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Gorbachev's Agricultural Policy: Building on the Brezhnev Food Program
prepared b>
of the Office of Sovietierie. ire welcome and may be
.SOV A.
SuruMi?
tl of
Agricultoral Policy. Building on Ibc Brezhnev Food Program'
Since beaming General Secretary, Gorbachev has assigned^ highimproving efficiency and reducing the coonnccos costs of foodHe has called for changes in policy toward agriculture andinvolved in food production and is pushing hardAccelerate the shift In the share of investment resourcesproduction away from farms and into development of ruralfood processing, and the nvacWne-bnildrag andthat support
Further restructure management of the agro-industrial sector to elun.-oate intetdcpartrjvalal conflicts and better synchronize the Recess ol moving food products froratarms to retaU outlets.
Replace "administrative means" with stronger economic incentiveseans of regulating enterprise activity.
These proposals build on2 Brezhnev Food Program and in concept,undamentally sound attack on the problems in food produc-tioa. Gorbachev hatood start in implementing at least some ol hi, ideas. To date, he has:
. Replaced top agro-industrial officials with his own associates and made major cuts in adrmnistrativc staflY The new agro-mdustrtal czar. Vsevolod Murakfcovskiy, seems committed to moving ahead rapidly in implementing Gorbachev's program.
. Moved aggressively to further revise and enhance organizational aspects or the Food Program by merging five ministries and one slate committeetate agro-industrial committee lhat is intended to have broad authority io plan and finance activities of all branches concerned wilh production and processing of food and natural fiber.
.ecree on agro-industrial management that gives localand farms more control over disposal of afcyve-pUn production and allows the sale of more produce, particularly perishaNea. at market-influenced prices.
. Provided for the transfer of all production subunits on farms and in other agro-industrial enterprises to the collective contract system of labor payments that makes financial rewards for workers somewhal more dependent on results.
Prorriised lo come up wilh specific profsouts for irarn-oving planning,nd iocentrves in lime forlan '
Gotbachcv'a strategy resembles lhat of put regimes ino far relies on reorganizing burvancracy, manipulating invest men t_ aad revising tbe exit li oa; incentive lystem while dodging lhe very difficult and controversial issues of major reforms in incentives, price forma item, and ckcisioturiskini latitude permitted iisdrridual farm rrsaitsjeri. Gorbachev ackrsowVedgcs thai bis present program I*irst step. Hi* prior exrxriencc ia agriculture aad political strength in tbe area, which allowed biro to undertake major reorganization first io this sector, pot himoodbe sointroduce additional initiatives that would be difficult to sell la other pans of tbe ecoixamy.
Effective Implementation of even tbe limited programs adopted to date requires, first, that Gorbachev, with Muisknovskiys active support,bureaucratic resistance to the reorganization and successfully irrrple-meot new lines of authority. Second, if the investment program is to pay off. Gorbachev must have at least some success In the campaign to modernize Industry. Finally. Oorbachev must follow through on his stated intention to provide an environment that relates rewards to effort. Thisattern of incentives (and penalties) to induce managers of farms and enterprises providing goods and services to farms (including transpor-Ulioa, marketing, aad processing of farm output) to carry out their function* in an efficient and timely manner. As long as, for example, prices are poor guides to decisionmaking, supplies are centrally allocated, and detailed plans are Issued "fromhere will be pressure forinterference in farm affairs and no way to make enterprises accountable for Inefficiency and high costs
'i To achieve productivity gains large enough to rrduce costs, subsidies, and the Bow of resources to food production, therefore, Gorbachev must be willing and able to implement additional, fundamental changes. The6 decree on agricultural management and lhe ciperlmcuts currently under way in the farm sector, however, detneatstrate that Gorbachev Is not yet ready to pursue such fundamental reforms. He undoubtedly perceives that such reforms carry unacceptable risks at present because they would threaten lhe rraogatives of lhe firmly entrenched party and government bureaucracies and might cause economic
wail lo asseae ibe reauta of hb
las more radical alternatives.'
We believe thai ibee drappcanled In ihe Iftcly u> be madered*inf. -
a^=iVlTa^^
"second stage" of airicullural reform migbl include.
. of Vocal wUHXilie. to actocxa .nto
chanEing
. iS* Vocal party Interferenceh day-to^ay
. Moving to-art low minimum wages and imr* farm* more authonty
n^erover the ambition of .uppl.esnd
.,hrouBhhe promiseguble to eaoarrd the amount controlled by Ibe farma.
43a.
aaaaaaaw
Gorbachev's Agricultural Policy: Building on the Brezhne* Food Program'
General Secretary Gorbachev haa Inherited an ineffi don)sector that bar one-third of all fixed capital (excluding housing aod services) butiet well below that of other ittdustria tired countries ia term* of quality andhe keifisacy of Gesrbechev'a exesraornlcl rcritalira-tioe program will beart, by tjli ability to uraprcne the quality of tbe Soviet diet. At tbe aanac time, be needa to raise productivity ia thia sector so that be can divert new resource Soars from agriculture to hla industrial modcrsilxatJon effort:
Tbe farm sector alone absorbs aboutercent of tbe Ubor force and investment resources (excluding bousing aad services! compared with (etaereenl ia the United Stales.
State tubaidy payments to cover Ihe difference* betsveea relatively low stale retail food prices and prccvreeacDi prices paid to farms have tripled since the. Tbey now account for IS percent of the slate budget and are equivalent to aboutird of total national income toners ted ia ibe farm awaor.
The additional fixed capita! needed to generate an additional ruble's worth of farm output baa tone upactor of focr, ithree timet as high is comparable capital rerjalrerrscnts ia Industry.
the high coats and inefficiency in Soviet food productserti;
A proliferation of specialired edmhrutrativeat part of past efforts to address agriculturalled to bloated sdmiahve staffs, la the sbasnscertesAaaism to regulate tbe relatioos of tbeae "partnera,"self-interest has encouraged tbe pursuit of often rrnsi goals. Bsaxaarve batrcaacraiie iater-ftreacc in local farm maasgernent baa led lo inefrV cieni production decisions and encouraged irreapcai-fibillty ajaong farm managers.
A grossly inadequate farm-to-market road systemack of iirsrage and transportation capacity haveor Large losses of farm prcducu between field aadtlcL
Industrial inputs to farms and food-peocrjsinghave beer. dcaVcient ia oualUy assd assortment.
Fiaandal incentives for farm managers and worken do aol depend sufficiently on the sire and quality of the harvest-esult, eflWetsey aod initiative are not eracouraied.
rsoecuaie boesi.ig aad poor rural Irving arrvdiuoos have encouraged younger, better cdacalrd weaken
to migrate to cHles.
Hard currency outlays for farm product imports are about fou. dmca tbe Vrvd cf the. Tbey account for one-third of hard currency Imports, up from case-fourth in tha.
The leadership haa ackncmledged that probterna not related to weather have contributed subtUatially lo
' la Sovki vasts, the (god rrotociioaafo-'nlowiialtraditionallyUullarE. eatsniulkini luiirili-kat tooea aad arrvieea laaftcaltam sack asoti^otc ssaasanary.ad atarrasscarrasrii salaries, leod-
orocaMlnt iadaUnac aad Sradr orn-iui err-
The Sovietsajor effort to rectify tbeae problems with the2 Betrhocv FoodItackage of measure* designee! to improve the efficiency of food product loo through better integration of all brancbea of tbecomplei. in terms of both the allocation ofand planning and management. The program also contained schemes to improve agriculture'a infra-tlructarc aad bctlcr the qaeb'ty o! lie in ibe rural areas (see Inset, "Key Features of tbe Brerirocv Food Program"1.
