SOVIET NATIONAL ACCOUNTS FOR 1955

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01141A001100030001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 168
• Document Creation Date: December 27, 2016
• Document Release Date: May 13, 2013
• Sequence Number: 1
• Publication Date: May 28, 1958
• Content Type: REPORT

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ECONOMIC INTELLIGENCE REPORT
N? 79
SOVIET NATIONAL ACCOUNTS FOR 1955
CIA/RR 133,
28 May 1958
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
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This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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ECONOMIC INTELLIGENCE REPORT
SOVIET NATIONAL ACCOUNTS FOR 1955
CIA/RR 133
(ORR Project 14+.15+7)
Office of Research and Reports
S-E-C-R-E-T
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FOREWORD
National accounts studies serve several specific requirements of
the intelligence community: (1) together with appropriate ruble-
dollar ratios, they provide the basis for intercountry comparisons
of national product in National. Intelligence Estimates; (2) deflated
by appropriate price indexes, national accounts series measure the
growth of the Soviet economy; (3) the end-use and sector-of-origin
breakdowns of national accounts furnish information on the structure
of the economy and the directions of economic policy; and (4) many
of the components derived in the construction of national accounts
are themselves of intelligence interest, such as the urban wage bill,
agricultural incomes, household consumption expenditures, and gross
capital formation.
50X1
This report has been coordinated within ORR but not with other
IAC agencies.
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Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
I. Introduction . . . . . . . . . . . . . . . . . . . .
II. Basic National Accounts . . . . . . . . . . . . . . . . . . .
1. Production Account . . . . . . . . . . . . . .
2. Appropriation Account . . . . . . . . . . . . .
a. Purchase of Goods and Services from Own Sector. 7
b. Purchase of Goods and Services from Other
Sectors . . . . . . . . . . . . . . . . . . . . 7
(1) Nonagricultural Enterprise Sector
(a) State and Cooperative Retail Purchases of
Goods . . . . . . . . . . . . . . . . . 9
(b) Services . . . . . . . . . . . . . . . . 10
c) Rent of State Housing . . . . . . . . . . 11
d) Imputed Rent . . . . . . . . . . . . . . 12
(e) Forced Labor Subsistence . . . . . . ... 12
(2) Agricultural Enterprise Sector . . . , . 12
N a) Collective Farm Market Purchases . . . . 13
(b) Farm Household Income-in-Kind . . . . 13
(c) Other Purchases . . . . . . . . . . . . . 13
(3) Government Sector . . . . . . . . . . . . 13
C. Taxes . . . . . . . . . . . . . . . . . . . . 13
d. Dues and Other Payments to Public Organizations . 14
e. Insurance Premiums . . . . . . . . . . . . . . 15
f. Saving . . . . . . . . . . . . . . . . . . . . . 15
g. Statistical Discrepancy . . . . . . . . . . . . . 15
h. Income from Own Sector . . . . . . . . . . . . . 15
i,. Income from Other Sectors . . . . . . . . . . 16
(1) Urban Cash Incomes . . . . . . . . . . . . 16
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a) Nonagricultural Enterprise Sector . . . 16
b) Agricultural Enterprise Sector . . . . 16
c) Government Sector . . . . . . . . . . . 16
(2) Rural Cash Incomes . . . . . . . . . . 17
(a) Wages in State Agriculture . . . . . . 17
(b) Cash Labor-Day Payments to Collective
Farmers . . . . . . . . . . . . . . 17
(c) Income of Farm Households from Sale of
Farm Products . . . . . . . . 17
(d) Other . . . . . . . . . . . . . . . . .17
(3) Incomes-in-Kind . . . . . ... . . . . . . 17
.(a) Military Subsistence . . . . . . . . . 17
(b) Farm Household Income-in-Kind . . . . . 17
(c) Imputed Rent . . . . . 17
d) Investment-in-Kind . . . . . . . 17
j . Transfer Receipts . . . . . . . . . . . . . . 18
1) Pensions . . . . . . . . . . . . . . . . . 18
2) Stipends . . . . . . . . . . . . . . . 18
3) Interest . . . . . . . . . . . . . . . . . 18
(4) Other . . . . . . . . . . . . . . . . . 18
3. Capital Account . . . . . . . . . . . . . . . 18
a. Gross Capital Formation . . . . . . . . . . 18
(1) Capital Repairs . . . . ..... . . . .. . . . 18
2) New Fixed Investment 18
b. Capital Transfers to the Government Sector . . 19
(1) Net Purchase of Government Bonds. . . . . . 19
(2) Additions to Savings Deposits . . . . . 20
c. Additions to Cash Balances . . . . . . . . . . 21
d. Saving . . . . . . . . . . . . . . . . . . . . 22
e. Net Borrowing from the Government Sector . . . 22
B. Nonagricultural Enterprise Sector . . . . . . . . . . . 22
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a. Purchases from Other Sectors (Agricultural Enter-
prise Sector) . . . . . . . . . . . . . . . . . 23
b. Indirect Taxes . . . . . . . . . . . . . . . . 23
(1) Turnover Taxes . . . . . . . . . . . . . 24
(2) Other Enterprise Taxes and Payments . . . 24
c. Capital Consumption Allowances . . . . . . . . 24
d. Income Originated . . . . . .. . . . . . . 25
e. Statistical Discrepancy ... . . . . . . . 25
f. Sales to Other Accounts . . . . . . . . . . . 25
(1) Household Sector . . . . . . . . . . . . . . 25
(a) Appropriation Account . . . . . . . . 25
(b) Capital Account . . . . . . . . . . 25
(2) Nonagricultural Enterprise Capital Account 25
3) Agricultural Enterprise Sector 25
(a) Production Account . . . . . . . . . . . 25
b). Capital Account 25
(4) Government Sector . . . . . .. . . . . . .'. 26
(a) Production Account . . . .. .. . . . . . . 26
(b) Capital Account. . . . . . . . . . . . 26
Subsidy Receipts . . . . . . . . . . . . . 26
2. Appropriation Account . . . . . . . . . . . . . . . . 26
a. Payments to the Household Sector . . . . . . . 26
(1) Worker and Employee Wages . . . . . . . . . 26
(2) Cooperative Artisan Wages . . . . . . . 28
(3) -Forced Labor Wages - . ... . . . . . . . . 28
(4) Profits Distributed to Cooperative Members . 29
(5) Other Urban Labor ?Incomes . . . . . . . . . 31
6) Imputed Rent 31
(7) Investment-in-Kind . . . . . ... . . . . . . 31
b. Payments to the Government Sector . . . . . . . 31
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(1) Direct Taxes . . . . . . . . . . . . . . . 31
(a) Profits Taxes.of State Enterprises . . . 31
b) Income Taxes of Cooperatives 31
(2) Social Insurance . . . . . . . . . . . . . . . 32
(3) Payments to Banking System by Cooperatives . . 32
c. Saving . . . . . . . . . . . . . . . . . . . . . . 32
(1) State Enterprises . . . . . . . . . . . . 32
(2) Cooperatives ... . . . . . . . . . . . 32
d. Income Originated . . . . . . . . . . . . . . . . 32
3. Capital Account . . . . . . . . . . . . . . . . . . . 33
a. Gross Capital Formation . . . . . . . . . . . . . 33
(1) Capital Repairs . . . . . . . . . . . . . . . 33
2) New Fixed Investment . . . . . . . . . . . 33
3) Additions to Inventories . . . . . . . . . . . 34
b. Capital Transfers to the. Government Sector 36
c. Other . . . . . . . . . . . . . . . . . . . . . . 36
d. Statistical Discrepancy . . . . . . . . . . . . . 37
e. Saving . . . . . . . . . . . . . . . . ... . . . 37
f. Capital Consumption Allowances . . . . . . . . . . 37
g. Capital Transfers from the Government Sector . . . 37
h. Net Borrowing from the Government Sector . . . . . .37
C. Agricultural Enterprise Sector . . . . . . . . . . . . . . 37
1. Production Account . . . . . . . . . . . . . . . . . . 38
a. Purchases from Other Sectors . . . . . . . . . . 38
(1) MTS's . . . . . . . . . . . . . . . . . . . . 38
2) State Farms . . . . . . . . . . . . . . 40
3) Collective Farms . . . . . . . . . . . . . 40
4) Farm Households . . . . . . . . . . . . . 41
b. Indirect Taxes . . . . . . . . . . . 41
c. Capital Consumption Allowances . . . . . . . . . . 41
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d. Income originated . . . . .. . . . . . . . . 42
e. Sales to Other Accounts . . . . . . . . . . . . 42
(1) Household Sector . . . . . . . . . . . . 42
a) Urban Collective Farm Market . . . . . 42
b) Rural Collective Farm Market . . 42
(c) Other Sales . . . . . . . . . . . . 42
d) Farm Household Income-in-Kind 43
(2) Nonagricultural Enterprise Sector . . . . . 43
(a) State and Cooperative Acquisitions . . . 43
b) Sales to Institutions on Collective Farm
Market . . . . . . . . . . . . . . . . . 44
(3) Agricultural Enterprise Capital Account . . . 45
(a) Investment-in-Kind . . . . . . . .4+5
b) Sales to Fixed Investment 45
c) Sales to Capital Repairs . . . . . ? . 45
(d) Additions to Inventories . . . . . . . 46
f. Subsidy Receipts . . . . . . . . . . . . . . . . 46
(1) MTS's ... . . . 46
(2) State Farms . . . 46
2. Appropriation Account . . . . . . . .. . . . . . . . . 46
a. Payments to Household Sector . . . . . . . . . . 48
(1) Wages in State Agriculture . . . . . . . . . . 48
a MTS' s . . . . . . . . . . 48
b) State Farms . . . . . . . . . . . . . . . 49
(2) Collective Farm Wage Payments . . . . . . . . 49
(a) Cash Labor-Day Payments to Collective
Farmers . . . . . . . . . . . . . . . 49
N b) Administrative Wages . . . . . . . . . . 50
N) Wages of Hired. Labor . . . . . . . . 50
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(3) Collective,Farm Transfer Payments . . . .
50
(4) Farm Household Income from Sale of Farm
Products . . . . . . . . . . . . . . . . .
.
50
a) Rural Households . . . . . . . . . . .
.
50
(b) Urban Households . . . . . . . . . .
..
51
(5) Farm Household Income-in-Kind . . . . . . .
.
51
b. Payments to the Government Sector . . . . . .
.
51
(1) Direct Taxes . . . . . . . . . . . . . . . .
.
51
a) Profits Taxes of State Farms . . . . .
.
51
(b) Income Taxes of Collective Farms
51
(2) Social Insurance . . . . . . . . . .
.
51
b) State Farms
51
(3) Insurance Premiums . . . . . . . . . . .
.
52
c. Saving . . . . . .. . . . . . . . . . .
.
52
(1) State Farms . . .
52
2) Collective Farms . . . . . . . . . . . .
.
52
a) Undistributed Profits . . . . .
.
52
b) Investment-in-Kind . . . . . .
.
52
(3) Farm Households . . . . . . . . . . . .
.
52
d. Income Originated . . ...
52
e. Transfer Receipts . . . . . . . . . . . . . .
.
53
3. Capital Account . . . . . . . . . . . . . . . . . .
.
53
a. Gross Capital Formation . . . . . . . . . . . .
.
53
(1) Capital Repairs . . . . . . . . . . . .
.
53
a) MTS's . . . . . . . . . . . . .
.
53
b) State Farms . . . . . . . . . . . . . .
.
53
c) Collective Farms . . . . . . . . . .
.
54
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(2) New Fixed Investment . . . . . . . . . . . . 55
a) State Agriculture . ... . . . . . 55
b) Collective Farms . . . . . . . . . . . . 55
c) Farm Households . . . . . . ? . . . 56
(3) Additions to Inventories . . . . . ... . . . 56
b. Other . ... . . . . . . . . . . . . . . . . . . 56
c. Saving . . . . . . . . . . . . . . . . . . . 56
d. Capital Consumption Allowances . . . . . . . . . 57
e. Capital Transfers from the Government Sector . . 57
f. Net Borrowing from the Government Sector . . . 57
57
57
1. Production Account . . . . . . . . . . . . .
a. Wages of Government Employees . . . . . 57
(1) Civilian Employees . . . . . . . . . . . . . 57
(a) Health and Education.. . . . . . . . . . 57
b) General Administration . . . . . . . . . 59
c) Internal Security . . . . . . . . . . 59
d) General Agricultural Programs . ? ? 60
e) Public. Organizations . . . ? . . . 60
(2) Military Pay ? ? ? ? ? ? ? ? ? ? . 61
b. Social Insurance . . . . . . . . . . . . . . . 61
c. Purchases from the Nonagricultural Enterprise
Sector . . . . . . ? . . . . ? . . ? . . . .
1)
2)
3
4
~
5)
6)
7)
8)
9)
(10)
Health and Education . . . . . . . . . . .
General Administration . . . . . . . . . . .
Military Subsistence . . . . . . . . . .
Military Procurement and Operations . . .
Internal Security . . . . . . . . . . . . .
General Agricultural Programs . . . . . . .
Defense Programs . . . . . . . . . . . . .
Research and Development Programs . . . . ?
Public Organizations . . . . . . . . . . . .
Miscellaneous . . . . . ? ? . . ? .
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d. Cost of Government Services . . . . . .
. .
64
2. Appropriation Account . . . . . . . .
. .
64
a. Cost of Government Services . . . . . . . .
. .
65
b. Transfers to the Household Sector . . . . .
. .
65
(1) Pensions
.
. . . .
.
.
65
. . . .
.
.
. .
2) Stipends
.
66
.
W Interest . . . . . .
66
. .
. . . . .
Insurance Indemnities
. .
67
c. Transfers to the Nonagricultural Enterprise
Sector . . . . . . . . . . . . . . . . .
. .
67
1) Price Differential Reimbursements . . .
. .
67
2) Grants to Cover Losses . . . . . . .
. .
67
,d. Transfers to the Agricultural Enterprise
Sector . . . . . . . . . . . . . . . . . .
. .
67
(1) Grants to Cover Losses
.
67
. . . .
. .
2) Insurance Indemnities
67
e. Saving . . . . . . . . . . . . . . . . .
.. .
67
f. Receipts from Own Sector . . . . . . . . .
. .
67
g. Receipts from Other Sectors . . . . . . . .
. .
68
(1) Taxes on Households . . . . . . . . . .
. .
68
(2) Taxes on Enterprises . . . . .
. . _
68
a) Profits Taxes . . . . . . . . . . .
. .
68
b) Income Taxes . . . . . . . .
. .
68
c) Turnover Taxes ? . . . . . . . . .
68
d) Other Enterprise Taxes and Payments .
69
(3) Social Insurance . . . . . . . . . .
. .
69
(4) Dues and Other Payments to Public
Organizations . . . . . . .
. .
69
(5) Insurance Premiums . . . . . . . . .
. .
69
Capital Account . . . . . . . . . . . . . .
. .
69
a. Capital Transfers to Other Sectors . . . .
. .
69
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1) Nonagricultural Enterprise Sector . . . . . 69
2) Agricultural Enterprise Sector . . . 71
b. Net Loans to Other Sectors . . . . . . . . . . . 72
(1) Household Sector . . . . . . . . . . . . . . 72
(2) Nonagricultural Enterprise Sector . . . . . . 72
(3) Agricultural Enterprise Sector . . . . . . . 73
c.. Government Capital Formation . . . . . . . . . . 71.
1) Capital Repairs . . . ... . . . . . . . . . . 71.
2) New Fixed investment . . . . . . . . . . . . 74
3) Other . . . . . . . . . . . . . . . ... . . . 74
d. Additions to Cash Balances . . . . .. . . . . . . 75
e. Saving . . . . . . . . . . . . . . . . . . . . . 75
f. Capital Transfers from the Household Sector . . . 76
1) Net Purchase of Government Bonds . . . . . . 76
(2) Additions to Savings Deposits . . . . . . . 76
g. Capital Transfers from the Nonagricultural
Enterprise Sector . . . . . . . . . . . . . . 76
E. Consolidated National Accounts . . . . . . . . . . . . . 76
1. Production Account . . . . . . . . . . . . . . 76
a. , National Income . . . . . . . . . . . . . . . . 76
b. Capital Consumption Allowances . . . . . . . 77
c. Indirect Taxes . . . . . . . . . . . . . . . . 77
d. Subsidies . . . . . . . . . . . . . . . . . . 77
e. Statistical Discrepancy . . . . . . . . . . . . . 78
f. Consumers' Expenditure on Goods and Services . 78
g. Government Current Expenditure on Goods and
Services . . . . . . . . . . . . . . . . . . . . 78
h. Gross Capital Formation . . . . . . . . . . . . 78
2. Appropriation Account . . . . . . . . . . . . . . . . 78
a. Wages and Other Cash Household Income . . . . . . 78
b. Income-in-Kind . . . . . . . . . . . . . . . . 79
c. Social Insurance . . . . . . . . . . . . . . . . 79
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d. Direct Taxes and Related Payments of
Enterprises . . . . . . . . . . . . . . . . . 7709
e. Saving of Enterprises . . . . . . . . . . .
3. Capital Account . . . . . . . . . . . . . . . . . . 80
a. Gross Capital Formation . . . . . . . . . . . 80
1) Capital Repairs . . . . . . . . . . . . . . 80 }
2) New Fixed Investment . . . . . . . . . . . 80
3) Additions to Inventories . . . . . . . . . 80
4) Other . . . . . . . . . . . . . . . . . . 81
b. Statistical Discrepancy 81
c. Capital Consumption Allowances . . . . . . . . 81
d. Saving . . . . . . . . . . . 81
e. Addition to Monetary Assets . . . . . . . . . . 82
III. Gross National Product by End Use . . . . . . .. . . . . 83
A. GNP at Established Prices . . . . . . . . . . . 83
1. Consumption.. . . . . . . . . . . . . . . . . . . 83
2. Investment . . . . . . . . . . . . . . . . . . . 84
3. Defense . . . . . . . . . . . . . . . . . . . . . 85
4. Administration . . . . . . . . ? . . . . . 85
B. GNP at Adjusted Factor Cost . . . . . . . . . . . . . . 85
iV. National Income by Sector of Origin . . . . . . . . . . 93
A. National Income at Factor Cost . . . . . . . . . . . . 93
1. Industry . . . . . . . . . . . . ... . . . . . . . 95
a. Wages and Other Cash Household Income . . . . . 95
b. Income-in-Kind . . . . . . . . . . . . . . . . 96
. . . . . . . . . . . . . . 96
c. Social Insurance'
d. Profits . . . . . . . . . . . . . . . . 96
2. Construction . . . . . . . . . . . . . . . . 96
a. Wages and Other Cash Household Income . . . . . 96
b. Income-in-Kind . . . . . . . . . . . . . . . 96
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c... Social Insurance . . . . .
... .
97
d. Profits - . . . . . . . . . . . . . . .
. . .
97
3. Agriculture . . . . . . . . . . . . .
. . .
97
a. Wages and Other Cash Household Income .
. . .
97
b. Income-in-Kind . . . . . . .
. .
98
c. Social. Insurance . . . . . . . . . .
. . .
98,
d. Profits . . . . . . . . . . . . . . .
. . .
98
4. Transport . . . . . . . . . . . . .
. _
98
a. Wages and Other Cash Household Income .
.
98
b. Income-in-Kind . . . . . . . . . . . . .
. . .
98
c. Social Insurance
98
d. Profits . . . . . . . . . . . . . . . .
. . .
98
5. Communications . . . .. . . . . . . . . . .
. . .
99
a. Wages and Other Cash Household Income .
. . .
99
b. Income-in-Kind . . . . .. . . . . .
. . .
99
c. Social Insurance . . . ... . . . . . .
. . .
99
d. Profits. . . . . . . . . . . . . . . .
.
99
6. Domestic Trade ... . . . . . . . . . . . . .
. . .
99
a. Wages and Other Cash Household Income .
. . .
99
b. Income-in-Kind . . . . . . . . . .
. . .
100
c. Social Insurance . . . . . . . . . . . .
. . .
100
d. Profits . . ..... . . . . . . . . .
. . .
100
7. Government Services . . . . . . . . . .
. . .
100
a. Wages and Other Cash Household Income .
. . .
100
b. Income-in-Kind . . . . . . . . . . . .
. . .
100
c. Social Insurance . . . . . . . . .
. .
100
d. Profits . . . . . . . . . . . . . . .
. . .
101
8. Other Services and Statistical Discrepancy .
. . .
a. Wages and Other Cash Household Income. .
. . .
101
b. Income-in-Kind . . . . . . . . . . . . . ... .
101
c. Social Insurance . . . . . . . . . . . . .
101
d. Profits . . . . . . . . . . . . . . . . . . .
101
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B. National Income at Adjusted Factor Cost . . . . . . 101
Appendixes
Appendix A. Soviet National Accounts, 1955: Classification of
Budget Revenues and Expenditures . . . . . . . . 103
Appendix B. Soviet National Accounts, 1955: Agricultural
Income and Outlay . . . . . . . . . . . . . . . . 109
Soviet National Accounts, 1955: Appropriation
Account of the Household Sector . . . . . . . . .
8
Soviet National Accounts, 1955: Capital Account
of the Household Sector . . . . . . . . . . . . .
19
Account 3. Soviet National Accounts, 1955: Production Account
of the Nonagricultural Enterprise Sector . . . . .
23
Account 4. Soviet National Accounts, 1955: Appropriation
Account of the Nonagricultural Enterprise Sector .
'27
Account 5. Soviet National Accounts, 1955: Capital Account
of the Nonagricultural Enterprise Sector . . . . .
34
Account 6. Soviet National Accounts, 1955: Production Account
of the Agricultural Enterprise Sector . . . .
39
Account 7. Soviet National` Accounts, 1955: Appropriation
Account of the Agricultural Enterprise Sector . .
47
Account 8. Soviet National Accounts, 1955: Capital Account
of the Agricultural Enterprise Sector . . . . . .
54
Account 9. Soviet National Accounts, 1955: Production Account
of the Government Sector . . . . . . . . . . . . .
58
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Account 10. Soviet National Accounts, 1955: Appropriation
Account of. the Government Sector . . . . . . . . 65
Page
Account 11. Soviet National Accounts, 1955: Capital Account
of the Government Sector . . . . . . . . . . 70
Account 12. Soviet National Accounts, 1955: Production Account
of the Consolidated National Accounts. . . . . . 77
Account 13. Soviet National Accounts, 1955: Appropriation
Account of the Consolidated. National Accounts 79
Account 14. Soviet National Accounts, 1955: Capital Account -
of the Consolidated National Accounts . . 81
Tables
1. Distribution of Soviet Gross National Product at Established
Prices, by End Use, 1955 . . . . . . . . . . . . . . . 84
2. Interrelation of Soviet Gross National Product and National
Income Magnitudes, 1955 . . . . . . . . . . . . . . . . . 87
3. Derivation of Soviet Gross National Product at Adjusted
Factor Cost, by End Use, 1955 . . . . . . . . . . . . . . 88
4. Soviet Gross National Product at Established Prices and at
Adjusted Factor Cost, by End Use, 1955
91
5. Distribution of Explicit Final Product Sales of the Soviet
. Nonagricultural Enterprise Sector, by End Use, 1955 . . . 92
6. Soviet National Income at Factor Cost, by Sector of Origin
and by Type of Factor Payment, 1955 ? . . . . . . . . . . 94
7. Soviet National Income at Adjusted Factor Cost, by Sector
of Origin, 1955 . . . . . . . . . . . . . . . . . . . . .
8. Soviet National Accounts, 1955: Classification of Budget
Revenues . . . . . . . . . . . . . . . . . . . . . . . . 104
Soviet National Accounts, 1955: Classification of Budget
Expenditures . . . . . . . . . . . . . . . . . . . . . . 105
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10. Distribution of Outlays from the Money Income of Soviet.
Collective Farms, 1955 . . . . ? ? . . ? . . . .. . . 110
11. Farm Household Sales. of Farm Products in the USSR,
1955 . . . . . . . . . . . . . . .. . . . . . . . 114
12. Income and Outlay of.Soviet State Farms; 1955 . . . . . . 119
13. Soviet National Accounts, 1955: Disposition of Output
of Commodities Included in Farm Household Consumption-
in-Kind -Kind . . . . . . . . . . . . . . . . . . . . . . . 125
14. Numbers and Live Weight of Livestock on State Farms of
the All-Union Ministry of State Farm's and on All
Soviet State Farms, 1955 . . . . . . . . . . . . . . . . 136
15. Valuation of Soviet Farm Household Consumption-in-Kind,
1955 142
I
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CIA/RR 133 S-E-C-R-E-T
(ORR Project 14.1547)
SOVIET NATIONAL ACCOUNTS FOR 1955*
Summary
In 1955 the gross national product (GNP), or total output of
goods and services, of the USSR amounted to 1,286 billion rubles in
established prices. When GNP is adjusted from an established price
basis to a factor-cost basis, in order to eliminate the effect of
the unproportionate distribution of indirect taxes and subsidies,
an adjusted factor-cost GNP of 961 billion rubles is obtained. Of
this total, 59 percent was devoted to consumption, 25 percent to
investment, 13.percent to defense, and 3 percent to government ad-
ministration.
National income, or the sum of all labor and enterprise incomes,
was 907 billion rubles at adjusted factor cost. About 37 percent of
this total originated in industry and construction; 27 percent in
agriculture; 9 percent in transport and communications; and the re-
maining 27 percent in trade, government services, and other services.
