Reassessment of the Soviet agrarian policy in the light of today’s achievements

Khrushchev's attempt to create “communist agriculture” contributed to the decline in animal husbandry. He forbade workers and employees to have cattle and started a campaign to force kolkhozniki to sell their cattle to kolkhozes at state prices significantly below market prices. Many preferred to slaughter their cattle and sell the meat at kolkhoz markets. Khrushchev also did not take into account that kolkhozes would need additional fodder for winter. The worst consequence of this communist project was that it finally destroyed the hope of returning to private farming, which caused the exodus of the most qualified rural workers that were so needed when Brezhnev started state investments in agriculture. People staying in the countryside did not have education, flexibility or interest to work. Many well educated specialists that were kolkhoz heads under Khrushchev's rule quit their jobs for they were fed up with crazy and harmful orders from above.

However, there was an alternative way to increase per hectare and per animal yields which was demonstrated by the experiment of thetractor driver Ivan Khudenko. He addressed his reform proposal to

Khrushchev who made him a director of the state farm in Kazakhstan. историяKhudenko reduced the workforce by 90 percent and tractors by 75 percent, and with the remaining tractor drivers he tripled grain production and could even pay some money to those who had lost their jobs. Khudenko proved the super-fluousness of the huge state agricultural administration and the bureaucracy struck back: instead of being awarded with the order of Lenin he was arrested for “corruption” and died in prison (Merl, 1990c; Zhiznposlezhizni, 1989; Yanov, 1984).

This example is not an exception which is proven by a widespread phenomenon of shabashniki -- highly motivated migrating teams of workers paid by cash by kolkhozes to do urgent work in a short period. Without motivation no kolkhoznik would fulfill such a task, so shabashniki supported the Soviet agriculture under the threat of arrest. Khrushchev called them “parasites” and they were often persecuted as “speculators” although kolkhozniki could be hired for cash by neighboring kolkhozes. The normal kolkhozniks lack of motivation can be explained by “obezlichka”, i.e. the lack of personal responsibility. Stalin had already mentioned this problem in industry in 1931, but the agricultural bureaucracy blocked any changes. Only those were awarded a premium who did a great work on huge areas although this was counterproductive for raising yields. Within the brigades it was hardly possible to decide who worked well of badly especially for the results became evident only after the harvest. This had a negative impact on the work discipline: why to work hard if the lazybones get the same payment? Only small teams from the mid-1930s showed better results.

In the mid-1960s, for the first time in the Soviet history there were important state investments in agriculture. After the quick changes under Khrushchev's rule, agrarian policy became stable and determined some increase in yields but in the 1970s stagnation returned again. The most striking feature of the period was that the increase in capital inputs did not correspondent with a significant decrease in labor inputs. During harvest millions of students and industrial workers were sent to help in the countryside although the available rural workforce in the Soviet Union was five times larger than in the Western agriculture. The “lack of labor” was due only to the lack of work motivation of the majority of rural workers. Thus, capital inputs did not ensure raising yields or efficiency, for instance, huge investments in irrigation led to just one percent of annual increase in yields, while there was a significant increase in waste. Finally, the state had to cover losses of agricultural enterprises. Instead of forcing enterprises to increase efficiency by keeping producer prices stable, as the European Union successfully did, the Soviet state always preferred to increase subsidies to cover the raising costs.

Capital inputs under Brezhnev's rule were not smaller than today but it was the state rather than enterprises to decide on investments.The agricultural producer could not choose the type of machinery and had to take what the planned economy suggested. Hungary in the 1970s showed that agricultural enterprises with free choice of investments could double corn yields in a few years by using Western machinery and competing service providers. Agricultural machinery produced by the Soviet industry did not meet Western standards in both quality and labor safety. Combine harvesters often caused huge harvest losses. Hardly any Soviet tractor or combine could work out the guaranteed period without breaking down, i.e. such machinery served interests of machinery producers rather than needs of agricultural enterprises. For the industry it was profitable to produce heavy machinery although it damaged the soil; the industry had no interest in producing spare parts, and under Brezhnev's rule already during the railway transportation new machinery mostly served as spare parts warehouse. Thus, when it reached the destination, it had only parts left that could not be used. Therefore, mechanization of agricultural work was never finished, and a lot of activities during harvest, in animal husbandry and milk production were still manual.