Feeeeret af iht Breiknev foot1 froiram
Tkt breihnev Food Program Included ihrtt key measures aimed at Improvlni food production and dUtrtbution.
First, to promote "urdftidf food production, tke Food Program broughtingle admdntstrattvt hierarchy the Ministry of Agriculture: tke ntinlsvies supplying agricultureet. transportation, and other services; tkt Mints try of Procurement, aad Ihe ministries managing the /odd proeming Industry. This orgenlielicn urns rt-sponttbltfor coordinating tht trttre food-production process from farm to retail outlet. Commissions made up of ike krads of lhe organisations Involved mm farmed at ike national, republic, iray. and oblast levels. At the rayon (district) level, "rayon agro-Industrial associations" [RAPOt) were formed. Tkty Include ell farms, service agencies,iven district and theoretically cut across mintstrritl lines, concentrating eulhoriiy at Iht local level
Second, tke edminisiratue reorgantiation was backed up by en Investment program to upgrade the sylttm/or handling, storing, and protesting food and ta improve housing and living conditions in the countryside. Tke heavy emphasis en Investment In rural Infrastructure reflected Moscow's desire la Improvearkel tramportetlon and stem the flow ef younger workers lo urban areas, luxrtastngly. ike Soviet egrleulivral labor force It made up af older, less productive workers as younger adults migrate to cities
Third, ihe Food Program provided an Intreese In financial Incenllrts thai was Intended to Increase output and retain younger, better educated workers on forms- Procurerrutnt pricei. especially for livestock products, were retted subttemiallyJ.
Tbe Food Program was flawedumber of respects, lis cecaniutrnalra iactpded concet-lioos io lhe inicretts of the central branch ngeociei. which msde integration laricly unworkable. It also failed to comerips with lhe mere fundamciitnl pratacatti. of Leiing rcvartb lo pesfeeraace, giving (am freedom to make product ion deetstorrt, andational pride ayalem lhat would didt the right mil and volume of farm output and inputs.
Nevertheless. Soviet dllzcos eipcrieneed an Increase ia per capita coeuumptioa of Quality foods taurine the irt'. three yearscf tbe Feed Program. Despite drier assd there/arc less favorable growinghe regime waa able toat forage crop prodaciioQ substantially aad OKreasc the prodoctkei aad diatribeIjoc of faultier aad other agricultural dacrakals. Lscrtased feed availability, auldei winter weather,ain impoits. and Improved feeding practices allowed Ibe livestock sector lo continue aleady growth, which betas' Mcdest gains were achieved In the production of fruits andProgress la tbe production of other important crops daring thk period has been negLgibac. boacer. with average annual production of grain, potatoea. lugarbeeu, and dlscedsevels."
While the regime has made progress in per capita cooiuenptioo of quality foods such as enest, milk, fruit, and vegetables, the Food Program has done litthr to further other important regime objectives arrcatirui tha rapid rises in costs ofi ng peoductivjiy, and reducing waste (figure Ik
Real per capita food importsereercent above ihdr' levels.
There waa no apparent irnexrweenearl Inaisdstorage-
Production costs for major (ami products rose steadily.
ia prtaducuvity were small 'lb* ifiip im-iiIirooihM!net bvulocbaraJactiaa wai
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Moang the Food Program Forwsrd
Brerhnev'i tgriculture secretary. Gorbachevtjor architect of tbe Food Progrs m. but bit ttkeecbet al tbe liaac reflected disuioftana wiih tcene of tbe csMiprornisci. Sinceeath Inorbachev baa eonibt to uic hit stowing Influence In tbe Leadership to reshape tbe program to reflect more catstety ait ownaad pesceities. Ia particular, he haa nought la
faater and further thaa originally planned In shifting investment! within tbe agrts-indutrial aoetor.
a Pushubstantial riscditscatioa of the organim-tional struct ere of the Food Program
through better economic iocenlives, an environment to fetter enterprise accountability and
link reward to effort.Promote the private sector in agriculturealuable adjunct to tbe socialized sector
GorbacteVs influence ia cfaaaging tbe pace tad focus of Ibe program was appareat during Andropov's brief tenure, but Chcmenko'i subsequent, equally brief tetania waseriod of marking time. It waa not until Gorbaebev took over as General Secretary in) that he waaosition lo set forth fully but plans for implementing tbe Food Program.'
Gorbachev probably views thersdasiria! aoetor aa critical to hb overall strategy for eoorsocruc revtial-Iralion (tee Inaot, "Oorbachev'a Oamebe highlyature of agricultural production aad distribution, in particalar. offers aim tbe potential for major productivity gains and the atteadaai accel-cration in growth of badly needed resources for tbe industrial modernlralion effort. He probablytbe rsroblerna of tbe agricultural sector better than those of the industrial secices. and ihe Food Programolitical and policy framework for instituting change. He is closeey personnel In tbe held, and bit strong polilical ant booty In this sector makes it possible for him to initiate nsottrflcwiscsna to it thai arc likely to be more difficult to sell in other pans of the economy
on agriculture art port and parcel
crnera/ strategy rhni Me womfd Uke to carry out for the eesmomyhole uittfocrtedthat ha hopes wtll rapidly place the country* derrt.fidcru footing It Is fully Implemesatd
A redistribution of resource! In favor af machine-building and other Industries vital to theation of the ecenuymy.
A streasnlining of the central governmenttohlfl of mere dextslcmrnaklng authority to the enterprise level.
Improvement to the role and effectiveness ofcredit,stimulate more efficient production and reduce the need for detailed, centrally sel directives.
A short-term focus on Improving discipline and uncovering "hiddenminowtedr-ment ihal his strategy may lake years to translateolicies or lo shove resulit.
General Secretary's testing ground for tome of his more Innovative and controversisl ideas (sec inset. "The Impetus for Agricultural ReformHe hat moved aggreasively to initiate changes ia leuorga nit*tbe poliueally risky and eccascnri rally drJkult changct sach as overhauling the price iiructore and giving greater aulonomy to farm managcra. By all iodicaiicnss. however. Gorbachev res fires that tub-ttanistJ progress in imprtnTni sgriculiuralhinge* on resolving these Inner issue*.
Tbe Compooenl Parts of Gorbachev* Agricultural Strategy
Revtiuctaring Inrestioecl
Gorbachev appears to have been the driving force behind the FoodconcentraUng resources where they would do most
plana for reorganising economicand management are, in fact, being implemented first in agriculture, and the sector seems to be the
in
The Impetus foreform
Thtserve as an Important
testing ground for more far-cracking changes thai Gorbachev appears so ham ia mind. Bexause of tht vagaries of tht weather and tht need for timeliness. flexlUlily. and on-the-tpot Initiative, reform-minded Soviet economists have long looied to agriculture as iht lector mosl In need of reform, moil likely lo benefit from II. and the place to begin any such terlems effort
improve eOxJcocy ind reducebe hu ccosisientli raised foraerxetic measarca to carry out tliii Strategy. Ia his report toh Piny Congress ine highlighted tbe lid that lone* of farm produce amounted tooercent, adding tbi! the con of eliminating losses would be ooe-bilf to one-third tbe coat of obuln'tric the tame luppty through additional prodnet>on. In funicular, he ha> iriued formote rapid ihlft away from the traditional concern ration of resources on farmfacilities, land reclamation, ind to forth--ice
Development of the industries that supply the farm lector with toed*em kali.