Converted on the basis of appropriate ruble-dollar ratios, Soviet
GNP at established prices was equivalent to 1955 US $146 billion.**
* The estimates and conclusions contained in this report represent
the best judgment of ORR as of 1 January 1958.
** Unless otherwise indicated, dollar values in this report are in
terms of US dollars.
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There is no single measure adequate to assess the economic capa-
bility of a nation, as the quantity desired depends on the purpose
for which it is needed -- for example, to estimate military strength,
consumer welfare, or growth. The closest approach to a general ap-
praisal of the over-all productive capacity of an economy is an esti-
mate of the net value of total goods and services produced during a
specified period, usually 1 year. This measure of total output is
called gross national product (GNP). Estimation of GNP is accom-
plished through the construction of national accounts for the
economy. In addition to measuring total size, however, national
accounts can be organized to show other aspects of the economy, such
as the end use. of its output, the industrial origin of its national
income, and intersectoral relationships.
The system of national accounts used in this report is intended
to show these and. other facets of the Soviet economy as well as to
derive total GNP. It is a modification of the accounting system
recommended by the Organization for European Economic Cooperation
(OEEC) J * and the UN. J This system involves a twofold classifi-
cation-of economic transactions, both monetary and nonmonetary.
Each transaction is classified by transactor and by type of eco-
nomic activity.
A. Four groups of transactors are distinguished and designated
as "sectors" households, nonagricultural enterprises, agricultural
enterprises, and the government. The Household Sector comprises all
individuals. The Nonagricultural Enterprise Sector includes all
enterprises and organizations outside of agriculture which,_produce
goods and services for sale. The Agricultural Enterprise Sector in-
cludes all such enterprises and organizations in agriculture. The
Government Sector comprises government agencies and organizations
engaged. in administration, education, health, defense, and police
services, which are organized for, but not normally sold to, the
community.
B. Three types of economic activity are distinguished and desig-
nated as "accounts": production, appropriation or consumption, and
capital formation. The Production Account of each sector presents
the revenue and expenses connected with its productive activity. On
the credit side are its sales and other revenues. On the debit side
are its purchases of goods and services outside the sector, indirect
taxes, capital consumption allowances, and the factor income generated
in the sector. The Appropriation Account shows on the credit side
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income received and on the debit side the disposition of this income.
The Capital Account lists on the credit side the sources of funds
for asset formation and on the debit side the types of asset forma-
tion accomplished. '
This classification of economic activity excludes transactions
with foreign countries and thus dispenses with the need for a
fourth, or external, account to record such transactions. In the
virtual absence of a balance of payments for the USSR, it is not
possible to construct an external account. Therefore, it is assumed
for the purposes of this report that the USSR is a closed economy
not trading outside its own boundaries. The effect of this assump-
tion on total GNP and its end use and origin distributions is con-
sidered slight because only net foreign sales or purchases of goods
and services are included in the calculation of GNP. Thus, whereas
exports or imports may be important in individual Soviet industries,
only the difference between total foreign sales and total foreign
purchases affects GNP.
The accounting system used is of the double-entry type. Every
transaction appears twice, once as a credit in an account of the
selling sector and once as a debit in an account of the purchasing
sector. The sources and methodology used to derive a given transac-
tion are discussed only once, however, normally in the debit or
credit entry of the sector which has the initiative in determining
the size of that transaction. Thus, for example, Household Sector
purchases of goods and services from the Nonagricultural Enterprise
Sector are discussed fully-in the Household Sector, whereas in the
Nonagricultural Enterprise Sector this transaction is merely recorded
and reference is made to the discussion of the Household Sector entry.
The double-entry feature provides a check on the accuracy of in-
dividual estimates and on the consistency of the intersectoral re-
lationships obtained. Wherever possible, debits and credits were
estimated independently. In these cases, statistical discrepancies
proved reassuringly small. Where data limitations did not permit
independent estimation of debits and credits, it was necessary to
derive the total debits of an account from its total credits, or vice
versa. In these instances the dependence of one side of the account
on the other explains the absence of a statistical discrepancy.
The precision implied by the present set of accounts and the detail
in which the data are presented fail to disclose the ranges of uncertainty
which surround particular estimates within the accounts. The accounting
frame of reference used differs from that employed by the USSR in pre-
paring the data upon which the report rests. For this reason, it has been
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necessary in many instances to adjust the official data available to fit
this different accounting frame of reference. Further, on occasion it has
been necessary to derive particular estimates as residuals from larger
reported totals. Both of these operations have been severely hampered by
the lack of detailed data and knowledge of what is included in the reported
totals. As a result, although the detailed data presented in the accounts
adequately reflect relative orders of magnitude, the individual entries
should be viewed as having varying degrees of uncertainty attached to them.
All figures in this report are in current (1955) rubles. Neither the
official Soviet exchange rate of 4 rubles per US $1 for merchandise tran-
sactions nor the official Soviet exchange rate of 10 rubles per US $1 for
tourist and other "invisible" transactions is.appropriate for converting
national accounts entries from rubles to dollars. Moreover, ruble-dollar
ratios cannot be calculated for most of the entries, because these entries
refer to money flows, such as profits, taxes, and saving, which by their
very nature do not have unit prices that can be compared to construct
ruble-dollar ratios. Ruble-dollar ratios are available, however, to con-
vert into dollars Soviet GNP as a whole -- that is, total final sales of
goods and services. In III, below, Soviet GNP at established prices has
been converted to dollars in order to permit comparison with the GNP of
other countries.
This report consists of 3 principal sections and 4 appendixes which
supplement the basic text. In section II the national accounts of the
USSR in 1955 are presented in terms of the 4 sectors and 3 accounts
described above. In section III the distribution of GNP by end use is
calculated first at established prices; then, in"order to eliminate the
effect of the unproportionate incidence of indirect taxes and subsidies,
the end-use distribution is adjusted to a factor-cost basis. In section
IV the distribution of national income by sector of origin is calculated
both at established prices and at adjusted factor cost. In Appendix A.
Soviet budget revenues and expenditures are classified according to
national accounts entries. In Appendix B the derivation of various en-
tries in the accounts of the Agricultural Enterprise Sector is-explained.
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II. Basic National Accounts.
The Household Sector includes all individuals normally resi-
dent in the USSR. Its accounts show their income from labor services
and transfer payments and the use of this income for consumption and
asset formation.
The Household Production Account 'records only the ser-
vices produced and sold by domestic servants, who, according to
national accounting practice, are considered members of the Household
Sector in their working capacity as well as in their capacity as con-
sumers. The production activities of artisans, professional people,
and owners of property are recorded in the Nonagricultural Enterprise
Sector. The Household Production Account is not included in this re-
port, because the wages of domestic servants and the sale of domestic
services cannot-be reliably estimated from available data.
2. Appropriation Account.
Account 1* records on the debit side the disposition of
household income through the purchase of goods and services, taxes,
dues and other payments to public organizations (such as trade unions),
and saving. On the credit side it lists the sources of income. The
various types.of income-in-kind are listed both as debits and as
credits.
a. Purchase of Goods and Services from Own Sector.
This entry, which represents the purchase of domestic
services from the Household Production Account, cannot be estimated.
b. Purchase of Goods and Services from Other Sectors.
(1) Nonagricultural. Enterprise Sector.
Total household purchases of goods and services
from the 1onagricultural Enterprise Sector in 1955 are estimated to
be 524.4 billion rubles, the sum of state and cooperative retail pur-
chases, services purchases, rent of state housing, imputed rent, and
forced labor subsistence.
* Account 1 follows on p. 8.
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Soviet National Accounts, 1955: Appropriation Account
of the Household Sector
Purchase
services
sector
of goods and
from own
N.A.
Purchase
services
sectors
of goods and
from other
744.1
Nonagricultural
Enterprise Sector 524.4
State and coop-
erative retail
purchases of
goods 454.2
Services 48.o
Rent of state
housing
Imputed rent 8.7
Forced labor
subsistence 9.4
Agricultural Enter-.
prise Sector 197.4
Collective farm
market purchases 50.5
Farm household
income-in-kind 145.0
Other purchases 1.9
22.3
Taxe s
54.3
Dues and other pay-
ments to public
organizations
8.0
Insurance premiums
1.0
Saving
40.6
Statistical discrepancy
-32.2
Income from own sector
Income from other sectors
Urban cash incomes
Nonagricultural
468.9
755.3
Enterprise Sector.
358.8
Worker and em-
ployee wages
307.4
Cooperative artisan
wages
15.5
Forced labor wages
14.4
Profits distributed
to cooperative
members
Other urban labor
incomes
Agricultural Enter-
prise Sector
4.5
Government Sector
105.6
Government civilian
employee wages
77.2
Military pay
28.4
Rural cash incomes
104.7
Wages in state
..agriculture
32.3
Cash labor-day pay-
ments to collective
farmers
Income of farm house-
holds from sale of
farm products 40.4
Other 2.0
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Soviet National Accounts, 1955: Appropriation Account
of the Household Sector
(Continued)
Incomes-in-kind 181.7
Military sub-
sistence 22.3
Farm household
income-in-kind 145.0'
Imputed rent 8.7
Investment-in-kind 5.7
Transfer receipts
Pensions 45.1
Stipends 6.7
Interest 6.9
Other 1.8
Total 815.8 Total
60.5
815.8
(a) State and Cooperative Retail Purchases of
Goods.
Household purchases for consumption purposes
are equal to total state and:cooperrative retail trade turnover less
institutional purchases, household purchases for nonconsumption pur-
poses, and household purchases of minor services. Total state and
cooperative retail trade turnover in 1955 was 501.9 billion rubles. J
Institutional purchases in 1955 are obtained
from data in the 1956 trade plan. According to the plan, total state
and cooperative retail trade turnover in 1956 was to be 108 percent
of 1955, institutional purchases were to be 7.6 percent of total
1956 turnover, and these purchases were to be 107 percent of actual
1955 institutional purchases. 4/ Then 1955 institutional purchases
must have been 7.7 percent (7.6 percent of 108 divided by 107) of
total state and cooperative trade turnover-in 1955, or 38.6 billion
rubles.
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Household purchases through state and coopera-
tive retail trade for nonconsumption purposes include (1) purchases of
building materials for private house building.and.(2) purchases of
producer goods for farm household production. Purchases of building
materials are estimated at 3.7 billion rubles,'the difference between
9.4 billion rubles, total investment in private housing, and 5.7 bil-
lion rubles, the portion of that investment represented by labor in-
vestment-in-kind (see 3, a, p. 18, below). Purchases of producer
goods for farm household production are estimated at 1.2 billion
rubles (see C, 1, a, p. 38, below). Total household purchases for
nonconsumption purposes are thus 4.9 billion rubles.
Household purchases of minor,-services, such
as repairs of clothing and other household articles, have been in-
cluded in the Soviet series on retail trade since 1951. J The
total amount of these expenditures in 1955 is estimated at 4.2 bil-
lion rubles. This estimate is based on information that receipts
of local industry and producer cooperatives from repair services
are planned at 5.5 billion rubles in 1960, or 69 percent more than
in 1955. J Receipts in 1955 must therefore have been 3.3 billion
rubles. This figure is increased by about 25 percent, to 4.2 bil-
lion rubles, to include other miscellaneous services in retail trade.
Household purchase of goods for consumption
therefore amounted to 454.2 billion rubles, the difference between
total retail trade purchases of 501.9 billion rubles and the sum of
institutional purchases of 38.6 billion rubles, household purchases
for nonconsumption purposes of 4.9 billion rubles, and household
purchases of services in retail trade of 4.2 billion rubles.
(b) Services.
Household purchases of services have been
estimated at 48 billion rubles. Purchases of services from the
retail trade network, such as tailoring and shoe and watch repair,
have been estimated above at 4.2 billion rubles (see (a), p. 9,
above). In addition, it has been estimated J that 43 billion
rubles were spent for the following other services: entertainment,
8 billion rubles; urban transport, 4 billion rubles; other passen-
ger fares, 16 billion rubles; postal and telecommunications charges,
3 billion rubles;. domestic electricity and gases-charges, 4 billion
rubles; domestic water purchases, 3 billion rubles; and baths,
laundries, hairdressing, and hotels, 5 billion rubles. Total pur-
chases from and outside the retail trade network, 47.2 billion
rubles, have been rounded upward to 48 billion rubles to allow for
additional miscellaneous services.
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This estimate of household outlays for serv-
ices is consistent with Soviet statements on the composition of house-
hold expenditures. A Soviet source states ?1:
To noncommodity expenditures of the
population -- payments for communal,
transport, cultural, and other types of
services, as well as taxes, compulsory
and voluntary payments -- are directed
less than one-fourth of all money in-
comes of the population. More than
three-fourth of the money incomes, of the
population are spent on the acquisition
of goods through the system of Soviet
trade
Because direct Soviet data are available on total household commodity
expenditures but not on total household incomes, the shares cited above
have been applied to household expenditures rather than to household
incomes. Household expenditures may be divided into commodity and non-
commodity items in the following manner. Expenditures for commodities
are 505.6 billion rubles, the sum of state and cooperative retail pur-
chases of goods by households of 459.1 billion rubles (see (a), p. 9,
above) and collective farm market purchases of 46.5 billion rubles (see
(2), (a), p. 13, below). Expenditures on noncommodity items are 156.8
billion rubles, the sum of taxes, 54.3 billion rubles (see D, 2, g, (1),
p. 68, below); dues and other payments to public organizations, 8 billion
rubles (see d, p. 14, below); gross bond purchases, 31.2 billion rubles
(see 3, b, (1), p. 19, below); increase in.savings deposits, 5.3 billion
rubles (see 3, b, (2), p. 20, below); outlays for rent, 4.1 billion
rubles (see (c), below); purchase of goods outside the "system of Soviet
trade," 5.9 billion rubles (see C, 1, e, (1), (b) and (c), p. 42, below);
and outlays for services,. estimated above as 48 billion rubles. Total
household expenditures are thus 662.4 billion rubles, of-which 505.6
billion rubles, or 76.3 percent, are expenditures on commodity items,
and 156.8 billion rubles, or 23.7 percent, are expenditures on non-
commodity items.
(c) Rent of State Housing.
Rent payments in 1955 were computed by apply-
ing the official rental rate of 1.32 rubles per month (or 15.8 rubles
per year) per square meter of dwelling space 9 to the average amount
of dwelling space in 1955. The average amount of dwelling space in
1955 may be estimated from Soviet sources. It has been stated that
total floor space at the end of 1955 was 432 million square meters
and that 23.9 million square meters of floor space in public housing
were constructed during 1955. / It may therefore be assumed that
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average total floor space during 1955 amounted to 420 million square
meters. Rental rates are charged.on the basis of living space, which
is 62 percent of total floor space. 11 Living space in 1955 is thus
62 percent of 420 million, or 260 million, square meters. At. the
rental rate of 15.8 rubles per year the explicit rent bill is 4.1 bil-
lion rubles.
(d) Imputed Rent.
Imputed rent on owner-occupied housing was
calculated by multiplying privately owned dwelling space, all,of which
was assumed to be owner-occupied, by the appropriate rental charge.
Total imputed rent of 8.7 billion rubles is the sum of imputed rent
on urban private housing, 1.5 billion rubles, and imputed rent on
rural housing, 7.2 billion rubles.
Dwelling space in urban private housing in
1955 is estimated at 146.million square meters. 12 Rent is imputed
at'two-thirds of the state urban housing rate of 1.32 rubles per
month, or 15.8 rubles per year (see (c), p. 11, above), in recogni-
tion of the inferiority of private housing to state housing in re-
gard to quality of construction, availability of utilities, and dis-
tance from place of employment. 13 At an annual rental charge of
10.6 rubles the imputed rent of 146 million square meters is 1.5 bil-
lion rubles.
Because rural housing is typically a log
cabin without separate kitchen or plumbing facilities, dwelling space
is taken as equal to total estimated space of 914 million square
meters. 14+ A rental rate of half of the state urban housing rate
of 15.8 rubles per year is imputed. At this rate of 7.9 rubles per
year, imputed rent on rural housing is estimated at 7.2 billion ru-
bles per year.
(e) Forced Labor Subsistence.
(See B,
(3), p. 28, below.)
(2) Agricultural Enterprise Sector.
Total household purchases of goods from the agri-
cultural Enterprise Sector in 1955 amounted to 197.4 billion rubles,
the sum of all purchases on the collective farm market, farm income-
in-kind, and other purchases.
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(a) Collective Farm Market Purchases.
-Total urban collective farm market trade turn-
over in 1955 was 48.9 billion rubles. 15, Part of this total consists
of institutional purchases, which must be deducted to obtain the fig-
ure for household purchases on the collective farm market. It has
been shown (see (1), (a), p. 9, above) that institutional purchases
represented 7.7 percent of state and cooperative retail trade in 1955.
It is felt that this percentage is too high for institutional pur-
chases on the collective farm market and that a lower figure, perhaps
5 percent, would be more accurate. As far as collective farms them-
selves are concerned, they do not ordinarily require the type of goods
offered on the collective farm market; as for state institutions,
every attempt would be made to. purchase necessary goods from state
and cooperative retail trade outlets, where prices are lower. In-
stitutional purchases on the collective farm market are therefore
estimated at 5 percent of 48.9 billion, or 2.4 billion, rubles,
leaving 46.5 billion rubles.for household purchases.
To this is added 4 billion rubles for pur-
chases on the rural collective farm market, which are not included
in the. published figure for collective farm market trade (see C,
1, e, (1), p. 42, below). Total household purchases on the collec-
tive.farm market are therefore 46.5 billion rubles plus 4 billion
rubles, or 50.5 billion rubles.
(b) Farm Household Income-in-Kind.
(See C. 1, e, (1), P. 42, below.)
(c) Other Purchases.
(See C, 1, e, (1), p. 42, below.)
(3) Government Sector.
r The,22.3billion rubles of, household purchases
from the Government Sector consist of military subsistence (see D,
1) c, (3), p. 63, below).
Household tax payments are estimated at 54.3 billion
rubles (see D, 2, g, (1), p. 68, below).
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d. Dues and Other Payments to Public Organizations.
This entry represents payments by households to "pub-
lic organizations," such as trade unions and the Communist Party,
all of which are classified in the Government Sector. It consists
of estimated dues of 5.8 billion rubles and other payments of 2.2 bil-
lion rubles.
The 5.8 billion rubles paid in dues consist of the
following: 2.4 billion rubles for trade union dues; 1.9 billion rubles
for Communist Party dues; and 1.5 billion rubles to other organizations,
such as the Komsomol and Spartak.
For 1955, trade union dues were planned at 286.6 per-
cent of the 1946 level. 16 Dues in 1946 were planned at 845 million
rubles, as planned expenditures on aid to needy trade union members
were stated to be 200.2 million rubles, or 23.7 percent of membership
dues. 17 Dues in 1955 are therefore estimated at 286.6 percent of
845 million rubles, or 2.4 billion rubles.
Communist Party membership dues are estimated at
1.9 billion rubles. Because Party members commonly occupy adminis-
trative positions, it is assumed that their income is much higher
than the average worker and employee wage of 8,600 rubles per year
or approximately 700 rubles per month (see B, 2., a, (1), p. 26, be-
low). On the assumption that the average wage of Party members is
1,500 rubles per month, average monthly dues, corresponding to 1.5
percent of wages, 18 would amount to 22.5 rubles and average yearly
dues to 270 rubles. Total Party membership in 1955 may be estimated
at 7.1 million, on the basis of the announcement at the Twentieth
Party Congress in February 1956 that membership was then 7.2 million. 19
Dues may then be estimated at 270 times 7.1 million, or 1.9 billion
rubles. I
In the absence of data on membership dues to smaller
organizations, 1.5 billion rubles have been added to allow for member-
ship dues,to Komsomol, Spartak, and similar organizations.
The estimate of nondues payments of 2.2 billion rubles
represents the sum of nondues payments to trade unions of 1.5 billion
rubles and nondues payments to the Communist Party of 0.7 billion
rubles. For trade unions, total income is made up of dues payments,
transfers from the social insurance budget, and other fees and pay-
ments made by the population. 20 Dues payments are estimated above
to be 2.4 billion rubles. Transfers from the social insurance budget
are earmarked for "organizational-administrative" outlays, such as
wages of union officials, maintenance of a staff to inspect working
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conditions, and support of factory physicians caring for insured
workers. 21 These administrative expenditures were estimated at
approximately 0.7 billion rubles (see D. 1, a, (1), (e), p. 60,
below). If it is assumed that total income in 1955 was equal to
total expenditures, or 4+.6 billion rubles (see D, 1, a, (1), (e),
p. 60, below), then other fees and payments by the population were
1.5 billion rubles, the difference between total revenue of
4.6 billion rubles and the income received from other sources
(2.1+ billion rubles of dues payments and 0.7 billion rubles of funds
from the social insurance budget).
Similarly, for the Communist Party, nondues payments
are taken to be the difference between total revenue and the dues
portion of revenue. In 1955, dues represented 73 percent of total
Party revenues. 22 As dues have been estimated above at 1.9 billion
rubles, total revenue would be 2.6 billion rubles and nondues revenue
0.7 billion rubles. It is believed.that the nondues revenue of public
organizations represents payments by the population not included in
entries above for taxes and trade purchases.
e. Insurance Premiums.
In the USSR, insurance premiums are paid by collective
farms insuring their property and by individuals insuring their prop-
erty or their lives. Planned indemnity payments to collective farms
and households in 1956 were 2 billion rubles. 23 It is assumed that
premiums were equal to indemnities and that the 1955 level was also
2 billion rubles. Premium payments by collective farms.have been
estimated at`1 billion rubles (see C. 2, b, (3), p. 52, below), leav-
ing 1 billion rubles for premium payments by households.
f. Saving.
(See 3, d, p. 22, below.)
g. Statistical Discrepancy.
This item represents the excess of the sum of all
debits, 848 billion rubles, over the sum of all credits, 815.8 bil-
lion rubles.
h. Income from-own Sector.
This entry, which represents the wages of domestic
servants, cannot be estimated.
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Total income from other sectors of 755.3 billion
rubles is the sum of (1) urban cash income, 468.9 billion. rubles;
(2) rural cash incomes, 10+.7 billion rubles; and (3) incomes-in-
kind, 181.7 billion rubles.
(1) Urban Cash Incomes.
(a) Nonagricultural Enterprise Sector.
Nonagricultural Enterprise Sector incomes
of 358.8 billion rubles are composed of the following:
i. Worker and Employee Wages.
Total nonagricultural worker and employee
wages in 1955.amounted to 307.4 billion rubles (see B, 2, a, (1),
p. 26, below).
ii. Cooperative Artisan Wages.
(See B, 2, a, (2), p. 28, below.)
iii. Forced Labor Wages.
For forced labor wages, 14.4 billion rubles,
see B, 2,. a, (3), p. 28, below.
iv. Profits Distributed to Cooperative Members.
(See B, 2, a, (4), p. 29, below.)
v. Other Urban-Labor Incomes..
(See B, 2, a, (5), p. 31, below.)
(b) Agricultural Enterprise Sector.
Urban household cash income from the Agricul-
tural Enterprise Sector was 4.5 billion rubles, the amount received
for the sale of farm products (see C, 2, a, (4+), p. 50, below).
(c) Government Sector.
i. Government Civilian Employee Wages.
(See D, 1, a; (1), p. 57, below.)
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ii. Military Pay.
(See D, 1, a, (2), p. 61, below.)
(2) Rural Cash Incomes.
Rural cash incomes of 104.7 billion rubles are
composed of the following:
(a) Wages in State Agriculture.
(See C, 2, a, (1), p. 48, below.)
(b) Cash Labor-Day Payments to Collective Farmers.
(See C, 2, a, (2), p. 4.9, below.)
(c) Income of Farm Households from Sale of Farm
Products.
(See C, 2, a, (4), p. 50, below.)
(d) Other.
Other income consists of collective farm
administrative wages and wages of hired labor (see C, 2, a, (2), (b)
and (c), p. 50, below).
(3) Incomes-in-Kind.
(a) Military Subsistence.
(See D, l,-c'1:-,(3)1 p. 63, below.
(b) Farm Household Income-in-Kind.
(Se~ C, 1, e, (1), (d), p. 1+3, below.)
) Imputed Rent.
(See A, 2, b, (1), (d), p. 12, above.)
(d) Investment-in-Kind.
(See 3, a, p.;18, below.)
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j. Transfer Receipts.
(1),Pensions.
(See D, 2, b, (1), p, 65, below.)
(2) Stipends.
(See D. 2) b, (2), p. 66, below.)
(3) Interest.
(See D, 2, b, (3), p. 66, below.)
(4+) Other.
This item is the sum of cash payments to collec-
tive farmers from collective farm social-cultural funds, 0.8 billion
rubles (see C, 2, a, (3), p. 50, below), and insurance indemnity pay-
ments to the population, 1 billion rubles (see e, p. 15, above).
3. Capital Account.
Account 2* lists as debits the various kinds of house-
hold asset. formation and as credits the sources of funds for this
asset formation.
a. Gross Capital Formation.
(1) Capital Repairs.
This entry cannot be reliably estimated from
.available data. The amount in question, however, is considered neg-
ligible.
(2) New Fixed Investment.