Instead of eliminating the “command system” in agriculture Brezhnev decided to introduce “socialist competition” to agricultural enterprises and workers. A huge state apparatus was busy with counting work results, awarding the winners and propaganda. Considering the stagnation of per hectare and per animal yields it is evident that such efforts had absolutely no effect for productivity. The attempt to overcome strong deficiencies of agricultural machinery by labor incentives was typical for the Soviet ideology claiming that success depended on the “right cadres” which was doomed to failure.

From the mid-1950s there was an intensive knowledge exchange with the West: many soviet specialists were send abroad to study, and according to the archives of the Soviet Ministry of Agriculture every progress in the West was known in the Soviet Union. Models of efficient Western machinery, animal breeds, hybrid seeds, equipment for producing concentrated fodder and milk were imported. Some models were developed by Soviet research institutions for Soviet mass production but the agricultural machinery producers were not able or willing use this knowledge. Moreover, the Soviet countryside lacked transportation capacities until the very end of the Soviet period and also lacked qualified labor needed for more developed machinery. As a result, in the early 1970s a large amount of grain was imported for food: first imports were due to the bad harvest in 1963 to avoid a heavy decline in livestock.

With the calls to the “fermer” and return to private farming at first radical reformers had a great success: peasants were allowed to work on their own without state interference. In the early 1990s, a minority of rural workforce, about 240.000 families, decided to become fermers while the majority of new fermers were not previously rural workers but rather industrial workers, townspeople or the leadingand qualified personnel of collective farms with good local networks

to organize their farms. Collective and state farms without any de- mctopma sire had to provide fermers with land. The fermers' movement shows to what extent some people were fed up with state paternalism and wanted to become their own masters. Many of them had more idealism than knowledge of agricultural production although many managed to get a tractor, farming implements and irrigation equipment. I met some fermers in 1992 and 1993 and believe that about 10 percent of them could become successful peasants with modern farms of several hundred hectares. It was not their fault that almost all of them failed by the mid-1990s; many stayed in the countryside and worked on their private plots.

The main reason for their failure was agricultural depression that started in 1992 after liberalization of prices that revealed an excessive demand for meat products. Liberalization of prices halved the demand for meat -- to the level expected from the general industrial development in Russia. Many urban consumers preferred to buy well packed and better processed meat products imported from the West. Fermers never got access to urban markets for the control of transportation and marketing of food products was quickly taken by local mafia groups that made producers pay for “protection”. There was no need to raise production but to produce agricultural products more efficiently to sell them in the market without losses. The quality of processing, storage, transportation and marketing neglected during the Soviet period now became the Achilles heel of the Russian agricultural producers.

At the same time serious mistakes of the radical reformers became evident: they correctly estimated the efficiency of labor inputs in the Soviet agriculture as very low but were too much focused on the idea of private property and did not take into account the necessary size of peasant farm under today's agricultural technology. Fermers usually got 40 hectares but had no chance to lease or buy additional land or to use their land property as a deposit to get credits to improve their farming. 40 hectares under the Russian extensive production were insufficient. For instance, under the transition to the market economy in the GDR the medium size of new peasant farms was about 150 hectares; thus, in Russia from 500 to 1000 hectares would have been necessary. It took Russian legislation more than 10 years to eliminate restrictions on private land property but only agricultural holdings benefited from it.

