THE RECENT RECORD IN SOVIET ECONOMIC GROWTH: AGRICULTURE

Created: 9/1/1962

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ANNftHDALE, VTRGIHIA2

THEECORD IN SOVIEr ECOXOMIC GROWTH C. AGRICULTURE

cowan.

Page

C- AORlCOiaUHE

1. Recent Trends in

of

of Agricultural Production,

Some LinltationB of the

Changes in Agricultural Production

of Major Crops and Livestock Pre ducts Major Programs to Stimulate

lands

3. Factors Influencing

n. Capital Inputs in

h. Prices and Vsges

Changes in Agricultural

l Reorganisation of Machine Tractor Stations

'

2 Iff'

et& Bi^rtshco'of tho Private Sector

Tables

Production of Crops in the USSR ,

Production of Livestock Products in the

"TTOductivo" Capitol Investment in Soviet Agriculture.

a

Allocation or trucks, Tractors, and Agricultural &chlu*ry to

Soviet2 ?laa

5- Prodvctiofi of Hlnaral Fertilizer ir. thend

5 Pit**

6. Sharo cf the Fr.ivr.le Sector In the Total production of

9

tan roitrleliei* sf invest,vAri-

^fcnt ox" Mlninasor -Ol-tsliviL? oiro-JiictSj the netting of saxlnus re toil prices on farn urxMcts, toe forcing c? rural, labor into industry, ^nd tbe use of agriculture! exports to pay tor Shorts of industrial equipoent. Holding down the levels of couaitnption. and agricultural developmentsrious imbalance inoviet econcny. Alttougb lerge nynborsral Barkers vers forcedto industry, the capital base of agriculture was so low that itabor-intensive sector, and tbe coveeent of farm vorkers into Industry eventually alovod novo. Furthermore, tbe continued low level of'.ltural output linitsd the incentive of industrial Thus, at

(Orirsbrushche? sought toetter

siVv tiw rcte if ujrlculfciisu inrssbcet rclttiv.'.dntMsnt, by rsisiso. prices foredness, nsfl bywtd*M- of orgcuikctioncl .saasurno.of tna Jncrosoct

ntfc&towi'A htven-bwnt sunk in tho dw lands devsjioyjrait<;tn

v.- rnavw . - t-to catch up

xsascres, mugnectjd byaal weather co edition, lifted sgrlcultvurc out ofo stagnant position and tetEporarllyetter UalencQ between agricultural nnu ioduntrinl development.

In recent years, however, the rule of agricultural Investment has declined relative to industrial Investment, acreage expansion baa become marginal, and veathcr conditions have returned to normal or worse than normal. With little progress in agricultural output during these years, the problem of raising tbe level of Soviet agriculture without impairing Industrial growth has again become acute.

Inhrushchev advocated correcting the growing

imbalance between producer and consumer goods lie evidently believed that overfulfilment of Indus trial production goals would generate substantial resources throughout the remainingf the Seven Year Planarge share of vhlch could be invented in the

consumer and agriculture sectors- owever, it became clear that Increased space, defense, and industrial construction costs

average ofercent In order to silaulate the lagging nnlool husbandry sector, which had been operating at huge losses on most forms. Significantly, tho financing of this price Increase was to fall not on defense or on heavy industry, buthe conauaer. Aside from several

concessions to improve the poor financial condition of the collective farms, ibere is little evidence that the priority of agriculture has

iture and nutrients, decline.

new lands vtil compound the

Organ!onal ehaagesan to change the cropping pattern have been substituted for Khrushchev's previsearge Increase in agricultural investment. Radical reorganizationsIeakened the position of tbe technical agricultural specialists and governmental managerial class and enhanced the position of the Party bosses in agricultural administration. Unwilling or unable to depend on decentralised administration based on the recoaoeadations of technical specialists, Khrushchev hen again embarkedrogram that relies on discipline end agitation by the strong Party organisation. This latest program calls for changing the cropping pattern by plowing op grassland and fsllov land and planting corn, sugar beets, peas, and field beans. In the short run this program could resultizable increase in the production of the feed crops necessary to Increase livestock production, but in the long run the program is likely to be self-defeating as soil

crops Isazardous venture.

>

j

1. ccnfc Trends Id Output a. Validity of Statistics

iha student of Soviet agriculture has alvryo been faced with serious problems in tbe interpretation of official data. 3 to at3 the USSR officially perpetrated overestimation of theof ssricultural crops by not deducting harvest losses from the estimates of crops In the fields. Following Stalin's death, however, the nev Soviet leadership indicated an awareness that the misleading nature of Soviet statistics on agricultural production wasritical situation. Although publication of statistics on agricultural production incrcaaea somewhatata continued to be fragmentary. Production of grain continued to be guardedtate secret until Piruahchev's revelation of the grain situation in

Whereas tho official policy of overestimating agricultural production was apparently discontinuedtatistical mal-

increased, .especially stations (MTS's) at8 resulted In the loss of an effective statistical control Furthermore,oviet administrators end farm rainagero have been confronted with impossible goals. Khrushchev at times has insisted personally that officials adopt unrealistic pledges snd then made it clear that their careers depended on meeting these pledges. Many officials have reacted by falsifying records. Opportunists aad glory seekers contributedave of statistics! falsification, unscrupulous

lnjligl duals, in hopes of rapid promotion la the Party or governjient apparatus, undertook ridiculously high pledges, come of uhlch were eubse-ouently fulfilled by padding statistics.

