ClAHISTORICALR^PROGRAM RELEASE AS SANITIZED
INTELLIGENCE REPORT
STBAIEGIC STOCKPILING POUCY IN THE SOVIET BLOC
is Mai* rasa
CENTRAL INTELLIGENCE AGENCY ;onr.!ci: of Resekroi and reports
STRATEGIC STCCKPILIHG POLICY IN TIE SOVIET
Su-aaary
The USSR is operarogram or strategic stockpiling which significantly increases its economic flexibility. Similar progrums have been established in Eastern Europe but areuch lessstage. In tlx- USSR, strategic stockpiles of considerable magnitude have been created at great cost. These reserves serve to reduce military vulnerability, to protect the economy frem other major disruptions, and to support plan fulfillment. In general, they are Intended to permit the government to take rapid, effective action in domestic and international situations which threaten It or afford opportunities to extend its power.
Soviet stockpiles are widely dispersed and are administeredpecialized organization. This mechanism provides strict control over stockpiles and insures that they will not be dissipated in nor.-strutcglc uses. In addition, itramework for regional self-sufficiency ln time of emergency.
1. Concepturpose of Strategic Stockpiling.
a. Definition.
Numerous categories of material utocks exist in the economies of the Soviet Bloc, ranging from working inventories located at individual plants or sales bases to the "reserves held at specialoperatedational stockpiling authority. The sua of ull these categories may be called national inventory, which breaks down into two foujor groups: normal operating stocks and strategic stockpiles.
* The estimates andontained in this report represent thc best Judgment of the responsible analyst as of
Normal operating stocks are organised in an extonsive syntem vhlch includes plant, commercial, seasonal, and other types of Inventories. These stocks are of Immense Importancelanned econcny because they are the major link in the system of material flows vhlch is crucial to the conatruction and fulfillment of piano. Tliey not only must provide for aupply among all sectors of the economy but also must be large enough to absorb the effects of chronic production and transport failures and yet small enough to keepinimum the amount of idle capital.
Tbe practice in agriculture illustrates the extensive nature of the system of normal stocks. Each kolkhoa must maintain three funds in kind for special feeding, seed, and fodder, and each is reinforcedorresponding insurance fund in stocks are formed at each stage of thc distribution chain fron kolkhoz to consumer, including the Machine Tractor Station, the procurement organisation, the processing plant, and the trade outlet. All these stocks are owned and disposed of by tbe local storage agent, subject of course to the requirements of the plan and the supervision of the economic control organs.
Tn the eyes of the Soviet leudcrs, hovever, tbe system of normal operating stocks cannot be used to provide against all contingencies. To enlarge this systemerel where it could sect such emergencies as var, drought, major transport breakdowns, or serious planning errors vould endanger centralised control over materials. This is true because lt vould entull putting large amounts of reserve stocks, far greater than those needed for normal supply and expected bottlenecks. Into the bands of economic units vhlchested interest in hoarding and In consumption.
The USSR has superimposed upon this system,econd system of strategic stockpiles, vhlch are ownedational stockpiling authority. These stockpiles, called state reserves, may be located at plants, at distribution points, at military or police units, or at state reserve bases. Despite these und other diversities, hewever, strategic stockpiles arefrom normal operating stocks by one common characteristicthe storage agent for these strategic stockpiles cannot release them
* Footnote references In arable numerals are to sources listed In the Appendix.
for use without specific authorization from the state. More positively, strategic stockpiles consist of unallocated resources under the Immediate control of the state.
It might be argued that, sinceommunist country all resources are at the disposal of the state, the distinction between strategic stockpiles and normal operating stocks is no more than formal. But this argument ignores the institutional framework of the Soviet Bloc economies and particularly the mechanics of tho planning process. Planning cannot foresee, let alone prevent, all possible economic, military, and political crisesndeed. It sometimes contributes to them. Furthermore, the economic ministries cannot be allowed to accumulate tbe stocks necessary to meet all these crises, since this would undermine centralized control not only over materials but also over economic units. On the other hand, the USSR has discovered that attempts to change allocations, whicha continual revision of the material flows laid out in tbe quarterly and annual plans, quickly destroy tbe advantages which the state obtains from economic planning. Tbe USSR, therefore, has chosen to build up and maintain strategic stockpiles vhlch can be held inviolate or put into use upon specific occasion at the vill of thc state.
b. Concept.
Thus defined, strategic stockpiles consistollection of material resources Immediately available to the state for use in various types of emergencies. The classic Soviet statement of the subject Is Stalin's much-quoted assertion that "it is necessary that the state have In Its hands certain known reserves necessary tothe country against any kind of contingency (pooror supplying Industry, for supporting agriculture, for thc development of culture, and so on. Without ronerveB, life and work vould not be possible at the present) Other Soviet vriters state that one of the contingencies which would call for the use of strategic stockpiles is war, and this, of course, is the only occasion upon which stockpiles of military end items-could be used. In the case of nonmllltary Items, however, strategic stockpiles may be usedumber of Instances, including wartime disruption of the economy, such natural calamities as droughts and floods, and economicdue to planning failures, transport breakdowns, and other supply difficulties. Strategic stockpiles may also be used in time
of political-crisis: e release of large amounts of food, clothing, and other consmerrooerman state reserves during the3 riotsac entirely consistent with the Soviet concept of strategic stockpiling.