New fixed investment of 9.4 billion rubles.repre-
sents the value of private urban and rural housing constructed in
1955. The former is estimated at 3.4 billion rubles and the latter
at 6 billion rubles. 24 It is estimated that investment-in-kind,
in the form of the labor furnished by individuals building their
houses, represents one-half of the value of urban.private housing
construction and two-thirds of the value of rural private housing
construction. Total investment-in-kind in private housing is thus
estimated at 1.7 billion plus 4 billion or 5.7 billion, rubles.
Account 2 follows on p. 19.
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Soviet National Accounts, 1955: Capital Account
of the Household Sector
Gross capital formation
Capital repairs N.A.
New fixed investment 9.4
Capital transfers to
Government Sector
Net purchase of
government bonds 24.9
Additions to savings
deposits 5.3
- 9.4 Saving 40.6
Net borrowing from
Government Sector 1.5
Additions to cash balances 2.5
Total 42.1 Total 42.1
b. Capital Transfers to the Government Sector.
(1) Net Purchase of Government Bonds.
Net bond purchases are the difference between
gross bond purchases and bond retirement during the year. Gross bond
purchases consist of subscriptions to the annual mass loan and of
voluntary purchases at the savings banks during the year. Government
receipts from subscriptions to the annual mass loan in 1955 were
30.2 billion rubles, 25 and purchases at savings banks may be esti-
mated from Soviet data at 1 billion rubles. 26 Total gross bond
purchases were therefore 31.2 billion rubles.
Bond retirement for 1955 was estimated at 6.3 bil-
lion rubles by dividing loan service payments to the public between'
interest and principal retirement. Total loan service payments to
the population in 1955 amounted to 12.2 billion rubles. 27 Principal
retirement was separated from interest, in annual loan service, by
examining the various bond issues on which loan service was paid in
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1955 and reconstructing the schedule of loan service payments-. Loan
service was paid through two types of lottery drawings: prize draw-
ings and nonprize drawings. One-third (or 35 percent in the case of
some issues) of the value of each bond issue was retired over the
20-year life of the issue by prize drawings, in which the lucky bond-
holders received prizes larger than the face value of their bonds,
which were then surrendered. The remaining two-thirds (or in some
cases 65 percent) of each bond issue was retired during the 6th to
the 20th years of the life of the issue by nonprize drawings, in which
bonds were purchased at face value. The chance element of this
lottery existed in determining how long the bondholder waited to get
back his principal. The principal components of loan service thus
consisted of the face value of bonds retired in prize drawings and
the total value of nonprize drawings.
Principal retirement was subtracted from gross
bond purchases to obtain net bond purchases, as follows:
Billion Rubles
Gross bond purchases 31.2
Less: Bond retirement 6.3
Equals: Net bond purchases 24.9
Interest payments were calculated by subtracting
bond retirement from total loan service payments to the population,
as follows:
Billion Rubles
Loan service payments to population 12.2
Less: Estimated retirement of principal .6.3
Equals: Estimated interest 5.9
These interest payments appear as transfer payments to households
in 2, j, p. 18, above.
(2) Additions to Savings Deposits.
The increase in savings deposits in 1955 was
5.3 billion rubles. 28
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The increase. in currency held by the population has
been estimated on'the basis of two assumptions. First, it is assumed
that all of the increase during 1955 in currency outside the banking
system occurred in the holdings of households -- that is, that there:
was no change in the currency holdings of enterprises. Second, it is
assumed that total currency in circulation bore the same relation to
the worker and employee wage bill in 1955 that it did in 1940.
The latter assumption has been made in the face of
two offsetting trends affecting the size of the worker and employee
wage bill and the amount of currency held by the population. On
the one hand, the share of the total employed population included in
the worker and employee labor force has increased as a result of the
movement of peasants into the urban labor force and of the inclusion
in the worker and employee labor force of certain occupations formerly
excluded. These developments would decrease the ratio of currency
in circulation to the worker and employee wage bill. On the other
hand, since 1953, rural non-worker-and-employee incomes have risen
more rapidly than urban incomes as a result of post-Stalin agricul-
tural measures. In view of the greater propensity of the rural popu-
lation to hoard savings instead of returning them to the banking
system, this development would increase the ratio of currency in
circulation to the worker and employee wage bill. In the absence of
data from which to assess the net impact of these offsetting trends,
the 1940 relationship between currency in circulation and the worker
and employee wage bill is assumed to have prevailed in 1955.
The average amount of currency in circulation in 1940
was approximately 15.3 billion rubles, the mean of the estimated amounts
in circulation on 1 January 1940, 15.5 billion rubles, and on 1 January
1941) 15 billion rubles. 29 The worker and employee wage bill in 1940
may be estimated to be 126.4 billion rubles, the product of the average
wage of 4,054 rubles 30 times the average number of workers and
employees, 31,192,000. 31 Currency in circulation thus amounted to
12.1 percent of the wage bill in 1940.
In order to apply this percentage, the annual wage
bill at the rates of 1 January 1955 and 1 January 1956 must be esti-
mated. Currency in circulation on those two dates may then be com-
puted and the increase determined.
The annual worker. and employee wage bill at the 1 Janu-
ary 1955 rate is assumed to be the mean of the wage bills for 1954 and
1955. The 1954 wage bill is estimated at 394.8 billion rubles, the
product of the average number of workers and employees, 47,287,000, 32
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times the estimated annual average wage of 8,350 rubles. This aver-
age wage is estimated by applying the official Soviet money wage
index of 206 33 to the 1940 wage figure of 4,054 rubles. The 1955
wage bill is estimated below (see B, 2, a, (1), p. 26; below) at
415.6 billion rubles. The mean of-the 1954 and 1955 wage bills,
405.2 billion rubles, is assumed to represent the wage bill at the
1 January 1955 rate. Currency in circulation on 1 January 1955 is
estimated at 12.1 percent of this figure, or 49 billion rubles.
The wage bill for 1955 is assumed to be the mean
between the bill at the 1 January 1955 rate and at the 1 January
1956 rate. In order to yield a 1955 wage bill of 415.6 billion
.rubles when the 1 January 1955 rate was 405.2 billion rubles, the
1 January 1956 rate must be 426 billion rubles. Currency in circu-
lation on 1 January 1956 is then estimated at 12.1 percent of this
figure, or 51.5 billion rubles.
The increase in 1955 in currency in circulation, all
of which is assumed to represent additions to cash balances. of the
population, is therefore 2.5 billion rubles, the difference between
currency in. circulation on 1 January 1955, 49 billion rubles, and on
1 January 1956, 51.5 billion rubles.
d. Saving.
Saving is derived as a residual -- that is, the dif-
ference between total credits, which are equal to total debits, and
the one known credit item, net borrowing from the Government Sector.
e. Net Borrowing from the Government Sector.
(See D, 3, b, (1), p. 72, below.)
B. Nonagricultural Enterprise Sector.
This sector comprises all state enterprises outside agri-cul-
ture, producer and consumer cooperatives, and independent artisans
and professional- men. It also includes certain imputed activities,
such as the self-rental or owner-occupied dwellings and the labor
furnished by individuals building their own houses.
Account 3* records as debits the production expenses of
the sector and as credits its revenue from sales and its subsidies.
* Account 3 follows on.p. 23.
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Account 3
Soviet National Accounts, 1955: Production Account
of the Nonagricultural Enterprise Sector
Purchases from Other
Sectors (Agricultural
Enterprise Sector)
88.7
Indirect taxes
324.5
Turnover taxes
242.4
Other enterprise
taxes and payments
82.1
Capital consumption
allowances
51.9
Income originated
527.2
Statistical discrepancy
3.8
Sales to other accounts 964.1
Household Sector 533.8
Appropriation
account 524.4
Capital account 9.4.
Nonagricultural
Enterprise capital
account 176.4
Agricultural Enter-
prise Sector 60.9
Production account 20.5
.Capit.al account 40.4
Government Sector 193.0
Production account 169.9
Capital account 23.1
Subsidy receipts 32.0
Total 996.1 Total 996.1
a. Purchases from Other Sectors (Agricultural. Enterprise
Sector).
(See C, 1, e, (2). P, 43, below.)
b. Indirect Taxes.
Indirect taxes consist of turnover taxes and other
enterprise taxes and payments.
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(1) Turnover Taxes.
(See D, 2, g, (2), (c), p..68, below.)
(2) Other Enterprise Taxes and Payments.
Other. enterprise taxes and payments are estimated
at 82.1 billion rubles, the difference between the total of other
enterprise taxes and payments and the sum of (a) those taxes and pay-
ments borne by the Agricultural Enterprise Sector and (b) payments
to the banking system from the Nonagricultural Enterprise Appropria-
tion Account.
Other enterprise taxes and payments
(see D. 2) f, p. 67, below)
85.2
Less:
Indirect taxes of Agricultural
Enterprise Sector (see C, 1)
by p. 41, below)
Payments to banking system by
cooperatives (see 2, by (3),
P . 32, below)
1.1
3.1
Equals:
Other enterprise taxes and pay-
ments from the Nonagricultural
Enterprise Production Account
82.1
c. Capital Consumption Allowances.
Capital consumption allowances are spent for new fixed
investment and for capital repairs. Capital consumption allowances'
spent for capital repairs are estimated at approximately 60 percent
of total capital consumption allowances on the'basis of percentages
given for various sectors; the respective figures are 52 percent for
industry, 75 percent for transport, and 62 percent for state farms. 34/
Therefore, capital consumption. allowances for new fixed investment,
which in 1955 were planned at 21.8 billion rubles, 35 are taken to
equal 40 percent of total capital consumption allowances. The latter
may thus be estimated at 54.5 billion rubles, of which 2.6 billion
rubles were charged in agriculture (see C, 1, c, p."41, below), leaving
51.9 billion rubles for capital consumption allowances in the Nonagri-
cultural Enterprise Sector. No capital consumption allowances are
charged in the Government Sector. Of total capital consumption allow-
ances devoted to capital repair of 32.7 billion rubles, 1.6 billion
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rubles were spent in the Agricultural Enterprise Sector (see C, 3) at
(1), (b), p. 53, below), leaving 31.1 billion rubles for the Nonagri-
cultural Enterprise Sector.
d. Income Originated.
(See 2, d, p. 32, below.)
e. Statistical Discrepancy.
This item represents the excess of the sum of all
credits, 996.1 billion rubles, over the sum of all debits, 992.3 bil-
lion rubles.
Sales to Other Accounts.
(1) Household Sector.
(a) Appropriation Account.
(See A. 2) b, (1), p. 7, above.)
(b) Capital Account.
(See A. 3, a, p. 18, above.)
(2) Nonagricultural Enterprise Capital Account.
(See 3, a, p. 33,.below.)
?(3) Agricultural Enterprise Sector.
(a) Production Account.
(See C, 1, a, p. 38, below.)
(b) Capital Account.
This item of 40.4 billion rubles is the.dif-
ference between total gross capital formation in agriculture, 53.6 bil-
lion,rubles.(see C, 3, a, p. 53, below), and that part represented by
purchases from the Agricultural Enterprise Production Account, 13.2 bil-
lion rubles (see C, 1, e, (3), p. 45, below).
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(4) Government Sector.
(a) Production Account.
(See D, 1, c; p. 62, below.)
(b) Capital Account.
(See D. 3) c, p. 74, below.)
g. Subsidy Receipts.
(See D. 2, c, p. 67, below.)
2. Appropriation Account.
Account 4* shows the distribution of the income originated
in the Nonagricultural Enterprise Sector.
a. Payments to the Household Sector.
(1) Worker and Employee Wages.
Wages of workers and employees of the Nonagricul-
tural Enterprise Sector, 307.4 billion rubles, are equal to the total
worker and employee wage bill, 1+15.6 billion rubles, less wages of
workers and employees in other sectors, 108.2 billion rubles.
The total worker and employee wage bill of 415.6
billion rubles is obtained by multiplying the average number of workers
and employees in 1955 by the average wage. The average-number of
workers and employees in 1955 was 48,360,000. 36 The average wage
is-estimated at 212 percent of the 1940 wage level of 4,054 rubles, 31/
or 8,594 rubles. The increase in average wages from 1940 to 1955 was
calculated from information in Soviet sources-concerning real wage
indexes.
A real wage index is obtained by dividing a money
wage index by a consumer expenditures price index. Although Soviet
sources often mention real wage changes, they'do not show the price
index used in these calculations. This price index is presumably. a .
weighted average of state retail,: collective farm market, and services,
price indexes. It is possible to derive the 1955 index number .
(1940 = 100) for this index from Soviet statements on real and money
wage changes in Soviet industry. It is stated in one source that the
* Account 4 follows on p. 27.
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Account 4
Soviet National Accounts, 1955: Appropriation Account
of the Nonagricultural Enterprise Sector
Payments to Household -Income originated 527.2
Sector 373.2
Worker and employee
wages . 307.4
Cooperative artisan
wages 15.5
Forced labor wages 14.4
Profits distributed to
cooperative members 1.5
Other urban labor
incomes 20.0
Imputed rent 8.7
Investment-in-kind 5.7
Payments to Government
Sector
124.6
Profits taxes of
state enterprises 97.0
Income taxes of
cooperatives 5.1
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Social insurance 21.4
Payments to banking
system by cooperatives 1.1
Saving 29.4
State enterprises 24.7
Cooperatives 4.7
Total
527.2. Total
527.2
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average money wage in industry in 1955 was 230 percent of the 1940
level. 38 Elsewhere it is stated that real wages in industry in
1955 were 190 percent of the 1940 level. 39 Comparison of the money
and real wage index numbers indicates a consumer price index number
of 121 (230 : 190) for 1955 (1940 = 100).
Real wages of workers and employees in 1955 were
stated to be 175 percent of the 1940 level. / If it is assumed
that the same price index was used here as in the preceding statement
on real wage changes in industry, the money wage index number for
workers and employees in 1955 (1940 = loo) must be 175 times 121, or
212.
This index number is consistent with the trend of
average worker and employee wages in the past few years. In 1953,
money wages were 201 percent of 1940 4j l; in 1954, 206 percent of
1940 /; in 1956, 3 percent above the 1955 level. An index num-
ber of 212 for 1955 (1940 = 100) gives a series of yearly increases
in money wages of 2.5 to 3 percent between 1953 and 1956.
Worker and employee wages outside the Nonagricul-
tural Enterprise Sector are 108.2 billion rubles -- the sum of those
in the Agricultural Enterprise Sector, 32.3 billion rubles, and in
the Government Sector, 75.9 billion rubles. The Agricultural Enter-
prise Sector figure consists of wages in state agriculture (see C,
2, a, p. 48, below). The Government Sector figure is equal to the
government-civilian wage bill, 77.2 billion rubles (see D, 1, a,
p. 57, below), less the, wages of Communist Party employees (1.3 bil-
lion rubles), who, according to a Soviet source, are not included
in the "worker and employee" figures.
(2) Cooperative Artisan. Wages.
In the absence of any data on the wage levels of
cooperative artisans, it is assumed that the,1.8 million persons in
this category in 1955 45 received the average worker and employee
wage of 8,594 rubles per year. On this assumption the total wage
bill was 15.5 billion rubles.
(3) Forced Labor Wages.
Recent analysis of forced labor wages j indi-
cates an average forced labor wage bf approximately 400 rubles per
month,-or 4,800 rubles per year, in 1955. According to a study of
population and electoral data, the number of nonvoting Soviet
citizens in 1955 was about 2.5 million. On the one hand, this figure
includes citizens who did not vote because of health or similar
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S-E-C-R-E-T
reasons as well as citizens in prison camps. On the other hand, it
does not include prisoners in labor camps who were not Soviet citi-
zens -- for example, nationals of other countries. It is assumed
that the total number of Soviet and foreign forced laborers in the
USSR in 1955 was approximately 3 million. At an annual wage of
4,800 rubles, the total forced labor wage bill is 14.4 billion rubles.
Of the 400 rubles credited monthly to each pris-
oner, 260 rubles were deducted for subsistence, 60 rubles were
spent by prisoners at camp stores, and the remaining 80 rubles were
paid by prisoners in taxes or bond subscriptions or appropriated by
the camp administration. 48 In this report the subsistence deduc-
tion, amounting to 9.4 billion rubles per year (260 x 12 x 3 million),
is classified as a household purchase (see A, 2, b, (1), (e), p. 12,
above). Expenditures at camp stores are believed to be included in
the figure for state and cooperative retail purchases (see A, 2) b,
(1), (a), p. 9, above). The remainder, representing taxes, bond
subscriptions, and appropriation by the camp administration, is
assumed to be included in other entries, such as taxes and bond pur-
chases in the Household Sector accounts and taxes and retained pro-
fits in the Nonagricultural Enterprise Sector accounts.
(4) Profits Distributed to Cooperative Members.
This entry is the sum of estimated profit distri-
bution to members of producer cooperatives, 0.7 billion rubles, and
to members of consumer cooperatives, 0.8 billion rubles.
For producer cooperatives, total profits before
tax in 1955 are estimated at 7 billion rubles on the basis of 1954
profits data and 1954 and 1955 output data. In 1954, producer coop-
erative profits were 5.9 billion rubles. / Producer cooperative
output in 1954 was 55 billion rubles and was planned at 62.4 billion
rubles in 1955. 50 Actual output in 1955, however, was 105 percent
of plan, 51 or 65.5 billion rubles. Output therefore increased
19 percent from 1954 to 1955. If it is assumed that profits increased
proportionally, 1955 profits may be estimated at 119 percent of the
1954 figure of 5.9 billion rubles, or 7 billion rubles.
Producer cooperative income taxes in 1955 were
planned at 3.5 billion rubles. 52 If it is assumed that, like out-
put, actual taxes were 5 percent above plan, income taxes in 1955
may be estimated at 3.7 billion rubles. Net profits are then 7 bil-
lion rubles less 3.7 billion rubles, or 3.3 billion rubles. Net
profits of producer cooperatives are distributed among several pur-
poses according to fixed percentages. 53 On the basis of these
percentages, the distribution of total profits is estimated as follows:
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Total profits
7.0
Less:
Income taxes
3.7
Equals:
Net profits
3.3
Distributed to members (20 percent)
0.7
Paid to Trade Bank for long-term
credit fund (20 percent)
0.7
Reinvestment (50 percent)
1.6
Other, such as health and old age
measures and social facilities
(10 percent)
0.3
In the accounting system used in this report, profits distributed
to members are recorded here. Payments to the banking system are
recorded below (see b, p. 31, below). The remaining 1.9 billion
rubles, corresponding to reinvestment and allocations for miscel-
laneous purposes, are considered retained earnings (see c, p. 32,
below).
For consumer cooperatives, total profits in 1955
Since consumer cooperatives pay an
were 5.4 billion rubles. 54
income tax equal to 25 percent of profits, 55 1955 income taxes were
1.4 billion rubles, leaving 4.4 billion rubles as net profits. Con-
sumer cooperative net profits are distributed according to a fixed
schedule, 56 which gives the following results when applied to 1955
profits:
Billion Rubles
Total profits
5.4
Less:
Income taxes
1.4
Equals:
Net profits
4.0
Distributed to members (20 percent)
0.8
Paid to State Bank for credit fund
(10 percent)
0.4
Reinvestment (50 percent)
2.0
Other (20 percent)
0.8
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Profits distributed to members are recorded here. Payments to the
banking system are recorded below (see b, below). The remaining
2.8 billion rubles, corresponding to reinvestment and allocations
for miscellaneous purposes, are considered retained earnings (see
c, p. 32, below).
(5) Other Urban Labor Incomes.
This.category includes payments from special funds,
such as the director's fund and funds for stimulating "socialist com-
petition"; incomes of individual artisans, such as barbers and photo-
graphers; and incomes of persons, such as doctors and plumbers, who
furnish their services in a "private" capacity in addition to working
as state employees.
This estimate has been adjusted upward to 20 bil
lion rubles for 1955 to allow for the increase in the size of the
labor force and the increase in the average wage level.
(6) Imputed Rent.
(See A, 2, b, p. 7, above.)
(7) Investment-in-Kind.
(See A, 3, a, p. 18, above.)
b. Payments to the Government Sector.
(1) Direct Taxes.
(a) Profits Taxes of State Enterprises.
Profits taxes in the Nonagricultural Enter-
prise Sector are equal to total profits taxes,- 97.5 billion rubles
(see D. 2,-g, p. 68, below), less the portion paid by the Agricul-
tural Enterprise Sector, 0.5 billion rubles (see C. 2, b, p. 51)
below), or 97 billion rubles.
(b) Income Taxes of Cooperatives.
Income taxes on cooperatives are estimated
at 5.1 billion rubles, the sum of estimated income taxes on producer
cooperatives, 3.7 billion rubles, and on consumer cooperatives,
1.4 billion rubles (see a, (4), p. 29, above).
50X1
50X1
50X1
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(2) Social Insurance.
Social insurance payments by the Nonagricultural
Enterprise Sector are 21.4 billion rubles, the difference between
total social insurance payments, 26.5 billion rubles (see D. 2) g,
p. 68, below), and the sum of social insurance payments by the Agri-
cultural Enterprise Sector, 1.4 billion rubles (see C. 2) b, p. 51,
below), and the Government Sector, 3.7 billion rubles (see D. 1, b,
p. 61, below).
(3) Payments to Banking System by Cooperatives.
Cooperatives are required to transfer part of
their profits after income tax to the banking system, which uses
these funds for loans to cooperatives. This entry consists of trans-
fers from profits of producer cooperatives, 0.7 billion rubles, and
from profits of consumer cooperatives, 0.4 billion rubles (see a,
(4), p. 29, above). -
c. Saving.
(1) State Enterprises.
Saving of state enterprises in the Nonagricultural
Enterprise Sector is equal to their profits less their profits taxes.
Total profits of state enterprises in 1955 were 123.7 billion rubles. 58
Deduction of 2 billion rubles for profits of state farms (see, C. 2,
a, (1), (b), p. 49, below) leaves 121.7 billion rubles for profits of
state enterprises in the Nonagricultural Enterprise Sector. Deduction
of 97 billion rubles for their profits taxes (see b, p. 31, above)
leaves as retained earnings or saving 24.7 billion rubles.
(2) Cooperatives.
This entry is the sum of retained earnings of
producer cooperatives, 1.9 billion rubles, and of consumer coopera-'
tives, 2.8 billion rubles (see a, (4), p. 29, above).
d. Income Originated.
Income originated, 527.2 billion rubles, is the sum
of all debit items in the Nonagricultural Enterprise Appropriation
account.
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3. Capital Account.
Account 5* shows the asset formation of the sector and
the sources from which it is financed.
a. Gross Capital Formation.
(1) Capital Repairs.
The 34.1-billion-ruble capital repair estimate is
a residual intended to bring the sum of agricultural capital repairs
(7.9 billion rubles; see C, 3, a, P-'53., below), government capital
repairs (3 billion rubles; see D, 3, c, p. 74, below), and nonagri-
cultural capital repairs to 45 billion rubles. This total capital
repair estimate is consistent with the estimate of 40 billion rubles
for 1954 made in a recent study of Soviet fixed assets. 59
Of the total of 34.1 billion rubles, it was esti-
mated that 31.1 billion rubles were furnished by amortization allow-
ances (see 1, c, p. 24, above). The remaining 3 billion rubles, it
is assumed, were furnished by budget grants.
(2) New Fixed Investment.
This entry is the sum of budget-financed invest-
ment of state enterprises, 92.7 billion rubles; investment of state
enterprises' financed by amortization allowances, 20.8 billion rubles;
investment of state enterprises financed by retained earnings, 10 bil-
lion rubles; and additional investment by cooperatives and by state
enterprises, 3.5 billion rubles.
Budget grants for investment are estimated at
92.7 billion rubles (see D, 3, a, (1), p. 69, below).
Amortization allowances provided 20.8 billion
rubles for new fixed investment in the Nonagricultural Enterprise
Sector, the difference between total amortization allowances for new
fixed investment of 21.8 billion rubles (see 1, c, p. 24, above) and
amortization allowances for investment in state agriculture of 1 bil-
lion rubles (see D, 3) (1), p. 69, below).
Profits of state enterprises devoted to financ-
ing capital investment are estimated at 10 billion rubles. In the
original 1955 centralized investment plan, profits were to provide
11.9 billion rubles. 60 If the profit financing of capital invest-
ment had been fulfilled to the same extent as the underfulfiliment
* Account 5 follows on p. 34.
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Soviet National Accounts, 1955: Capital Account
of the Nonagricultural Enterprise Sector
Gross capital formation
176.4
Capital repairs
34.1.
New fixed investment
127.0
Additions to inventories
15.3
Capital transfers to
Government Sector
5.3
Other
3.8
Statistical discrepancy
6.9
Total
192.4
Saving
29.4
Capital consumption
allowances
51.9
Capital. transfers from
Government Sector-
99.6
Net borrowing from
Government Sector
11.5
Total
192.4
of the entire profit plan (86.3 percent) 61 actual profit financing
would have been 10.3 billion rubles. However, as profits are an
especially important source of capital investment financing in those
industries where the percentage of profit underfulfillment was prob-
ably greater than average, profit financing of centralized investment
is estimated at 9.5 billion rubles. In addition, about 1 billion
rubles of state enterprise profits were probably spent for investment
outside the central plan, in view of the 1.6 billion rubles intended
for this purpose in the original 1955 profit plan. 62 Thus total
profits devoted by state enterprises to financing investment may be
estimated at 10.5 billion rubles. Of this amount, about 0.5 billion
rubles probably went to agricultural investment, 63 leaving 10 bil-
lion rubles for investment in the Nonagricultural Enterprise Sector.
