in spring sowing would have made up for unfulfilled fall sowing plans for wheat, rye, and barley, but there-week delay In starting field operations. This delay resulted In nonfulfillment of spring planting plans. Cool weather has prevailedune, retarding growth and development of spring crops and delaying harvests. Despite efforts to increase mechanization and farm labor, there has been only limited success. It is likely, therefore, that the shorter harvesting period and the lack of machines and men toimely harvest will result in above-normal harvesting losses and will reduce total production.

The capability of the European Satellites to effect aincrease in agricultural production during theearss very unlikely under present policies. Although there has been, and probably will continue toubstantial increase in investments devoted to agricultureeans ofcrop yields and animal productivity, the all-important role of the peasant will determine the effectiveness of these investments. Despite an initial liberal approach to collectivization with the announcement of the "newecent speeches indicatehift to pre-"new course" collectivization policy is occurring, with officials stating that complote socialization is the final objective. An long as this remains the policy, the peasant will not have the incentive to increase productions has been so well proved in the USSR. Low productivity in agriculture, one of the most Important sectors of the economy, will continue to plague the European Satellite governments for many years to come.

- Ik -

B. Weather and Crop Condltlono. 1. Albania.

Agricultural production in Albania5 probably will be somewhat lover than, whichelatively good year.

According to reports by the Ministry of Agriculture, the plans for sowing grain In the faUor harvest5 had been The greater portion of the fall-sown crops is wheat, and it is estimated that the area sown to wheat5 was0 hectares greater than thathere are indications, however, that this Increase was made at the expense of the spring-sown cropsorn and

Reports indicate that in the spring sowing program there have been failures which can be attributed partially to above-nonnal dry weather in the spring and lack of organization on the port of the Machine Tractor Stations. lk/

Government plans5 collpercent increase in wheat production over thatk, aincrease inpercent increase Inercent Increase in sugar,percont increase in tobacco. Because there is only aincreasenvisioned for the total sownt ii to be assumed that increases in production are to be achieved by Increased yieldB.

Under favorable weatherlight increase In wheat production may be ottalnedut corn and industrial crops probably will remain static orf dry weather continues to persistmay be less than

Plans5 and the projected output0ontinuing emphasis on agricultural production. The recentlyinvestment program5perceot increase. arge portion of this increase undoubtedly will go into land reclamation and irrigation. The long-term outlook for Albania, barring peasant resistance, indicates on increase in the contribution of agriculture to the total national income. The strongest factor

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ynamic growth is the reserve of land still available for exploitation. Continued investments for reclaiming this land and

the introduction of new techniques, education, and acquired skills of mechanized farming could improve the situation.

There arc indications5 over-all agricultural production in Bulgaria will be somewhat greater than thatU. Seeding of grain crops in the fallh for harvest5 apparently was completed in November,onth later than planned, XJJ but the winter was mild and wet, and the early spring condition of fall-sown crops was good.

Because of an early5 field work wasto the same periodspite of this, the press has

criticized failures to meet time schedules for the sowing of early-and medium-ripening grains. ,Above-normal precipitation during March delayed planned schedules and encouraged weed growth but was favorable to the development of pastures. Cool weather in early spring and below-normal rainfall during April and May possibly retarded rapid growth in the north, but by June the harvesting of early grain crops was in progress in the southern part of

planning5 indicates an expected gross

production7 percent greater than thatarger share of the increase is to result from an expandedprogram. Some increase in yields of the major crops is planned, but otherwise there has been no indicationhange from the past crop patternsexcept an expansion of perennial fodder grasses, which is in line with the current emphasis on expanding the livestock

Planned investments in agriculture5 are expected to beercent greater thanroportionately larger share going Into the lagging livestock industry and afforestation pro-

long-term planning in Bulgaria7 shows the greatest effort being directed toward increasing livestock numbers and related products. Because of the existing low ratio of pasture

avallabilities to planned numbers of livestock, modified goals have been projected. The dynamic planned growth of livestock numbers is further hampered by the relatively rigid and inflexible pattern of food and forage crops. With such limitations, it is not expected that any acreages taken out of food crops will be able to supply the additional feed required for carrying larger numbers of livestock.

Preliminary production estimates tend tolight Increase4 grain and potato production and possibly heavier slaughter weights for livestock. The situation of industrial cropstatic level of production. Although the over-allproduction in Bulgaria5 probably will be greater than, the planned increase7 percentnrealistic.