Tht case was most forcefully argued by Novosibirsk ctxnuomlsl Taiyana Zastevskaya In am Interview wish tht government ntvrtpaper Irvcatiya. Theof agriculture! pioneering role has beensaid In the Imerrlew. "by tke erperiencr of Other socialist countries which have Implemented ecoeusmtc reform."Sheon to argue Ihatis the most responsive lector to economic raiher than administrative forms of leadership. New forms of eeottemtic management, many of them guilt effective, fruitful, and original, constantly emerge In agriculture In spite af administrative control."to Soviei sources. Gorbachev hasongstanding acquaintances lavs kayo thai dates back to his daysegiamal party boss In Stavropol Kray. He reportedly traveled frequently to Novosibirsk to seek her advicevarious expert men tal managtmenl innovations that he was trying In Stavropol
t1
t
DUlr.bw.on of Capital Stock In Industries Supplying Agricuitwe ind Food Proofing With Inputs
3
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far food ireocegUic
and
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I.gtieulli-tn
microbioWicIr.
aod xnra. 1andof ihf
firm AfaeAfaery. Gorbachev appeari lo have had tome socceae duringnaining Politburo approval for additiotul iaveaiment ia farm machineryarly-iUtc decree on sgri-cvillura) machine building published in) appareatJy earmarked aa addnIraniillion rubles for (hb lector over and above what had been caned for Id tbe Food Program.eference last yearit measure, Gorbachev ranted that it waa beginning to ihow gocdoviet statistics confirm thatVK4 produccri of tractors, agricultural machinery, and repair facilities for farm machinery atulned tbe targes! increase ia the share of capital stock among the various industries that providewith Inputs* Producers ofmacfaioery areo acbievc comparatively large increases in capacity iah Five-Yeareriodesult of the rapid growth slated for the nsnchlne-buUdlng sectorhole
Progress in actual machinery production hu been ml aed. Last year production of machinery for live-nock aad feed production grew at faster rates, while
'aNMa raeica appait tpent aver Ihtowed b> Uk woonto thaw tweaurutaneta,twdayi"ovU ataUta. aatjalta inn la int> i
ptrcraa of atonal iaitttrmnt ia tht awtfiinc haHh| rwiuairy
hclni. ihe farmiliu aixwnu for almtot Iwo-ihtrdi oltaraiil uarh In the lare-irdratriit eornp'.t.
mi mi -iw)
ffjrfw frg/nthbi
Vahwuf tattai
for crop
jrntvMa
.ad feo!
predwtUOrt
biuu
epmMnta
tarvtaltet
n! feed hievetren
growth rales fell for machinery Involved In crop production
Jirf-. i Oorbacbev has been particailarly critical of the failure to follow through on the Food Program's plans fee invest meal in storage and Irantportatitan. "Despite fiequeni talk of the importance ofe complainedbut year.perceptible itrtprtyaertscnt isvisible, and nearly cme-nfih of the harvest continues to be lost- Tbe Food Program called for storage capacity for food products to be built est tarsal aad in food-processing enterprises. Farms were also tornorc storage capacity for perishsbleuch as fertilizer and lives lock feed, but frequentby Soviet orhcials ssggesi that little progress
(Jonflfle iiTTa!"
een made. The paucity of data on storage capacity make* Itto measure pfocreu and to assess future piaaa ba detail
The Food Program plan for Unprovuvjcentered onig and improving theintcrfarm and farm-to-market roadi andvehicles ruch aa retrigersic* trucks, milkand cattle tntkrt. larrsstmcnt ia cared roadibadly to reduce high trampceution coaulosses la marketing farm products.claim, for example, that onlyercent ofused to move workers to joba. feedestocmachinery to fields sre paved
stal 1st lot on planned investmcai In storage and trans-portatlon forh Five-Year Plan period have notecision was taken in early February to greatly increase ia vestment in thek base of the consumer's cooperative trade network.
foodatkmtin. Gorbachev has as-signed the highest priority to Bpgrading (cod-process-(ag and packaging equipment inrve-Ycar Plan. Soviet goali Include reduced energy consumption and labor requirement* in food procctt-mg. increased quality and variety of food producti avtiLabse to consumers, reduced losses and trans porn, lion cosu, and estcaded shelf life of food producu
Id con of bit earliesteneral Secretary. Gcarbeebrv charged lint wort im cau-rysag out like Food Program goth for building op ike maiertal-techntcul bote of (be food-processing industry wu Im tagn two separate orxautsonshe Politburo approved measures for tbe dcveS-oprncni of Ibisthai ptvsnmabty bvohod lhe el:on of additional fundi. The5ation,ecember, suggests that Gorbachev oooiinctd to wortarther upward revision of invent men: in foodafter publication of the draft guidelines for lhe 1Kb Frve-Ycavr Plan. Premier Nikotay Ryzbkev staled Ln bis party congress ipeech thai priority ia lhecomplex will be assigned duringear Plan period to tbe sectors processingraw animals and lhat capital lervestsaeni ia these sectors will increase6 billion rubles' toillion rubles
pesticides. and livestock feedcrtilircr aad peuieades arc key inputt for the "inteatsnc loch-nology" effort iirDtigiy endorsed by Gorbachev to increase grainrowth rates forof these product! to agriculture have packed up sharply since the iaitnidaraioa of the Fooder hectare applies lion rates of fertihrcr oa grainereercent above lhat. The increase in ejus mi tics available for use on forage crops wu even larger. Deictic these gains, there arc fre-qiacni cotnplaiats In tbe Soviet press about tbortages of (ertiiixer-applicatioa machinery and impropertechniques on farms. Farther, total supplies of agricultural cbrmicali arc trial far abort of needs
TaAJag rfcr? Maney From Traditionalas been far more empfcitic lhaa Brcahnev lathat the restructuring of invesiracnt within the atro-industrial comptci thould not entail anin its overall share. "We have reached the rational limits of btnading up capital investment in thborbachev bluntly5 conlercnce. Me went out of his way lo notethat tbe additional resources allocated inor agricultural machine building bad been taken from tbe farm sector and indicated that be favored further shifts of thb son
Gorbachev appears to beager to cut back on the large amount of resources going io the land-reclamationince the.
ta lo agriealuire grew ai nanvernge
nf SO percent int-wandUpftcentI-tJ
ardercent
in Soviei ohnilaiastu,n ihrat wnetiaaeint Mvt been lowr lhaa ihost for other intyw invtstmtnl trojecu an
tarietHure
iLcerffifcirtiaT"
invcslracot in irrigation and drainage projectsone fourth of total invest men!Tbe Soviet leader bu'twitbtentlyemphasis thould be put on iinprovittcbetter iruiritenancc and repair oflands rather than on undertakingHe appear* to have had little part inland-reclamation program adoptedtenure and has clearly beenthe decline in Moscow's support for many ofbackedsecretary for agriculture Viktor Nikooov toldrtummor that the regime
would not halt projects that bad already been started, bul be sharply cri tidied auch projects as Ihe ambi-tioos Siberian river diversion scheme, long under study, as Inordinately expensive. References to tbe completion of feasibility studies for this highly coatro-versial project were dropped from the draft guidelines forh Fivc-Ycar Plan published last fall, and public tobbyine by central Asian spokesmen at the same time came to an abrupt halt. Moreover, several other water diversion projects that were included in the draftmost controversial being the diversion of water from tbe northern lakes and rivers to the Volga "Subsequently came under sharp public attack from eminent academicians, includingreputed advisor Abel Aganbcgyan, and were removed from the final version of the plan approved ath Party Congress in February andhe close timing between this last-minuteto shelve the river diversion scheme and tbe decisions earmarking additional resources for the consumers* cooperatives and the fcod-rxoccssingappear io reflect Gorbachev's priorities-"
Streamlining tbe Bureaucracy Gorbachev bu viewed tbe central bureaucracy, with its organiration along narrow departmental lines, as tbe main obstade lo his plans lo redirectesolve interbranch conflicts, and transfer greater
ubvmvrai-a. paMHhcd inwno-acing lae
wrrmanw. cf lO ptaarting awJ prerwraWry -OrI On beta Ore AOeiKrn srd Sltcoin river oivcriacnFinincn) aad Mailt nwiro rek.wa esell of ihii Oecilie- nr*be chinne'ed intoer budion jad iniaalioam|eCU in Ike Ruuiaato the regional aod enterprise levels. Not surprisingly, Food Program initistives to coordinate the ananagetrienl of the entire food-production and distribution process were effectively Quashed by the minis tries and state committees that stood to lose authorityegionally oriented system were fully oUbUshed. The diitrictJ cvel commissionsProgram's solution to coordinatingdecision making at the crucial local level-were never effectively established. Many RAPOs exist In name only. Few have earned sufficient author-It* to even attempt to one rale as originally envisioned.