There were many convenient opportunities for deception. Farm managers are often able to manipulate the statistics relative to the share of production which remains on the farm. Animal husbandry, in particular, lends itself to fabrications of data. For Instance, the fact that atlk fed by hand to animals (not suckled) is Included in Soviet statistics on production of milk can be utilised for podding accounts with relatively complete freedom of detection if not greatly abused. Sooe overzealoua farm managers, however, created absurd situations for themselves. The Lenin Bayogi kolkhoz in Uzbekistan claimed, for example, thet during the first quarterons of milk wero hand fed to young pigsas much as una needed bo fulfill the plan for production of milk. It was later revealed that the kolkhoz did not raise plga- It Is relatively easy to

perished from disease, weather, and predatory animals

Before the revelations of widespread falsification ofin recent years, the acreage and procurement data were believed to be reasonably accurate. This confidence van unwarranted. In, nirushchev drew an admission. fcdgorny. Party First Secretary of the Ukraine, that corn acreages In the Ukraine (tbe largest cons producing area inR) vere falsely reported. ne rayon inblaot in Kazakhstan0 hectaree of uncut

grain0 noctures of on threshed grain an 'harvested area" and padded Its figures on production of grain0 tons.

One CCTTJOU malpractice bas been the delivery of feed and seed stocks of grain in order to fulfill or exceed the plan for deliveries of grain. At the1 Plenum, Khrushchev revealed thatercent of tbe grain procured by the government in the RSFSR9 vas returned to the furns- In order to fulfill procurement plans, many farm cznagerc purchaeo products such as meat, milt, or eggs on tbe kclkboz market or from farm members and credit the purchases to the production of the farm.

Inc scandalous extent of statistical falsification vas indicated by the issuanceecree in1 vhlchrison sentence of upears for those persons guilty of making "inflated entries in state accounts or other deliberate distortions of accounts on the fulfillment of plans

The widespread falsification of statistics In recent years at upward bias, for most of the fslsl-

es ^fulfill goals. Nevertheless, no

downward revisions were made in the production statistics for any of the major agricultural comaodltlea (except cotton) in tho KaroCroye0 Godn, published InI. Production figuresarge number of commodities as well as for the index of gross agricultural output were even higher than those published earlier. olicy of not making downward revisions in national ctati-jMcr. on agricultural production was Implied in the Soviet statistical Journal Vestnti Bcatlstihl inI:

he perversions of accounting data by Individualid not influence the overall totals of statistical works, because the basic indices of the development of the national economy of the USSR are mutually controlled and mode precise on the basis of coojparebllity of the different sources and of all-round economic and statistical snalysio. These national economic totals do not and cannot arouse any doubts*

Many statistics on agricultural production, however, are not

erified by cantral authorities. Although officials should have

fairly firm statistical control over that part of agricultural production

which the government procures, it was revealed that there was collusion

among top officials to pad procurement accounts. For exaznplc, the fact

that all cotton is procured by tho state and that production statistics

em bi verified by ginning records did not prevent hi ph.-level collusion

to falsify cotton statistics in Tndshiilatan.

b. Inder of Agricultural

omef. the Index

cultural production inB:

Ike mjssure of agricultural production chosen la the sum of the prics-

uantities of the major crops and animal products. Including

nventories of livestock, with deductions for the amounts of potatoes, grain, and milk fed to livestock (to avoid uouble-counting) and with dchictlons of potatoes and grain used ao seed. Because of the secy serious probieas involvedforemost of vhlch is tbe reliability of statisticstbe results must be used with caution. She indexore reliable indicator of tho changeseriod of years than of those betweeniven years. Itoro reliable indicator of the direction of change than of therant of change. The computation of such en Index involves probieas of three main types: (a) incomplete coverage of the cccnodltles, (b) possible errors In tho estimates of tho gross ana net production of tho various comnndltieo, and (c) toe choiceystem of weights for aggregating the coraaodlties. This index covers all the major agricultural cooeodttles produced in the USSR except eggs, fruits, and vegetables, so that the limitation of coverage probably la not serious. Estimates of the groes production of conxooditles, which in some caecs from official data, are discussed In the following the estimates of the* gross and net production of tho coaxodities in coze cases may be quiteut the effects of such erroi'S on the Index probably are not excessive. State pur chape pricesare used as weights with some adjustments, for free market sales- ose may be made for alternative weights, their use probably would not affect the main configuration of the in 'ex.

* In sSdltiOQ, changes in inventory of livestock ere estimated by tseons of charges In the nunber of livestock end ignore changes in weight and value.

a

il caeca in Agricultural Production

During thenly limited gainsin sot ogrlcultnrxl production. apid expansion intogetherood harvest of grain in the Ukraineumper aawest of wheat in the new lands6 raised the indexsubstantially. An excellent harvest for most cropsgains inroa large increaso Inproduc

e to the

3lyeors nave*.'

8 the index reflect* the general stagnation inOhioeac.ahvexcellent crop

bsah only averegc orthe lack of progress has been caused bythe^chronic shortcomings ofcuiturol'eriol incentives to the faimcrs^oaoViOuate:t, as reflected :ina shortage ofparo parte, and mineral fertilisers;

acreage - oans ion vas primarily confined to thehenr lends were being plowed. The acreago of grain and other '" crops used priEnrlly for livestock feed Increased most.

As noted in the section on the validity of stntiotics, since

3H has published figures on production of grain claimed to ha in terns of "barn yield" rather than "biological yield."