An additional 3.5 billion rubles of investment
outside the centralized investment plan is added to allow for in-
vestments of producer cooperatives, which were 1.5 billion rubles Q/;
investments of consumer cooperatives, which were probably about the
same amount 6J5; and investments from special funds of state enter-
prises, like the director's fund.
(3) Additions to Inventories.
Additions to inventories are estimated at 15.3
billion rubles, or 80 percent of the estimated total increase in
working capital, 19.1 billion rubles.
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The total increase in working capital consists of
retained earnings devoted to expansion of working capital, 6.5 billion
rubles; capital transfers from the Government Sector for expansion of
working capital, 3.9 billion rubles; and the net increase in short-
term borrowing from the State Bank, 8.7 billion rubles.
Total expansion of working capital from retained
earnings in both the Nonagricultural and Agricultural Enterprise
Sectors was planned at 6.5 billion rubles. 66 It is assumed that
the agricultural portion was negligible and that the total therefore
applies to the Nonagricultural Enterprise Sector.
Capital transfers from the Government Sector for
the expansion of working capital were 3.9 billion rubles (see D,
3, a, (1), p. 69, below).
The net increase in short-term loans has been
estimated at 9.5 billion rubles (see D, 3) b, (2)_, p. 72, below).
Part of these loans is used for the modernization of production
techniques and isissued-by the State Bank to enterprises for ex-
penses not foreseen in the capital investment plan. These loans for
modernization, which increased during 1955 by 0.8 billion rubles, 67
must be deducted from the increase in total State Bank loans to the
Nonagricultural Enterprise Sector, 9.5 billion rubles, to obtain a
figure for short-term borrowing devoted to the expansion of working
capital, 8.7 billion rubles.
Additions to inventories are estimated at 80 per-
cent of the total increase in working capital on the basis, of the
estimated distribution of working capital by use on 1 January 1955.
This distribution in turn has been derived from analysis of the dis-
tribution of working capitalb y source of financing.
Soviet sources 68 provide the following informa-
tion on the distribution of working capital by source of financing
on 1 January 1941 and 1 ' January 1955:
1 January 1941
1 January 1955
Source of Financing
Billion
Rubles
Percent
Billion
Rubles
Percent
Enterprise own funds
65.7
52.9.
184.0
49.2.
State Bank loans
42.5
34.2
154.8
41.4
State Bank advances against
receivables
16.0
12.9
35.2
9.4
Total
124.2
100.0
374.0
100.0
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From this tabulation the distribution of working
capital by-use may be estimated for 1 January 1941. Bank advances
against receivables are equal to net receivables; deposits and cash
are known independently ?j g; and inventories may be found as a
residual, as indicated below:
Use of Working Capital
Billion Rubles
Percent
Net receivables
.16.0
12.9.
Deposits and cash
13.1
10.5
Inventories
95.1
76.6
124.2
100.0
From the two preceding tabulations the distribu-
tion of working capital by use on 1 January 1955 has been estimated.,
Net receivables on that date were equal to State Bank advances
against receivables, 35.2 billion rubles. It is assumed that de-
posits and cash represented 10.5 percent; of working capital, the
same share. as in 1941. Then inventories are derived as a residual,
as indicated below.:
Use of Working Capital
Billion Rubles
Percent
Net receivables
35.2
9.4
Deposits and cash
39.3
10.5
Inventories
299.5
80.1
Total
374.0
100.0
On the basis of this distribution for 1 January
1955, it is assumed that 80 percent of the increase in working capi-
tal during 1955 was devoted to the expansion of inventories.
b. Capital Transfers to the Government Sector.
(See D, 3, g, p. 76, below.),
c ..'Other.
An estimated 3.8 billion rubles, or the remaining
20 percent, of the increase in working capital calculated above
(see a, (3), p. 34, above), consisted of net receivables and deposits
and cash.
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d. Statistical Discrepancy.
This item represents the excess of the sum of credits,
192.4 billion rubles, over the'sum of debits, 185.5 billion rubles.
e. Saving.
(See 2, c, P. 32, above.)
f. Capital Consumption Allowances.
(See 1, c, p. 24, above.)
g. Capital Transfers from the Government Sector.
(See D, 3, a, p. 69, below.)
h. Net Borrowing from the Government Sector.
(See D, 3, b, p. 72, below.)
C. Agricultural Enterprise Sector.
This sector consists of machine tractor stations (MTS's.),
state farms, collective farms, and farm households in their capacity
as agricultural producers. MTS's are treated as ordinary state enter-
prises whose production expenses are covered by revenue from the sale
of product and by a subsidy. That is, it is assumed that MTS revenue
is returned to the MTS's by the state budget and is supplemented by
a subsidy. "State farms" include the state farms proper of various
ministries as well as all subsidiary agricultural enterprises of all
ministries. "Farm households" comprise the private plot agriculture
of both urban and rural residents.
General government services to agriculture, such as experi-
ment stations, forest, conservation, and pest control, are excluded
from this sector and included instead in the Government Sector, ex-
cept insofar as fixed investment in these activities is concerned.
Data limitations do not permit estimation of. the share of total in-
vestment in state agriculture which is devoted to these activities.
Consequently, their investment has not been deducted from the state
agriculture investment total (see 3, a, (2), p. 55, below).
Because total debits were estimated from total credits for
each of the agricultural producers -- MTS's, state farms, collective
farms, and farm households -- no statistical discrepancy resulted
in the accounts of this sector.
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In Account 6,* intrasectoral purchases and sales for cur-
rent production purposes have been canceled out. For example, state
farm sales of seed to collective farms are excluded from both sales -
(credits) and purchases (debits). Accordingly, purchases. include
only purchases from other sectors, and sales include only sales to
other sectors and sales of capital goods and services'to the Agricul-
tural Enterprise Capital Account.
Purchases from the Nonagricultural Enterprise Sector
by the four types of agricultural producers totaled 20.5 billion
rubles. Generally speaking, this estimate, calculated from indirect
data, is subject to a significant margin of error.
(1) MTS's.
MTS expenditures for all purposes except new fixed
investment were planned at 23.3 billion rubles, 70 a figure which,
in the absence of fulfillment data, is assumed to have been the actual
expenditure. Deduction of 3.8 billion rubles for capital repairs
(see 3, a, p. 53, below) leaves 19.5 billion rubles for production and
administration wages, social insurance charges on these wages, and
materials purchases. Wages and social insurance in production and
administration are equal to total wages and social insurance, 17 bil-
lion rubles (see 2, a, (1), p.1.8, below), less wages and social insur-
ance of capital repair workers, 2.3 billion rubles (see e, (3), (c),
p. 1+5, below), or 11+.7 billion rubles. Subtraction of this wage and
social insurance bill from the 19.5-billion-ruble figure leaves 1+.8
billion rubles for materials purchases for both current use and addi-
tions to inventories. It is estimated (see 3, a, (3), p. 56) below)
that the latter amounted to 0.3 billion rubles, leaving.4.5 billion
rubles for materials purchases for current use. This estimate is
consistent with Soviet statements about the magnitude of expenditures
for fuel and lubricants, which are by far the most important opera-
tional materials purchase of MTS's. These expenditures are said to
constitute "about 25 percent" of total MTS production costs. 71 On
the basis of a statement that in 1951+ a 1-percent saving in fuel would
have resulted in a saving of 1+0 million rubles, 72 the 1951+ fuel bill
may be estimated at 1- billion rubles.
* Account 6 follows on p. 39.
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Account 6
Soviet National Accounts, 1955: Production Account
of the Agricultural Enterprise Sector
Purchases from
other sectors
MTS's
4.5
State farms
4.4
Collective farms
l0.4
Farm households
1.2
Indirect taxes
Capital consumption
allowances
2.6
Income originated
289.2
299.3
Household Sector
197.4
Urban collective
farm market
46.5
Rural collective
farm market
4.0
Other sales
1.9
Farm household
income-in-kind
145.0
Nonagricultural
Enterprise Sector
88.7
State and coopera-
tive acquisitions
83.7
Sales to institu-
tions
Agricultural Enterprise
capital account 13.2
Investment-in-kind 5.0
Sales to fixed
investment
Sales to capital
repairs
Additions to
inventories
Subsidy receipts
MTS's
State farms
314.3
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4.4
3.8
13.0
2.0
314.3
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(2) State Farms.
Total materials purchases by state farms are esti-
mated in Appendix B, section 3, at 4.9 billion rubles. To derive
purchases outside agriculture, it is necessary to deduct purchases
within agriculture from the total. It is believed that the only im-
portant purchase by state farms within agriculture for current opera-
tions is the purchase of seed and fodder from other state farms. In
the absence of data on the distribution of state farm materials
purchases, this item has been estimated on the basis of the seed and
fodder costs of collective farms, which amounted to 20.9 percent
of collective farm production expenditures in 1955 (see (3), below).
State farm outlays for this-purpose are estimated at 10 percent of
state farm operational purchases, in recognition of two differences
between collective farm and state farm production expenditures.
First, a greater share of state farm purchases is associated with the
operation of capital equipment, such as tractors and combines. Second,
state farms, many of which are quality seed-breeding establishments,
are generally more self-sufficient in meeting their seed requirements.
Therefore-10 percent was deducted from total materials purchases of
4.9 billion rubles to obtain purchases of 4.4 billion. rubles outside
the Agricultural Enterprise Sector.
(3) Collective Farms.
Purchases of 10.4 billion rubles by collective
farms are the sum of production purchases, 10.2 billion rubles, and
other purchases, 0.2 billion rubles.
In Appendix B, section 1, it is estimated that
total money "production expenditures" of collective farms, consisting
of materials purchases, payments to hired nonconstruction labor, and
money payments for services of MTS's, amounted to 16.3 billion rubles.
From this total must be deducted 6.1 billion rubles, representing
the sum of payments to MTS's for services rendered, 1.2 billion rubles;
wages for hired nonconstruction labor, 1.2 billion rubles (see Appen-
dix B, section 1); materials purchases within the Agricultural Enter-
prise Sector, 3.4 billion rubles; and materials purchases for addi-
tions to inventories, 0.3 billion rubles. Materials purchases within
the Agricultural Enterprise Sector are assumed to consist of seed and
fodder, purchases, which in 1955 represented 20.9 percent of total
production expenditures 73 of 16.3 billion rubles, or 3.4 billion
rubles. It is assumed that all-of these seed and fodder purchases
were from state farms. Purchases for additions to inventories are
estimated at a total of 0.6 billion rubles (see 3, a, (3), p. 56,
below), of which 0.3 billion rubles were assumed to have been financed
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by bank credit (see 3, f, p. 57, below) outside the "production ex-
penditures" outlay derived in Appendix B, section 1.
To production purchases of 10.2 billion rubles
are added 0.2 billion rubles of the collective farms' "administrative-
economic expenditures" of 1 billion rubles (see Appendix B, section 1)
to allow for purchases of office supplies and services.
(4) Farm Households.
This entry is necessarily a very rough estimate
and is based on two assumptions. First, Bergson's estimate that
10 percent of the income of farm households from the sale of farm
products is absorbed by money expenses of production is accepted. 74/
Second, assuming negligible purchases for capital investment, it is
believed that most of these expenses consist of purchases within
agriculture and, that a small share of them, nominally estimated at
25 percent, represents purchases from other sectors. Accordingly,
it is assumed that 2.5 percent of gross farm household income from
the sale of farm products, estimated below (see 2, a, p. 48, below)
at 46.7 billion rubles, was spent for purchases from the Nonagricul-
tural Enterprise Sector.
This entry is the sum of taxes paid by collective
farms, 1.1 billion rubles; state farms, 0.4 billion rubles; and farm
households, 0.6 billion rubles. It is assumed that tax payments by
MTS's, as gross budgetary institutions, were negligible. The collec-
tive farm estimate is composed of collective farm market fees and
other taxes (see Appendix B, sections 1 and,2). State farms,. in the
aggregate forming a smaller establishment than collective farms, are
assumed to have made a smaller payment, estimated at 0.4 billion
rubles. Collective farm market fees of farm households are roughly
estimated at 0.3 billion rubles (see Appendix B, section 2), and it
is assumed that cattle taxes and other fees amounted to the same
sum, bringing total collections from farm households to 0.6 billion,
rubles.
,
c. Capital Consumption Allowances.
In the Agricultural Enterprise Sector, only state
farms charge amortization allowances as an expense against revenue.
The estimate of 2.6 billion rubles is obtained by applying the state
farm amortization rate of 7.5 percent 75 to the value of state farm
fixed assets at the beginning of 1955, 35 billion rubles. 76
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d. Income Originated.
(See 2, d, p. 52, below.)
e. Sales to Other Accounts.
(1) Household Sector.
(a) Urban Collective Farm Market.
(See A,_2, b, (2), (a), p. 13, above.)
(b) Rural Collective Farm Market.
This entry refers to estimated sales of agri-
cultural products by collective farms to the population in rural
collective farm markets. It excludes such sales by farm households,
which are likewise excluded from household purchases of goods and
services. Sales in rural collective farm markets between farm house-
holds are difficult to estimate from available data and hence are
treated elsewhere in this study as part of farm household consumption-
in-kind.
A Soviet source attributes 15.6 billion rubles
of collective farm money income in 1955 to "collective farm trade."
It is believed that the designation of "collective farm trade" probably
includes all collective farm sales of agricultural products (excluding
livestock on the hoof) except those to state and cooperative procure-
ment organs. In Appendix B, section 2, it is estimated that 10.6 of
the 15.6 billion rubles represent sales in urban collective farm
trade, leaving 5 billion rubles for other sales. It is arbitrarily
assumed that this figure of 5 billion rubles in turnover is entirely
attributable to transactions in rural collective farm markets. Of
the 5 billion rubles, it is-estimated that sales to the population
accounted for 4 billion rubles and that the balance of 1 billion ru-
bles represerits'sales to nonfarm institutions.
(c) Other Sales.,
This entry represents sales of services and
nonagricultural products to the population by collective farms. In
1955, 4.8 billion rubles of money income to the collective farms
consisted of "other income." 78 This category is believed to con-
sist of revenue from the sale of services, such as milling of collec-
tive farmers' grain; of revenue from the sale of livestock and non-
agricultural commodities, such as firewood and building materials;
and of receipts from insurance indemnities. Insurance indemnities
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were estimated in Appendix B, section 1, at 1 billion rubles. It is
arbitrarily assumed that half of the remaining 3.8-billion-ruble total
consisted of sales of,capital goods (such as livestock, bricks, and
timber) between collective farms and the other half of sales to the
population.
(d) Farm Household Income-in-Kind.
(See Appendix B, section 4.)
(2) Nonagricultural Enterprise Sector.
(a) State and Cooperative Acquisitions.
This entry consists of sales to state and
cooperative procurement organizations by MTS's, 5 billion rubles; by
state farms, 17.9 billion rubles; by collective farms, 55.2 billion
rubles; by rural farm households, 4.6 billion rubles; and by urban
farm households, 1 billion rubles.
MTS sales of 5 billion rubles represent the
amount credited as MTS revenue by procurement organizations for the
delivery of crops which the MTS's receive from collective farms as
payment-in-kind for services rendered; these deliveries are valued
at contractual or obligatory delivery prices. In 1955, total MTS
revenue, from money payments and in-kind payments by collective
farms, was 6.2 billion rubles. 79 It was further reported that
80.7 percent of MTS income was received in the form of payments-in-
kind, the remainder of 19.3 percent constituting money payments from
collective farms for services rendered. 80 Because the money
payments are intrasectoral payments, from one agricultural producer
to another, for current production purposes, they are excluded from
both sales (credits).and purchases (debits) in these accounts. Reve-
nue of 5 billion rubles from crop deliveries to procurement organi-
zations, which are classified in the Nonagricultural Enterprise Sector,
is, however, recorded as an intersectoral transaction.
State farm sales outside agriculture are
estimated at 17.9 billion rubles by deducting from estimated total
sales, 23.1 billion rubles, the estimated amount of sales within
agriculture, 5.2 billion rubles.- In 1955 the "marketable production"
of state farms of the All-Union Ministry of State Farms was valued at
14 billion rubles. / In the absence of adequate data on the prices
and quantities of state farm deliveries, total sales of all state
farms are estimated on the assumption that the value of sales per
worker for all state farms as a group was the same as value per worker
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of the All Union Ministry of State Farms. In 1955, production workers
of the All-Union Ministry of State Farms numbered 1,617,000, 82 and
the corresponding figure for all state farms was 2,664,000. 83 It
is therefore estimated that total sales of state farms were 2,664
divided by 1,617, or 1.65 times sales. of 14 billion rubles by the All-
Union Ministry of State Farms. The resulting estimate of total sales,
23.1 billion rubles, is quite consistent with the estimates of state
farm expenditures and subsidies in Appendix B, section 3.`
From total state farm sales are deducted sales
within the Agricultural Enterprise Sector, 5.2 billion rubles. These
sales consist of sales of seed and fodder to other state farms, 0.5
billion rubles (see a, (2), p. 40, above); sales of seed and fodder
to collective farms, 3.4 billion rubles (see a, (3), p. 40, above);
and sales of livestock to collective farms, 1.3 billion rubles. The
estimate of livestock sales is based on the assumption that collec-
tive farms made about half of their total estimated purchases of
2.5 billion rubles (see (3), (b), p. 45, below) from state farms and
half from collective farmers. Whereas the number of head of live-
stock purchased from state farms was probably less than half the
total, this is offset by the greater value per head of prize breed-
ing stock in purchases from state farms.
Collective farm sales to state and coopera-
tive procurement organizations in 1955,were reported as 55.2 billion
rubles.
Rural farm household sales to state and
cooperative procurement organizations are estimated in Appendix B,
section 2, at 4.6 billion rubles.
Urban farm household sales to state procure-
ment organizations are estimated at 1 billion rubles, on the basis
of data in Appendix B, section 2. It is estimated there that rural
plots account for about 75 percent of total private plot production
and that their obligatory deliveries amounted to 3 billion rubles.
Hence it is estimated that total obligatory deliveries from farm
households were 4 billion rubles, of which 1 billion rubles were pro-
vided by urban households.
(b) Sales to Institutions on Collective Farm
Market.
In A. 2, b, (2), (a), p. 13, above, it is
estimated that sales to institutions in the urban collective farm
markets were 2.4 billion rubles. To this must be added two other
items. First, sales to institutions in rural collective farm markets
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are estimated at 1 billion rubles (see (1), (b), p. 42, above).
Second, many private sales transactions, especially those between
collective farms and institutional purchasers, occur outside the
collective farm market and probably go unrecorded in the official
estimates for collective farm market turnover. To account for this
phenomenon, an allowance for direct private sales to institutions
by collective farms of 1.6 billion rubles is made. Total sales to
institutions of 5 billion rubles therefore are the sum of sales to
institutions in urban collective farm markets, 2.4 billion rubles;
in rural collective farm markets, 1 billion rubles; and outside
collective farm market channels, 1.6 billion rubles.
(3) Agricultural Enterprise Capital Account.
(a) Investment-in-Kind.
This entry is the sum of investment-in-kind
of collective farms, 4 billion rubles, and farm households, 1 billion
rubles. Investment-in-kind of collective farms, consists primarily
of collective farmer labor used in construction and of natural in-
crements to livestock herds. The estimate of 4 billion rubles for
1955 is based on estimates for earlier years in a study of postwar
agricultural investment. 85 This report suggests that one-fourth
of collective farm investment-in-kind originates in natural live-
stock increases. Because household livestock ownership is approxi-
mately equal to that of collective farms, 86 it is assumed that in-
vestment-in-kind of farm households, in the form of natural live-
stock increases, was also about 1 billion rubles.
(b),Sales to Fixed Investment.
This item consists of purchases of capital
goods, such as livestock and building materials, by"collective farms
from within the Agricultural Enterprise Sector. Total collective
farm livestock purchases in 1955 are estimated at 2.5 billion rubles
on the basis of announced expenditures of 2.5 billion rubles for this
purpose in 1954. 87 Because, as the same reference shows, collec-
tive farm purchases of livestock have been declining in recent years,
the level of such purchases for 1955 is assumed to have been the
same as in 1954. In addition, it is estimated that collective farms
purchased 1.9 billion rubles of other capital goods from other col-
lective farms (see (1), (c), p. 12, above).
(c) Sales to Capital Repairs.
This entry records the use of internal labor
resources for capital repair projects. It is assumed that all mate-
rials used in agricultural capital repairs were purchased from the
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Nonagricultural Enterprise Sector but that all labor used for this
purpose was furnished by the Agricultural Enterprise Sector itself.
Because farm household outlays for capital repairs are considered
negligible, this entry is the sum of the labor cost of capital re-
pairs of MTS's, 2.3 billion rubles; state farms, 1 billion rubles;
and collective farms, 0.5 billion rubles.
In the case of state agriculture it is
assumed that labor cost constituted 60 percent of total capital re-
pairs. This share is applied to MTS capital repairs of 3.8 billion
rubles (see 3, a, (1), (a), p. 53, below) to obtain an MTS labor
cost of 2.3 billion rubles and to state farm capital repairs of
1.6 billion rubles (see 3, a, (1), (b), p. 53, below) to obtain a
state farm labor cost of 1 billion rubles. The cost of collective
farm labor devoted to capital repairs is roughly estimated at 0.5 bil-
lion rubles (see 3, a, (1), (c), p. 54, below).
(d) Additions to Inventories.
This entry represents sales of agricultural
products to agricultural producers for the purpose of building up
their working inventories. In the belief that the size of this item
is negligible, no estimate has been attempted.
f. Subsidy Receipts.
(1) MTS's.
MTS subsidies are defined as total budget appro-
priations for current operations less revenues credited to the MTS's
for money and in-kind payments received from collective farms. Appro-
priations for current operations are equal to 19.2 billion rubles,
the sum of wages and social insurance for production and administra-
tion workers, 14.7 billion rubles; and materials purchases for opera-
tions, 4.5 billion rubles (see a, (1), p. 38, above). From this total
are deducted MTS revenues of 6.2 billion rubles (see e, (2), (a),
p. 43, above) to obtain a difference or subsidy of 13 billion rubles.
(2) State Farms.
The state farm subsidy is estimated at 2 billion
rubles in Appendix B, section 3.
2. Appropriation Account.
Account 7* shows the distribution of income originated in
* Account 7 follows on p. 47.
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Account 7'
Soviet National Accounts, 1955: Appropriation Account
of the Agricultural Enterprise Sector
Payments to Household Sector 255.0 Income originated 289.2
Wages in state
agriculture
32.3
16.3
State farms
16.0
Collective farm wage
payments
32.0
Cash labor-day
payments to collec-
tive farmers
30.0
Administrative wages
0.8
Wages of hired labor
1.2
Collective farm transfer
payments
Farm household income
from sale of farm
products
44.9
Rural households 40.4
Urban households 4.5
Farm household income-
in-kind 145.0
Payments to Government
Sector
Direct taxes 6.9
Profits taxes of
state farms
Income taxes of
collective farms
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Transfer receipts 1.0
9.3
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Account 7
Soviet National Accounts, 1955: Appropriation Account
of the Agricultural Enterprise Sector
(Continued)
Social insurance
1.4
MTS's
0.7
State farms
0.7
Insurance premiums
1.0
Saving
State farms
1.0
Collective farms
23.9
Undistributed profits
19.9
Investment-in-kind
4.0
Total .290.2 Total 290.2
a. Payments to Household Sector.
(1) Wages in State Agriculture.
(a) MTS's. L
Wages of MTS production (including repair)
workers in 1955 were planned at 14 billion rubles, 88 and in the
absence of performance data it is assumed that the plan was fulfilled.
In addition, wages were paid to administrative personnel. It has been
estimated in a RAND study that administrative wages were planned at
2.5 billion rubles in 1953. 89 In recognition of the subsequent in-
crease in MTS administrative personnel, a figure of 3 billion rubles
is estimated for 1955. This total wage outlay of 17 billion rubles
is thought, however, to contain social insurance charges, in view
of the practice of including social insurance under the:wage category
in the five-item accounting system used by MTS's for planning and
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reporting purposes. 90 Therefore, social insurance charges have been
deducted. As these charges amount to.4.4 percent of the wage bill in
state agriculture, 91 the 17-billion-ruble figure represents 104.4
percent of the estimated wage bill, which then becomes 16.3 billion
rubles.
(b) State Farms.
an average wage of
5,460 rubles per year was applied to the total nuib er of- workers and
employees in state farms, 2,832,000, 93 to obtain an estimated basic
wage bill of 15.5 billion rubles.
To this figure was added an estimate for addi-
tional labor compensation in the form of retained profits devoted. to
bonuses and special awards. In 1955, total profits of the All Union
Ministry of State Farms were planned at 2 billion rubles, of which
.0.5 billion rubles were to be paid to the budget as profits taxes;
0..5 billion rubles devoted to fixed investment under the central in-
vestment plan; and 1 billion rubles in retained profits left at the
disposal of the state farms for the formation of the internal insur-
ance fund, the director's fund, and the fund for the expansion of
the farm. / In view of their historically low profit level, it
is assumed that total net profits and retained profits of all state
farms were equal to those planned for the All-Union Ministry of State
Farms. Furthermore, it is assumed that half of this estimated 1 bil-
lion rubles in retained profits was distributed as supplementary
labor compensation and half devoted to fixed investment outside the
central plan. Therefore, 0.5 billion rubles were taken as the total
supplementary compensation of workers and added to the basic wage
bill of 15.5 billion rubles to obtain a total wage bill of 16 bil-
lion rubles.
