Monday, September 3, 2007

What a sad look!

Have you laid up the fodder?
Govorkov V. I., 1965

Almost 60-odd years ago in Canada. I was studying agriculture, how to produce better chickens, better cattle, better horses — horses in those days — better fruit, better vegetables. This was in the early years of the Great Depression, and the thoughts crossed my mind that there wasn't a hell of a lot of use producing better crops and better livestock if you couldn't sell them, that the real problem of agriculture was not efficiency in production but the problem of whether you could make money after you produced the stuff. So I shifted from the technical side to, first, the study of agricultural economic issues and then on to economics itself.

John Kenneth Galbraith

In 1965 the land reform started. Khrushchev’s agricultural policy which implied extensive farming and no personal commitment of the peasants forcefully made the country to purchase the grain abroad.

So in 1965 several crucial measures were introduced: the government increased purchasing prices for the grain and goods, the 6 years procurement plan was given to the kolkozi along with 50% bonus for over-delivery. But most important was that peasants were allowed to do their personal farming, on a very small scale, of course.

But all those measures were useless, until the free trade could be introduced. And the government was constantly imposing new regulatory instructions for the peasants, like limiting the amount of strawberry crops one could plant on his small plot of land. So on one hand the profitability of kolkozi reached 34% in 1970, and on the other all the huge investments (more than 400 bln. of rubles in 1966-1980) did not bring significant gain in total agricultural output.