These cloiias ere given below (in oilllons of metriclone with catlnates for those years where the dales do not appear to be reasonable:

Claloa

7 ill 79

9?.

%

m

H*l.

i37"

U5

115

as been relatively unsuccessful Inof potatoes. Although acreage expanded scoewbat ironevel only

clightly higher tlinnotato yields have not In crooned durlDg the post decade.

LO

' 'V -

m

f cast technical cropc In tho USSRlrg toe past decade (sec. The amounts ofSUX flouor oeoda, end. fiber flax produced in recent years orethe size of tho harvests in thes. Tho increaseof sugar bootsargely the result of on expansion Inwhereas increased yields accounted for moat of the increasecceds.and fiber flax. Increases in the yield of cottonlargelyhifting cotton from nonirrlgated to irrigated' Production of meat, milk, and wool* increased rapidlyperiod00 (see Khrusbchjcv took measurestho Incentives of the livestock prbducero, and great enphasison expanding-the livestock industry In connection with theand.the program to catch up within the per capitaof meat-and

o J. followi on

Tab?.'. P. foUosa era

Production of Crops in tti

Sunflower

Fiber Flax

Million Metric Tone

Sugar

Ginned Cotton 0/ Beets b/

cotton in assumed to equal one-third of raw (seed)

inclualoa*beete grown for livestock feed.

Tbe USSSecord harvest of no.on tons.

rroeuctioo of Livestock Products In the

v

Cortet pcoducticii of ocafc and nuMh art00

.

lal"lUte, tone of neat vere

?.. or I'fogr.-'jaa to Stimulate Growth

Khrushchev bcs sponsored four aaln programs aimedapid increase in agricultural production: the new lands program; the com program; the program to catch up vlth the US In production per capita of neat and milk; and the latest program, vhlch celloadical change in the .cropping system.

ands Program

Tha nev lands program una conceived and carried outspeednnrfatchediin 'agricultural {history. The original goal'uas to reclaim and-aeed'nbt leas thanillion hectares,' In Ifogp.kh SSH and 'Siberia. Ink. however, when harvest;prospectn lookedev decree was published which ^raiaeo^^ejgoal to betweenillion andlllion hectares and extended to6 Ihlo new goal was reached 5

the new. lands accounted for appro xlnsitelyercent of the allocations of budgetary expenditures for agriculture. Allocations of agricultural machinery were large and were made at the expense of theolder agricultural areas. loans of equipment from other areas were important In facilitating tho harvesting and delivery of grain topoints.

Tho latitude, soils, and cllsate or raich of the new bands firca are soKtvint enelogcus to those of the prairie provinces of

...

ConcicMinitoba, Sn*kstchsv-.n, mod. MMTtl e -if tb* greatest

rodujlEg regions in the BorU. Thoy of the new laada

is easily adapted tonrchanlzedfirming. Kueu of tho soil-is fairly eultshle for production of grain, although alkalinityerloua problem In some

Wore important than the marginal or suhmnrglnal character of

of the soils.is^the hazard of..cllaatc. There le no EOuntoln barrier.

the'nev'lands.and tl

Asian deoertn to the south or tbe teen the dry, hot winds from Central Aala drought say result, end. Arctic vinds nay bring

of the new land" in Kazakh

where the average annual relnfell rengec frco shoutnches tonches.

Because of the extreme fluctuations frcn year to year in tho amount and .distribution, of rainfall, the size of the harvest varies sharply in the new lands, especially in Kazak.'] SSF.. *rowing conditiono vore ODnnunllj 'aToroble, and therain were well ebore

BveragO. 5ovever, most of thoanlu sufieradught. catting yields to suchtag3. r*cM was "stbereiut yieldsei?. ItoiF-am rupplles

am Innrtfiqmta9.x-?l, cola* watttxo rv-gsfotoa fctavr wad ib-^stst&on. cfnfn Su She nea lacrtiitheir eco&.'ibuUct to rjc-ruwiii-i r. BT* shove baler-:

Tear

9 -

(Centners per Hectare)

to

Production (Million Metric Toon)

b.5

8365

Proportion

5 7

263

years, several Soviet vriters have

'the area ox* clean fallowwith an iiapliedgrainto control weeds, conserve Eoisture, reduce

production of greln throsteiw thn fuc.vre of tVJi new Isndstable grain base. The latest majorv'cb ci-JLG for radical changes In tba cropping system, has slresdy resultedurther reductica in the areahis program iecuseedeparate

ing.

Ssss Ssbbss

*&S% BOBSvs of the KS.Jr" n-cnUriS f*ciiM J

1 sad climate ou ravorublc for production of cam ec In tbe US corn bolt, om occupiedercoot of the oroa ooun to grain.

Inhrushchevrogram for expanding production of Com. Be Bold that the livestock feed situation vas serious, adding that it vas en the basis of com that the US succeeded Inigh level of livestock production' he proposed to increase the area of com from the illion hectaresb toillion hectaresn area almost equal to theillion hectares planted to corn in thef this expansion had to take place in areas where com had never been grown and where It was Impossible for ccanvonly grown'typos of com to mature as grain. Khrushchev therefore emphasized production of com flilago^and green food as well as com for grain. The program vas rapidly, implemented, and2 com acreage had expandedillion, hoc tare d. (see the tabulation below).