On becoming General Secretary, Gorbachev ackr-owl-edgod the inadequacy of2 organizational rocesurei and pushed bard for mote eatewtverestructuring that would suearaliocand esubtish dear lines of authority. In one of hb firstew party boss, Gorbachev bluntly reminded Central Committee members: "We agreed at the2 plenum that the agro-iodustrial comples should be planned, managed, andingle entity at all levels. We must carry this to iu logicalroad inletpre-tation of the Food Program ass intended bothustify the creationentral coordinating body with more teeth than the sibling coenroission and to give tbe RAPOs enhanced authority, at the expense of tbe central ministries, to distribute resourcesfor their districts and assign production plans among assodaiion partners."
Thb call was fdlowodS decreeSSR Union-Republic state agro-industrial committee (Gosagroprom) with broadover all components of the agtcMndustrial
- Gortacaev'i inierptctition appears In reSets He viewa af iwo
rcbrmiil cecmmhu cearKtlcdCoaplaa'l agro-oVum! *ee-lian. winhom.efueled atura! yearn
Bekey eonsuttnan to
Garhatbtv. MilourSov twaa number of artieJeattvrraailieaarfaamanaicrneni ind plannlnfal al level, logieany means lhai
mtHriai aadahcwld pa..la it* individual tnittprilta ihre-ith art thanrxl. il.ii of-.he tgro-irvouurial bodies aad resi auayCXIerern hearten thaeatH
_ Cottfidcntin I
ma or reduction in force has mo parallel since7 wvnofkhor rcorgl million and isgenerating much unhappineaa andevertheleo. Murskhovikiy can be cs peeled to carry out thb policy with vigor. In an article published in the party journal terilymayo Zkitm' not song before bit tEpointmcnt, Marakhovskiy argued ihat thettafT of the agrc-industrial cornplea should be reduced by "no teashird and paperworkactoroHe remarked that he made the tame pitch at thero industrial conference severs! years ago.
The way for tbe reorganization was cleared by the removal in late October of ihe two top government agro-industrial officials. Deputy Premier Zlyn Nur-lyevMinis tarrson he re Vakatiabothvtbe appomtmeritlose Gorbachev protege, Vsrvolod MuraUtovtksy, as Ihe new government sgro-induitrial ens. Hit position as First Deputy Premier gives him more influence than his predecexsce Nu riyev possessed and may put him in linecat on the Politburo, the party't lop policymaking body, it tome future date.
Tbe reorganization wit aaotrrpanicdajor cut in administrative staffs. Soviet official! state that JO pereenl of the personnel in the central apparatuses of the abolished agricultural mlnistr; have been let go. either transferred to sobs at the production level or fired. Similar cuts are reportedly being made al the local level. Tbe decreeumber of provisions to smooth the transition for those released, but such t
Fbc urSurflaa buaa ISC lena olmad MUriaUvsf Oraiamifm ImJ-prodaeiisakt mnSi|.
Itii irrantemial msy ba only sempsrary. but il a a Ittnagaa so alio* tieontrolmam anpvtaai baairjnmii ag awnolbcr atrkaSluril
Soviei agriculture officials have eipteiiedGcaagroprom will put aa end to thelobbying, which often esicouragcdminis tries to work at cross-purposes.that Gosagropeoen willestedseeing that the entirenans snsoothry, as well at ibe latitude lorequisite investment and resource-allocs lionSis months afterat Ion.new committee was apparently ttiD goingdifficult shakedown period. Writing In theof the journal Vofoiy Iiierii KtSS.NUonov complained that tbe functionswithin Gougroprorn and the dulsesworker had not yet been clearly defined,in i. lack of coordination and efficiency andon the part of manyor resorting .
The rocsntended lo be the first step In shifting more deciiiootnakiag authority to tbe region al and enterprise levels. Al least on paper, the reorga-niratioa eliminates the dual subordination ofthat plagued the RAPOt and opens the way tor strengthening iheir role in planning and resource allocation. Provisions enhancing ibeir authority were spelled out to the revised RAPO statutes issued ingain, however, lack of propels in working oat and impttnecimg these measures has caused concern in Moscow. In ihe tame journal article
io
NikonOV charged lr.nl the apparatus of GcruEioprom
K (he ratio oa] level wai continuing lo examine questions ibai should be resolved ai ibc local level just aa the former miiuilrie* bad. tie went onomplain, as did Gceagroprom chief Murnkhcrvskiy in Ibc April Issue of Kommunlst. ibai "old-stylewas abo making its presence fell ia the new earganixa lions ai the regional level, and be criticized tbe failure of many regional Ooaagrorirom officials to move more quickly in including agricultural Ienterprises in tbe RAPO atructure
Moscow's alow progress In delegating decision mating to tbe regional and localot too surprising. Besides having to deal with bureaucratic foot-dragging,robably still in the process of weeding out deadwood, selecting regional officials, and establbhing iu own role within the Council of Ministers. Even when Gosagroprom iso guarantee that It will be able to effectively delegate authority to the farm. Local party leaders have traditionallyajor role in resource allocation and production decisions within their respective regions. As long as local politicalin tcrests mar not coincide with those of their farmdecisionmakingdecentralization measures may have only limited
Effective delegation of authority to the local level, however, is also dependent on tbe far more challenge ing issue ofet of economic incentives tha! will ensure that tbb additionalroperly exercised at eachthe RAPO. in particular, docs not become one more bureaucratic layer impinging on the operational autonomy of the farms.
fairly major changes, and he has pressed hard for the implementationumber of specific policies that, although not new in themselves, may push the regime in the direction of more meaningful reforms. He has, however, avoided any concrete proposali for basic changes in the system of economic incentives.acknowledges that coming to grips with thbbe most coo (rovers ia I, complex, and difficult aspect of bis program '
Setf-Ai&mdtiz. Gcrhacbev has attached particular importance lo the introduction ofrequiring enterprises to finance their operations out of their ownthe main vehicle for creating positive incentives for producers aodrerequisite for rnanagerial autonomy. While self-financing hasegime goal for years, it has largely been introduced only on paper and bai not been anmeans of increasing farm accountability. During thend, unfavorable weather, rising production costs, and inadequate procurement prices combined to cause tbe virtual collapse of tbe regime's efforts at self-financing in tbe agricultural sector.'
On becoming parry secretary for agriculiareorbachev argued for the need to create moreconditions for the farms and began to work In other waysakeore meaningful proposition. Gorbachev hai since called for putting alt management and production subunitse lias stressed in particular that "contractinginnovative form of orga-Hiring Labor on the farms that be began pushing most vigorously duringelf-financing basis (sec inset "Contracting Brigades").
