USSR ABOLISHES PRODUCER COOPERATIVES (CB 61-8)

Created: 2/16/1961

OCR scan of the original document, errors are possible

CIA/RR

ebruary losi

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3HISTORICAL REVIEW PROGRAM

RELEASEAS9

CURRENT SUPPORT BRIEF

USSR ABOLISHES PRODUCER COOPERATIVES

OFFICE OF RESEARCH AND REPORTS

CENTRAL INTELLIGENCE AGENCY

This report represent* the immediate views of the originating intelligence components of the Office of Research and Reports. Comments are solicited.

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document contains Inf the United States, wlthlivjhe meani USC,he tra

affecting the national defense of the espionage laws, Titlen or revelation of which

USSR ABOLISHES PRODUCER COOPERATIVES

The Soviet Union has recently completed the reorganization of all producer cooperative enterprises into state enterprises under republic ministries or main administrations of local industry or under councils of national economy. This actionype of economic organization which was considered ideologically inferior and which was unjustifiably costly to administer and coordinate. Budget data, industrial cost, output, and labor force statistics are affected by the change.

In recent years significant numbers of producer cooperative enterprises had been reorganized as state enterprises. Such changes ineriod were great enough to reduce membership incooperativesillionillion,lthough by

had increasedilliononagriculturalforce of aboutillion. 2/ Each producer cooperative was,allowed to hire additional workers and employees up toercent of total membership, and higher limits were set incases.

Production by cooperative industryercent of total Soviet industrial production/ This figure apparently includes some production by collective farm and consumer cooperativebut producer cooperatives accounted forercent of total industrial output. Producer cooperatives concerned themselves primarily with the production and provision of consumer goods and services, utilizing waste materials and by-products of state industry as well as other locally available materials. Cooperative shops turned out significant quantities of clothing and other textiles, woodincluding furniture, metal products such as kitchen utensils, food products, and leather and fur goods. Services rendered byorganizations Included tailoring, shoe mending, and general household repair work.

Soviet officials have always considered the cooperative form of organization to be transitional and ideologically undesirable. It has been employed where expediency demanded it or inertia maintained it. Producer cooperatives originally were introduced to effect the consolidation, organization, and state control of production byskilled craftsmen without subjecting these craftsmen to the psychological shock of reduction to the status of state workers.eneration after the producer cooperatives had beenby the state, the tradition of the independent craftsman had been effectively submerged, and the success of the earlier transfers cleared the path for the general change.

Harbinger of the general transfer was the announcement onay

Turkmenskaya Iskra of the reorganization of thatcooperatives into state enterprises and the replacementTurkmen Council of Producer Cooperatives with theAdministration of Local Industry under the Turkmen Council4/ Similar announcements were made in the summer andthe Kazakh, Tadzhik, and Belorussian republics. 5/

An article in Kommunist, appearing intated that earlier changes from the producer cooperative to the state industry form of organization had been successful and that producer cooperative enterprises were therefore in the process of being reorganized as state enterprises/ The following month, USSR Deputy Finance Minister Uryupin wrote in Finansy SSSR that the decision had been made to transfer producer cooperative enterprises to theof state agencies. 7/ 0 plan fulfillment report,ontated that all producer cooperativehad been reorganized as state enterprises by the close/

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An effect of the reorganization on the state budgot appeared in0 budget report. This reporteferenco to funds of moreillion (new) rubles which were available "from non-contralized sources" to bo used to finance capital works by state organizations. 9/ The sources are probably accumulations of liquid assets in the producer cooperative organizations which have boon taken over by the stato.

The effect on industrial cost and output data nay also be seon in the budget report. Cost flguros for state industry and output totals derived from them do not coincide with previously constructod cost and output series. The now Soviet figuresoticoable discontinuity between the output of state industry9 and that planned Tho discontinuity is caused by an unexpectedofercentage points, which may be attributed to tbe inclusion of output formerly credited to cooperative enterprises.

According to0 plan fulfillment report, the conversion of producer cooperatives into state enterprisesillionto the state labor forceontributing to the unusually largo annual Increaseillion in that category. Thepublished results of9 census Indicate that the categoryof producer cooperatives" has now been eliminated from Soviot employment statistics.

Analyst:ources|

l' Uff?AStatistical Administration. 6 eodu (National Economy of tha.

2' ROctigb-or-tiSupply and Employwe_nt. tn tne

3' Sitatistical Administration. Narodnoyo khozyaystvo9 eodu (National Economy ofUSSR0 Moscow,. U.

Turkmensknya Iskra. U.

Kazakhstanskaya Pravda.. Kommunlst. Sovetskaya Bolorusslya. u.

Kommunlst. U.

Flnansy SSSR. U.

Pravda. u.

bove).

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