These stockpiles are strategic, therefore, because theya large amount of economic and military resources which enable the state to take rapid and effective action in any situation that threatens its power or offers an opportunity to extend It. The requirement that all releases must be approved by the center and the creationational stockpiling authority to enforce thisassure that each proposed release will be Judged against the total stratagic interest of the state, an Interest which includes economic growth, military preparedness, and insurance against material shortages.
*
2. Organization of the Stockpiling Effort, a- Military, hf .
Stockpiling of material intended for military consumption is carried out primarily by the armed services. In the Soviet system the Ministry of Defenseide network of regional depots in all the military districts of the USSR. This stockpiling nysten-is under the general supervision of the Chief of the Rear Services, but administration is carried out by the main administrations of the ccrabot branches, technical services, and rear services for whosehe stockpiles are ultimately Intended.
Regional depots, specialized along commodity lines, exist for rations and fodder, fuel and lubricants, weapons, ammunition, clothing motor vehicles, engineer supplies, armored equipment, and signal and medical supplies and equipaent. These depots may contain replacement supplies as veil as strategic reserves. The latter cannot be utilized except by authorization of top-level cemmand and are constantly turned over to prevent deterioration.
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b. Economic."
Stockpiling of materials intended for consumption by the national economy la carried out in the USSR by two organizations: the Main Administration of State Food Reserves and thc Mainof State Material Both are attached directly to the Council of Ministers of the USSR and thereforetatus equal to that of the All-Union ministries. Through them the state exerts that centralized, planned control which Is essential to the realization of the alms of the stockpiling program.
The Moscow headquarters of these organizations are set up along functional lines and include administrations of two typesthose concerned with the accumulation, maintenance, and release of stockpiles of particular commodity groups (such as grains, metals, and fuels) and those concerned with administrative functions (such as personnel, construction, and/ In contrast, their field offices are organized on the regional principle. The basic field unit Is the territorial administration (territorlalnoyehich operates all phases of the stockpiling programiven region and ia responsible directly to the Moscow office, beingof local authorities. These territorial administrations, which cover the USSR, are Important links In the policy of regional self-sufficiency. Through them thc USSR attempts toattern and level of stockpiles which guarantee the uninterrupted operation of all regional economies in any eventuality.
The strategic stockpiles controlled through the territorial administrations Include capital equipment, industrial materials, and foodstuffs. 7/ They are divided into three categories. 8/ The first includes reserves stockpiled at plants and warehouses of economic ministries. These reserves are in addition to, and are carefully differentiated froa, the normal stocks and normal reserves at these plants and are owned and strictly controlled by thefood or material reserve agency. They consist of (l) planned
* It is possible that the agencies responsible for economicalso maintain some reserves destined for military consumption. These organizations were formed2 by splitting tho former Ministry of State Food and Material Reserves. It is possible that they have been reunited in the general administrative consolidation which followed Stalin's death. 5/
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amounts of thc nwterial inputs required under the normal production plan of the enterpriselanned amounts of Its finished products. They cannot be used by the enterprise, which merely acts as storage agent, without specific permission from the state. The site of. these stockpiles is geared to the production program of the enterprise. One Soviet defector has stated that input stockpiles must be sufficient foronths' production and that .output stockpiles must consistonths' production. 9/ These statements, however, are without confirmation.
The second category of stockpiles consists of reserves held at specialized reserve bases owned and operated by tbe two stockpiling agencies. These stockpiles are designedast line ofo be used only after the depletion of all types of normal inventories and the first category of strategic stockpiles located at enterprises. They are intended to include all the materials required to insure the uninterrupted operation of the regional economy when depletion of all other local sources has occurred. Tbe defector- Cited above reports, again withoutthat these stockpiles are set at levels sufficientupply ofonth
The third category of stockpiles consists of mobilization reserves. These stockpiles are located at enterprises but are not designed to guarantee continuation of normal production. Instead, they consist of the toolB and equipment necessary to convert the enterprise to the production program laid down in Its mobilization plan as well as the material Input's required to maintain that productionpecified time period.' . Vozneeenskly-describes the program as follows:
Prior to the Patriotiche Soviet government adoptedrecautionary measure the "mobilization plan" with'respect to ammunition for the second half: and, aiming at wartime conversion of industry in the event of war. The mobilizationefinecVa program of Industrial conversion, especially for thc machine-building industry, in the event-of an . The Soviet government took measures to prepare enterprisesossible conversion of production in line with theplan in the case of war. For this purpose,
enterprises uere given assignments to work out technological processes for ammunitionwith the equipment on hand, to prepare tools and equipment for thc production ofaccording to the mobilizations!assigned to them, and to stockpile the materials and semi-manufactures essential for war production in the mobilization reserves of
These mobilization reserves are owned and controlled by the Main Administration of State Material Reserves, which works closely on mobilization matters with the Mobilization Departments which exist throughout the Soviet economy on the ministerial, mainand plant level.