Fcoaooiic Incentive* Gorbachev has repeatedly emphasized that changing the role of ministries aad giving tbe RAPOs and farms greater autonomy cannot be fully accomplbhed unless accompanied by stronger economic Incentiveseans of influencing enterprise activity and has stressed the need to overhaul the e< is ting system of economic levers. Hbrepeated call since tbe congress for "radicalorsuggests that be is inclined toward and would support
Although self-financing has the potential togreater responsibility on the part of farmand labor collectives for the efficient use of resources allotted them, it does not provide theof (rue proAt-and-toss accounting because farms do not face rational procurement prices or have
^'orrMetulpt- -
CMirrarring Brigades _
Tht it mini tcraoenous brigades or learnt aaarairaith ike farm, and art lire latitude to manage tkt production procti, a, they see fit During the growing season, worker, rectlt monthly cask adrances. After tke harvest, total wages art Increased If crop yields or livestock production have Improved. Where self-financing has been fullyaa effort is made to takeountcosts. The March decree calls for all production mtiuntt, cm farms and la food-proceiilng and other enterprises la ihlft to ike eollectlrt coearaet system Contract, with families art also encamraged
The effectiveness of this type of brigade Is directly dependent upon tht success of farm itlffinaneing. Although many teams operate, form of collective contract, few have reportedly switched to full cost accounting because of the many unresolved problems.'
Machinery, fertiliser, and other supplies guaranteed to teams operating on collective contracts, forare frequently shifted by farm managers lo Other uses, leaving trams wtlh no alternative suppliers. Furthermore, personnel sufficiently trained loresponsibility for all phases of thecycle and for maintenance and ust of machinery are tn short supply. High turnover among ikllled machine operators, iht coreearn, undermines ihe team's ejTtcJvtntss. Finally, farm vmmagers. who have been reluctant to hvtd control over to teams, receive relatively smalt financial rewards forunder the collective, contract syittm
enough choice sboui what to produce, what input! to purchase, aod ho* to spend their profits Tbe system ot ccnlrilirod allocation of material resources meiins that deliveries of goods to farms are planned in physical terms and that farms must pay for these deliveries regardless of tbeir utility orituation thategative impact on production costs. Self-financing Is also weakened by the payment
ot high minimum wages and by writing olf debts of unprofitable farms. In reuportse to spreading farm losses lathead, the central authorities resorted lo writing off debts and hssing cheap bank lonjsa, effectively aodercuniog efforts to pens!or inefficient fsrmars. '
Most of all, self-financing haa been undermined by the cutting price system Specifically, rigid. centrally set prices do not cover costs for some farm products and cannot take Into account the impact oa costs of constantly changing growing conditions and the ti ireme differences in soil and climate that exist from region loarm chairman bluntly addressed case aspect of the problemural lift article "Frnancaal asrtrjaeray remains just wishfule asserted, "as Jong as there arc such wide swings in earnings from good to bad years. Hour ii it possible to expect farms to finance their own development when irscoroea awing from huge losae* to esiesfrnoushat is needed, the farm chairmanre modiSca irons to procareaxau prices so that ihey wfll rise in yean of drought when Use harvest is small and 'all in years of plenty when tbe dernand ialeas, '
Some reform-minded economists have gone further in explicitly arguingajor price reform bthat would reflect scarcity aad would balance supply and demand. For example,economiil Ivan Buzdalev Insisted in an article appearingeading Soviet economic journal in the spring5 thatomprehensive approach lo price fc :ttu tiooonsidersuoo of general market laws, supply and demand."
Gorbachev Is well aware of these basic obstacles to the imrncrrsenUlioa of fully effective sdf-Anancing and acaasowlcdges: that changes ia tbe ocooomicare rwfsured. He baa argued that the practice of automatically bailing out ihe farms breeds trrcarnsrsti-bility and in hb congress report urged that ibe system of bank credits be "substantiallye has also
calkdote rapid thill losystemkuk trade lo increase Ibcd timet meat of industrialeries to ng ncue. WWe Gorbachev hu aot taken as reformiststand oa pfien as tomc oconomisUuzdalov and dearly docs sol have la mind abandoning; Ibc lyitem of officially administered prices, he hu called for mote price flcsiUlity. noting ia his party congress speech that prices should be "cccediutcd" with cooaamcr
Public exhortation for chanie DMwiihsUading,la well aware lhat beignificant bureaucratic constituency for reform measures. Kc sppcsn to be pushing teL'-financing partlyay to define and highlight tbe txoblerns and. morem. to help build tbe broadly based supportrogram of change that is necessary if it is lo work. Inconversation this
the economics editoreadingnotedebateunder waywbo argued that expansion ofnot proceedrice reform hadout and those who lawand. like Gorbachev, felt that expansionlatter
group felt there would be little pressure for price reform unless self-financing wu rigorously pursued.
'1progress his been made hiomprehensive reformew iaitiil steps have beenajor decree on agricultural management isiacd ia late March after Iha party congress includes some measures aimed at irnproving the 'economic mcchaniim" and the coivditiorts for farm financial iridependence and lays the groundwork for some other changes in lhe future.
Afnvc* Octree aw Airiraliwiul Afauaageanrac. In bis congress report. Gorbachevcheme to givefficials and farms greater control over the disposal of above-plan production and allow the sale of more produce, particularly perishables, at market-influenced prices- Gorbachevromise often made ia the past, bat never kept, that farms will be givenannual procurement quotas for the entire five-year period. What they produce in esccat of these
a
t TiirfiifTiiiTil
plan. Moreover.key factor will be whether procuremenl quotas, once set, rcrnsin unaltered.the farms from ihe traditional vicious circle in whichctioo is ineviubly followed by an iocicased quota. Retime officials appear deter-mlned to adhere lo their promise of stable plans for tbb five-year period, but farms may continue to seek understated plans,ig jump intargets in tbe neat five-year plan.
While tbe decree is not likely toubstantial impact onolds out some promise of reducing losses and improving local food supplies. Specifically, officials at the oblast and republic level are given greater responsibility for managing local food supply. They will continue to receive centrally set procurement target^ for delivery Into all-union and republic siocks, but, startingrocurement targets for agricultural produce destined for "local supply" will be set by officials at the oblast and kray level. In the case of republics that have no obtain, targets will be determined at tbe republic level."
Local authorities arc also autborilcd to exchange food products with other regions directly instead ofrequests throughmeasure that could improve food distribution. More important, union republics will be able to set procurement prices for individual farm producU as long as tbe total procurement budget is noty adjusting prices, and therefore profits, republic authorities will be able to increase the willingness of farms to produce products called for in the plan but that st present provide little profit. While this measure will not reduce costs or subsidies, it could increase tbeof products procurediven area.
It seems clear that tbe regime hopes to channel more food products through tbe consumer cooperativequasi-independent organization that sells food at retail prices somewhere between the low state
" Thii precedweto be draan frm an etprrimcnl in LnhuaaM that began aeverat ytiri ago. Proolemi developed.
however, beeadac cm ttmgh procurement largo: for local upp'l
were art Vteally, crnuil aathtahktceaiinutd lohanddwnipeeilic ptani lor wKai rSoaW be prtt*Beed by "horn aid InQuiniulo
"tl lira clear from lhe decree whether thia inptiea wall petidKU or onlyhote procured for local tupply.
store prices and the much higher prices at thefarm markets. Meat and poultry products.raised under contract with private ptot owners, for example, will be sold through consumer cooperativeshan through state procurement channels."