8

"mm'

60 large acreages oi* vjeat ware wiu'cerkilled and were reseeded to com .vhlch accounts for the abnormally high com acreage In those yearc. Tbe program to change the cropping pattern, initiated this year, resultedarge expansion In com ccreaselthough some of this expansion may he accounted for by the need to reseed vintorkillcd grains.

Rot only van the nroao corn to be oxpaO'tod.vero to be Increased greatly Dados- Khrushchev's ra-ogran. Heof the success In the US of Increasing yields by use of His analysis of this success, however, van superficial, lietjbo. gains attributable to tho Introduction of hybrid seed,US that he cited is largely Irrelevant tocorn program, Soviet planners have continued

to

they have'

ofillion tons

to

rliDpcartance of hybrid seed, but there Is no evidence thatidespread use of well-adapted and productiveecause, of the Inexperience of Soviet faroers In growing corn,act' of; Iccally adapted hybrids, equipment shortage a, end tbeof the corn crop (grain and silage, expressed Inas fluctuated from Iowaillionillion

In aplt^ojl

3 1

the

c. "catch-up" Program

Pot years, Soviet oratiirs have boosted of the industrial

might ofUSSH end prendoed to curpooo the nations of the Free World In

.si;

Industrial production. ovever, no iiuch promioeB wire made for Soviet agricultural production,one. certainly not for production of milk and meat. Indeed, inhrushchevBlngled out the livestock sector no the most backward segment of Soviet agriculture, rovealing that the nuabern of dairy eovfl end ofattleven less

Lhan6 and that only ssall increases bod boon achieved in the number of hogs, sheep, end gout a. Increases in procurement prices, however,ecord grain hervoat6 resultedignlficaat lraproveEont in the livestock sector, and in7 Khrushchevrogram to cotch up to the US in per capita production of mi-Ik and meat. The following month, ho boasted that the USSR would produceillion tans* of milk,3 andillion toillion tons* of meat0ummary of those goals and actualn for the

lllufltratoo the complete lock of rcnllcrj in UuMObcbev'c boast:

Million Metric Tons

Actual

62 o

admitted that some Soviet economists had calculated that Soviet production

per capita of tailfc and moat could not be raised to OS levels

but be cast aside their advice. Two reasons may account for Khrushchev1c

failure to accept the views of his eeonomicta. Undoubtedly the record

grain crop6 bad bolstered Soviet hopes. Also, Khrushchev's boasts

vers part of en important propaganda campaign: the prcralces to overtake

the US have been given vide distribution throughout tho world- Khrushchev

Since the U3 statistical definitions of nilk and neat differ from the Soviet definitions, theuld have to produce aorc than the quantities tuoted by Khrushchev to achieve U3 par capita production in conipnrable terms.

atg'iSticawed eiaiis* tla-.t USSRla ito ec'icarx. for productlcti of wnmaar'Ja, raid hathn iwllili.iHMi.nl of Ms goals for taut .inn.wuld hit toeM&st psv-iifuAtor

actices, Meed at reining thend sfc isprov the people's bell-being, will exert on the Blinds of vocillstore an influeuco vhich will be stronger than, othsv methods. And otich people vill bo nore anxious to cooperate with us, to side with Marxist-Leninist thoory and with theV^loss in tbe struggle against capitalism. It willreat thing.

Although the Party Central Committee continued to refer to the

,"catch-up" campaign in its official May Day Sloganshe announc-

: ;

.i'dpeht of tho Sevan Year Plan goals in8 amounted to an admission

there wns no chance of catching tbe US in par capita production of

meat0 5 neat production goal was set atillion

to Khrushchev's target ofillloo toillion tons

smpaigQ-lwaS>droppeday Day Slogan,

end the faded campaign posters vare replaced by fresh pledges to surpass

tbe USer capita Kilk output3 end in por capita meat output in

Although Khrushchev's boastsompletely unrealistic, the Increased enphasis on livestock production, enjoineduapcr grain

bci-vst-t dnco4 oLoaut sain in prestation of cent ens nilk

taring thn. svaver, tho pur onpits. output of

ir-.st lawllfwd enfi thelta catgut ofton faUoa co laasttN.

Atd Party CoogreBB Inhrushcheva> that eventually will eliminate the grass rotation eyeteo or farming, reduce the area seeded toand restrict the practice of clean fallowing. Following the rorty Congress, Khrushchev toured the agricultural areas of the USSR, promoting his prcgrem, and ot tbe2 Party Plenum he firmly admonished those opposing it. Cultivated cropscorn, peas, field beans, and sugar beetswill be oovn on the acreages released.

Grasses currently occupy an important place in Soviet agriculture, but they are not so prevalent in tbe crop rotations as the current controversy over tbe grassland system might imply. Under Stalin this systCT vas Indiscriminately introduced in all agricultural areas of the USSR. Following Stalin's death, however, tbe system was discarded in those areas where it woo clearly not suited, chiefly the eeelorid zones. Aboutoercent of Soviet Eown acreage wan in perennial and annual grauacs and clover Iu. the nore humid Northwest, however, they occupied about one-third of tbe sown area.

