Agricultural procurement
Agricultural procurement. Compulsory, regulated deliveries of agricultural products and raw materials to state agencies for centralized distribution and redistribution among the population, industry, and other sectors, and for export. Deliveries of farm products were the Soviet state’s means for expropriating without compensation a portion of the production of collective farms and state farms. In the Soviet economy the deliveries formed one of the main sources of capital formation, not only in agriculture, but also in industry and government (see National income). The quotas to be delivered and the prices paid for them by the state were determined by state planning. Any surplus that remained after the state and collective farms met their delivery quotas was purchased by co-operative organizations, commercial enterprises, municipalities, and manufacturing concerns.
After the Revolution of 1917 farm products were procured by what was known as the surplus appropriation system (prodrozkladka) (under War communism). According to the government decree of 12 February 1919, the peasants were allowed to keep the seed and 14.5 poods (237.5 kg) of grain per person per year, while the rest of the harvest was requisitioned without compensation by the state. Because of peasant resistance to this policy in Ukraine and numerous peasant uprisings, the surplus appropriation system was replaced by the tax in kind (prodpodatok) in 1921 (under the New Economic Policy). According to the new system only a part of the farm production was subject to compulsory delivery to the state. In 1924–7 the state purchased farm products largely on the open market, but in 1927 the advance contract system, under which peasants contracted to delivered certain amounts of farm products to the state in exchange for manufactured goods, was introduced.
With the introduction of collectivization in 1929–32, compulsory grain deliveries, which had the force of taxation, were instituted and were implemented according to the strict quotas set in Moscow for all the republics, including the Ukrainian SSR. At the same time the government introduced payment in kind—20 percent of the harvest—for work performed by the machine-tractor stations. The quotas for this compulsory grain procurement were very high: in 1931 the state took 7 million tonnes (38.5 percent) of the 18.2 million tonnes harvested, and in 1933 it planned to take 6.6 million tonnes (50 percent) of the 13.2 million tonnes harvested. As a result of these high exactions famine broke out (the Famine-Genocide of 1932–3). Consequently a new law on compulsory deliveries of farm products was issued on 19 January 1933, which set forth somewhat more reasonable delivery quotas—3.1 centners per ha of land planned for cultivation for collective farms that were not served by machine-tractor stations and 2.5 centners per ha for collective farms that did use the stations. In 1935 the quotas were lowered to 2.4 and 2.3 centners per ha respectively, and in 1936 to 2.4 and 2.0 centners per ha. On 1 April 1940 the delivery quotas in the Ukrainian SSR began to be calculated on the area of actually tilled or cultivated land. Deliveries of industrial crops and certain other farm products were conducted under the advance contract system. The grain delivery quotas differed in each raion, ranging from 20 to 210 kg per ha. For the 510 raions in the Ukrainian SSR the average quota was 137 kg per ha. With certain modifications these quotas remained in force until 1955.
On 9 March 1955 the law ‘On Changing the Agricultural Planning Procedure’ was introduced. By the end of 1958 procurement prices for farm products were increased sharply, private subsistence plots farmed by individual households were freed from compulsory deliveries, and payments in kind for the services of machine-tractor stations were abolished. In 1961 the advance contract system was reintroduced. At first two- to three-year contracts were signed between procurement organizations and collective farms and state farms, and then, beginning in 1965, one-year contracts. After 1965 the prices on deliveries were raised several times to provide greater material incentives for the farmers and to deal with recurring agricultural crises and crop failures.
Not only grain but all farm products were subject to compulsory deliveries. In 1940–57, for example, collective farms had to deliver 4.5 kg of meat per ha per year. In 1976–8, 2,260,000 tonnes of meat were delivered to the state. In 1933–40 the milk delivery quotas were 470 l per collective-farm cow and 110 l per private cow. In 1966–70 the average annual delivery of milk to the state was 9,881,000 tonnes; in 1976–8 it was 13,837,000 tonnes.
The statistical data in the accompanying table are based on official information from the annual Narodne hospodarstvo Ukraïns'koï RSR (The National Economy of the Ukrainian SSR), and do not always reflect the full extent of the expropriation of Ukraine’s farm production by the Soviet state. According to the estimates of some Ukrainian economists, particularly Konstantyn Kononenko, Ukraine’s grain deliveries exceeded by 50 percent the deliveries of other parts of the USSR and especially of the Russian SFSR before the Second World War. In 1933–8 the Ukrainian SSR delivered to the state 353.7 million centners of grain (deliveries, purchases, payments in kind to machine-tractor stations) out of a harvest of 778.6 million tonnes (ie, 45.4 percent of its harvest), while the rest of the USSR delivered only 1,184,000,000 centners out of a total harvest (actual, not biological) of 3.791 billion centners (ie, only 32.1 percent). Moreover, this took place when Ukraine had a lower hectare/peasant ratio and productivity than did the rest of the USSR.
It should be pointed out that the state paid very low, monopoly prices, unrelated to the real value of the products, for deliveries and then resold the products to consumers at much higher prices. Thus, both the farmers and the consumers were exploited. The excessive profits of this legalized speculation, which sometimes reached 1,000 percent, were turned over to the state treasury in the form of the turnover tax and were used for industrialization, armaments, and maintaining the government bureaucracy. Until 1958 surplus farm products (after obligatory quotas had been met) were sold to the state at so-called above-quota incentive prices, which were much higher than the obligatory delivery prices. In 1939, for example, the obligatory delivery and above-quota prices per kilogram were 0.06 and 1.00 rubles for rye (ie, the above-quota price was 16.7 times higher), 0.10 and 1.20 rubles for wheat, 2.50 and 28.00 rubles for butter, and 0.15 and 2.10 rubles for milk. The difference between the two prices was considerably reduced after the Second World War. In 1955–7, for example, the two prices per centner were 25 and 120 rubles for wheat, 55 and 135 rubles for milk, 905 and 1,450 rubles for butter, and 20 and 45 rubles for eggs (per 100). State farms delivered their products at the state-farm procurement prices (zdavalni tsiny), which were also considerably lower than the above-quota incentive prices.
In 1958 the delivery and above-quota prices were replaced by uniform prices (yedyni tsiny), which were much higher than the general level of above-quota prices and especially obligatory delivery prices. In 1978 the government decided to establish a uniform, centralized delivery plan, beginning with the 11th Five-Year Plan in 1981. The compulsory deliveries of farm products had a detrimental effect on the development of agriculture. In spite of the various reforms, including the 1978 reform, the Soviet state continued to make very high and economically unjustified profits from reselling farm products. These profits were in fact a peculiar kind of rent that the collective farms and state farms had to pay to the state for using the land.
BIBLIOGRAPHY
Na fronte sel'sko-khoziaistvennykh zagotovok (1928–35)
Sil's'ke hospodarstvo Ukraïns'koï RSR (Kyiv 1958)
Kononenko, Konstantyn. Ukraïna i Rosiia: Sotsiial'no-ekonomichni pidstavy ukraïns'koï natsional'noï ideï, 1917–1960 (Munich 1965)
Istoriia selianstva Ukraïns'koï RSR, 2 vols (Kyiv 1967)
Mishchenko, O. Derzhavni zahotivli sil's'kohospodars'kykh produktiv (Kyiv 1968)
Panchenko, P. Razvitie sel'skogo khoziaistva Ukrainskoi SSR, 1959–1980 (Kyiv 1980)
Vsevolod Holubnychy, Bohdan Wynar
[This article originally appeared in the Encyclopedia of Ukraine, vol. 1 (1984).]