Farms arc given the most flexibility in disposing of perishable produce such as fruits and vegetables, for which timely delivery to stores is vital and where losses have beenleastercent in the case of fruit. This seems to be one area where Gorbachevs call at the congress for coordinating prices with supply and demand will be applied.farms will continue to be able to sell their above-plan produce where tbey can get the best price. Moreover, the Quota for fruit and vegetables that they can sell to consumer cooperatives or oo collective farm markets lhat will count toward fulfillment of the procurement plan has now been raised fromoercent. *
Agriculturalress the hope that these rrveasures will improve quality and profitability of production and help drive down prices on thefarm markets. Any limbic increase in tbe sale of fruits, vegetables, and meat lo ihe consumer through oonprocurement channels would abo help reduce the burden of stale subsidies somewhat" The consumer wouldise in the average retail prices of these products, bul the resulting imrwoverrKotiff quantity and assortment should help compensate.
The degree of success that the regime will have in selling these measures, however, is uncertain. For the three years during which the farms bad tbe right to
"h Party(he chairnua of Ih*
Centra) Uaion of Comrmer Ce-pt'ttivri. MiVatil TnitHf, rSalraod
illion raUes -mid he araxaitd datingIke lath FrVe-Yrar Plan In impwe tHe ewperjiSvea" ketf tic bate ai much as hadttoeaied for Ibit prime for ibeeMirt JO ycait pan. Hetftat major attentatfa)nrldrag pp interregional Made capabihliu. ibc via leu SnAaalhr So>iel tood dtaulbution lyltcra.
Aay rcPvciien in lubvditt from hither retailroMbly "ill hvcUVti e> tie cited* oa grain pioeirrtmtni pt k> I' '
dovbllng Ihe botal la aboar-elanU tan of
large ha null
nftckf
Goebachrvith Khabarovsk farmr photo)
you making use of tkt right of the SO percent tale ef vegetabUtT
farm manager e are. We hem, set up nail, at the /collective farm] market
Another manager: Last poorngopek, fromilogram, now III,epekj.
Masutger:
tjeobociter:
Manager
Gorbachev:
Manager: Gorbachev:
Official:
because of those JO pereenl.
Right. That is remit, am extraordinary decision. Mikhail Sergeyevteh.
The mainotUng is waited now. tf someone gets annoyed. If Ihe fruit and ^getoble Iprocvrememj base makes aHSicullies. you go right back to your nail. And tke price, will fall In the market, too
Recently prices have been bealen down In no time at all. Tomatoesubles from the But if one turn, to ihe stale farm theyubles.
You should not refer to all of them as speculators. Your workers might be there too. There Is nothing wrong with growing something for oneself.
ThrpolmU that prices have fallen by SO percent.
You know, tke problem of prices cannot ba resolved with administrative means. Il could be, but then the market would be empty. But what you have said It another thing. Thai Is good. And It It petthtabiefor you.
Yes. And we would Ilka to grow other thingseggplant, and green crops. Green crops were not prxfilabit before, but now they will be.
They are learning lo trade.
orerint to tke rwovlnon tn the March entree thai
tarmt1crrh.tr rmwrmwed ext. /r.
Jvmtt, ami veooahle, rtmarf* toilttavt form morhrru tmd twa^
crccsi Of tbeir prrxa rumen* quota tot fruit*nd vegetable' oo ibe collective farm mat rid or to the consume*ry Hule advantage waiofgricultural itokeaoea no* ncAto-ledge
that thai was ihe rate,af local official* and their hoatiliiy to int abarp contrail, bo-ever, lo almott total lack of official public attention in topport ofating the farms the right io sellercent of
t cmereenl of poutm. ml.mJa. raautoM
I'm gfljg aoM toparaaasaiother iSmmu
orpiuutloru Solaeta*eooparntlvr not
ottraOve turn math el eaonarla >ularavr bat alia ao mart
eroral af mnttean,
1.1
.CawftdcrriiH-
rwoculan oo Ihe open market.Mippoflezj teem detertoined io moveIn promoting Ibc present expansion of this mearerc. Not Only arc caiea of local obtlroaiooism being publicly scored, but Gorbache* abopectal point of puttinglug for (he concept in hit informal talk with farm ofBciab during hu (rip to lhe Soviei Far East in late July (tec inset, "Gorbachev Raps Wiih Farmoreover, as farms come under increatinc pressure to become financially self-sumcieni, they are likely toreater inter -eat In the opportunities afforded by the meaiurcs in the decree.
There ate ncvcribclcss signs that opinions within Ihe top leadership differ on the rate lhat marketshould play under (he conditions of (be March decree.o closest agricultural advisers have been the most upbeat oo this itrue even more to (han Gorbachev Goragroprom head Mutakhtmkii described Ihe decree in hU April Kommunlii article at "eieluscvdy" devoted lo sueagtheaing aod"commodity-money" relations (Soviet jargon for marketnd he focused at Length on (hose irscasurcs in the decree lhat allow some greaterand marketing flexibility.ubsequent Kom-muniii article, Alcksandiresident of the Academy of Agricultural Sciencesongtime Gorbachev associate, implied that the concept of P'odnaYof would be grcally cipaoded. AgrrcuKarsl pobcy in Ibe not five-year plan, he said, willembody"aa ia kind Party secretary (oe agrieulturc Viktor Mikonov. oo (he other hand, in inmhci lengthy journal discussion of ihe decree, avoided any icfereoce to tbe ipedfk market-relalad elements of (he decree entirely
A
I'- Strand Suit. The Msrch decree is dearlys an interim measure. It calls lot (urth< rexperiments lo Improve planeinancing, aad Ibe Incentive system with prcipeaals toO aod incorporated inhis scorns consistent withimetable for reform throughout theand Inlilativot tbat remise cjukk tains isow. laying tbe groundwork for. more fuftdarnenial irfcjrros ba tbe so-ood Wage
Tbe Scarlet sender appears to be fairly opeeunloded in hla search for practical approaches to sumoUle farm prodocsjoo (le haa tamed to refcam-enissded ceenjo-misis bkn Abel Ajaobegrxn. termer bead of the Nem^"btrsk branch of tbe USSR Academy cf Sci estots aad now bead of ooc of the acssdemy's lassiitaics in Mcskow. and Tatyanaanner asao-ciata ofat the Siberian branch^
Jiayiag an Important role as aa informal adviser todrafting economic proposals aod speeches for him.ics to the Soviei leader reportedly goumber of yean.'
Public debate on reform Issues has abo picked up since Gorbachev came to reenter. What Is particularlyhe attention that reformist prctposnb arc receiving In the mass media. Ideas that in tbe past would have appeared, if at afl. cmly in obscure Jossr-nab are now often vetted In the central press. ttver-ttye, km gatftksslar, hasorum forof conaroversisl ideas. Television has aboehicle for the eajosurc of such views la the samracr. for instance, the TV am carried an Interview with an rrrrhserrt axricultural coooocnist, VladLmir Tilbooov, fa which be spelled out in very atraUhilbrwar:easWeheosrve propcanl for tha radical reform of asjriciiiinral nan-agementeared to to almost as farm reducing central administrative cootrob as tbat accomplished la Hungary. He indicated that his wstitute had
SpocaVally. tht Sntmt canti0the svnaam systemdiraraM plarrnlni of firm aaedmioa to shhitod
al the farms' bad.HIi aloea.
snd bbca nmn.es.Vxit ind eororxrwn- lo Inurhsweni.