In tbe teopcrato rone, grasses ond clovers serve ain crop rotations by maintaining the fertility andbileheap aource of livestock feed. Laborrequirements urc generally much lossr cultivatedthe USSK, uh-iro luck of fertilisers has longd clovern heve contributed cignificmtly toward soilgrossa more efficient use of labor and

c^uipKni beea-ice th? fcirvest of bay dooo not coincide with that of other en-:

Clcenonsively prr-cticed in tho

Uv2Ti iuara, bantt-TcXaiiied by ceay SsTiet scientisti a* a

the Lqbj yJiVv cx-jood by used infestation and frequent

drought in th? arid nevcgicn. c-ritneo GugSGSts tbnt

iJov-iet terms* hare beann duigorously large propcrtico of cropland

to grain in the nev lands. In contrast too to percent of the cropland

in clean fallow in the Canadian wheat belt, only aboutercent of tho

cultivated land in the neu laad3 aren was fallowed Philure to

institute proper crop rotations in the new lands has already boon reflected

in decreasing yieldo-

KhrushcheVa tour of the raj or agricultural areas in lete

was aleef. at propagandising the abolition of the grassland cyst do cf raroing

end overcoainc- the opposition that his proposal had aroused among scientists

and specialists. Tbe press cccpalgn vnged against this syotcffi took on the

proportiensajor offcaaivo, which is Indicative of significant

opposition. At tba? Party Plenum on agriculture, Khrushchev stated:

The harmful effect of the Grassland farming system is evident. But It cannot bo said that its aeVooates ore abandoning their positions. They ore trying, to uphold then ctubbornly. etterroop of Ecientiota of the Lithuanian Agricultural research Institute they assert that gross rwet be th? foundation of the fodder bass o?isllar reports coao frcn other ereas.

Kbrushchov's position ues upholdesolution of th; Plenum condecnlng

thest3K.

iueiaituis c':>ed at

pt^sOtlvn of BMtt scAy Increasing, the feed supply.

i&b'ido >iot bave

coaiu with tt* present disposition of sown

: 'cpa, sariye chrll taw? uo faafl. There vill bo

no neat Off raJi either iof-sy or fcex-ros.""

ZbBiUica hictorco, or olnosterceat of the cultivated area, vae in soto gross, clean felloij, and onto. Khrushchev plans eventually to ehlft kl. aiUlou hectares0 of this area to cultivated cropscorn, peas, field beano, and sugar beets. boutiillionre shifted to cultivated crops andilllon edditlonal hectares to wheat, barley, and millet, leaving aboutillion bectares in sown graoo, clean fellow, and oato. The total sown area increasedillion hectaresercent)I.

In the short run the obindrjnsent of tbe grass rotction system sad tbe reduction of fallow could resultizable Increase in production of feed crops. The decision to Increase the ereo in cultivated crops in the face of Bhortages of fertilizers and machinery involvca considerable risk, however, and in the long run the pragrsn is likely to be self-defeating as soil moisture and nutrients decline- Reducing the erea of clean fallow in the new lends will co-pound tbe ricks in that area whereucticn of crops isazardcus venture.

The chance hocow blow to Soviet agricultural selenc.

ucnciou by iijafcysten of agriculture, ubicb In flame degree ban

Q'jyt'-yzQ traroegbout tba world end afeich ban been the official buci

r%otslnco the latsocldbavirclii.in(,

stanalt oniliitl3t3oMe to that cu-sad by the rcpiidiation of

. luvwKice to XftrVSKtnlaU.

srv.iv-fvi.'rfc rfl.-ytra'.auts ofn crop-rins pattcxr-

* ', fiivupff "to tbsxsc tit tfai cav ifv-fis.

3 Flictorc Influencing Grqvrth

fl. Capitol Inputs In Agricolture

During the period of the nev course and the nev lands proeraais the Soviet consumer and the sericulture sector enjoyed improved positions In the scald of notional priorities. The percentage of totalhat vent Into agricultureeak At theI Party Plenum, Khrushchev announced another era of high priority for these oectors. The sincerity and urgency of Khrushchev's proposal at the January Plenum may be tested by comparison vlth the new course and nev lands programs that were unquestionably In earnest.

Khrushchev's remarks at the January Plenum on the subject of priority of economic goalstriking resemblance to Malenkov's statements when he launched the nev course consumer goods program inareful study of the speeches reveals almost Identical wording on the subject, except that Malenkov's program was urgent and definite while Khrushchev's was long-term and vague. Malenkov's new course speech sooneries of Implanontol decrees vhlch spelled out detailed short-run targets end specific priorities. The3 Plenum resolution, for example, directed the construction materials Elnietries to give first priority to the MTS system in the shipment of materials. Although recently revised plans for rural electrification, irrigation, and allocation of equipment and fertiliser seem toong-rouse increase in the priority of Soviet apiculture, none of the "inputs" decrees aed resolutions that have followed the1 Plenum clearly pegged agricultureigher level In the scale of

loncdlate priorities- For Instance, in hie opening speech at the2 Plenuxi, Khrushchev suggested that it would be desirable to give priority to the building of three new agricultural equipment plants. The Plenum resolution, however, bypassed thie suggestion, merely noting thut "it lo necessary to find additional capital" for agricultural equipment

Quantitative Indicators reflect no significant change In the priority status of agricultureI. nvestment Increased onlyercent1 compared viGi Increases of 'O percentk andercenthe beginning years of the new lands program (sec Allocations of trucks and buses to agriculture remained belowevel (see Table ft"). Onlyercent of the total tractor output was allocated to agriculturen contrast to lk percent for theM* The production of'agricultural machinery (excluding trucks, buses andhich roseercentI, still fell short of tbe7 level of output. The plan for new capacity for the production of critical spare parte and fertilizerere fulfilled onlyercent and Uk percent, respectively.

State Investment In agriculture, scheduled torobably will Increase little more than enough to keep pace

* ollow onollows on

Inhrushchev noted that the agricultural pork2rucksractors coopered with 'reep-irss-nts"rucksractors.