Czechoslovakia.

The present outlook for agriculture in Czechoslovakia5 Indicates that the,over-all production may not be any better than the below-average production Despite significant increases in agricultural InvestmentsU and those plannedeather and peasant apathy are once again working counter to the deal res of the government.

The failure of the fall agricultural campaign was well summed up by Prime Minister Slroky when he stated on5 that despite favorable weather conditions the farm work in the autumn4 was not completed. Sowing of grain in the fall4 for harvest5 was greatly delayed, and the plan for Increasing the acreage of arable land was not fulfilled. 2l/ The failure to fulfill fall work plans is further confirmed by the fact that, according to the Czechoslovak Minister of Agriculture,3 percent of fall sowing operations was completed byhe established In addition, fall plowing by the Machine Tractor Stations was fulfilled by4 percentJ/ Adverse weather during December prevented further field operations, and both sowing and fall plowing plans were drastically1 led.

Ail early spring would have enabled farmers to Increase spring grain acreage, but thereate spring, and the start of spring field operations was delayed by nearly aeult, an abnormally larger amount of work had to be performedhorter period of time. It is estimated that because of this

notUSl?Uled8ratn' sugar beets were

.entire spring has been characterized by below-normal

temperatures and inadequate sunshine, and the development of spring-Plantedcrops has been retarded. Field observers reported near-freezing temperatures In the northern half of Czechoslovakia and heavy frost as far south as Roznava as late aeay.

v. , ^ atC Eprlne Beano that tbe harvest of field crops will have to be performedhorter than normal period of time, as was the aituation In view of inadequate farm mechanization and labor shortages, high harvesting losses may result.

Unless exceptionally good weather prevails, the prospect^increase in agricultural output, especially of field crops, over the* level is unlikely. Plannedn yields per hectare ofercent for grain and more thanercent for oil crops will definitely not be attained.

,ood-deficit country attempting to increase its level of self-sufficiency as part of the

new course, will once again be dependent on imports for ashare of the food requirements of the urban population. Because of the low agricultural productionoupled with insufficient food imports, Czechoslovakia Is closing the consumption year ending5hortage of food supplies.

4. East Germany.

a r. Jpreaent indications are that5 over-all agricultural production in East Germany may be lower than that of the4 crop year. Any drop below4 level would make even more critical the present low availability of food.

Although rather favorable weather prevailed in East Germany during the foilor the seeding of grains to be harvested5 (wintert is probable that plans were notercent for wheat, barley, or oilseeds. The Ministry of Agriculture and Forestry announced that asecember the sowing of winter wheat3 percent completed. ZjJ Ko mention of barley was made, which could be interpreted as indicating an unsatisfactory situation. It is likely that above-normal precipitation prevented the seeding of grain any later thanecember. Seeding of winter rye was claimed to have been fulfilled5sovember, and, therefore, the plan probably was fulfilled. 5 plan, however, calls forectares less area devoted to rye than was sown in

The mild winter and above-normal precipitation gave winterood Btart. Contrary to the situation, when high losses occurredesult of winter kill, there was no evidence of winter kill thisn5 it was estimated that winter grain and forage crops looked better than theyear

Above-normal precipitation and below-normal temperatures during February, March, and April delayed spring field operotions by This meant that on above-normal amount of field work had to be donehortime when the government waspercent increase in field It is doubtful that spring planting plans were fulfilled. One source claimed thatew Agricultural Producers' Cooperatives fulfilled their spring

Another problem in spring planting in East Germany was the shortage of seed. It Is not known how serious the situation was, but the agricultural press admitted that difficulties may arise In the planting of oats, barley, and potatoes. 3jt/

The weather during May and tho firstays of June lias been cold. This has delayed both planting and development of spring crops (particularly vegetables) throughout East Germany. esult the entire harvest season will be later than usual, causing an overlap in harvesting of different crops. With the inadequate mechanization and labor shortage In agriculture, this could mean high harvesting lessen.

Unless there is vara weather and acre sunahinc, yields or crops may be leas than It is believed, however, that total production of grain, will be more than* because of less loss of acreage from winter kill5 and good soil moisture reserves. forecasts for potatoes, sugar beets, oil crops, and, the like are premature at thia date, but, assuming normal weather Tromune to the harvest of these crops, production could be expected. levels. With more normal temperaturea and sunshine, yields of forage crops should be above average.