(2) Collective Farm Wage Payments.
(a) Cash Labor-Day Payments to Collective Farmers.
In Appendix B. section 1, it is roughly esti-
mated that these payments amounted to about 40 percent of collective
farm money revenues, or approximately 30 billion rubles.
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(b) Administrative Wages.
In Appendix B. section 1, total "administrative-
economic" expenditures of collective farms are estimated at 1 billion
rubles. On the assumption that wages are the largest component of
these expenditures, it is estimated that 0.8 billion rubles were devoted
to administrative wages. In addition, some small portion of cash
labor-day payments goes to administrative personnel who are members
of the farms. 95 Positive evidence, however, as to the importance
of these administrative wages is lacking and therefore no attempt at
an estimate is made.
(c) Wages of Hired Labor.
(See Appendix B. section 1.)
(3) Collective Farm Transfer Payments.
This entry represents cash payments to sick and
aged collective farmers from the social-cultural funds of the collec-
tive farms. In Appendix B, section 1, the total allocation to these
funds from collective farm revenues is estimated at 1.1 billion rubles.
Of this amount, it is assumed that slightly more than two-thirds, or
0.8 billion rubles, was devoted to pensions and other cash transfer
payments and the remainder to fixed investment in social-cultural
facilities like schools, reading rooms, and theaters.
(4) Farm Household Income from Sale of Farm Products.
(a) Rural Households.
In Appendix B, section 2, sales by rural farm
households on the urban collective farm market are estimated at 36 bil-
lion rubles, and obligatory deliveries to the state and commission
sales to cooperatives are estimated at 4.6 billion rubles. In addition,
sales of livestock by collective farmers to collective farms are esti-
mated at 1.2 billion rubles. From these total sales of 41.8 billion
rubles is deducted an allowance of 1.4 billion rubles for expenses in
the form of collective farm market and other fees, 0.5 billion rubles,
and purchases of materials from the Nonagricultural Enterprise Sector,
0.9 billion rubles. The fee expenses are estimated by attributing
0.5 billion rubles, of the 0.6 billion rubles charged to farm house-
holds, to rural farm households, which carry on most of the private
plot activity (see 1, b, p. 41, above). The materials purchase esti-
mate is derived by allocating to rural households three-fourths of
total farm household materials. purchases of 1.2 billion rubles (see
1, a, (4), p. 41, above).
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(b) Urban Households.
Collective farm market sales by owners of
urban plots are estimated at 3.9 billion rubles in Appendix B, sec-
tion 2. In addition, it is estimated there that urban plots made
obligatory deliveries valued at 1 billion rubles. From total sales
of 4.9 billion rubles are deducted expenses of 0.4 billion rubles,
in the form of collective farm market and other fees, 0.1 billion
rubles, and materials purchases, 0.3 billion rubles. The fee figure
is the difference between total estimated fees paid by farm house-
holds, 0.6 billion rubles (see 1, a, (4), p. 41, above), and payments
by rural households, 0.5 billion rubles. The materials purchase
figure is one-fourth of total farm household materials purchases of
1.2 billion rubles (see 1, a, (4), p. 41, above).
(5) Farm Household Income-in-Kind.
(See Appendix B, section 4.)
b. Payments to the Government Sector.
(1) Direct Taxes.
(a) Profits Taxes of State Farms.
Profits taxes of the All Union Ministry of
State Farms were planned at 0.5 billion rubles (see a, (1), (b),
p. 49, above). In 1955, state farms subordinate to other ministries
were permitted to retain all of their profits. 96 Therefore, the
All-Union Ministry of State Farms figure is entered here as the
total on the assumption that these payments to the state would have
had priority and would have been met despite probable underfulfill-
ment of planned profits.
(b) Income Taxes of Collective Farms.
(See D, 2, g, (2), (b), p. 68, below.)
(2) Social Insurance.
(a) MTS's.
(See a, (1), (a), p. 18, above.)
(b) State Farms.
This entry is calculated by applying the
4.4-percent social insurance charge in state agriculture (see a, (1),
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(a), p. 48, above) to the basic state farm wage bill of 15.5 billion
rubles (see a, (1), (b), p. 29, above).
(3) Insurance Premiums.
(See Appendix B,, section 1.)
c. Saving.
(1) State Farms.
This entry represents the sum of profits devoted
to investment under the centralized investment plan, 0.5 billion
rubles, and to noncentrally planned investment through the director's
fund and other enterprise funds, 0.5 billion rubles (see a, (1), (b),
p. 1.9, above).
(2) Collective Farms.
(a) Undistributed Profits.
The undistributed profits of collective farms
consist of the following components: deductions to indivisible funds,
16.5 billion rubles (see Appendix B, section 1); funds earmarked for
repayments on long-term loans, 2.3 billion rubles (see Appendix B,
section 1); investments from their social-cultural funds, 0.3 billion
rubles (see a,.(3), p. 50, above); additions to. inventories, 0.3 bil-
lion rubles'(see 3, a, (3), p. 56, below); and the value of labor
services rendered on capital repair projects by collective farmers,
0.5 billion rubles (see 3, a, (1), (c), p.. 54, below).
(b) Investment-in-Kind.
(See 1, e, (3), (a), p. 45, above.)
(3) Farm Households.
This entry represents investment-in-kind,.esti-
mated at 1 billion rubles (see 1, e, (3), (a), p. 1.5,. above).
d. Income Originated.
Income originated is, estimated as the sum of all pay-
ments made from income originating in the productive activity of the
Agricultural Enterprise Sector. It includes transfer payments to
collective farmers from the social-cultural fund (see a, (3), p. 50,
above) because they are made out of income generated by the productive
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activity of the collective farms, even though they are disbursed on
a transfer basis rather than as compensation for services currently
rendered. Income originated excludes transfer receipts in the form
of insurance indemnities (see e, p. 57, below), however, because
these sums are merely transferred within the collective farm commu-
nity, through the intermediary of the state insurance organization;
they do not constitute income generated by productive activity.
e. Transfer Receipts.
Receipts of insurance indemnities, for damage to
collective farm property, are assumed to be equal to insurance
premiums paid by collective farms, 1 billion rubles (see Appendix B,
section l).:
3. Capital Account.
Account 8* records the asset formation of the sector and
the sources from which it is financed.
a. Gross Capital Formation.
(1) Capital Repairs.
(a) MTS's.
In 1954 the "gross output" of MTS. repair
stations was 3.6 billion rubles. / In 1955, all repair expendi-
tures increased by 0.2 billion rubles. It is assumed that the
sum of these two figures, 3.8 billion rubles, represents capital
repairs, on the ground that current repairs would normally be con-
ducted in the field and only major-repairs at repair stations. This
assumption is consistent with a Soviet statement 99/ that in MTS's
all repairs of agricultural machinery constitute about 25 percent of
total appropriations exclusive of,new fixed investment. In 1955,
total appropriations exclusive of new fixed investment were planned
at 23.3 billion rubles (see 1, a, (1), p. 38, above). If all re-
pairs amounted to 25 percent, or 5.8 billion rubles, the estimate
of 3.8 billion rubles for capital repairs would leave a reasonable
balance for. current repairs.
(b) State Farms.
State farms are required to spend on capital
repairs a sum equal to 4.7 percent of the original value of existing
fixed assets. 100 Therefore, state farm capital repairs are estimated
Account 8 follows on p. 54.
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Soviet National Accounts, 1955: Capital Account
of the Agricultural Enterprise Sector
Gross capital
formation
Capital repairs
7.9
MTSIs 3.8
State farms 1.6
Collective farms 2.5
New fixed investment 43.0
State agriculture 18.8
Collective farms 23.2
Farm households 1.0
Saving 25.9
53.6 Capital consumption
allowances 2.6
Capital transfers from
Government Sector 22.5
Net borrowing from
Government Sector 2.6
Additions to inventories 2.7
Other N.A.
Total 53.6 Total
53.6
at 4.7 percent of 35 billion rubles, the value of fixed assets in
1955-(see 1, c, p. 41, above), or 1.6 billion rubles.
(c) Collective Farms.
. Materials purchases for collective farm capi-
tal repairs in 1955 are estimated at 2 billion rubles, on the basis
of a Soviet statement that 1.8 billion rubles was spent for this
purpose in 1954. 101 Because money wage compensation to collective
farmers, in the form of cash labor-day payments, is so low compared
with wage compensation in state agriculture, the 60 percent-labor,
40 percent-materials relationship assumed in state agriculture (see
1, e, (3), (c),'p. 45, above) was not considered appropriate for
collective farms. Instead, it is assumed that the labor component of
collective farm capital repair costs was only 20 percent and the mate-
rials component 80 percent. On that basis, total repairs are esti
mated at 2.5 billion rubles.
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(2) New Fixed Investment.
(a) State Agriculture.
This entry is the sum of estimated centrally
planned state investment in MTS's, state farms, and general agricul-
tural projects, 18.3 billion rubles, and estimated decentralized in-
vestment of state farms, 0.5 billion rubles.
At the 20th Party Congress, Khrushchev announced
that new fixed investment in state agriculture, presumably under the
central plan, during the 2-year period 1954-55 totaled 34.4 billion
rubles. 102 This total has been adjusted from a 1 July 1955 price
base to an average 1955 price base, estimated to be about 2 percent
higher. 103 Of the resulting adjusted 2-year total of 35.1 billion,
rubles,-it is estimated that slightly more than half, or 18.3 billion
rubles, was spent in 1955. 104
To this figure was added 0.5 billion rubles
for estimated investment by state farms outside the central plan (see
2, a; (1), (b), p. 49, above).
(b) Collective Farms.
This entry is the sum of investment from in-
divisible funds, 14.5 billion rubles; investments financed by long-
term credits, 4.4 billion rubles; investment-in-kind, 4 billion rubles;
and investment from social-cultural funds, 0.3 billion rubles.
Outlays from indivisible funds in 1955 were
16.5 billion rubles. 105 From this total are deducted outlays for
materials for capital repairs, estimated at 2 billion rubles (see (1),
(c), p. 54, above). The remainder of 14.5 billion rubles was devoted
to fixed investment.
Long-term credits. to collective farms in 1955
totaled 4.4 billion rubles. 106 Although a small portion of these
loans was for noncapital.outlays, such as fertilizer and young live-
stock Y no deduction has been made from the total, because of the
small magnitude involved.
Collective farms' investment-in-kind has been
estimated at 4 billion rubles (see 1, e, (3), (a), p. 45, above).
New fixed investments from collective farms'
social-cultural funds were estimated at 0.3 billion rubles (see 2,
a, (3), p. 50, above).
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(c) Farm Households.
This entry represents farm household investment-
in-kind (see 1, e, (3), (a), p. 45, above).
(3) Additions to Inventories.
This entry represents increases in stocks of fuel,
fertilizer, and other materials. It is the sum of additions to stocks
of state farms, 1.8 billion rubles; collective farms, 0.6 billion
rubles; and MTS's, 0.3 billion rubles. Additions by farm households
are considered negligible.
The state farm figure is the sum of budget grants
for expansion of working capital and the estimated increase in inven-
tories financed by bank credit. Budget grants were planned at 1.6 bil-
lion rubles in 1955. 107 In addition, it is assumed that state farms
received. 0.2 billion rubles of the 0.5-billion-ruble increase in
short-term credit to agriculture.(see f) p. 57, below).
In the absence of specific data, collective farm
and.MTS additions to. inventories are estimated roughly on the basis
of the state farm figure. Because the budget grant to state farms
was-intended to organize new state farms in the "virgin lands" as
well as to expand the operations of existing farms, 108 it is be-
lieved that additions by collective farms to inventories were only a
modest fraction, perhaps one-third, of the state,farm total. There
fore, 0.6 billion rubles were assumed for collective farms, of which
0.3 billion rubles are assumed to have come from bank credit (see f)
p. 57, below) and 0.3 billion rubles from revenues of collective
farms (see 1, a, (3), p. 40, above). As a notional allowance, MTS
additions to inventories are estimated at half the collective farm
figure, or 0.3 billion rubles.
The increase in monetary assets, such as cash, bank
deposits, and receivables, of the Agricultural Enterprise Sector
cannot be reliably estimated. It is believed to be relatively small,
however, for the corresponding item in the Nonagricultural Enterprise
Sector is only 3.8 billion rubles.
c. Saving.
(See 2, c, p. 52) above.)
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d. Capital Consumption Allowances.
(See 1, c, ,_p. 41, above.)
e. Capital Transfers from the Government Sector.
(See D, 3,'a, p. 69, below.)
f. Net Borrowing from the Government Sector.
This entry is the sum of net long-term borrowing by
collective farms, 2.1 billion rubles, and net short-term borrowing
by collective farms and state farms, 0.5 billion rubles (see D, 3,
b, p. 72, below). It is assumed that, of the short-term total,
collective farms received 0.3 billion rubles and state farms 0.2 bil-
lion rubles.
D. Government Sector.
The Government Sector comprises national and local govern-
ment agencies engaged in providing services which are organizedfor,
but not sold to, the community. These services are primarily health
and education, defense, and internal security. This sector also
includes organizations and activities which carry out the economic
and social policies of the government. In this group are public
organizations, such as trade unions and the Communist Party, and the
banking system.
Account 9* shows the cost, in terms of wages, social in-
surance charges, and materials purchases, of providing government
services. Because these services are not sold, they are valued at
cost on the credit side.
a. Wages of Government Employees.
(1) Civilian Employees.
(a) Health and Education.
Health and education wages are estimated at
59.'5 billion rubles on the assumption that these wages increased from
the prewar period to 1955 at the same rate as the wages of workers
and employees generally -- that is, that their wages in 1955 were
* Account 9 follows on p. 58.
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Account 9
Soviet National Accounts, 1955: Production Account
of the Government Sector
Billion Rubles
Wages of government
employees
105.6
Civilian employees
77.2
Health and education
59.5
General
administration
8.3
Internal
General
security
agricultural
3.9
programs 2.5
Public organizations 3.0
Military pay 28.4
Social insurance
Purchases from Nonagricultural
Enterprise Sector
169.9
Health and education
28.1
General administration
3.8
Military subsistence
22.3
Military procurement
and operations-
57.5
Internal security
3.8
General agricultural
programs
5.3
Defense programs
32.4
Research and development
programs
5.0
Public organizations
5.5
Miscellaneous
6.2
279.2
Total
279.2
212 percent of the 1940 level (see B, 2, a,
(1), p. 26, above).
In
the absence of wage data for 1940, the 212-percent increase has been,
applied to wage data for 1941, in the belief that average wages in
health and education changed very little from 1940 to 1941.
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Cost of government-
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The assumption that wages in health and educa-
tion increased between 1940 and 1955 at the same rate as wages for
workers and employees in general is made in the face of two offsetting
trends. In the first place, it appears likely that health wages in-
creased more slowly than average wages, in view of the need for a
special pay raise for medical workers granted in November 1955. 109
On the other hand, education workers, at least teachers in lower and
middle schools, received significant pay increases in the postwar
period. 110 Therefore, although the procedure adopted here may
slightly overstate the health wage bill and understate the education
wage bill, the estimate of the total wage bill for workers and em-
ployees in health and education appears reasonably accurate, given
the limited information available. Moreover, it should be noted that
these estimates of the wage portion of total health and education
expenditures are in accord with Soviet statements on the proportion
of total social-cultural expenditures absorbed by wages. 111
Average annual wages in health in 1941 were
planned at 3,120 rubles. 112 An increase to 212 percent would bring
1955 wages to 6,610 rubles per year.. This figure is applied to the
1955 total number of workers and employees in health, 2,627,000, 113
to yield a total wage bill in health of 17.4 billion rubles.
- Average annual wages in education in 1941
were planned at 4,330 rubles. 114 An incze ase to 212 percent would
raise the level in 1955 to 9,170 rubles. This figure is applied to
the number of workers and employees in education in 1955, 4,582,000, 115
to yield a total wage bill in education of 42.1 billion rubles.
(b) General Administration.
Wages account for two-thirds of the general
administration bill. 116 In 1955 the general administration bill
amounted to 12.5 billion rubles, 117 and wages were therefore
8.3 billion rubles.
(c) Internal Security.
It is assumed that expenditures on nonmili-
tarized internal security forces are roughly equal to expenditures
on militarized internal security forces. Expenditures on militarized
internal security forces are estimated at 7.7 billion rubles, the
sum of 5.4 billion rubles for pay (see (2), p. 61, below) and 2.3 bil-
lion rubles for subsistence (see c, (3), p. 63, below). Because of
the lower pay scales of ordinary guard troops, however, and also be-
cause of the inclusion of materials purchases in the nonmilitarized
internal security bill, it is assumed that pay represents a smaller
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share of total outlays in the case of nonmilitarized internal secu-
rity forces than in the case of militarized forces. Consequently,
it is assumed that the nonmilitarized internal security bill of
7.7 billion rubles may be divided about equally between pay and mate-
rials purchases, yielding a wage bill of 3.9 billion rubles and a
purchases bill of 3.8 billion rubles.
(d) General Agricultural Programs.
In this category are included government
programs for irrigation, electrification, forest conservation, agri-
cultural experimental stations, and the like. These activities,
although financed from the agricultural appropriation of the Soviet
budget, are considered government activity in national accounting
practice and are therefore included here in the Government Sector.
Expenditures for general agricultural programs are taken to be the
residual of the budget appropriation to agriculture.
In 1955 the total planned budget appropriation
to state agriculture in prices of 1 January 1955 was 55.1 billion
rubles. 118 At the new prices effective 1 July 1955 the original
appropriation would have been reduced to 48.1 billion rubles. 119
If it is assumed that the original plan was fulfilled and that half
of the appropriation was made during the first half of the year at
old prices and half during the second-half of the year at new prices,
then total appropriations in 1955 would be the mean. of the two fig-
ures, or 51.6 billion, rubles.
Out of the total appropriation to agriculture,
capital transfers and investment in general agricultural programs
have been estimated at 22.5 billion rubles (see C. 3, a, (2), (a),
p. 55, above, and 2, d, p. 67, below). Noncapital grants to MTS'S
and state farms were estimated at 21.2 billion rubles (see C, 1,
f) p. 46, above). This leaves a residual of 7.9 billion rubles for
noncapital expenditures on general agricultural programs. Of this
amount, one-third, or 2.6 billion rubles, is assumed to consist of
wage and social insurance 'payments; at the estimated 5-percent rate
(see b, p. 61, below), social insurance payments would be 0.1 bil-
lion rubles. The remaining two-thirds, or 5.3 billion rubles, is
assumed to consist of materials purchases.
(e) Public Organizations.
This category includes the wages of employees
of trade unions, 0.7 billion rubles; the Communist Party, 1.3 billion
rubles; and other organizations, 1 billion rubles.
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Trade union wages are estimated at 0.7 bil-
lion rubles on the assumption that they are equivalent to the portion
of trade union expenditures devoted to administrative expenses. In
1955 these expenses were 15.8 percent of total trade union expendi-
tures, which were planned at 248.1 percent of the 1946 level.
120
Total planned expenditures in 1946 are estimated on the basis
of the
following information: expenditures on aid to needy members
in 1946
were planned at 200.2 million rubles, or 9.9 percent of total reve-
nues 121/; total revenues were therefore 2.02 billion rubles. As
expenditures were planned at 92.7 percent of revenues, 122 they must
have amounted to 1.87 billion rubles in 1946. Total expenditures in
1955 are thus estimated at 248 percent of 1.87 billion rubles, or
4.6 billion rubles. Trade union salaries are estimated at 15.8 per-
cent of this, or 0.7 billion rubles.
Wages of Communist Party'employees are esti-
mated at 1.3 billion rubles on the assumptions that total expenditures
of the Party were equal to total revenues, estimated at 2.6 billion
rubles (see A, 2, d, p. 14, above.), and that total expenditures were
distributed about equally between wages and other outlays.
In addition, wages for employees of other
organizations, such as Komsomol and Spartak, are estimated at 1 bil-
lion rubles.
(2) Military Pay.
This entry is the sum of pay of the armed forces
proper under the Ministry of Defense, 23 billion rubles, 1L3/ and the
pay of militarized internal security forces, 5.4 billion rubles.
The estimated pay for militarized internal secu-
rity troops is the product of an estimated average pay rate of 10,000
rubles per year times estimated numbers of 540,000. The pay estimate
is based on various defector reports and on the similarity to armed
forces officer pay scales. !L4/ The strength estimate of 540,000
.represents the sum of (a) estimated MVD forces of 440,000, consisting
of border troops (300,000), operational troops (100,000), and an up-
ward adjustment of 10 percent (40,000) to allow for the large admin-
istrative apparatus of the MVD, 125 and (b) a rough estimate of
100,000 for militarized KGB forces.
b. Social Insurance.
The social insurance rate for government civilian
employees is estimated at 5 percent of the corresponding wage bills
on the basis of information for education and health. The rate is
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4.3 percent in middle schools and mass educational institutions and
5.9 percent in health institutions. 126 Application of the esti-
mated average rate of 5 percent yields total social insurance charges
of 3.7 billion rubles, representing the sum of charges on health and
education wages, 3 billion rubles; general administration wages, 0.4
billion rubles; general agricultural program wages, 0.1 billion rubles;
and public organization wages, 0.2 billion rubles. (See a, p. 57,
above, for the respective wage bills.) As internal security employees
have their own pension program, no social-insurance payments are made.
on their wages.:
c.- Purchases from-the Nonagricultural Enterprise Sector.
(1) Health and Education.
Health and education purchases are estimated at
28.1 billion rubles, the difference between adjusted total health
and education expenditures and the portion of those expenditures de-
voted to wages, social insurance payments, investment, and capital..
repair.
Adjusted health expenditures are 35.4 billion
rubles; the sum of explicit health expenditures, 31.2 billion rubles 127/.;
and social welfare outlays devoted to health purposes, 4.2 billion
rubles (see 2, b, (1), p. 65, below). Adjusted total education ex-
penditures are 62.2 billion rubles, representing total budget expendi-
tures on education, 68.9 billion rubles, 128 less student stipends,
6.7 billion rubles (see 2, b, (2), p. 66, below).
Combined adjusted expenditures for health and
education are thus 97.6 billion rubles. From this amount is sub-
tracted 69.5 billion rubles -- the sum of health and education wages,
59.5 billion rubles (see a, (1), (a), p. 57, above); social insur-
ance payments for health and education employees, 3 billion rubles
(see b, p. 61, above); capital repairs, 2 billion rubles (see 3, c,
(1), p. 74, below); and fixed investment, 5 billion rubles (see
Appendix A, Table 9*). This subtraction leaves 28.1 billion rubles
for health and education purchases.
(2) General Administration.
Total budget outlays for general administration
in 1955 amounted to 12.5 billion rubles. 129 Of this amount, 8.3
billion rubles went to wages of government employees (see a, (1), (b),
p. 59, above), and 0.4 billion rubles went for social insurance
* P. 105, below.
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payments (see b, p. 61, above). It is assumed that government invest-
ment for general administrative purposes was negligible. Therefore,
the remainder of the administration total, or 3.8 billion rubles, went
for government purchases from the Nonagricultural Enterprise Produc-
tion Account.
(3) Military Subsistence.
This entry is the sum of the subsistence of armed
forces under the Ministry of Defense, 20 billion rubles, 130 and the
subsistence of militarized internal security forces, 2.3 billion ru-
bles. The figure for armed forces under the Ministry of Defense,
it should be noted, includes subsistence of reservists on active duty
as well as regular troops.
The estimated militarized internal security force
of 540,000 (see a, (2), p. 61, above) is assumed to receive the armed
forces subsistence rate of 4,300 rubles per year per man. 131 Total
subsistence for militarized internal security forces is thus 2.3 bil-
lion rubles.
(4) Military Procurement and Operations.
This item consists of.the difference between
total explicit defense expenditures and the sum of armed forces pay,
subsistence, pensions, military investment, and military capital
repairs. Total explicit defense expenditures in 1955 were given as
107.4 billion rubles. 132 Armed forces pay is estimated at 23
billion rubles (see a,, p. 61, above); subsistence at 20 billion
rubles (see (3), above); pensions at 2.9 billion rubles (see 2, b,
(1), p. 65, below); military investment at 3 billion rubles (see 3,
c, (2), p. 74, below ; and military capital repairs at 1 billion
rubles (see 3, c, (1 , p. 74, below). The sum of these items, 49.9
billion rubles, is deducted from total defense expenditures, 107.4
billion rubles, to obtain a figure of 57.5 billion rubles for military
procurement and operations.
(5) Internal Security.
Purchases for nonmilitarized internal security
forces are estimated at 3.8 billion rubles (see a, (1), (c), p. 59,
above).
(6) General Agricultural Programs.
(See a, (1), (d), p. 60, above.)
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(7) Defense Programs.
Purchases for atomic energy and other defense-
oriented programs are estimated at 32.4 billion rubles (see Appendix A.
Table 9*).
(8) Research and Development Programs.
(See Appendix A, Table 9.*)
(9) Public Organizations.
Materials purchases represent the difference be-
tween total expenditures and labor costs. Total expenditures are
8.7 billion rubles, the sum of trade union expenditures of 4.6 bil-
lion rubles; Communist Party expenditures, 2.6 billion rubles; and
expenditures of other organizations, 1.5 billion rubles. Trade union
expenditures were estimated above (see a, (1), (e), p. 60, above);
Communist Party expenditures are assumed to be equal to total.revenue.