The Soviet state has capitalized upon the existence of the stockpiling agencies by adding-to theiresponsibility which goes beyond the concept of strategic stockpiling agencies: namely, the control of excess resources. The stockpiling agencies perform this function in two types of instances. First, whenever productioniven ccramodity exceeds the planned distribution, "the question arises, of increasing the initial allocation to state Second, according to Voznesenskiy, state reserves alsoole in the storage of seasonal stocks.against the disruptions of transport which occur in tbe winterhis problem of seasonal inventories is of particular importance to industries located far from their suppliers and to industries inarge portion of annual consumption or productioniven commodity occursingle season. It appears that in some cases of overproduction and seasonal inventories resources which are temporarily surplus may be put under the control of the stockpiling agencies, which have no vested interest in consumption, into leaving them in tbe hands of distribution agencies or consumers, either of whom would be likely toay to use them.
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The organization of stockpiling efforts in the European Satellites shows considerable variation. Central stockpiling authorities on tbe ministerial level have been established in East Germany, 1U/nd Scattered information exists concerning stockpiling activities in Poland, Czechoslovakia,
Hungary, and Albunla, but apparently operations aro carried out by Individual economic ministriesrogram coordinated at the national planning level. Economic stockpiling In Cast Germany Is the responsibility of the State Secretariat Tor Administration of State Reserves, formed from the State Administration for Material Procurement innd one report indicates the possible existenceecond stockpiling authority for material destined for the army, the police, and the Dlenst fuer Deutschland. Rumania established an Office of State Reserves at the end
3. Operation of the Stockpiling Program.
The stockpiling agenciesigh priority in the USSR. Fur from representing the residual remaining after the satisfaction of other requirements, stockpiling allocations are filled from the first fruits of production. Soviet writers regard state reserves notuxury to be enjoyed to the extent that the economy can afford, butrime necessity. Thus E. Lokshln writes, in Bol'shcvlk:"The increase of state reservesarticular type of product depends on the significance of that type offor the economy and for the defense of the country, on its scarcityn the scale of production, on the conditlons of storage and on the time necessary to increase Itsin case of Defectors froa all levels of the Soviet economy confirm that stockpiling receives first-priority
It appearstockpiling priority policy of equal sternness has not yet been applied In the European Satellites. of reserve goals and unauthorized consumption of stockpiled items arc reported In East Geraany, where the authority to effect releases was transferred from the Cabinet to the Presidium in2 in an apparent effort to strengthen In the other Satellites, positive information on stockpiling priorities and vigorous enforcement of stockpiling allocations Is lacking.
The establishment ofadministrations andof stockpiles atconsumptionideof reserves In thethe central supply depots
containing military stockpiles are scattered throughout the military districts, thc numberingle military district ranging from. The special bases, which are heavily guarded, are served by railroad sidings and must be locatedinimum distance from thc main line so as to reduce their vulnerability. Thus the strategic stockpiling system -oust be regarded as including theof millions of ton-kilometers.
c. Withdrawals.
During World War II, all withdrawals from Soviet strategic stockpiles were made on tbe Justification of the defense of the country. As consequence, sources whose information dates from this period regard state reserves as "untouchable" except in time of war. On the other hand, more recent defectors report that the strategic stockpiles stored at enterprises with which they were connected were occasionally released and put Into use upon permission from Moscow.
for
example, reporting tne existence of an emergency stocxquare decimeters of the best chrase leather "which could beonly upon special orders froa theoted thatwere often authorized and that after such withdrawals "the emergency stock was replenished as soon as Another Soviet defector has reported that mobilization reserves* within the Ministry of the Merchant Fleet could be released upon guarantee of Such releases implement the policy of using state reserves,to prevent economic disruption In time of peace.** The requirement that permission be obtained from thc center insures that local releases shall not significantly reduce national reserves, while the mandatory repayment of material loansurther attempt to combine flexibility and preparedness for war ln the stockpiling program.
* This source also lists the following items as being maintained in "mobilizationy this ministry: tugboats, steel ships,weapons, nonferrous metals such'aft bronze and babbitt, special treated steels, solid and liquid fuels and lubricants, navigational and steering equipaent, internal combustion engines und spare parts, and clothing and
It should he noted that the "refreshening" process, under which old cconoditles are replaced by new stocks in thc strategicprogram,onstant flow frcm stockpiles to the national economy.
Original document.
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