5. Hungary.

The over-all agricultural production in Hungary5 probably will be unaatisfactory oven though it will be somewhat larger thanrought year. The outlook5 is that theroductIon* probably

Following in the wake of the serious decline Inhe government announced its plan Tor sowingillion hectares in the fall* for harvestn expansionectares over the previous Reports as or5 indicate serious shortcomings in the fulfillment of this plan, especially in the private farming sector. 3j/ These shortcomings are primarily the result of poor operation of the Machine Tractor Stations, even though their equipment had been increased during the year.

i

,lnt.rthe whole, the crops sown in the fall* weathered the winter without serious damage. There were some reports of severe freezing, but apparently the proportion of winter kill was not greater than normal.

A late and wet spring has caused additional delays in field work, and the sowing of spring fodder crops was reportedly unsatisfactory. Inhortage or spring wheat seed prevented the peasants from filling gaps lcrt by underfulfillment of fall sowing

. Q6 nanPe"fd by cold weather in March and excessive rain in April, and the development of both fall- and spring-sown Rrains has been retarded by the continuing cold weather persisting throughout Hungary. The below-normal precipitation in May has delayed theent of corn, particularly.

After the devastating experience In the agricultural sector, the Hungarian government has allocated to2 percent of all budgetary Investments This artificial stimulant comes too late, however, to offset the depressing effects of the extremes of weather and the underfulfillment of plans because of organizational difficulties. As of early June, the outlook forood supply, although slightly better than that, is unsatisfactory, and It may become worse.

6. Poland.

Indications are5 over-all agricultural production in Poland will about approximate that* and thatercent increase planned5 4o/ probably will not be achieved.

This generally unfavorable outlook in Poland is, in part, the result of failure to fulfill the plowing and sowing plans In the fallor seeding and harvest/ Failure to fulfill these fall plans, in turn, has increased the workload in the spring, thus reducing the probability of fulfillment of ambitious spring sowing plane. Overercentillion hectares) of Poland's arable land was to be sown in the springnd. Inectares of fallow land were to be put Into In view Of the chronic inefficiencies of the Machine Tractor Stations especially low tractor productivity, which was largely responsible for the nonfulfillment of plans in the fallit seems unlikely that spring sowing operations were fulfilled. Furthermore, bad weather in March and April delayed sowing operations as much/ and lagging sowing plans were severely criticized in the Polishs recently as early

Although favorable weather conditions prevailed throughout most of May, plant growth was set back in late Hoy and early Juneold spell which In some regions resulted in killing frosts. In many areas, grains seeded In the foilor harvest5 (winter grains) were underdeveloped, and planting of potatoes was still In progress In early This increased the necessity forweather conditions throughout June and July toair crop.

The chief tusks of the Polish agricultural program in 1QS5 include increasing agricultural production by expanding the sown area and increasing the yields per acre. Considerable expansion of the socialist enterprisescollective and state farmsis alsoalthough government hopes of Increasing the socialist sectornits annuallyre well behind It is precisely these socialist enterprises, however, which are the greatest laggards in fulfilling government plans.

agricultural Proeram is to be financed by an alloca-

tion1 billion zlotys from the Polish budget, an increase8 percent over the allocationj/ As mentionedectares of fallow land were to be put into cultivation5 as part of the government's long-range plans to increase the arable land. Inputs of fertilizers during spring sowing alone were to increaseetric tons It is unknown whether or not these inputs were realized but general availability of fertilizers should be greater than4 because of expansion of fertilizer production in the newly opened Kedzierzyn plant and the expansion of the Cherzow and Tarnow plant

Increases in livestock numbers have been noted. Because of the emphasis on livestock production as well as increased per capita human grain consumption,however, Poland hasrain-deficit country and has had to resort to imports to supplement domestic produc-

. olttQd importedillion tons of

grain from non-Bloc In view of present conditions, it seems likely that grain production5 will be no greater than theillion tons produced In that cose, Poland wild have to continue to import grains to support the present livestockprogram and to maintain the present human consumption pattern.

7. Rumania.

The over-all agricultural production in Rumania5 probably will be somewhat greater than that In the foil*illion hectares (chiefly wheat and rye) were seeded for the harvest This wasectares more than was seeded3 for harvest

Because of more favorablearger amount of field work was performed during the fall* than during the fallhe winter was relatively mild, with conditions about normal, and fall-sown crops wintered well. Ground moisture was considerably increased by above-normal precipitation during the fall and winter months.