Tabic 3

"Productive" Capital Investment in Soviet Agriculture2 Plan

Agricultural Inveet-

Mlllion Keyercentage

Xear State Kolkhoz c/ Total ) of Total Inveatnent d/

Flan

r/

occlude outlay0 for "eotabiiebaieat of herds" and for capital repair.

prices5 adjusted to the1 rats of exchange

exclude outlays for tractors and agricultural nachinerybelonged to the HIS nystem-

capital icvestoent in agriculture expressed as atbe tottl invssraeat in the econovy {excluding private housing).

Inorcao? ofercent compared

ltnl'ncaS3R.I,ndQP? ckpocciiki, no..

fatal* i*

buses.

trucks, buses end tractors production in pricesulyto tba1 rate of exchange. Figuresreon rirodjiction in phyoical units.

busedonth period.

l'skogo kbozvavstva. no.p.

FBIS Daily Report (USSR and East5

el'kho^aafdiiny. no-. I; no.. 2.

oei.teo{yp.'iatvo

khazyiyatvc.0 gc^j, Moscow,,

1 to.Vi..

Allocation of trunks. Tractors, end Agrici-lturil Icacbinery to Soviet2 Plan

Yonr

a/

Machinery b/ (Million Nev Rubles)

Units

of Production

Units

of Production.

c/

c/

with tho growth of the State eector In agriculture, vhlch is being accomplished largely by the conversion of collective to stateteasureo enacted during tbe period1 to2 (discussed more fully In the next section. Prices and Wages) are expected to moke available to tbeotal additional sum5 billion rublesIf one-fourth of this is set aside for investment, as has been normal practice la recent years, then capital available for kolkhoz Investment will be on estimatedoercent above1 level. The actual level of kolkhoz Investaaentowever, will dependargo extent on weather; on the amount of conversion of collectives to state farms; and on the availability of equipment, fertiliser, and other capital inputs.

Production of agricultural equipment thus for2 shows

t

improvementI, but the allocation of equipment apparently will fall short of that required to meet the expanded workload

J L the state sector increased Its sown acreage byercent, primarily through conversion- Further conversions are planned

rnble values in this report are in newate of exchange).

CCiA Xo^iC > ova on p.

Production of fertilizerncreasedate far short of that needed to meet the Seven Year Plan goal (seehe planned Increase In the output of fertiliserhe midyear of the Seven Year Plan, is below the average annual increase Implied by the original Seven Year Plan directives. Production figures for theonths2 Indicate that even this modest plan probably will not be met. Annual fertilizer production plans for theere small

in relation to5iter target, ouggeshing that5

erious goal, althcugh there is some Indication that

?.orgcr increeaes uare planned ior the later years of the Seven year Pino

period- In recent souths there haze been signs that the regime is be-

cocilng more earnest aboutoal. The cbenical Industry Is making

an effort to overcome the lack of protpreso by Introducing on incentive

system for workers engaged In the production of fertilisers and by

arger share of Its Investment funds to fertiliser plants.

Although these measures may raise fertiliser output in the longer run,

they probably are not sufficient to overcome this significant lag in the

Seven Tear Plan period.

Clearly Khrushchev's current consumer-agriculture program

lacks tho initial vitality of the new course and new lands projects. At

the1 Plenum, Khrushchev spoke of this program as

for lost opportunities.1' In his closing remarks on the requirements of

agriculture, delivered at tbea Plenum, he hinted that still

more opportunities may be lost:

It can be stated beforehand thatew years we shall perhaps reproach ourselves for not bavins fully taken into account our possibilities for tho development of agriculture.

The Plenum foiled to give agriculture the priority which Khrushchev hod

esked for la his opening speech- The above quotation may be both an

edalsaion of defeatloclolieer of responsibility for future conne-

^iencfis.

'--vry, tfesc BkAbmt initiated fclfpiT-cvcn in, becUernfl that Inftun-fcrlclcntcantix^ to gccci-ct- ccbctuntinl funds throu^'tout tho reoiniue gasnf the Sever? testVTSvliJ.ch could bo investe! to tho conauner cod cgriculturcnd perhaps earlier, it beccx* lnci-ecelngly clear that thereother ficmands on thcas funis fron increased space, defease, and industrial construction costs. Althoach IQirushchcv continued to press foronsumer-agriculture program in Mo OfHMlna speech to2 Plenum, his closing speechlcul'.-ural leaders andnot to cagjcct the iaaodletc transfer of fends to agriculture to tho dstriment of industry end defense. unon acolcgotic appeal to the population spelled this out eor= clearly, livestock prlcco wore to be incroracd, but tho financing of the price incressts would fell not: on^defense, not on heavy industry, buthe consumer "jy atono of higher' retail prices. Ibis latest tor suraetbaeX tolioremised inIIuctrial funds vculd bei.id tc the sgrlcalturo and cooa-iiaa- sectors end vho,ardynd no recently as Moronhodeonousar that retail pi-icon fcr agricultural products would not be raiocd. b. Prlce3.asd

ncentives wiretigr-sa tsfces( port the iflrteaidnna sttattlaa ftfUsvlmnt* of SiaAin. Pro-v iii; prices, voieh;

products, vere raised; toa: concessions were mode; and obligatory deliveries from private plots were decreased and then abolished, however, additional stimuli necessary to overcome the inertia in the sericulture! economy hove been lacklxg in recent years.

