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Incentives in Communist Agriculture: The Hungarian Models

Published online by Cambridge University Press:  27 January 2017

Extract

One of the greatest failures of Communist systems everywhere has been in agricultural productivity. In the Soviet Union some thirty-five years of collectivized agriculture have brought but modest increases in yields and gross production of many crops and livestock; growth of agricultural output per capita since even before the Revolution has been even less impressive. Among the Communist countries of Eastern Europe, although collectivization is much more recent, the pattern has been much the same; yields remain low, and gross production as well as per capita increases has been small.

Although some areas of Eastern Europe and large parts of the USSR can be classified as physically marginal for agriculture, the low levels of agricultural productivity are primarily attributable to defective organization and operation. There have been years when crop failure in this or that area was the direct result of drought, flood, or other natural cause, but these catastrophes cannot be blamed for the low yields which characterize the longer run. The major obstacles to production gains lie within the collectivized system.

Type
Articles
Copyright
Copyright © Association for Slavic, East European, and Eurasian Studies. 1968

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References

During visits in September and October 1966 the writer was able to make intensive studies of ten Hungarian farms—seven collective and three state farms—which greatly illuminated earlier field observations made in Hungary, elsewhere in Eastern Europe, and the USSR. A later visit to Budapest in October 1967, to participate in the international symposium, "Effects of Industrialization on Agricultural Population in the Socialist Countries," sponsored by the Geographical Institute of the Hungarian Academy of Science, was followed by further farm visits.

1 “The Best Methods of Income Distribution and Bonus Payments in the Farmers Cooperatives” (Radio Free Europe translation, p. 9). The writer is greatly indebted to the research department of Radio Free Europe (RFE) for many translations of Hungarian publications. The term “farmers cooperative” is used in Hungary to designate collective farms.

2 First mention of these incentives in a Western journal appeared in R. V. Burks, “Perspective for Eastern Europe,” Problems of Communism, XIII, No. 2 (March-April 1964). David Binder of The New York Times published an article on Nadudvar in the Nov. 1, 1964, issue of that paper.

3 Interview, Sept. 29, 1966.

4 Field investigation revealed that there are several different kinds of field team structures in operation on Nadudvar and other collectives. On highly specialized row crops such as corn, sugar beets, or potatoes, a family of one to three workers is most common, and the parcels are assigned in proportion to the size of the team. Total land per field team rarely exceeds 10 hectares (25 acres). In some areas, vineyards or other intensive crop, the field team may have four to six members, one or more having the skills necessary to operate specialized machinery; parcels may be as small as six hectares.

5 Kelet Magyarorszag, Jan. 5, 1964.

6 Hungarian industrial workers had an average monthly income of 1757 forints in 1964 and 1707 in 1965; collective farm workers received an average of 954 forints monthly in 1964 and 953 in 1965. Both averages were expected to increase in 1966. Nepszabadsag; Radio Budapest, Nov. 24, 1966 (translation by RFE).

7 Reported by Radio Budapest, Dec. 3, 1966.

8 Nepszabadsag, May 15, 1966. These figures require some qualification. Most farms have a state-imposed requirement to grow wheat on about 25 to 35 percent of their arable land, so that the Nadudvar system is not applicable to these fields. A large number of farms using Nadudvar methods may also have other incentive systems, especially in their livestock and horticulture sectors. These figures do suggest that something more than half of all row crops now grown in Hungary are being cultivated by the Nadudvar tenancy system.

9 The approximately 3200 collectives in Hungary can be divided into three qualitative categories : (1) the top 500-600, which qualify as “good” or “best“; (2) the middle 1400- 1500, classified as “average” or “mediocre” (the best of these approach the “good,” and the worst are barely able to break even); (3) the remainder, nearly 40 percent of the total, rated as “poor” collectives, generally located on physically marginal land or very badly managed; production, yields, and income are far below average, and state financial assistance is regularly required to make up for the low incomes on these farms. In 1966 the deficit incurred by the weak collectives amounted to half a billion forints ($21, 000, 000). As state aid is usually derived from the profits of the more efficient farms, the latter, in effect, support and maintain the poor farms. This is strongly resented on the better farms. As a result, the poor farms constitute a very serious drag on the whole agricultural economy. These poorer farms have a minimum requirement of supporting a large part of the agricultural population, for whom there are no other jobs available. Increasing yields on these farms are the only solution; at best this will take many years. In 1967 another effort to upgrade the poor farms was initiated. Technicians of the Institute for Agricultural Economics, Budapest, are working directly with the poor farms, attempting to evaluate the difficulties and propose better methods. After a period of field analysis, specific recommendations are made in a plan prepared at the Institute specifically for each farm. Because of the large number of poor farms this program is necessarily long range.

10 F. Biro and Z. Kovacs, “Payment Methods in Producer Cooperatives,” Partelet, Dec. 1964 (RFE translation).

11 Reported in Kisalfold, Feb. 27, 1966 (RFE translation).

12 New York Times, Aug. 26, 1965.

13 Komaron Megyei Dolgozok Lapja, March 14, 1964 (RFE translation).

14 None of the ten farms visited by the writer during his field study in 1966 had direct sharecropping. As was mentioned earlier, the poorer farms use this system, and all of the farms examined were “good,” several being in the top thirty in Hungary. Press reports and details of sharecropped farms are limited but tend to support statements made to the writer in the field that direct sharecropping is found chiefly on poorer farms.

15 Interview at Keszthely, Oct. 7, 1966.

16 “Best Methods of Income Distribution,” pp. 49-50.

17 Kisalfold, Jan. 23, 1966 (RFE translation).

18 Nepszabadsag, April 21, 1967 (RFE translation); Magyar Nemiet, April 23, 1967.

19 Nepszabadsag, April 21, 1967.

20 Pravda, June 20, 1964, reported that the purpose of the visit was “to get acquainted with experience.”

21 Statement to the writer at Nadudvar on Sept. 29,1966.

22 Kommunist, No. 11, 1964.

23 Professor Folke Dovring has given the background and details of recent changes in organization and operation of field units and teams in "Soviet Farm Mechanization in Perspective," Slavic Review, Vol. XXV, No. 2 (1966). He points out that "alternatively, zven'ia [work teams] may have distinct plots of land assigned to them on a more or less permanent basis, but usually without operational autonomy and without being able to do all the work with their own resources" (p. 296). Roy D. Laird summarizes Khrushchev's influences in "Agriculture under Khrushchev," Survey, No. 56 (July 1965).

24 Pravda, Nov. 18,1964

25 Pravda, Nov. 23,1964

26 The Economics of Agriculture (Moscow : Progress Publishers, n.d.), p. 93 (my italics). The book is a translation from V., Abramov, Ekonomika i organizatsiia sel'skokhoziaistvennogo proizvodstva (Moscow, 1965).Google Scholar

27 B. Mozhaev, in Literaturnaia gazeta, Oct. 4, 1966.

28 Pravda, Dec. 10, 1966.

29 Some opposition to these incentive systems continues in high places. Most evident is the continued silence on these matters of the Agriculture Ministry's newspaper Sel'skaia zhizn'. On March 4, 1967, Pravda, in a hortatory editorial addressed to “rural toilers in the Jubilee Year,” argued against changes in central planning and increased incentives in agriculture as likely to “cause serious damage to the advancement of socialized agriculture.”

30 Kisalfold, Feb. 15, 1966 (RFE translation).