raatas viewbaft aala ttwaraoalnf
bMnatsaoaetbedl ofrowan
ThtProposal
In font /Mi.elevised tmervtewona prominent Scrtefexcsnomltt. WoatWralienedackersort fitcondition! In which the
requirement! to iht producer Isske central Issue of Improving the ecotuymk nm^hanbnCHeitdd thai central planning was the legiiimaie 'prerogative af the Central State running Buret* piaa shmmU he m
txotumdc development timed at creating a,
plan shen^ne* be eagogtdU making dt-zlled
r to farms whether they want them or la axdgm-ng sxn^ teodmctto* tasks
Tlkkamoy further maintained ihal the farmsthould have the right to choose their own suppliers, decide on their awn production strutturt. and tell their produce to whom they choose. He Instiled thai ike slate could ensure that what was profiiobtefor the farms was also what was wanted by SOCielyhole, partly by manipulating credit and Inttrtit rates and byore flexible priceIs. by allowing prices toflool between certain setlkhcrnov noted, however, that In tdaurefthe -carreers! disrespectful attitude" toward prlcn. reliance on them atone would not help- He ml* proposed In addition the tmrcducttcm of maf taxation loax cm land value, capital assets, and profits
nnalty. Ttkktmot assorted, tha systemtmtraeu must come tovajor role Ctmtracts signed between luppiiert and producers, that Is,the farms and processors, should be used not only as an Instrument for fulfilling ihe plan bul also as the basis for formulating It
luggestcd to higher aulbcaritiu thai these ideas be tried out on an experimental basil In several Soviet republics (see IriscL "TrieTikr^rsov Proposal"
local Esperimenti
Esperimenti Im new approaches to planning mmal management are presentlyumber of admisstslroltvc regions In ibe USSR. Im one district In the icmlkern Russian arm of the Kuban, am ripen-mental territorial agro-Industrial combine bat been gtvem extraordinarily broad rnamtgeHalTbe Kuban combine, .hick Include* all the farms and processing otitrprittx In tha district. Is totally pelf-eupponlng. makes Iu own production decisions, and Is permitted to sett senna of Itsal combine owntd ouXlettfor whatever price It cam command In addition, the combine Is answerable to only one ministry and receives all of lis material asteti through one specially organised wholesale outlet '
In another experiment with decentralized planning, centrally tet procurement target! for ibe Uthiranlan Republic only specify the amount af produce to be delivered for all-union supplies. This was reportedly to allow republic authorities greater Independence and responsibility for providing local food supplies. Tke experiment was extended to Stavropol Kraynd subsequently elements of II ware Incorporated Im the March decree. Proponents of this measure see It as the first step toward freeing some agricultural products from central comrolsas has been done Im Hungary. In anotherbeing conducted In several districts In the Russian Republic, centrally set targets havebeen sharply reduced and ihe farms allowed to establish their own plans for the production and tele
experiments incorporating elements ofproposals for management ind planningand for improving the economic mechanism are no-oodtscted ai the regional level. Tbeylearer picture of theises thatwould like to Introduce thaa can be gleaned from his speeches. Not only are many of them being cooducicd In Stavropol Kray. his former political base, but several ire evidently being inoniioredn rmi with whom he ii reportedly in closeWhile none of the experiments are ai radical ai the one proposed by Tikhceiov, al! are aimed ai
- nhai authority atovd and point ap the potentially re.'ormiit thrust of Gorbachev'sumber of elements of these eiperirnents have now been inducted ia the March decree (see inset, "Local
Even these experiments, however, dodge the mosl diflvcurt issues of price formation and farm manager autonomy. Soviet sources say that Gorbaclicv has
high-levelgroup* lo crime up wiiheorngwebensive roeijge of measures They ue Hid. however, la be fir from'ven reform mindedorreportedly are deeply divided on vrhal Ihe proper role of prices ibocld be. aod. la interview* with Weatern newimen liacc Ibe party cotsgreta, Gorba-cbev'i reputed adviier. Abelas ex-prcased cons (dera tie pctximum about the pirapcct* for aary major price reform ia the near faiare.
ware of tbe obstacle* he faces In pressing for major reforms. He has gone out of his way, for example, to answer potential critics by cmpbailiing that hb call for flexible prices and greater use of economic mean* of management does dm represent the abolition of central pianitmg or the victory of "spontaneous markete is,apparently prepared to allow consUcrable time for cecoomk reform measures to be worked ouL Although Gorbachev its ted in his congress speech that the Politburo bad drafted general guidelines for transfceming Ibe economic mechanism, he stressed that thb was only tbe "start of the journey" and that tbe actual restructuring of tha economie syitera would take both "time ande appeared toas have other Sonets ia private coeversatiooj. that il mightumber of years beforeprogram appears
Tht Private Sector
While Gorbachev's mainhe rt-riuUgation of agriculture's social tied sector, he hai been one of the iiron*cat lupportcis of the private sector,aluable complement to large-scale farming. He was, for imLxoce, closely identified1 decree that wis intended loajor contxasson to private agriculture. Ho has more recently madereferences to experiments ia Georgia and tbe Baltic republics involving si/able family-run farms operating under contract with lhe state and has sought in other ways loloser Imcgratioo of private and socialrted farming (see inset. "Private Agriculture in tbe USSR")*
iwaee Oa InilUiiaa or iktww. prwtM wHor praSw-iWa ea thaa cot-ha I'araal rar year.fharply inThe Utiieamairrialned do- bwi aitady grewih aVlet ihli period.
lhe of the Acaukmy of AgriculturalAlektaadr Nikoaov, stated Last summer thai ibc role of private plots had probablyai he Indicatedore flexible poGcy would be pursued and lhat measures would be takenreate betterfor the more cCncacot use of the private plots. The March decree, in particular, if fully implemented, may open newhile llieto make the state sectorcompetitive could drive down prices on the enflcctrrt farothehe private producers could be offset by potential berieCtt from such measures at the expansion of the rrwmmei cccpcrativc network. The full effca of the March decree oa the private sector a. however, uncertain al thb early Juncture.'
Poletttial Impact
Gorbachevs attexnpu lo refocus and strcrigthcn the Brcrhncv Food Program, even if fully implemented, have only halted potential for irnproviag agricultural performance for the rest of the decade. Moreover, positive impact will not be immediate and will be heavily dependent on fulfilling other goah 'table 4k
If the reorganization and streamlining of agro-Indostrialarried out according to GorbacheVi plans. It could reduce ibc bureaucratic haggling and competition- which has traditionally hampered effective decisionmaking. The elimination of dual lubordiraliori would facilitate cardinal km between farms, tcod-preccssaag entetpriaes, sndelements of Ihe food-production chain. Service organisations thai supply farms wilh machinery, cbesnicab. aad repair services would beelter position to meet farmbe process oflines of autborily andew modus operandi for the nUnbtorialtill far from complete, and old habits and constituencies die bard.
S
Canfirtmliil. .
Agriculture In ike USSR
Pritatr agriculture In lhe USSR -the one remaining il table elementhe economy Hill legally operaiingree mortalcarried out cm someillion email ploli of land, uploOJ hectare In tlte. which ihe Hate allocate! for individual use. In addition, families usuallyew head of cattle or pigsmall flock of poultry. For most people with private plots, petvate agriculturalecondary occupation. Although iha privatesector produces about cme-fourth of tke gross value of agricultural output, its economic significance cannot be meatured by lis overall ihart ofproduction alone, becanse lour lueitty andare chronic problems wfr* state-suppliedSovietely on their own plots or on direct purchases from private producersna)or share of ihtir comumptlcn of fresh vegetables, meat, dairy products, end other highly perishable product
Although rtstricllons on private agriculture are now relatively relaxed, lhe gradual decline in tke role of private farming is continuing. Tht privett lector's share In the number cf livestock declined from tmt-fourth1 lo one fifthn addition, tke share of potatoes, vegetables, meat, milk, and eggs produced In the private lector has fallen steadily
Sovietave modi concessionsrivate agriculture, viewing private farming ascompensation for sluortfatli in socialisedIn the most recent decrees, the Itadtrshlp
explicitly acknowledgediht private secior'ion stale and collective farms for Inputs such as livestock feed and urged, but did noi force, farm managers to make resources availablerivate producers.'