Spring field work and sowing were delayed, however, because of cold weather and continuous rains during March and the beginning of Because of reported better organization of Machine Tractor Stations and the increase or other farmingreater part of the spring work was completed before the end of The rapid development of weeds necessitated extra work in corn fields, but up to June the development of small grains wbb satisfactory. Favorable weather in May helped the rapid development of wheat, rye, and/ and abundant ground moisture hasood start to the com crop.

The announced government program to increase agricultural production5 made specific reference to grain production as the most important factor in agricultural development. 5 plan callsrain production ofillion metric tons, of whichercent is reflected in the expanded corn program. 4 grain crop was estimatedillion metric tons. 5j/

The acreage of grain has been slightly expanded, and weather conditions up to June have been favorable. The prospects for5 grain harvestomewhat better crop thanut the planned figure ofillion metric tons of grain5 is unrealistic.

C. Outlook for Agricultural Production.

One Important problem that the European Satellites have in common is their low agricultural production. This problem was brought to the attention of the world with the announcement of the "new course" policy measures in the summer and fall These announcements stressed the fact that agricultural production had not attained prewar levelB and in some areas wastate of decline. Two major reasons were givendirectly, the inadequate agricultural Investments, and, indirectly, the collectivization program.

-R Jj^Wflf T

Investments were immediately increased for agriculture and increases have continued The investments have primarily been channeled into machinery, fertilizer, buildings, and livestock. Aa in the past, the social lied sector was favored.

The collectivization program, which temporarily came toin some countries and was slowed down in others, wasthe last half. Propaganda and possibly economiconce again being applied in the countryside In order tomembership of the collectives. Each of the Europeanhus announced that eventual socialization ofthe answer to increasing both agricultural production andof farm

One incentive which the European Satellite governments thought might raise agricultural production and help themarger share of the production was an increase of the peasants1 supply of manufactured consumer goods. roduction in light industry was emphasized, and there was on increase in the supply of consumer goods to the rural areas. The Increase, however, was not enough to effect an increase in either production or procurement of agricultural products As ofune,ppreciable Increase* is foreseen In5 availability of manufactured consumer good, for the countryside. This willontinued shortage of incentive consumer goods that might at least cause the peasant toreater share or his production.

On the basis of these facts, it is estimated that noIncreases In agricultural output (especially livestock) will take Place in the European Satellites during theo the extent that prewar levels will bether than what may result from excellent weather in any one year.

The Communists have failed to consider the importance of the human element in agricultural production. As long as the peasant knows that he will eventually have to give up his land andollective, there Is no Incentive for him to make the increased inveal-ments In his farm neceasary to raise crop yields and animalimilar situation prevails In the socialist sector, where the collective and state form membera do not have the personal Interest in the tending and caring for field crops and livestock, and the result Is lower

production than on privately held land. This has been proved by Soviet experience. Therefore, should thererive toward completeof the European Satellite farmers, or ateversion to the pre-"new course" collectivization policy, agricultural production could well decline. In any event, it is estimated that the European Satellites, in total, will not be able, to Increase agricultural outputate higher than that of the increase in population and that they will not attain prewar levels of production Under present Communist policies the problem of trying to establish an agricultural production base adequate to meet requirements will be with the European Satellites long

III. Conmonlefr-China.

CommuniBt China is faced with new agricultural setbacks which threaten the industrial development and military modernization programs. To counter these threats and to maintain exports of foodstuffs, the Communist regime has been tightening controls over food consumption in both rural and urban areas. Some open unrest resulting from these measures has been reported.

The production outlook for the early crops being harvested in June in most of Communist China is poor, but the harvest will relieve somewhat the general food shortage and the starvation prevalent in certain

The crops sown last fall, which are about to be harvested, normally constitute aboutercent of Communist China's annual food output. These crops have been hiteries of disastersplanting problems caused by undrainedther aftereffects of last summer's disastrouseverend the spring drought which has afrected all of China except Manchuria and the Yangtze Valley. 6l/

The Chinese Communist press has already conceded that in the Borth Chinaajor wheat-producing area, there have been losses to the wheat cropesult of the The drought in the South China province of Kwangtung is said by Communist sources to have been the most severe in more than The food situation there is expected to remain critical until after the late summer rice Meanwhile, thousands of refugees and destitute farmers are reportedly fleeing to Macao and Hong

-

As yet there has been no announcement of mitigation of agricultural taxes in kind or of quotas for peasants' forced sales, both of vhlch are set on the basis of norms. To combat the condition of general scarcity, the Chinese Communist government, which controls the distribution of most of the country's food, has intensified the austerity campaign by reducing allocations to both rural and urban markets late this In recent months, rationing in cities, first adoptedide scale last year, has been extended to more items in more Recently adopted urban austerity measures appear designed to reduce the food rations of population groups less favored by the

Another government action taken this spring to cope with agricultural problems has been the strengthening of the Partyhe real rulers of rural This effort to increase Party control over the peasants probably indicates that immediately after5 fall harvests there will be stricter procurement policiesenewed drive for the development of Agricultural Producers' Cooperatives, an elementary form of collective.