(see A. 2, d, p. 14, above); expenditures of other organizations are
assumed equal to dues payments (estimated in A, 2) d, p. 14, above).
The wage bill has been estimated at 3 billion rubles (see a, (1),
(e), p. 60, above), and social insurance payments at 0.2 billion ru-
bles (see b, p. 61, above), leaving 5.5 billion rubles for materials
purchases.
(10) Miscellaneous.
Unspecified budget expenditures of.,6.2 billion,
rubles are assumed to represent purchases for current purposes from
the. Nonagricultural Enterprise Sector (see Appendix A, Table 9*).
This entry is the sum of wage, social insurance, and,
2. Appropriation Account..
Account 1O** shows on the credit sidethe receipts of the
Government Sector and on the debit side their disposition through the
purchase of government services, transfer payments to households. and,
enterprises, and saving.
* P. 105, below.
* Account 10 follows on p. 65.
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Cost of government
services
Transfers to Household
Sector
279.2
59.7
Pensions
45.1
Stipends
6.7
Interest
6.9
Insurance indemnities
1.0
Transfers to Nonagricul-
tural Enterprise Sector
32.0
Price differential
reimbursements
17.0
Grants to cover
losses
Transfers' to Agricul-
tural Enterprise Sector
16.0
Grants to cover
losses
15.0
Insurance' indemnities
1.0
Soviet National Accounts, 1955: Appropriation Account
of the Government Sector
Saving
Receipts from own
sector .
Receipts from other
sectors
523.7
Taxes on households
54.3
Taxes on enter-
prises
436.6
Profits taxes
97.5
Income taxes
11.5
Turnover taxes
242.4
Other enterprise
taxes and pay-
ments
85.2
Social insurance
22.8
Dues and other pay-
m
o
ents to public
rganizations
8.0
In
surance premiums
2.0
140.5
527.4 Total
527.4
a. Cost of Government Services.
(See 1, d, p. 64, above.)
b. Transfers to the Household Sector.
(1) Pensions.
Pension payments to the population have been esti-
mated as 45.1 billion rubles, which is the sum of pension payments
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from social welfare funds, 42.2 billion rubles, plus estimated mili-
tary pensions, 2.9 billion rubles. Pension payments from social
welfare funds have been estimated as total budgetary expenditures for
social welfare of 47.1 billion rubles 133 less estimated health out-
lays of 4.2 billion rubles and transfer of funds to trade unions of
0.7 billion rubles. Out of the social insurance appropriation for
1955, it was planned that 2.2 billion rubles would be devoted to health
expenditures, such as outlays for building, equipping, and repairing
rest homes and sanatoria for workers and employees. 134 In addition,
it is known that funds from the social security appropriation are also.
spent for operating invalid and old age homes. 135 It seems reason-
able to assume an outlay of 2 billion rubles of social security funds
for this purpose, bringing total health expenditures from social wel-
fare funds to 4.2 billion rubles. In'addition, 0.7 billion rubles of
social insurance funds was transferred to trade unions for administra-
tive purposes (see A, 2, d, p. 14, above). After deduction of these
health expenditures and transfers to trade unions, 42.2 billion rubles
are left for pension payments from social welfare funds.
Pension payments to career members-.,of the armed
services do not come out of social welfare funds; rather, they are
part of the defense appropriation. These pensions payments in 1955
are estimated at 2.9 billion rubles, bringing total pension payments
to the population to 45.1 billion rubles.
(2) Stipends.
Student stipends were planned at 5.8 billion
rubles in 1953, 136 when student enrollment in universities and
tekhnikums was 3.2 million. 137 Enrollment in 1955 is estimated at
3.7 million -- an average of 3.6 million for the 1954-55 school year
and 3.8 million for the 1955-56 school year. 138 On the assumption
that stipends increased from 1953 to 1955 in the same proportion as,.
enrollments, stipends in 1955 are estimated at 115.6 percent of the
1953 level, or 6.7 billion rubles.
(3) Interest.
This entry consists of two items -- interest on
the government debt and interest on savings deposits. The former
was estimated as 5.9 billion rubles (see A, 3, b, (1)) p. 19, above).
Interest on savings deposits is calculated from information on the
rate of interest and total savings deposits. Total savings deposits
were 48.4 billion rubles on 1 January 1955 and 53.7 billion rubles
on 1 January 1956. 139 Therefore,.the average during 1955 was
51.1 billion rubles. Interest paid on ordinary savings deposits in
1955 was 2 percent. 140 Interest in 1955 is consequently estimated
at 2 percent of 51.1 billion rubles, or 1 billion rubles.
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(4) Insurance Indemnities.
(See A, 2, j, (4), p. 18, above.)
c. Transfers to the Nonagricultural Enterprise Sector.
(1)-Price Differential Reimbursements.
-(See Appendix A, Table 9.*)
(2) Grants to Cover Losses.
(See Appendix A, Table 9.*)
d. Transfers to the Agricultural Enterprise Sector.
(1) Grants to Cover Losses.
(See C, 1, f, p. 46, above.)
(2) Insurance Indemnities.
(See C, 2, e, p. 53, above.)
e. Saving.
Government Sector saving is the difference between
current receipts and current expenditures. It is equal to the excess
of total current receipts, 527.4 billion rubles, over the sum of the
cost of government services and transfer payments, 386.9 billion
rubles.
f. Receipts from Own Sector.
This entry consists of social'insurance payments made
by government agencies to the social insurance system on behalf of
their employees. Because the social insurance system is considered
a part of government activity, although it has its own accounts, these
payments appear here as government receipts from its own sector (see
1, b, p. 61, above).
* P. 105, below.
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g. Receipts from Other Sectors.
(1) Taxes,on Households.
Taxes on households are the sum of 'taxes on the
population" and other taxes paid by households. "Taxes on the
population," consisting of income, agricultural, and bachelor taxes,
amounted to 48.3 billion rubles in 1955. 141
Other taxes are estimated at 6 billion rubles.
Local taxes and fees were planned at 7.8 billion rubles in 1955. 142
It is assumed that half were paid by the population and half by non-
agricultural and agricultural enterprises; payments of this type
paid by the population may therefore be estimated at 3.9 billion ru-
bles. This figure is increased by approximately half, to 6 billion
rubles, to allow for the portion of unspecified budget revenues paid
by the population in the form of fines and notarial, passport, and other
legal registration fees. 143
(2) Taxes on Enterprises. i
(a) Profits Taxes.
Profits taxes on state enterprises are esti-
mated at 97.5 billion rubles, the difference between total profits
taxes of 102.8 billion rubles I~J4 and that portion representing the
return of surplus working. capital, which was planned at 5.3 billion
rubles. 145 The latter payment is recorded'in the Government Capi-
tal Account (see 3, g, p. 76, below).
(b) Income Taxes.
Total budget revenue in 1955 from income taxes
and taxes on noncommodity sales (such as entertainment admission fees)
amounted to 12.4 billion rubles. 146 Income from the tax on noncom-
modity sales was planned at 0.9 billion rubles, 147 leaving 11.5 bil-
lion rubles for income tax payments. Of this sum, 5.1 billion rubles
have been estimated for income tax payments of cooperatives (see B,
2, b, (1), (b), p. 31, above); the remainder, representing collective
farm income tax payments, was therefore 6.4 billion-rubles.
(c) Turnover Taxes.
Turnover taxes in 1955 totaled 242.4 billion
rubles. 148
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(d) Other Enterprise Taxes and Payments.
Other enterprise taxes-and payments of-
85.2 billion rubles consist of taxes and fees paid by the Nonagri-
cultural and Agricultural Enterprise Sectors and analogous payments
by cooperatives to the banking system. Miscellaneous taxes and fees
paid by enterprises are estimated at 84.1 billion rubles (see Appen-
dix A. Table 8*): Payments to the banking system by producer and
consumer cooperatives were estimated at 1.1 billion rubles (see B,
2, b, (3), p. 32, above). The figure for miscellaneous taxes and
fees is obtained through the distribution of budget revenues. Be-
cause it was impossible to estimate independently revenue from state
reserve sales, this revenue is included in the total amount of tax
receipts. For a more complete discussion of this problem, see,3,
c, (3), P. 74, below.
(3) Social Insurance.
Total payments to the social insurance system
from all sectors totaled 26.5 billion rubles in 1955. 1Lq Payments
from the Government Sector of 3.7 billion rubles are deducted (see
f, p. 67, above) to obtain a remainder of 22.8 billion rubles for
the Nonagricultural and Agricultural Enterprise Sectors.
(4) Dues and Other Payments to Public Organizations.
(See A, 2, d, p. 14, above.)
(5) Insurance Premiums.
(See A, 2, e, p. 15, above.)
Capital Account.
Account 11** records the various capital transactions of
the Government Sector. As debits it lists the capital outlays of the
sector, in the form of its capital grants (transfers), loans, and own
real and monetary asset formation. As credits it shows the sources
of funds for these outlays.
a. Capital Transfers to Other Sectors.
(1) Nonagricultural Enterprise Sector.
Capital transfers to the Nonagricultural Enter-
prise Sector are the sum of transfers for new fixed investment,
P. 104.' below.
Account 11 follows on p. 70.
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Soviet National Accounts, 1955: Capital Account
of the Government Sector
Capital transfers to
other sectors
Nonagricultural
Enterprise Sector 99.6
Agricultural Enter-
prise Sector 22.5
Net loans to other
sectors
Household Sector 1.5
Nonagricultural
Enterprise Sector. 11.5
Agricultural Enter-
prise Sector 2.6
Government capital
formation
Capital repairs
New fixed invest-
ment
Other
5.1
15.0
Saving
122.1 Capital transfers from
Household Sector
Net purchase of
government bonds 24.9
Additions to
savings deposits 5.3
15.6 Capital-transfers from
Nonagricultural
Enterprise Sector
Additions. to cash
balances 15.2
176.0 Total
14o.5
30.2
176.0
92.7 billion rubles; capital repairs, 3 billion rubles; and expansion
of working capital, 3.9 billion rubles.
In the 1955 budget speech it was specified that
109.3 billion rubles would be furnished by the budget for centrally
planned investment. 150 This plan-figure did not, however, take
into account the price reductions of 1 July 1955, which slightly reduced
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the budget allocations required. On the other hand, there were
significant supplementary allocations for capital investment fin-
anced by the budget during the course of 1955. 151/ After con-
sidering both factors, it is estimated that total centralized
investment financed through the budget was 109.1 billion rubles.
Of this total, 16.8 billion rubles went to state agriculture (see
(2), below) and 1.1 billion rubles went to centralized investment
in educational and health construction (see c, (2), p. 74, below),
leaving 91.2 billion rubles for centralized investment in the Non-
agricultural Enterprise Sector. In addition, it is estimated that
1.5 billion rubles were provided by the budget for decentralized
investment, bringing total budget grants for investment in this
sector to 92.7 billion rubles.
Budget grants for capital repairs were estimated
as 3 billion rubles (see B, 3, a, (1), p. 33, above).
. Capital transfers of 3.9 billion rubles for work-
ing capital are the difference between total planned budget grants
for expansion of working capital, 5.5 billion rubles, 152 and grants
to state farms, 1.6 billion rubles (see C, 3, a, (3), p. 56, above).
(2) Agricultural Enterprise Sector.
This entry is the sum of transfers for new fixed
investment, 16.8 billion rubles; capital repairs, 3.8 billion rubles;
and expansion of working capital, 1.9 billion rubles.
Budget grants for new fixed investment are equal
to total new fixed investment in state agriculture less that financed
from other sources. Total investment in state agriculture. has been
estimated at 18.8 billion rubles (see C, 3, a, (2), (a), p. 55,
above). From this amount must be deducted 1 billion rubles for state
farm investment under and outside the centralized investment plan
(see C, 2, a, (1), (b), p. 48, above) and 1 billion rubles for state
farm investment from amortization allowances. The.1 billion rubles
from amortization allowances is the difference between total allow-
ances, 2.6 billion rubles, and the portion devoted to capital repairs,
1.6 billion rubles (see C, 3, a, (1), p. 53, above). Deduction of a
total of 2 billion rubles from the investment. figure of 18.8 billion
rubles leaves 16.8 billion rubles to be financed from budget grants.
Because it is assumed that all state farm capital
repairs were financed from amortization allowances, only MTS capital
repairs, estimated at 3.8 billion rubles (see C, 3, a, p. 53, above)
are considered to have been financed by budget grants.
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The working capital figure is the sum of grants
to state farms, 1.6 billion rubles, and grants to MTS's, 0.3 bil-
lion rubles (see C. 3,. a, (3), p. 56) above).
b. Net Loans to Other Sectors.
(1) Household Sector.
Household borrowing is for private housing con-
struction. In urban areas, households borrow from the Communal Bank;
in rural areas, from the Agricultural Bank.
New Agricultural Bank loans for private housing
in 1956 were planned at 1.4 billion rubles out of total new loans of
6.4 billion rubles, 153 or 22 percent of the total. For 1955, it is
known that new nonhousing loans were 4.4 billion rubles. 154 If the
1956 relationship is applied to 1955, total new loans in 1955 become
5.6 billion rubles and new housing loans 1.2 billion rubles. Repay-
ments on housing loans in 1955, however, amounted to 330 million ru-
bles. 155 Thus net Agricultural Bank loans for housing were 0.9 bil-
lion rubles.
New Communal Bank housing loans in 1955 were 850
million rubles. 156 If it is assumed that repayments were at the
same rate as for the Agricultural Bank (330 out of 1,200, or 28 per-
cent), then repayments to the Communal Bank were 240 million rubles,
and its net loans were 850 less 240, or 610 million rubles. Net
Communal Bank loans are therefore estimated at 0.6 billion rubles.
(2) Nonagricultural Enterprise Sector.
This entry consists of the increase in short-term
loans by the State Bank, 9.5 billion rubles, and long-term loans by
the Industrial and Trade Banks, 2 billion rubles.
I The change-in short-term loans is. estimated by
subtracting State Bank credit outstanding on 1 January 1955 from credit
outstanding on 1 January 1956. State Bank credit outstanding on
1 January 1955 was 190 billion rubles. 15 Credit outstanding on
1 January 1957 was reported as 243.6 billion rubles and 22.2 percent
above the 1 January 1956 level. 158 Credit outstanding on 1 January
1956 must therefore have been 200 billion rubles, indicating a 10-
billion-ruble increase during 1955.
The 10-billion-ruble increase in short-term loans
in 1955 went partly to agricultural enterprises and partly to nonagri-
cultural enterprises. On 1 January 1956, out of total State Bank
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credit outstanding, 8.5 percent was devoted to agriculture and agri-
cultural procurement. 159 If it is assumed that agriculture alone
accounted for slightly over half of the 8.5 percent, then 5 percent
of bank credit outstanding may be attributed to agricultural enter-
prises and 95 percent to nonagricultural enterprises. If it is
further assumed that the increase in short-term credit during 1955
was distributed in the same proportion as credit outstanding on
1 January 1956, then the Nonagricultural.Enterprise Sector received
.95 percent of the estimated 10-billion-ruble increase, or 9.5 bil-
lion rubles. This calculation leaves 5 percent, or 0.5 billion
rubles, for the Agricultural Enterprise Sector.
Long-term borrowing of the Nonagricultural Enter-
prise Sector consists of loans from the Trade and Industrial Banks.
Trade Bank loans are estimated to have increased in 1955 by 1.5 bil-
lion to 2 billion rubles on the basis of (a) a planned increase in
195+ of 1.4 billion rubles in funds available to the Bank for lend-
ing, 160 and (b) a 1955 statement that the Bank annually granted
credits amounting to "about" 2 billion rubles. 161. Industrial
Bank loans are very small. According to a 195+ Soviet statement,
total loans granted during the period 19+1-53 amounted to "more than
1 billion rubles." 162 The total increase in Trade and Industrial
Bank loans in 1955 is therefore estimated at 2 billion rubles.
(3) Agricultural Enterprise Sector.
Loans to the Agricultural Enterprise Sector con-
sist of the increase in short-term loans by the State Bank, 0.5 bil-
lion rubles, and net long-term loans by the Agricultural Bank collec-
tive farms, 2.1 billion rubles. Short-term loans to the Agricultural
Enterprise Sector were estimated at 0.5 billion rubles (see (2),
p. 72, above). Net long-term loans of 2.1 billion rubles are the
difference new loans of 4.4 billion rubles 163 and repayments of
2.3 billion rubles. The latter is calculated from a Soviet statement
that collective farms repaid only 85.8 percent of scheduled repayments
of 2,685 million rubles in 1955. 164
. Net loans granted by the banking system in 1955
may be summarized as follows:
Bank
Household
Sector
Nonagricultural
Enterprise Sector
Agricultural
Enterprise Sector
Total
State Bank
9.5
0.5
10.0
Agricultural Bank
0.9
2.1
3.0
Communal Bank
o.6
0.6
Trade Bank and
Industrial Bank
2.0
2.0
Total
1.5
11.5
2.6
15.6
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c. Government Capital Formation.
(1) Capital Repairs.
In 1956, capital repairs to health and educational
facilities were planned at 2.3 billion rubles. 165 On this basis it
is estimated that similar outlays in 1955 were 2 billion rubles. In
addition, 1 billion rubles have been added to allow for capital re-
pairs to military facilities and equipment. Total government capital
repairs are thus estimated as 3 billion rubles.
(2) New Fixed Investment.
This entry is the sum of Government Sector invest-
ment in health and education, 2.1 billion rubles, and military invest-
ment, 3 billion rubles.
Investment in health and education by the Govern-
ment Sector is the sum of centrally planned and extraplan investment
in schools and health facilities by republic and local authorities.*
Their investment in school construction is estimated at 0.5 billion
rubles on the basis of planned school construction of 363 million
rubles in 1955 by the Ministry of City and Rural Construction. 166
Investment by the union-republic Ministries of Health is estimated at
0.6 billion rubles on the basis of estimated 1953 investment of 448
million rubles. 167 In addition, expenditures for the acquisition
of fixtures and equipment outside the centralized investment plan are
estimated at 1 billion rubles on the basis of a planned 1956 outlay
of 1.2 billion rubles for this purpose'. 168 Total Government Sector
investment in health and education is therefore estimated at 2.1 bil-
lion rubles.
Government investment in the construction of
airfields, barracks, and the like by the military forces is estimated
notionally at 3 billion rubles out of the total explicit defense appro-
priation of 107.4 billion rubles.
(3) Other.
This category includes additions to gold stocks,
state reserve purchases, expenditures for investment project planning
* In addition, the Nonagricultural Enterprise Sector is estimated
to have invested 2.9 billion rubles in education and health facilities
attached to its establishments (see Appendix A, Table 9, p. 105, below).
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bureaus, and minor investment expenditure such as outlays for geologi-
cal surveys. These expenditures are estimated at 15 billion rubles
in 1955 in Appendix A, Table 9.*
An accounting problem arises in connection with
the government state reserve program. Under Soviet budget accounting
practice, gross purchases for state reserves are treated as budget
expenditures., and gross sales from state reserves are treated as bud-
get revenues. Because of the complete lack of information on the
magnitude of state reserve purchases and sales,' however, any estimate
of their size would be pure guesswork. Under these circumstances
the least questionable procedure appears to be to avoid a separate
estimate of state reserve purchases and to include them in a total
Government Sector capital formation figure. Similarly, no allowance
has been made for budget revenues resulting from sales of state
reserve stocks. One effect of this procedure is to overstate invest-
ment in the end-use distribution in III, below, since sales from state
reserves should be deducted from government capital formation to obtain
a net figure for additions to inventories. A second effect of this
procedure is to overstate "other enterprise taxes." These were com-
puted as unspecified budget revenues (see Appendix A, Table 8**) and
therefore include proceeds from state reserve sales. Although these
two effects are regrettable, the net result of this procedure seems.
to be less misleading than that of the alternative procedure of esti-
mating state reserve sales and purchases completely arbitrarily.
This entry represents the portion of the budget sur-
plus not devoted to offsetting the expansion of State Bank short-term
credit. The total budget surplus was 24.8 billion rubles. 169
Total expansion of State Bank credit was computed at 10 billion.rubles
(see b, (2), p. 72, above), of which 0.4 billion rubles was offset
by consumer cooperative payments to the State. Bank from profits (see
B) 2, a, (4), p. 29, above). It is assumed that the remaining 9.6
billion rubles of State Bank credit expansion was offset by the bud-
get surplus, in accordance with Soviet doctrine. 170 The rest of-
the surplus, 15.2 billion rubles, is assumed to represent an increase
in the Ministry of Finance budget account at the State Bank and thus
an addition to the cash balances of the Government Sector.
e. Saving.
(See D, 2, e, p. 67, above.)
P. 105, below.
P. 104, below.
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f. Capital Transfers from the Household Sector.
(1) Net Purchase of Government Bonds.
(See A, 3, b, p. 19, above.)
(2) Additions to Savings Deposits.
(See A, 3, b, p. 19, above.)
Capital Transfers from the Nonagricultural Enterprise
Sector.
In 1955 it was planned that enterprises would transfer
to the budget excess working capital in the amount of 5.3 billion
rubles.
E. Consolidated National Accounts.
Consolidated national accounts are obtained by combining the
sector accounts and, eliminating mutual purchases and sales, in order
to show only final products. Thus, when the same transaction is
listed on the.debit side of one sector's production account and on
the credit side of,another sector's production account, the trans-
action is omitted from both debits and credits in the Consolidated
Production Account. The total of each consolidated account repre-
sents an important measure of Soviet economic performance. The total
of the Consolidated Production Account is GNP at established prices.
The total of the Consolidated Appropriation Account is national in-
come at factor cost. The total of the Consolidated Capital Account
is gross capital-formation.
1. Production Account.
Account 12,* the Consolidated Production Account, con-
tains the sums of the corresponding. entries in the sector production
accounts. In order to show GNP and gross national expenditure at
established prices, however, subsidies are eliminated from the credit
side (where they appear in the sector production accounts) and are
explicitly deducted from the debit side of the Consolidated Production
Account.
Consolidated national income is the sum of national
income originating in the Nonagricultural Enterprise Sector, 527.2
* Account 12 follows on p. 77.
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Soviet National Accounts, 1955: Production Account
of the Consolidated National Accounts
National income'
948.0
Capital consumption
allowances
54.5
Indirect taxes
326.5
Less: subsidies
47.0
Statistical discrepancy
3.8
Gross. National
Product at Estab-
lished Prices
1,285.8
Consumers' expenditure on
goods and services
744.1
Government current expendi-
tures on goods and services
279.2
Gross capital formation
262.5
Gross National Expendi-
ture at Established
Prices
1,285.8
billion rubles (see B, 1, d, p. 25, above); in the Agricultural Enter-
prise Sector, 289.2 billion rubles (see C, 1) d, p. 42, above); and
in the Government Sector, 131.6 billion rubles. National income origi-
nating in the Government Sector is the sum of wages of government
employees, 105.6 billion rubles (see D, 1, a, p. 57, above); social
insurance payments, 3-.7 billion rubles (see D, 1"b, p. 61, above);
and military subsistence, 22.3 billion rubles (see D, 1, c, p. 62,
above).
I
b. Capital Consumption Allowances.
This entry is the sum of allowances in the Nonagricul-
tural Enterprise Sector, 51.9 billion rubles (see B, 1, c, p. 24)
above), and in the Agricultural Enterprise Sector, 2.6 billion rubles
(see C, 1, c, p. 41, above).
This entry is the sum of indirect taxes paid by the
Nonagricultural Enterprise Sector, 324.5 billion rubles (see B, 1,
b, p. 23, above), and by the Agricultural Enterprise Sector, 2 bil-
lion rubles (see C, 1, b, p. 41, above).
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Total subsidies are the sum of subsidies to the Non-
agricultural Enterprise Sector, 32 billion rubles (see B, 1, g, p. 26)
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above)., and to the Agricultural Enterprise Sector, 15 billion rubles
(see C, 1) f, p. 46, above).
e. Statistical Discrepancy.
The consolidated statistical discrepancy is the dis-
crepancy in the Nonagricultural Enterprise Sector of 3.8 billion
rubles (see B. 1, e, p. 25, above).
f. Consumers' Expenditure on Goods and Services.
This entry includes both money expenditures on. goods
and services and the receipt of goods and services as income-in-kind.
It is the sum of purchases by the Household Sector from the Nonagri-
cultural Enterprise Sector, 524.4 billion rubles; from the Agricul-
tural Enterprise Sector, 197.4 billion rubles; and from the Government
Sector (in the form of military subsistence), 22.3 billion rubles
(see A. 2) b, p. 7, above).
g. Government Current Expenditure on Goods and Services.
This entry-is the cost of government services (see D;
1, d, p. 64, above).
h. Gross Capital Formation.
This entry is the sum of gross capital formation in
the Household Sector (new fixed investment), 9.4 billion rubles (see
A, 3, a, p. 18, above); in the Nonagricultural Enterprise Sector,
176.4 billion rubles (see B, 3, a, p. 33, above); in the Agricultural
Enterprise Sector, 53.6 billion rubles (see c, 3, a, p. 53, above);
and in the Government Sector, 23.1 billion rubles (see D, 3, c, p. 74,
above).
2. Appropriation Account.
Account 13,* the Consolidated Appropriation Account, is
compiled by combining the entries in the sector appropriation accounts
according to the type of payments made, rather than according to
intersectoral transactions.
a. Wages and Other Cash Household Income.