Putin's agriculture: Rapid growth of yields, risky focus on agroholdings

Unlike the Soviet past, today, after privatization, agroholdings pursue their personal gains and are masters of their fields free from admin-istrative interference in production decisions. The state uses economic levers and subsidies to guide the development of agriculture in the desired direction. These subsidies make investments in agriculture attractive even for non-agricultural capital owners. Although the production itself always has losses, state subsidies and food exports ensure significant profits (Wegren, Nikulin, Trotsuk, 2018). The rapid growth of per hectare and per animal yields is determined by the use of Western machinery and livestock breeding equipment, seeds and cattle breeds. The “green revolution” taking place in Russia mainly in agroholdings and some peasant farms finally introduces new agricultural technology and achievements of industrial agriculture (Merl, 2015).

Putin's agricultural policy tried to support private farmers; however, the lack of experience in selecting promising peasants and especially the widespread corruption determined that only a minor part of state subsidies was provided to active peasants. Moreover, in recent years they lost state protection for the state allows land-grabbing by agroholdings. “Household farms” are successors of the Soviet private plot production and a separated part collective farms that does not take part in the “green revolution”: only very few of them want to become peasants or lease machinery. The majority of them are the elderly without qualification producing just some additional food for their own consumption. The state is very at risk relying primarily on speculative large agro-holding production dependent on state subsidies for there is a high risk of losses and failures for capital owners especially considering the scale of agro-holding production -- many of them have more than 200.000 hectares under cultivation.

Thus, the growth of per hectare and per animal yields in Russia from the early 2000s prove that the low Soviet yields cannot be explained by bad soil or climate. A different approach allowing agricultural producers -- large-scale enterprises and peasant farms -- to master their fields and investments, production and marketing would have made already Stalin's agriculture efficient enough to feed the working class, to support industrialization and to export food after the World War II. In the 1920s, the Soviet Union successfully used economic levers to increase yields and improve peasant agricultural technology but in 1929 the situation changed radically -- Stalin focused on state compulsion and deprived agricultural producers the right of making decisions on agricultural production and of getting adequate payment.

These are the features determining the results of the Soviet “socialist” agriculture:

* The Bolsheviks did not trust peasants and later heads of collective and state farms. They considered them as counter-revolutionaries, incompetent farmers and unreliable allies incapable of efficient agricultural production. Thus, only in short periods of liberalization in 1953, 1965 and 1985 there was some increase in yields.The quality of Soviet agricultural machinery and equipment lagged far behind the Western standards at least from the 1950s. Moreover, there were no mechanized equipment for private plots. Soviet agricultural equipment never allowed to fully mechanize the production especially in preparing hay and fodder and dairy production. Stalin's “industrialized agriculture” was designed for the aims of control rather than modernization of production.

• From the 1870s to the very end of the Soviet period the rural sector suffered from the hidden unemployment. While in the developed capitalist countries 1-2 percent of the workforce produce enough food for the population, in the Soviet agriculture even in the 1980s more than 10 percent of the workforce was employed. Soviet agricultural labor productivity was only 1020 percent of the capitalist countries level, which is determined by the loss of motivation in the Soviet agricultural regime that alienated people from the results of their work. This loss of motivation became the main factor of the steady negative trend in yields under the Soviet rule. Stalin's state demanded that peasants worked as serfs engaged in bonded unpaid labor. According to the radical reformers in the late 1980s, collectivization turned peasants into agricultural workers without any interest in the results of their work. Thus, the Soviet agriculture definitely did not lack labor, and the “felt” lack of labor was the result of the lack of motivation to work.

• In the 1920s, hardly any other country had so many agricultural experts as the Soviet Union, and the level of agricultural scientific research was high until the end of the Soviet period. However, this and also Western knowledge was not applied in the everyday production of collective and state farms. The role of Soviet experts was ambivalent: they were scapegoats for failures of the Soviet agriculture and had to provide “bacchanalian” plans so that the party leadership would hide its dilettantism in managing agricultural production, which led to huge differences between optimistic images of the plans and sad realities of rural life.

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