To cope with food riots in the starvation areas and with other manifestations of hostility, the Chinese Communist regime apparently has strengthened security forces in the countryside. Communist control of any appreciable area, however, apparently has not been seriously endangered.

Because of the* floods In the Yangtze Valley, China's "rice-bowl" area, this year's planned exports of rice toetric tonsave been coming from Canton, fo/ despite the critical food situation in South China. Rice exports from South China to Macao were increased in, and exports to Bong Kong werein5 after an interval of several Moreover, the Chinese Communists continue to ship rice to the USSR. The Communist regime has contracted to buy from Burma thisetric tons of rice, which will offset part of the Chinese Communist rice exports.

The Chinese Communists have often publicly expressed theirto export foodstuffs to pay for industrial They are expected to try to maintain net exports at the level of previous years.

The Communist regime has5 food target calling for an increaseercent over last year's This goal may not be reached unless the fall harvests are larger than normal. As has happened in all other years since the Communists came to powerood productionrain equivalent basis again may fail to reach the average output of the prewar years1

These failures, reminiscent of the difficulties experienced in the USSR during the early years of Soviet economic development, appear to haverincipal factor behind the acceleration of socialization and state controls and the adoption of Increasingly harsh austerity policies in Communist China during theears. The peasantaroused by the regime's actions is regarded by some observers Tk/ asajor potential source of instabilityunless, of course the regime chooses to moderate its policies at the expense of the current rate of industrial and military development.

There are no Indications, however, that the regime is inclined towardajor shift in its planning. Recent official statements indicate that the Communist regime now recognizes that the rise in food output dur ing the first two Five Yearill be limited because of the low priority assigned to allocation of investment resources to the agricultural 6ector of the economy. The Communist regime has clearly abandoned hopes expreoscd early in the First Five Year Plan for anof as much asercent in food output

Actually, during the first two Five Year Plans the rise in food output probably will notrercent and may be muchstimated population growth during this period will almost certainly keep pace with the rise in food production. After that it will be impossible to maintain an equilibrium without substantial inputs of fertilizer.

The two principal means of achieving agricultural Increases in Chinahe application of chemical fertilizer and the opening up of new land vith mechanized equipmentwill not be attemptedarge scale until the Third Five Year, according5 To/ report by the Minister of Agriculture to the State Council.

It is estimated that the supply of chemical fertilizer in Communist China will, rise frometric tons3 toillion metric tons At leastillion toillion metric tons are needed to achieve significant crop increases. Jj/

A modest plan to expand acreage during theears was recently announced. The plan envisages the addition ofercent to Communist China's present cultivated

Meanwhile, Communist China plans to concentrate on expansion ofand water conservation works as its main effort to expand food output, and modest increases can be expected from this

In view of these unfavorable long-range prospects the rising needs of the regime for foodstuffs are to be met by an accelerated drive to increase In several ways the regime's control over agricultural output. These unfavorable agricultural prospects, the drive toward socialized farming, and other harsh rural policies of the regime have led some observers to conclude that during the first two Five Year Plans there is in Communisteasonable possibilityeasant reaction similar to that of an important portion of the peasants in the USSR during its First Five Year Neither this possibility nor thatore open -peasant revolt appears to worry the Communist regime; which has already developed effective security controls in the countryside. i

Unlesserious reaction occurred, agricultural failures probably would have no great effect on Chinese Communlct military plans. The worst food situation in the regime's history occurred In Later in the year the Chinese Communists intervened in Korea. The food situation remained poor but was slowly recovering1 and2 "hen the Chinese Communists committed and suppliedhinese Communist troops in the Korean

APPENDIX

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SelttkOye khozyaystvo, lU Oct 5'i, U. Eval. RRT Octi, U. Eval. Rii 1. Eval. RR P.

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