A decree published in6 reconniended that collective farms nuke monthly cash "advances" to the fern members in partial payment* for tho work done by then on the socialized sector of tho form during the month. ustained effort was made following the8 Party Pleoun to get the collective fnrms to abandon the workday <trudoden) oyotcsn of labor payment, which Included payment-in-kind, sad to go overguaranteed" monthly cash wage system. Tbe implementation of these two maasureo wan limited, probably because of the relatively poor financial status of most farms.

There is little evidence to indicate that8 reform of the procurement price system took into consideration the full financial 'affecto of the abolition of the HTS on tho collective ferns. Following the oedlocre crop years9he heavy financial burden thatIzopooed on the collective forms by the purchase of MT3 machinery had become obvious. The increase In kolkhoz coney Income (on calculated In terms of current rubles per household) averagedercent8 for those two years, while tbe expenses of the forms had greatly increased.

* The final settleocnt or accounting by the farm with its meabere vaa ntill to bo rawie at the end of the year.

12 tho regime took measures to Improve the financial condition of the collective farms. The period over which they

could pay for the machineryra the MPE'i wr* oxtonded; prions of trucks, tractors, Geaollno, spare parts,tarlcls, and metuA products -jre lowered; the tax on annual incomer.'mal husbandry vno reduced byercentnterest on lon^-jem state credits wns lowered; and, beginninghe state was co assume thecoats for the delivering of products by the collective farms to procurement points up toilometers (the state was already paying those costs incurred beyondilometers). These ocasures ere expected to save the collective farms5 billion rubles annually.

One of the most Important measures taken8 to stimulate the agricultural sector, especially in animal husbandry. Is2 decree, which raised the procureuent prices for livestock end poultry obtained from collective farms and individuals an average ofercent, and raised procurement prices for butter and creon byercent, respectively. Preliminary ectlcatea Indicate that the new prices will increase kolkhoz mooey income byillion rubles.* This billion rubles combined with5 billion ruble savings to be realized by collective forms from the measures taken1 end2 should raise collective farn income by aboutoercent above thatI.l, added eciphaels was given to rewording work-ra with port of the above-plan production. Khrushchev recently held upodeloldavian com grower whoons of cornis share of above-plan production - While the exceptionalhit* workers are widely propagandised, few workers con expect similar rewords.

* Tillsinclude additional kolkhoz incomeise in prJceo for livestock producti; on the kolkhoz ir.urket. Althoughise la likely, tboxa la no fend basis fornttud'j The prices paid to atata ferns for livestock deliveries* decree eree in-isnaedevel'sv the prices aeld t> collect! ve ferns.

Aeto Increase the lntaraat ofn oU.ce mraaeuit:; ta_-iv vori, una adoptednsteadixed wane for state farm workers, the nor Byrtca provides that the wages of state forn workers will be partially dependent on the Quantity and quality of production, la nnlnal husbandry as much asercent of the wage con be dependent on production, whereas in production of crops tho proportion nay be as little asercent. Pramaably the new etate farm wage system will nean an over-all Increase in wages,illion additional rubles were allocatedI for tho readjustment. However, there has been no widespread publicity of the effectiveness of this new wage system, suggesting that at least to date the system has not produced the desired results.

h. Chongoo Id Agricultural Organisation

Indicative of tho state of flux In Soviet agriculture3 have been tho rainy lcportnnt change in agricultural organization at tho highest levcla. Following the death of Stalin inlw five agricultural Ministries (Agriculture, State Faros, Agricultural Procurement, Cotton Growing, end Forestry) were merged Into one Ministry of Agriculture and Preincrement. In tbe foil3 tbe consolidated Ministry ofend Procurement was split Into the Ministries of Agriculture, State Forms, and Agricultural Procurement. i amine responsibilities vers transferred from the Hlnletry of) Agriculture to Ooeplan. 6 the procurement function of the Ministry of Agricultural Procurement was transferred to the Ministry of Agriculture, end its other functions were taken overewly organised Ministry of Grain Products. 7 the Ministry of State Forms vns abolished, and tbe etato farms under Itwere transferred to tbe Ministry of Agriculture.

a. 3 Reorganisation of Machine Tractor Statlono(MTS's) Almost from tho beginning of collectivisation, th? MT6 bad control ssd nearly all tho oachinery used on tbe collective farms and bad urred tbia monopoly to control the activities of the collective forma. The role of the KTS vns Increased still further6 with the transfer of responsibility for agriculture! procurement frar the Ministry of Agricultural Procureaont to the Ministry of Agriculture. On tha local level this reesens'biittfrassigned to the hie, vliUrh by nav bad bscesie the focal Pel at fee- local Party control and directlcri of tie collective force.

inhrushchev proponed the- most important organlrational change in Soviet agriculture alnceocialization Inr.- He suggested ntripping the MTD'u of tbslr power by relegating tbcm to the status of repair uad supply depots- In presenting his theses to the Plenum of the Central Ccendtteo, Khrushchev argued that the political and econoadc functions of tbe MTS bad become outmoded now that the "socialist consciousness" of the collective farmers had increased and the collective farms ware large and wealthy enough, with adequately trained cadres, to take over the machinery of the KTS. He stated that the indivisible funds of collective farms ware large enough to pay for the machinery froa the MTS's. An article in the7 iBsue of the KTS journal, however, bad expressed the opposite view.