This entry is the sum of wages and other cash house-
hold income originating in the Nonagricultural Enterprise Sector,
Account 13 follows on p. 79.
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Account 13
Soviet National Accounts, 1955: Appropriation Account
of the Consolidated National Accounts
Wages and other cash
household income
574.4
Income-in-kind
181.7
Social insurance
26.5
Direct taxes and related
payments of enterprises
110.1
Saving of enterprises
55.3
National income at factor
cost
948.0
National income
National income at factor
cost 948.0
948.0
358.8 billion rubles (see BY 2, a, (1) through (5), p. 26, above); in
the Agricultural Enterprise Sector, 110 billion rubles (see C, 2, a,
(1) through (4), p. 48, above); and in the Government Sector, 105.6 bil-
lion rubles (see D. 1, a, p. 57, above).
This entry is the sum of income-in-kind originating in
the Nonagricultural.Enterprise Sector, 14.4 billion rubles (see B. 2,
a, (6) and (7), p. 31, above); in the Agricultural Enterprise Sector,
145 billion rubles (see C, 2, a, (5), p. 51, above); and in the Govern-
ment Sector (military subsistence); 22.3 billion rubles (see D, 1, c,
p. 62, above).
This entry is the sum of social insurance payments by
the Nonagricultural Enterprise Sector, 21.4 billion rubles (see B,
2) b, p. 31, above); the Agricultural Enterprise Sector, 1.4 billion
rubles (see C. 2) b, p. 51, above); and by the Government Sector,
3.7 billion rubles (see D, 1, b, p. 61, above).
d. Direct Taxes and Related Payments of Enterprises.
This entry is the sum of all direct taxes and of pay-
ments to the banking system by cooperatives in the Nonagricultural
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Enterprise Sector, 103.2 billion rubles (see B, 2, b, p. 31, above);
and of direct taxes of the Agricultural Enterprise Sector, 6.9 billion
rubles (see Cl 2) b, p. 51, above).
e. Saving of Enterprises.
Enterprise saving was 29.4 billion rubles in the Non-
agricultural Enterprise Sector (see B. 2, c, p. 32., above) and 25.9
billion rubles in the Agricultural Enterprise Sector (see C, 2, c,
P. 52,. above).
3. Capital. Account.
Account 14,* the Consolidated Capital Account, is obtained by
combining the sector capital accounts, with one adjustment. Saving de-
voted to the formation of purely monetary assets is deducted from both
sides of the account in order to obtain real capital formation and saving.
a. Gross Capital Formation.
(1) Capital Repairs.
Total capital repairs are the sum of capital re-
pairs in the Nonagricultural Enterprise Sector, 34.1 billion rubles
(see B, 3, a, p. 33, above); in the Agricultural Enterprise Sector,
7.9 billion rubles (see C, 3, a, p. 53, above); and in the Government
Sector, 3 billion rubles (see D, 3, c, p. 74, above).
(2) New Fixed Investment.
Total new fixed investment is the sum of invest-
ment in the Household Sector, 9.4 billion rubles (see.A, 3, a, p. 18,
above); in the Nonagricultural Enterprise Sector, 127 billion rubles
(see B. 3, a, p. 33, above); in the Agricultural Enterprise Sector,
43 billion rubles (see C, 3, a, p. 53, above); and in the Government
Sector, 5.1 billion rubles (see D, 3, c, p. 74, above).
(3) Additions to Inventories.-
Additions to inventories were 15.3 billion rubles
in the Nonagricultural Enterprise Sector (see B, 3, a, p. 33, above)
and 2.7 billion rubles in the Agricultural Enterprise Sector (see C,
3, a, p? 53, above).
-Account 1E follows on p. 81.
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Gross capital formation
262.5
Capital repairs
45.0
New fixed investment
184.5
Additions to inven-
tories
18.0
Other
15.0
Soviet National Accounts, 1955: Capital Account
of the Consolidated National Accounts
Statistical discrep-
ancy 6.9
Gross capital
formation
(4) Other.
Account 14
Capital consumption
allowances
54.5
Saving
236.4
Less: Addition to
monetary
assets 21.5
Gross real
269.4 saving 269.4
Other investment in the Government Sector was
15 billion rubles (see D, 3, c, p. 74, above).
b. Statistical Discrepancy.
The statistical discrepancy in the Nonagricultural
Enterprise Sector was 6.9 billion rubles (see B. 3, d, p. 37) above).
c. Capital Consumption Allowances.
This entry is the sum of allowances in the Nonagri-
cultural Enterprise Sector, 51.9 billion rubles (see B, 3) f, p. 37,
above), and in the Agricultural Enterprise Sector, 2.6 billion rubles
(see C, 3) d, p. 57, above).
d. Saving.
Total saving is the sum of saving in the Household
Sector, 40.6 billion rubles (see A, 3, d, p. 22, above); in the Non-
agricultural Enterprise Sector, 29.4 billion rubles (see B. 3, e,
p. 37, above); in the Agricultural Enterprise Sector, 25.9 billion
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rubles (see C, 3, c) p. 56, above); and in the Government Sector,
1+0.5 billion rubles (see D, 3, e, p. 75, above).
e. Addition to Monetary Assets.
Saving devoted to the formation of cash balances,
enterprise bank deposits, and receivables was 2.5 billion rubles in
the Household Sector (see A, 3, c, p. 21, above); 3.8 billion rubles
in the Nonagricultural Enterprise Sector (see B, 3, c, p. 36, above);
and 15.2 billion rubles in the Government Sector (see D, 3) d, p. 75,
above).
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III. Gross National Product by End Use.
The composition of Soviet output is revealed by the distri-
bution of gross national product (GNP) into end-use categories
of consumption, investment, defense, and administration. In
A, below, GNP at established prices, as calculated in the Con-
solidated Production Account (see II, E, 1, p. 76, above), is
distributed by end use. In B, below, the end use distribution
of GNP is adjusted to a factor cost basis in order to reflect
more closely the allocation of resources among end uses.
GNP at established prices is classified into end-use
categories by regrouping the expenditures in the Consolidated
Production Account (see II, E, 1, p. 76, above). Government
current expenditure on goods and services is distributed
according to purpose, and military capital formation is trans-
ferred from Gross Capital Formation into Defense. Research and
development outlays are classsified as Investment.. The components
of each end-use category are shown in Table 1* and are discussed
below.
1. Consumption.
a. Consumers' expenditure on goods and services is
taken directly from the Consolidated Production Account (see II,
E, 1, p . 76, above) .
b. Communal expenditure -on goods and services for
consumption is composed of government current expenditure on
health and education plus total expenditure of public organi-
zations (excluding the Communist Party). The 96.7-billion-ruble
figure is the sum of wages, social insurance payments, and
materials purchases incurred in the health and education activi-
ties of the government as well as all activities of trade unions
and miscellaneous recreational and educational public organizations
(see II, D, 1, p. 57, above). Communist Party expenditures of
2.6 billion rubles have been deducted from total expenditures of
public organizations for Consumption and are classified below
under Administration.
Table .1 follows on p . 84.
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Distribution of Soviet Gross National Product
at Established Prices, by End Use
1955
1.
Consumption
84o.8
a.
Consumers' expenditure on goods
and services
744.1
.
b.
Communal expenditure on goods
and services
96.7
2.
Investment
263.5
a.
Gross capital formation
262.5
b.
Less: Military capital formation
4.0
c.
Research and development programs
5.0
144.6
a.
Military procurement and operations
57.5
b.
Government current purchases for
defense programs
32.4
c.
Military pay
28.4
d.
Military subsistence
22.3
e.
Military capital formation
4.0
4.
Administration
36.9
a.
General administration
12.5
b.
Internal security
7.7
c.
General agricultural programs
7.9
d.
Communist Party
2.6
e.
Other
6.2
1,285.8
From gross capital formation (see II, E, 1, p. 76,
above) is deducted the summof military capital repairs, 1 billion
rubles, and military fixed investment, 3 billion rubles (see II,
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D, 3, p. 69, above). This military capital formation is classified in the
defense end use. To gross capital formation is added government outlays
for research and development programs (see II, D,,l, p. 57, above).
3. Defense.
The total defense end use of 144.6 billion rubles is the sum of
the components indicated. Items a, b, c, and d are taken from II, D, 1,
p. 57, above. Item e is from II, D, 3, p. 69, above.
The total of defense expenditures derived in this report re-
presents total. explicit expenditures for defense as reported in the budget
plus an estimate of militarized internal security expenditures and a re-
sidual of expenditures from the budget category, Financing the National
Economy. The total of these groups of expenditures,. 144.6 billion rubles,
may be compared with an alternative figure derived by costing, in some detail,
estimates of Soviet military posture and activities during 1955. This latter
figure, 173.4 billion rubles, however, is not strictly comparable with the
estimate derived for national income purposes. 171 Included in the larger
total but not the defense estimate for this report are military pensions,
payments to reserve members while on reserve duty by economic enterprises,
and an estimate of'military research and developmental expenditures charged
to economic enterprises and the social-cultural sector of the economy.
Military pensions are treated in this report as transfer pay-
ments from the government to individuals, and the payments to reserve
members while on reserve duty by economic enterprises have been included
in the calculation of the economic enterprise wage bill. The financing
of military research and development performed by the educational system
is already included in the social-cultural vote of the budget and appears
in the present accounts as communal consumption. Additionally, it is quite
probable that a portion of the government purchase of research and develop-
ment from economic enterprises represents military-oriented activity.
The two estimates of defense expenditures may be adjusted in
the following manner:
National Income Estimate
Cost-Derived Estimate
144.6
Total
173.4
plus:
less:
a.
Military-oriented re-
a.
Military pensions
2.9
search and development
b.
Payments to reserve
performed by economic
members by economic
and social-cultural
enterprises
2.3
enterprises
8.0
152.6
168.2
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The resulting difference, 15.6 billion rubles, is quite small considering
the uncertainties surrounding these two estimates.
4. Administration.
a. General administration expenditures are the sum of wages,
social insurance payments, and materials purchases for this purpose (see
II) D, 1, p. 57, above).
b. Internal security expenditures are the sum of wages and
materials purchases (see II, D, 1, p. 57, above).
c. Expenditures on general agricultural programs are the sum
of wages, social insurance payments, and materials purchases (see II, D,
1, p. 57, above).
d. Communist Party expenditures are the sum of wages, social
insurance payments, and materials purchases (see II, D, 1, p. 57, above).
e. Miscellaneous budget expenditures were assumed (see II,
D, 1, p. 57, above) to represent purchases of goods and services from
the Nonagricultural Enterprise Sector. It is assumed here that these
purchases were for general administrative purposes rather than for con-
sumption, investment, or defense.
On the basis of this end-use distribution, appropriate
ruble-dollar ratios may be applied to convert Soviet GNP at established
prices from rubles into dollars. Preliminary ratios in- 50X1
dicate that 1955 Soviet GNP of 1,285.8 billion 1955 rubles was equivalent
to about 146 billion 1955 US dollars.
B. GNP at Adjusted Factor Cost.
It is desirable to adjust the end-use distribution of GNP from
an established price basis to a factor-cost basis because the latter more
accurately reflects the allocation of resources by purpose in the USSR.
This is so primarily because of the unproportionate distribution among
end uses of indirect taxes, which are included in established prices but
are not payments to factors of production for services rendered. Because
these indirect taxes, especially the turnover tax, fall most heavily upon
consumption expenditures, their inclusion in GNP at established prices
increases the relative importance of consumption in total GNP. In order
to show more accurately the distribution of resources to consumption, in-
vestment, defense, and administration, it is necessary to calculate total
GNP and its four end-use components in terms of factor costs -- that is,
payments for resources devoted to each of these end uses. GNP at estab-
lished prices is adjusted to a factor-cost basis by deducting indirect
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taxes (including imputed turnover taxes in income-in-kind) and the statis-
tical discrepancy and by adding subsidies, which are payments to factors
of production that are not included in established prices. If capital
consumption allowances are deducted from GNP at adjusted factor cost, net
national product or national income at adjusted factor cost is obtained.
The interrelation of these income and product concepts in 1955 is shown
in Table 2.
Interrelation of Soviet Gross National Product
and National Income Magnitudes
1955
GNP at established prices 1,285.8
368.0
Explicit turnover taxes 242.4
Imputed turnover taxes 41.5
Other enterprise taxes 84.1
Less:
Statistical discrepancy.
3.8
Plus:
Subsidies
47.0
Equals:
GNP at adjusted factor cost
961.0
Less:
Capital consumption allowances
54.5
Equals:
Net national product or national
income at adjusted factor cost
906.5
The breakdown of GNP at adjusted factor cost by end use is obtained
by distributing indirect taxes, subsidies, and the statistical discrepancy
among the four end uses and deducting them from (or, when appropriate, add-
ing them to) the end-use totals at established prices. The adjustments are
shown in Table 3.*
In Table 3, turnover taxes are distributed by end use by identify-
ing final product expenditures subject to turnover tax (column B) and, in
the absence of information on tax rates on individual commodities or groups
of commodities, by applying the average effective rate of taxation (column
C). Both explicit turnover taxes actually collected and imputed turnover
taxes included in the portion of farm household income-in-kind priced at
state retail prices (which include turnover tax) must be deducted. The
average effective rate of turnover taxation is determined by dividing ex-
plicit turnover tax collections by total explicit final product expenditures
subject to the tax. The resulting rate of 42.85 percent in 1955 is applied
to the expenditures in order to deduct the appropriate amount of turnover
tax from each end use (column D).
Table 3 follows on p. 88.
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Table 3
Derivation of Soviet Gross National Product at Adjusted Factor Cost, by End Use
1955
End Use
Consumption
Household state and cooperative retail
purchases of goods
and services
Farm household income-
in-kind
Forced labor subsistence
Materials purchases for
health and education
Materials purchases of
public organizations
Building materials
Inventories
Military subsistence
Petroleum products
Materials purchases
Subtotal
Total
Turnover Tax at GNP Less
Expenditures Subject Effective Rate a/* Turnover Tax
GNP at Established Prices to Turnover Tax 42.85 Percent of B A - C Other Enterprise Taxes
458.4
97.0 c/
9.4
28.1
4.2
84o.8 597.1 255.9 584.9
9.1 J
13.7 J
22.8
22.3
3.1
144.6
25.4
to
133.7
10.5
17.3!
36.9
17.3
7.4
29.5
1.9
1,285.8
662.6
283.9
1 O, 01.9
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Table 3
Derivation of Soviet Gross National Product at Adjusted Factor Cost, by End Use
1955
(Continued)
Household state and
cooperative retail
purchases of goods
and services
Farm household income-
in-kind
Forced labor subsistence
Materials purchases for
health and education
Materials purchases of
public organizations
Building materials
Inventories
Military subsistence
Petroleum products
Materials purchases
Subtotal
Total
GNP Less Indirect Explicit/Expenditures GNP at Adjusted
Taxes Statistical Nonagricultual =duct s of Agricultura Factor Cost
D- E Discrepancy A/ Subsidies h Agrial Origin A/ Subsidies F -G+ H+ J
227.3 J
0
7.5 J
14.0
0
535.3 3.8 21.0 248.8 13.E 65 6.4
0
1.4 n/
1.4 0.1 241.8
17.8
0
17.8
0
0 0 .0 27.6
917.8 1 38 32.0 268.0 12 --0 1.0
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Table 3
Derivation of Soviet Gross National Product at Adjusted Factor Cost, by End Use
1955
(Continued)
Turnover tax collections Explicit expenditures subject to turnover tax equal total
a. Effective rate of turnover tax Explicit expenditures subject to turnover tax'
final product expenditures subject to turnover tax minus imputed transactions subject to turnover tax (the portion of farm household
income-in-kind priced at state retail prices). Then 22497.0 = 54= 42.85 percent.
b. Other Enterprise. Taxes, totaling 84.1 billion rubles, are distributed by end use on the assumption that they were passed along equally in each
ruble of explicit final product sales. Because indirect taxes of the Agricultural Enterprise Sector are negligible, sales of this sector are dis-
regarded, and total Other Enterprise Taxes are distributed according to the distribution by end use of explicit final product sales of the Non-
agricultural Enterprise Sector. The distribution of these sales is estimated in Table 4. On the basis of these calculations the percentage
shares in its sales of the different end-use categories in 1955 were as follows: Consumption, 59.0; Investment, 26.3; Defense, 12.5; and Administra-
tion, 2.2. Application of these percentages to the 84.1-billion-ruble total yields the distribution shown in column E.
c. Of total farm household income-in-kind of 145 billion rubles, 97 billion rubles is the portion priced at state retail prices and 48 billion
rubles the portion priced at collective farm market prices. (See Appendix B,section'4.)
d. Purchases of building materials by households and collective farms through state and cooperative trade. '''
e. Assumed equal to the increase in stocks of wholesale and retail trade organizations, 13.7 billion rubles. Q J4
f. The sum of materials purchases for General Administration (3.8.), Internal Security (3.8), General Agricultural Programs (5.3), Communist
Party (1.3), and half of Miscellaneous Purchases (3.1).
g Because the largest statistical discrepancy in the basic accounts occurs in household consumption expenditures, the entire discrepancy is
deducted from the consumption end use.
h. Of total nonagricultural subsidies of 32 billion rubles, 16 billion rubles were devoted to compensating agricultural procurement organizations
for price differentials; these subsidies are therefore attributed to the consumption end use. Of the remaining 16 billion rubles, it is assumed
that 5 billion rubles were paid to consumption-oriented activities, such as housing and municipal services; that 10 billion rubles were paid to
investment-oriented activities, such as production of basic raw materials like timber and coal; and that 1 billion rubles were devoted to the
defense end use. The last figure is a notional allowance intended to acknowledge the use of basic raw materials, the production of some of
which is subsidized, in defense production. Allowance for the sale of final products to the armed forces at less than full cost of production
has been made in the accounts in the entry of 32.4 billion rubles for defense-oriented research and development programs (see II, D, 1, c, (7),
p. 64, above).
1. These expenditures relate to food products only. It is assumed that expenditures on all products of agricultural origin were distributed
by end use in the same proportions as those for food.
J. Agricultural subsidies are distributed by end use in the same proportions as estimated expenditures on agricultural products in column I,
where, of the total of 268 billion rubles, Consumption accounts for 92.8; Investment, 0:5; and Defense, 6.7 percent. Application of these per-
centages to the 15-billion-ruble total for agricultural subsidies yields the distribution in column J.
k. Estimated at 49.5 percent of total expenditures of 459.2 billion rubles. This is the share which food purchases represented of total
purchases through state and cooperative retail trade in 1955?
6
1. Based on the military subsistence distribution of 80 percent for food and 20 percent for clothing. fl/
m. Arbitrarily assumed to be half of the total of 28.1 billion rubles. ,.,,,~
n. Assumed equal to the increase in foodstuff stocks in wholesale and retail trade and industry, 1.4 billion rubles. 111
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Then Other Enterprise Taxes are distributed by end use (column E)
on the assumption that they were passed along by enterprises equally in
each ruble of explicit final product sales. The necessary distribution
by end use-of explicit final product sales of the Nonagricultural Enter-
prise Sector -- used to distribute total Other Enterprise Taxes because
Other Enterprise Taxes of the Agricultural Enterprise Sector are negli-
gible -- is calculated in Table 5.*
In addition to adjustments for indirect taxes, Table 3** contains
adjustments for the statistical discrepancy in-the basic GNP account
(column G) and for nonagricultural and agricultural subsidies (columns H
and J).
The resulting end-use distribution of GNP at adjusted factor cost
is.compared in Table 4 with the end-use distribution of GNP at established
prices. This table reveals that the effect of the factor-cost adjustment
is to increase the shares of investment and defense in total GNP at the
expense of consumption. The factor-cost distribution more accurately re-
flects the pattern of Soviet resource distribution, for reasons explained
above, and is therefore the more appropriate one for international com-
parisons of resource allocation patterns.
Table 4
Soviet Gross National Product at Established Prices
and at Adjusted Factor Cost, by End Use
1955
At Established Prices
At Adjusted Factor Cost
End Use
Billion,
Rubles -/
Percent
of Total
Billion
Rubles
Percent
of Total
Consumption
840.8
-65.4
566.4
58.9
Investment
263.5
20.5
241.8
25.2
Defense
144.6
11.2
125.2
13.0
Administration
.36.9
2.9
27.6
2.9
Total
1,285.8
100.0
961.0
100.0
a. From Table 1, p. 84, above.
b. From Table 3, p. 88, above.
Table.5 follows on p. 92.
P. 88, above.
The Consolidated Production Account (Account 12, p. 77, above).
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Table 5
Distribution of Explicit Final Product Sales
of the Soviet Nonagricultural Enterprise Sector, by End Use a
1955
Purchaser
-
Distribution by End Use
Sector
Account
Type of Purchase
Consumption
Investment Defense
Administration
Total
Household
Appropriation
State and cooperative retail purchases of goods
454.2
Services
48.0
Rent of state housing
4.1
Forced labor subsistence
9.4
Capital
New fixed investment
3.7
Nonagricultural
Capital
Gross capital formation
176.4
Agricultural
Capital
Total purchases from Nonagricultural Enterprise
Sector
40.4
Government
Production
Health and education
28.1
General administration
3.8
Military subsistence
22.3
Military procurement and operations
57.5
Internal security
3.8
General'agricultural programs
5.3
Defense programs
32.4
Research and development programs
5.0
Public organizations
4.2
1.3
Miscellaneous
6.2
Capital
Government capital formation
19.1
4.0
548.0
a44.6
116.2
20.4
929.2
a.. Explicit final product sales of 929.2 billion rubles are equal to total Nonagricultural Enterprise Production Account sales of
964.1 billion rubles less sales of intermediate products (sales of materials to the Agricultural Enterprise Production Account,
20.5 billion rubles) and imputed sales (imputed rent, 8.7 billion rubles, and investment-in-kind in private housing construction,
5.7 billion rubles).
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IV. National Income by Sector of Origin.
Distribution of national income by sector of origin shows the
structure of the economy by'measuring the contribution of each
of its sectors to total national income. In this part of the
report the Soviet economy has been divided into the following
sectors of origin: industry, construction, agriculture, trans-
port, communications, domestic trade, government services, and
other services. In A, below, national income at factor cost,
calculated at 948 billion rubles in the Consolidated Appropria-
tion Account (see II, E, 2, p. 7$, above), is distributed by
sector of origin and by type of factor payment. In B, p. 101,
below, national income is adjusted to remove imputed turnover
taxes included in the figure for farm household income-in-kind.
The result shows the distribution by sector of origin of net
national product or national income at adjusted factor cost,
calculated at 906.5 billion rubles in Table 2.*
A. National Income at Factor Cost.
. In Table 6,*e national income at factor cost is dis-
tributed by sector of origin and by type of factor payment. The
total of 948 billion rubles is from the Consolidated Appropria-
tion Account. National income was derived independently for
each sector of origin, with the exception of the Other Services
category. This category consists of income originated in personal
services, housing, and miscellaneous services, such as foreign
trade. It was not possible to'estimate the wage and profit
components of outlays for services and housing, and consequently
they have been included with the statistical discrepancy as a
residual in the last row of the table.
Income originated in each sector is divided into four
components: wages and other cash household income, income-in-
kind, social insurance, and profits. Because land and capital
(with minor exceptions) belong to the state, these factors of
production are not compensated with explicit factor payments re-
corded in money flows, aside from minor exceptions, such as rent
of state housing and interest on bank deposits. Although the
"profit motive" does not determine decisions to organize new
enterprises and undertake new activities in the USSR, as it does
in Western free enterprise economies, profits as reported in
* P. 87, above.
Table 6 follows on p. 94.
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Table 6
Soviet National Income at Factor Cost, by Sector of Origin and by Type of Factor Payment
1955
Type of Factor Payment
Sector of Origin
Wages and Other
Cash Household
Income
Income-in-
Kind
Social
Insurance
Profits
Total
Industry
186.6
-'0
13.4
83.5
283.5
Construction
42.0
5.7
2.1
.1.0
50.8
Agriculture
107.5
145.0
1.4
33.3
287.2
Transport
50.0
0
3.0
24.0
77.0.
Communications
4.4
0
0.3
1.0
5.7
Domestic trade
26.9
0
1.2
17.0
45.1
Government services
105.6
.22.3
3.7
0
131.6
Other services and
statistical discrepancy
49.4
8.7
1.4
7.6
67.1
Total
572.4 a
181.7
26.5
167.4
948.0
a. This figure differs from 574.4 billion rubles, the figure for wages and other cash
household income in the Consolidated Appropriation Account (see II, E, 2, p. 78, above),
by 2 billion rubles, the sum of profits distributed to cooperative members, 1.5 billion
rubles, and to state farm employees, 0.5 billion rubles. In this table these dis-
tributed profits are included in profits in order to show the distribution by sector of
total profits, whereas in the Consolidated Appropriation Account they are included in
wages and other cash household income.
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Soviet money flows do constitute a factor payment. The Soviet
profit concept has elements of rent and interest because profits
are calculated in-.relation to cost of production -- which in
turn is related to the amount of fixed and working capital
invested in the enterprise -- and are set at an average level or
within a "normal" range, 178/ implying a notion of average rate
of return.
The derivation of each figure in Table 6 is discussed
1. Industry.
a. Wages and Other Cash Household Income.