Because of tke high degree of Interdependenceprivate and soctallstd agriculture, lhe private sector has been affected by many cf the samefated by state end collective farms, such as the aging of the rural population, poor housing and services In rural areas, end Inadequate marketing end transportation. Private agriculture factsnegative Influences, however, thaiurge In production unlikely:
the leadership has acknowledged tkt private sector's dependence on the todallsed sector for livestock feed and other Inputs, privateare tkt lowest priority claimants on stale resources.
' Riling levels cf education and occupational ranking In rural areas have beta eceomponted by aInterest In private farming.
The gap between urban and rural availability of food in state stores has narrowed, as has the gap between urban and rural incomes.
Experience has taught prtvate farmers lhatto boost private farming do not result In substantial long-term efforts on the port of tke leadership but tend to be temporary.
The supply of machinery and looli for small-scale farming Is Inadiouaie
If investment hih Fire-Year Plan it shifted along Ibe lines suggested by Soviet poiicymalieii. the results of Ibis redistribution, which may lake some time lo appear, should cut losses caused by pooron, storage, and processing and eventually result in more and higher quality farm equipment. Success in the investment program, however, depends on Gorbachev's Industrial mod-crniialKKi program.
Increased accountability at the farm level achieved by discipline campaigns and administrative means couldomewhat more rational use of inputs, thereby increasing productivity. These gains will be very small, however, unless Gorbachev follows through on his stated Intemions of improving the economic incentives.
TrlMt*
M*iLm*m
: gas--lr-^rr"
0 treats far Farm Prod met io, Bt Mtt?
at* of growth In net form output Is maintained.l Inh Five-Year Fitm and in the Food Prop-am for enroll grourtk Inform *eetor ptx^netion will not he nmet. Shprtfatls wonld occur mainly In crop produeiion. If retenl growth rates In livestock production0 targets fc*-Important livestock products would bt mn Too^rufir rreeraJI growth, farm produxtlon mult grow atereent per rear duringompared with IJ per, en1 8S
SegalI* bgfuenres Una will lend to hold growth rates In the farm setter below present levels over the next few ytari.verage weather continuei. are
lo slow growth of capital slock on formsarger snort cf Investment goes to other activities af Iht ttgro-lndusttial complex.
Continuing gradual decline of labor Inputs.
progress In devising new economic Incenitres capable af generating large gains Inform producttv-
ny
Present programs. If Implemented effectively, offer positive Influences'mat have the potential lo raise growth roses toverage rateercent per year, given lhe same weather conditionsJ-M. These Include:
Improvements im tke ennllly afcapitel stock end other industrial goads.
Measures to raise yields on reclaimed lands.
Improvements In education program for farm worken.
Efforts to Improve teed euality tnd livestock breeds
If positive Influences art enhancedeturn to meeefaverrabie weather ujiaXjaj. growtk raits In farm production would bt above long-term average rates. Raising growth rata Inform produeiion to plea Wi. however, would reaulrt very large gains In productivity ami/or weather conditions sothat they havt Itssercent chenct of occurring over Iht five-year period. Wilh somewhat more favorable weal her and modi it gains Infarm productionould grow at rates above tkt long-term average bul well below plan.
farmthreatening the rsrerogatives ol total partyhim wfth aato shake ap ibc bureaucracy, bring Ui people wbcec view* on farm policy parallel hii own, and stresuffhen hb political power bate In lhe aasm-leutustrial bureaucracy and on tbe local level.
Although tbe growth targcu lah Five-Year Plan for tbe farmarcout of reach, tbcae ritiitxrea, if Unplcrocoted effectively and paired with ongoing aciieas ba improve feeding practices, have theleu favorableto allow the Sorlett to make some prog rest toward two of their four major agrvcaltaral policy goah (tec inset.0 Ooab for Farm Prodociroei Be MetT" aad figure 4Je
Improvements in storage, transportation, andfeeding could contribute to gains ia per capita eveilebilttj eJperttbaeU feed products including meal.0 targets for per capita cexuumption for meat. milk, and eggs would be met even If current growth ratea only remain constant Im-ra-rwcarvcoU ia storage and Ira naporta lion alonebe ^sumaont to0 pa capiu consumption goals for fruit and vegetables,of these crops mast abo be sabstantisllyfor thb to occur.
MEeastldfutlal
Reduction it foodrowth rain in lives)production would require ihat grain imports continue, bat continued imprevc-meal ia feeding practices wcadd reduce demand Al the nine time, treat imports could be ruminated and butler imports reduced. If pari production trendi continue, however, prospects would be poor for cutting Irripocts of vegetable oil suad sugar '
Limitede sonde toward ibe remaining two goals over Ihe neat few yean:
In corn of production- Contlauing the policy incentive* of high miajnuim wages and bail-ing oat uarprcabablc farm* wilt tend lo keep costs high, rwrucularty io poor crop yean. Rapid growth in ihe uac of industrial goods in /arm production wiM tend to raise ccou. especially if tncaitixa for farm worken do not improve lubatantiilly. While the regime may be able to limit growth in overall investment inarticularly hfb aucceasful in sealing clown thewill be unable to free up Investment fundi to lupport industrial modernization.
mrtoiditt. Aaocrunced polKses art likely to result in higher procarrment prices aad. in the absence of retail food price iisereasea, higher tubsi-dios.esult, agriculiural subsidiea will continue to accesunt forereenl or more of the stale budget
Beyond raw Food fragrant. The major productivity gains sought by the leadership depend, in the Anal analysis, on tbe implementation of additional organi-raliooal and economic measures that effectively link all branches and levetJ of tbe agrtvindustrtal sector. Perhaps meat important, tcorscenic criteria mastadministrative means for regulating farmAl long as prices are poor guides tosuppliea are centrally allocated, and detailed peccu retreat targets arc issued, farms and la be* teams do not have the incentive or wherewithal to effectively respond to eppon onirics lo Improve thef inputs and outputs nor can they be held responsible for the results
While the potential economic gains arc certainly attractive, any reform callingarger role for market forces and farm aelouosny threatens theand prerogatives of Ihe party aad coulderiod of economic instability. While Gorbachev bat apparently scale-red Politburo consensus on histhus far,pparent disagreement ewer moves toward market-influenced prtccsv la al taYrti bood. Gorbachev himself is hoping that current initia-livca, including his campaigns for greater discipline and accountability, win bring notable improvenvents in tbe consumer diet while allowing some reduction in the share of resources allocated lo tbeector.
We believe tbat the leadership win probably discover, over time, that tab limited approach will not yield the predoctivity gains needed to reduce the ccoraeank burdca of ihis sector andhift of rcseaircen ioodcrnliatlon effort. This real] ration, if accompanied by an eapansion of his {tower through the regional as well as the central bureaucraars. may reduceatsuace toore radical option
lrsdicaiofsilbacneas by the leadership to make more fundamental changes might include:
Expanding the right of local authorities to tet stxrsc prices in response to changing conditions.
Reducing interference in day-to-day farmby both ccniial and local esflscsals.
Moving toward lower ntraimum wagesarms more authority over what Ihey pay out.
Following through on the promise to keep procure-mcnt targets stable to expand tbe amount controlled by the farms
Providing local farms with more authority to decide what to produce and greater say over the acqubition of supplies such as equipment and fertiliser.
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Original document.
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