Tbe MT3 Journal proved to be correct. The abolition of the KTSarge investnent load from the state to tbe kolkhozes. This burden was especially heavy in the mediocre crop years9eaving many kolkhozes In poor financial condition- Qy the endolkhoz investment reserves (per unit of sown area) had fallen toercent ofevel. Although investment reserve figures for the end0 arc not available, investments per hectare remained largend the financial condition of the kolkhozes probably did not improve. Inhrunhohw stated that the leading collectives would be able to pay for MTS equipmentears, average collectivesears, end poor collectivesears. I the state found it necessary to extend theseoears core and to introduce other measures to alleviate the poor flannelat condition of the kolkhozes.

The administration of Soviet agriculture vaa radically changed by c. uerien of decrees issued in tbe first quarter The Ministry of Agriculturealready vackersd by the loss of its planning reanoasl-bilitleshe abolition of its MTS systemnd tho loos of its supply functionan divested of the administration of otata and collective farms and forestry, control over state purchases of agricultural products, and responsibility for tho repair of agricultural machinery. These functions vere scattered among several government organizations leaving no clcsr delineation of primary odr) nlstrative responsibility.

1 reorganization weakened tho position of the governmental bureaucracy or eencgerlal class and enhanced tho position of the Party in agricultural odmlnl strati on. Thea Party Plenum, v'alch endorsed another reorganization of agriculture, clarified rcsponsi-billty and foraslizcd the dominant position of the Party in theof Soviet agriculture.* Boy for the first time, the republic and oblast Party bosses haveorsal part of tbe state administrative neeninery for agriculture. osses are responsive to the ruling Party Presidiumn feet, eone of tho republic Party bos sen are ttubere of the Presidium.

Opposition to tho elloil nation of tbe grass rotation oystto of farming say have generated tbe decision Colearer delleecticn of authority cad on integral role for the Party in agricultural acninistrr.tioa.

Tho rcorcnnirsaMoa, bovever, doee not solve the basic problem of Giving oore flexibility of decision Making at tbe faro level thatecessary for efficiency in agriculture. On the contrary, it appears that centralized declolon nnkinc has been etrengtbened. ecree published in Pravda onimed at upgrading the role of the specialists in agricultural production, may be an attespt to slnlnize publicly the rolo of tho Forty in agriculture. There is little doubt, bovever, that the Party, oriented tovords centrally established goals, will prevail, probably ovenreater extent than in the past, ovor the recccsendations of the specialists and the Banagcrlal class, c. Importance of the Private Sector

*ollowo on

Tbe small private garden plots are one of tbe last remnants of legal private enterprise in the USSR. These plots, vhlch have always been ideologically unpalatable In the Soviet system, have been tolerated for progpmtic reasons. The intensively cultivated plots, tfhich occupiedercent of the total sown areaontribute alargo share of the total output of many important food items such as vegetables, potatoes, meet, milk, and eggs- (see. Tbe plotseans for individual Soviet citlsons to provide themselves with many food Iteos that would not otherwise be available, and they provide faraero, particularly collective farmers,onsiderable share of their Boney Income.

asro of tba Private Sorter inotalo of Holeoted Agricultural CcnveditiM0

Percent.

Ik

) .

72

a^^oejioye khooyoistvoQffl sgdjr. Data tire

It should be noted that seme of the feed canona-ed by the privatoly-ovned liveetock le grownoclallxed lanl. The current prosrsr! to nlcw-up the grnaelando probably will reduce the availability of "socialised" pasture to privately owned livestock.

The private ploto compote with tho socialized sector for tho labor tine of the farmers, and this competition has been of considerable

to Soviet offlclclo. In addition, tho Evert disparity between ylttlds on the private plots and on theamn hasource of efnbarraBi'jentegiua cctaxit-cd to tba doetrina of the superiority of socialized agriculture. The attitude of tbeve?-nmont tovnrd tlicce saall private plots, therefore, fcss betar. ccdl<;ctive faraioii bmonma core profitable, th* pri irate plots a'uovlfi fl&creace in inportcncQ.racr! the plots has, btv-var, vneUlt^sd greatly cvw

/

'-he yeca.t. he private plots hsve been taxed or otherwise pmattsad Amos in tines ofhey have been ralieved of some of these bcvlrtuj.

INirins tho first few years after Stalin'e death the regimeuthsr lenient attitude tonard the private sector.hereeduction in the taxes paid by collective farmers on their private plots, end, beginning inollective fern private plots were exempted from the compulsory delivery of grain to the state. The collective farmers responded to these concessions, andheir private holdings of cattle Increasedhare of total cattle holdings.

ovover, legislation was enacted that encouraged reductions in the size of the plots end In the number of livestock belongings to the collective farmers. In the ssreeax uas levied on livestock owned by urban workers and en attempt woo made to prohibit urben corkers fron feeding inexpensive state store bread to their livestock. All compulsory deliveries from private plots were cancelled as of

Bovever, tbe drive to reduce the number of cattle in the private sector continued. By the decision of the8 plenum, state form vorkers wera to sell their livestock to tho state fermo within

ecrs,collective farmers were "encouraged" to cell their livestock to the collective farms. Under decrees issued by various republic' .Inurban dtelloro were to sell their cattle to state or collective fVre*.

BQaourec canted6 have substantially reducedco o^ the private sector. Tbe shirs of this sector

In tberea declined fromercent inercent. During the earae period, privately owned cattle decreased from U6 percent topercent of ell cattle. nevertheless, tbe private sector remains highly productive and much in evidence.

Original document.

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