Total wages and social insurance payments in
industry are estimated at 200 billion rubles on the basis of a
study of costs in Soviet industry. L72/ The total cost of pro-
duction (sebestoimost') in Soviet industry in 1955 was estimated
at 690 billion rubles. This estimate was based on a large number
of statements in Soviet sources regarding possible savings from
reductions in sebestoimost'. For example, Kaganovich reported
in 195+ that a reduction of 1 percent in sebestoimost' in state
industry would result in a saving of 5 billion rubles 180/;
another source stated in 1956 that a 1-percent reduction in
sebestoimost' would result in a'saving of nearly 7 billion
rubles. 1 1
On the basis of a Soviet analysis of costs, 182
payments for labor are taken to be equal to 24.8 percent of total
sebestoimost' of 690 billion rubles, or 171 billion rubles.
This figure includes wages, social insurance charges, other pay-
ments (such as bonus and premium compensation to workers), and
an allowance for the cost of loading, storing,, and again loading
finished products. In addition to this, an allowance of 7 billion
rubles (l percent of sebestoimost') is included to cover labor
costs involved in loading, storing, and unloading incoming
materials in factories. The resulting total of 178 billion
rubles is the labor cost bill for industry at the plant level.
A further addition of 22 billion rubles, however, is made to
allow for wages paid by sales and supply organs of industrial
ministries, higher administrative organs, and research and design
organizations. This addition brings the labor cost bill in
industry, including social insurance,.to a total of 200 billion
rubles.
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Because social insurance payments constitute 1.4
percent and wages 19.5 percent of direct production costs in Soviet
industry, 183 average social insurance payments are estimated at
1.4 divided by 19.5, or 7.2,percent.of the industrial wage bill.
The 200 billion rubles in total labor costs is therefore 107.2
percent of the wage bill, which thus becomes 186.6 billion rubles,
leaving 13.4 billion rubles for social insurance.
b. Income-in-Kind.
None.
c. Social Insurance.
(See a, p. 95, above.)
d. Profits.
Profits. in state industry have been estimated at
76.5 billion rubles. 184 This estimate is based on the assump-
tion that actual profits in industry in 1955 fell short of planned
profits in industry by the same percentage as total profits of
state enterprises fell short of planned profits in that year.
Actual profits of state enterprises in 1955 were 123.7 billion
rubles, 18 or 86.3 percent of planned profits of 143.3 billion
rubles. 136 Actual profits in industry are therefore taken as
86.3 percent of planned profits of 88.7 billion rubles, 187 or
76.5 billion rubles. Profits of producer cooperatives in 1955
were 7 billion rubles (see II, B) 2, a, (4), p. 29, above). The
sum of these two items is 83,5 billion rubles..
2. Construction.
a. Wages and Other Cash Household Income.
Wages are reported to constitute 40 percent 2,88
of total costs in construction, estimated at 104.9 billion rubles. 189
b. Income-in-Kind.
Income-in-kind in construction consists of invest-
ment-in-kind in private housing, in the form of labor furnished by
individuals building their own houses. This item has been estimated
at 5.7 billion rubles (see II, A,-3, a, (2), p. 18, above). ,
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c. Social Insurance.
Wages and social insurance together constitute
42 percent of total costs in construction. 190/ As wages alone
account for 40 percent (see a, p. 96, abovef, social insurance
payments must be 2 percent of total costs, estimated at 104.9
billion rubles. Social insurance payments are therefore estimated
at 2.1 billion rubles.
d. Profits.
rubles. 191/
3. Agriculture.
a. Wages and Other Cash Household Income.
Total cash.household income originated in the
Agricultural Enterprise Sector is estimated at 110 billion rubles)
the difference between total payments of agricultural enterprises
to the Household Sector, 255 billion rubles, and income-in-kind,
145 billion rubles (see II, C, 2, a, p. 48, above). This cash
income figure, however, includes 0.5 billion rubles of state farm
profits distributed to state farm employees. In Table 6 this
amount has been included in the profit column and has therefore
been deducted from cash household income, leaving 109.5 billion
rubles for cash household income originating in the Agricultural
Enterprise Sector.
A further adjustment is required because all of
the income originating in the Agricultural Enterprise Sector did
not originate in agricultural activity. Farm household income
from sales of farm products on the collective farm market consists
of a payment for trade services as well as a payment for agricul-
tural production services. It is assumed that compensation for
trade services should be valued at a sum equal to the agricultural
production income foregone by farmers who chose to travel to
the markets to sell their products rather than to-remain on the
farm to engage in agricultural activity. On the basis of Appendix
B, section 2, it is estimated that cash and in-kind earnings
foregone by collective farmers selling products in the markets
amounted in 1955 to 2 billion rubles. Accordingly, in Table 6,
this sum is deducted from income originating in agriculture and
classified as income originating in trade. Deduction of 2 billion
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rubles from total cash household income of the Agricultural
Enterprise Sector of 109.5 billion rubles leaves 107.5 billion
rubles for income originating in agricultural activities.
b. Income-in-Kind.
(See Appendix B) section 4.)
c. Social Insurance.
(See II) C, 2, b, p..51, above.)
d. Profits.
Profits are the sum of profits distributed to
state farm employees, 0.5 billion rubles; direct taxes, 6.9 billion
rubles; and saving, 25.9 billion rubles (see II, C, 2, p. 51, above).
4 Transport.
a. Wages and Other Cash Household Income.
A study of costs in transport 192 estimates total
labor cost, consisting of wages and social insurance payments, at
53 billion rubles. A social insurance charge of 6 percent of
the wage bill is assumed for transport as a whole, on the basis of
the 6.7-percent rate applied in sea and river transport, 193
which is thought to be higher than the average because of the
more hazardous working conditions of water transport compared to
land transport. Then 53 billion rubles represents 106 percent of
the wage bill, which becomes 50 billion rubles, leaving 3 billion
rubles for social insurance payments.
b. Income-in-Kind.
None.
c. Social Insurance.
(See a, above.)
d. Profits.
Profits in transport are estimated at 24 billion
rubles. 194
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5. Communications.
a. Wages and Other Cash Household Income.
Total revenue in communications in 1955 amounted
to 8.4 billion rubles.-195 Profits, estimated at 1 billion
rubles (see d, below), are deducted to obtain total costs of
7.4 billion rubles. As wages constitute 60 percent of costs in
communications, 196/ the wage bill in 1955 is estimated at
4.4 billion rubles.
b. Income-in-Kind.
None.
c.. Social Insurance.
As-the social insurance rate in communications is
6.1 percent of the wage bill, 197 social insurance charges are
estimated at 0.3 billion rubles.
Total profit in transport and communications in
1955 was planned at 25.2 billion rubles..198/ Deduction of profits
in transport, 24 billion rubles (see 4, d, p. 98, above), leaves
1.2 billion rubles for communications. This figure has been
adjusted downward to 1 billion rubles to allow for the underful-
fillment of the state enterprise profit plan. 199/
6. Domestic Trade.
a. Wages and Other Cash Household Income.
Total labor cost, consisting of wages and social
insurance charges, in domestic trade is estimated at 26.1 billion
rubles, the sum of wages in trade proper at 20.8 billion rubles,
and in public dining at 5.3 billion rubles.
Labor costs for direct retail trade workers in
1955 were 9.4 billion rubles. 200 This group numbered 1,328,100
out of a total labor force in trade (excluding public dining)
of 2,937,500, or 45.2 percent. 201/ On the assunq)tion that labor
cost per worker for all workers was the same as for direct
retail trade workers, the figure of 9.4 billion rubles is taken as
45.2 percent of the total labor cost, which then becomes 20.8
billion rubles.
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Labor costs for direct workers in public dining estab-
lishments of all ministries were 4-5 billion rubles. 2L2/ In estab-
lishments of the Ministry of Trade, direct workers were,84.2 percent of
the total labor force. 203 On the assumptions that labor cost per worker
was the same for indirect workers as for direct workers and that direct
labor was the same share of'the total in other trade organizations as in
the Ministry of Trade, 4.5 billion rubles was taken as 84.2 percent of the
total labor cost, which is therefore estimated at 5.3 billion rubles.
The social insurance charge in trade is 4.8 percent of the
wage bill. 204 Consequently, total labor costs of 26.1 billion rubles
are 104.8 percent of the wage bill, which is therefore estimated at 24.9
billion rubles, leaving 1.2 billion rubles for social insurance.
To the wage bill of 24.9 billion rubles is added 2 bil-
lion rubles for trade income originating in the'Agricultural Enterprise
Sector (see 3, a, p. 97, above).
b. Income-in-Kind.
None.
c. Social Insurance.
(See.,a, p. 99, above.)
d. Profits.
This, entry is the sum of profits of the Ministry of Trade,
10.2 billion rubles; workers' supply organizations, 1.4 billion rubles;
and consumer cooperatives, 5.4 billion rubles. 205/.
7. Government Services.
a. Wages and Other Cash Household Income.
(See II, D, 1, a, p. 51, above.)
b. Income-in-Kind.
This entry consists of military subsistence (see II,.D,
1) c, p. 62, above).
c. Social Insurance.
(See II, D, 1, b, p. 61, above.)
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d. Profits.
None.
8. Other Services and Statistical Discrepancy.
a.. Wages and Other Cash Household Income.
This entry is a residual equal to the difference
between the total and the sum of entries for the preceding seven
sectors. The total, 572.4 billion rubles, is equal to total cash
household income, 574.4 billion rubles (see II, E, 2, a, p.. 78,
above), less profits distributed to cooperative.members,. 1.5 bil-
lion rubles, and.to state farm employees, 0.5.billion rubles. In
Table 6 these distributed profits are included in the profit
column.
Income-in-kind in services consists of imputed rent
of 8.7 billion rubles (see II, A, 2, h, p. 15, above).
c. Social Insurance.
This entry is a residual equal to the difference
between total payments, 26.5 billion rubles, and the sum of pay-
ments by the seven preceding sectors, 25.1 billion rubles.
This entry is the differenee between total profits,
167.4 billion rubles, and the sum of profits in the preceding
seven sectors, 159.8 billion rubles. Total profits are.the,sum of
direct taxes and related payments, 110.1 billion rubles_(see II,
E, 2, p. 78, above); saving of enterprises, 55.3 billion rubles
(see II, E, 2, p. 78, above); and profits distributed to coopera-
tive members, 1.5 billion rubles (see II, B, 2, p. 26.,-above) and
to state farm employees, 0.5 billion rubles (see II, C, 2, a, p. 48,
above).
B. National Income at Adjusted Factor Cost.
In order to show national income and its sector dis-
tribution on the same adjusted factor cost basis as GNP, it is
necessary to remove imputed turnover. taxes from national income
at original factor cost. These imputed turnover taxes are in-
cluded in farm household income-in-kind (145 billion rubles)
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because it was valued in part (48 billion rubles) at collective farm
market prices, which do not include turnover tax, and in part (97 bil-
lion rubles) at state retail prices, which do include turnover tax (see
Appendix B, section 4). In Table 3* the average effective rate of the
turnover tax was calculated at 42.85 percent in 1955. At this rate,
41.5 billion rubles of the 97 billion rubles priced at state retail
prices constitute imputed turnover taxes. This sum must be deducted
from the figures in Table 6 for income originated in agriculture,
287.2,billion rubles, and total national income at original factor
cost, 948 billion rubles.
The results of this adjustment are shown in Table 7,
which presents the distribution by sector of origin of national in-
come at adjusted factor cost. This table reveals that in 1955 about
37 percent of Soviet national income originated in industry and con-
struction; 27 percent in agriculture; 9 percent in transport and
communications; and the remaining 27 percent in trade, government
services, and other services.
Table 7
Soviet National Income at Adjusted Factor Cost
by Sector of Origin _a/
1955
Industry
283.5
31.3
Construction
50.8
5.6
Agriculture
245.7
27.1
Transport
77.0
8.5
Communications
5.7
0.6
Domestic trade
45.1
5.0
Government services
131.6
14.5
Other services and
statistical discrepancy
67.1
7.4
906.5
100.0
a. National income at adjusted factor cost in this table dif-
fers from national income at original factor cost in Table 6
(p. 94, above) by the. amount of imputed turnover taxes in-
cluded in farm household income-in-kind, 41.5 billion rubles.
This sum has been deducted from the agriculture and total
figures in Table 6 to derive this table.
* P. 88, above.
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APPENDIX A
SOVIET NATIONAL ACCOUNTS, 1955:
CLASSIFICATION OF.BUDGET REVENUES AND EXPENDITURES
The purposes of this appendix are to show how Soviet budget revenues
and expenditures are classified in the national accounts and to derive
certain national accounts entries as budget residuals. In Tables-8*
and 9, respectively, the total amount of each budget revenue and
expenditure item is distributed among the corresponding entries in the
accounts of the Government Sector, where the sources and methodology
for most of these entries are discussed (see II, D) p. 57, above). The
remaining entries.are derived here as residuals representing the undis-
tributed portions of the corresponding budget items.
Table 8 follows on p. 101.
Table 9 follows on p. 105.
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Table 8
Soviet National Accounts, 1955: Classification of Budget Revenues-
Budget Item
Amount
Government
Sector Account
Turnover tax
Profits tax
242.4
102.8
Appropriation
Appropriation
Capital
Social insurance receipts
26.5
Appropriation
MTS revenue
6.2
Appropriation
Income taxes on enterprises
and organizations
Appropriation
Appropriation
Appropriation
Entry Amount
Taxes on enterprises (turnover taxes) 242.4
Taxes on enterprises (profits taxes) 97.5
Capital transfers from Ngnagricultural Enterprise Sector 5.3
Net purchase of government bonds a/ 31.2
Additions to savings deposits 5.3
Receipts from own sector 3.7
Social insurance 22.8
Transfers to Agricultural Enterprise Sector (grants to
cover losses) W 6.2
Taxes on enterprises (income taxes) 11.5
Taxes on enterprises (other enterprise taxes) 0.9
Taxes on households c/ 3.9
Taxes on enterprises (other enterprise taxes) .C/ 3.9
Taxes on households , 2.1
Taxes on enterprises (other enterprise taxes) ^,/ 79.3
a. Estimated retirement of state loans is deducted from gross bond purchases to obtain net bond purchases.
b. MTS revenue is deducted from MTS noncapital expenditures to obtain the current deficit of the MTS's, which is
covered by a subsidy from the Government Sector to the Agricultural Enterprise Sector.
c. It is assumed that half of local taxes and fees was paid by households and half by enterprises.
d. See II, D, 2, g, (1), p. 68, above.
e. It is assumed that the residual of 79.3 billion rubles represents taxes, fees, and other payments to the Govern-
ment Sector by the Nonagricultural and Agricultural Enterprise Sectors.
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Table 9
Soviet National Accounts, 1955: Classification of Budget Expenditures
Government
Budget Item Amount Sector Account Entry Amount
Financing the national economy 232.7 a/* Capital Capital transfers to other sectors
Nonagricultural Enterprise Sector 96.7
Agricultural Enterprise Sector 22.5
Government capital formation (other) 15.0
Production Wages of government civilian employees (general agricultural
programs) 2.5
Social insurance 0.1
Purchases from Nonagricultural Enterprise Sector
General agricultural programs 5.3
Defense programs 32.4
Research and development programs 5.0
Appropriation Transfers to Nonagricultural Enterprise Sector 32.0
Transfers to Agricultural Enterprise Sector (grants to cover
losses) 21.2
Social-cultural measures 147.2 Production Wages of government civilian employees (health and education) 59.5
Purchases from Nonagricultural Enterprise'Sector (health and
education purchases) 28.1
Social insurance ( 3.0
Appropriation Transfers to Household Sector
Pensions 42.9
Stipends 6.7
Capital repairs 2.0
New fixed investment 2.1
Capital transfers to Nonagricultural Enterprise.Sector - 2.9
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Table 9-
Soviet National Accounts, 1955: Classification of Budget Expenditures
(Continued)
Budget Item
Amount
Government
Sector Account
Entry
Amount
Administration
12.5
Production
Wages of government civilian employees (general administration)
8.3
Social insurance
0.4
Purchases from Nonagricultural Enterprise Sector (general adminis-
tration)
3.8
Defense
107.4
Production
Military pay
23.0
Purchases from Nonagricultural Enterprise Sector
Military subsistence
20.0
Military procurement and operations
57.5
Appropriation
Pensions
2.9
Capital
Government. capital formation
Capital repairs
1.0
New fixed investment
3.0
Loan service to population
12.2
Appropriation
Transfers to Household Sector (interest)
5.9
Capital
Capital transfers from Household Sector (net purchase of government
bonds)
6.3
Other expenditures
27.5
Production
Wages of government civilian employees (internal security)
3.9
Military pay J
5.4
Military subsistence
2.3
Purchases from Nonagricultural Enterprise Sector (internal security)
3.8
Appropriation
Transfers to Household Sector (interest) /
1.0
Capital
Net loans to other sectors -
4.9
Production
Purchases from Nonagricultural Enterprise Sector (miscellaneous) /
6.2
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Table 9
Soviet National Accounts, 1955: Classification of Budget Expenditures
(Continued)
a. The distribution by national accounts entries of total expenditures in the budget category Financing the National Economy is ex-
plained as follows:
From total budget expenditures for Financing the National Economy of 232.7 billion rubles, ?L6/ capital transfers to the Nonagri-
cultural Enterprise Sector of 96.7 billion rubles and total expenditures for state agriculture of 51.6 billion rubles have been de-
ducted to obtain residual outlays of 84.4 billion rubles.
Capital transfers of 96.7 billion rubles to the Nonagricultural Enterprise Sector from the budget category Financing the National
Economy are the difference between total capital transfers to the sector, 99.6 billion rubles (see II, D) 3, a, p. 69, above), and
capital transfers from budget category Social-Cultural Measures, 2.9 billion rubles. Total new fixed investment in social-cultural
facilities is estimated at 5 billion rubles in 1955. Of this total, 2.1 billion rubles is estimated to have been invested by the
Government Sector itself (see II, D, 3, c, p. 74?) above), leaving 2.9 billion rubles for investment by the Nonagricultural Enterprise
Sector in social-cultural facilities attached to its establishments.
Budget expenditures to state agriculture have been estimated at 51.6 billion rubles (see II, D, 1, a, (1), (d), p. 60, above).
The remainder of 84.4 billion rubles in the category Financing the National Economy was spent for reimbursements for price dif-
ferentials, grants to cover losses, research and development outlays, government capital formation, and atomic energy and other
defense-oriented programs. The distribution of the 84.4 billion ruble total among these uses has been estimated, more or less
arbitrarily,. as follows:
Budget grants to procurement organizations to reimburse them for price differentials have been estimated at 16 billion rubles
in 1955. In addition, budget appropriations appear to be necessary to reimburse foreign trade organizations for bookkeeping
losses resulting from differences between Soviet internal prices and international prices. 208 To allow for this type of grant, a
token allowance of 1 billion rubles has been added to the 16 billion rubles above, raising the total price differential reimbursement
figure to 17 billion rubles.
On the basis of evidence in Soviet Journals concerning losses in Soviet industry, 20 it is estimated that, in addition to
losses covered by ministerial profit redistributions, there were losses of about 15 billion rubles in 1955 which were covered by sub-
sidy grants from the budget.
Several types of research and development outlays are financed from the budget as operational expenditures. These include
expenditures for "mastering the production of new products" and outlays for technical improvements and inventions. 210 These ex-
penditures, estimated to be 5 billion rubles, are considered in this report as services performed for the Government Sector by the
Nonagricultural Enterprise Sector and are classified in the Government Production Account as current purchases by the former from the
latter.
It is assumed that government capital formation, in the form of additions to state reserves and the gold stock, investment
planning outlays, and geological survey expenditures, amounted to about 15 billion rubles.
It is assumed that the remaining 32.4 billion rubles have been devoted to atomic energy programs and other defense-oriented
development activities. These expenditures are classified as current purchases of goods and services by the Government Sector from
the Nonagricultural Enterprise Sector.
b. Estimated retirement of state loans is deducted from gross bond purchases to obtain net bond purchases.
c. Pay of militarized internal security forces, which is classified as military pay.
d. Subsistence of militarized internal security forces, which is classified as military subsistence.
e. Estimated interest on savings deposits of the population. This is paid to households by the savings banks, which in turn receive
budget funds in the form of interest on their investments in the state loan.
f. Estimated as the difference between the total increase in long-term bank credit and loan funds available to the long-term credit
banks from other sources. The total increase in credit of the Agricultural, Industrial, Trade, and Communal Banks was 5.6 billion
rubles. Of this amount, 0.7 billion rubles were covered by payments of producer cooperatives to the Trade Bank (see II, By 2, a, (4),
p. 29, above).
g. It is assumed that the unspecified residual of 6.2 billion rubles represents current purchases of goods and services from the
Nonagricultural Enterprise Sector.
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APPENDIX B
SOVIET NATIONAL ACCOUNTS, 1955: AGRICULTURAL INCOME AND OUTLAY
In this appendix the incomes and outlays of the principal agricul-
tural producers -- collective farms, state farms, and farm households --
are analyzed in detail and various entries in the accounts of the Agri-
cultural Enterprise Sector (see II, C, p. 37, above) are estimated.
Collective farm expenditures are discussed in 1, below; farm household
sales in 2, p. 113, below; state farm income and outlay in 3, p. 118,
below; and farm household income-in-kind in 4+, p. 121, below.
1. Distribution of Outlays from Collective Farms' Money Income.
In Table 10* the distribution of outlays by collective farms
from their money income in 1955 is estimated. The individual entries,
which follow the system used in collective farm accounting, 211 vary
considerably in their precision and reliability as a result of differ-
ences in the amount and in the applicability of information available
for the different entries. Lines (2), Repayments of Long-Term Loans,
and (3), Deductions to Indivisible Funds, are the only items for which
exact figures were available from Soviet sources. Lines (1), (4+), and
(6) -- Taxes, Collections, and Insurance Premiums; Deductions to Social-
Cultural,Funds; and Administrative-Economic Expenditures, respectively
-- are estimates based on indirect information. Because the magnitude
of these three entries is relatively small, however, probable errors
in estimation are not considered serious. The most significant item,
both in magnitude and in impact upon the residual entry, is line (7),
Cash Labor-Day Payments. The accuracy of this important but neces-
sarily rough estimate primarily determines the reliability of the
residual entry in line (5) for production expenditures.
a. Total Money income.
b. Money Outlay.
Total money income is estimated to have distributed by
type of outlay as follows:
(1) Taxes, Collections, and Insurance Premiums.
Table 10 follows on p. 110.
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(a).Income Taxes.
(See II, D) 2, g, (2), (b), 68, above.)
Distribution of Outlays
from the Money Income of Soviet Collective Farms
1955
Billion Rubles
a. Total money income 75.6
b. Money outlay
(1),Taxes, collections, and insurance premiums 8.4
(a) Income taxes 6.4
b) Indirect taxes 1.0
(c) Insurance premiums 1.0
(2) Repayments of long-term loans 2.3
(3) Deductions to indivisible funds 16.5
4) Deductions to social-cultural funds 1.1
(a) Transfer payments 0.8
(b) Fixed investment 0.3
(5) Production expenditures 16.3
(a) Payment for work of MTS's 1.2
b) Payments to hired non-
construction workers and
specialists .1.2
c) Additions to inventories 0.3
d) Materials for current operations 13.6
(6) Administrative-economic expenditures 1.0
(a) Wages of administrative-
management personnel
(b) Office supplies, travel allow-
.ances, and the like
0.. 8
(7) Cash labor-day payments 30.0
75.6
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(b) Indirect Taxes.
Only a somewhat arbitrary guess is possible for this
category. Included are taxes on the sale of timber, fines for under-
fulfilling the livestock plan, collective farm market fees, and the like.
In all, 1 billion rubles seems a reasonable estimate.
(c) Insurance Premiums.
published paper, cites indemnity payments to collective farms of the
RSFSR alone of 0.740 billion rubles in 1955 in source 2L113 J. On this
evidence, it seems reasonable to assume that total insurance indemnities
for crop damage, cattle losses, and the like, approximated 1 billion
rubles. It is assumed that insurance premium payments were equal to
indemnities.
in an un- 50X1
(2) Repayments of Long-Term Loans.
Repayments of long-term loans were 85.8 percent of the
planned goal of 2.7 billion rubles, or 2.3 billion rubles. 214
(3) Deductions to Indivisible Funds.
Deductions to indivisible funds represent the amount
allocated for investment purposes from 1955 income, not the amount of
investment accomplished by collective farms during 1955. Part of the
deductions to indivisible funds from 1955 income was used to pay for
the completion of investment projects begun before 1955, Part was
spent for investment undertaken and completed in 1955, and part was
set aside for investment in 1956. Deductions to indivisible funds from
1955 income were officially reported at 16.5 billion rubles. 215
(4) Deductions to Social-Cultural Funds.
The Model Charter of the Agricultural Artel states
that these deductions shall not exceed 2 percent of collective farm
money income. 216 In view of the traditional subordination of con-
sumption-oriented outlays to production-oriented outlays, it is
assumed that 1.5 percent of money income was allocated to social-
cultural funds in 1955. The distribution of the resulting 1.1 billion
rubles between transfer payments to aged and disabled members of the
farms, 0.8 billion rubles, and investment in social-cultural facilities,
0.3 billion rubles, is discussed in II, C, 2, a, (3), p. 50, above.
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(5) Production Expenditures.
The total of 16.3 billion rubles is a residual equal
to the difference between total outlay, 75.6 billion rubles, and the
sum of the other six main entries, 59.3 billion rubles.
(a) Payment for Work of MTS's.
(See II, C, 1, e, (2), (a), p. 43, above.)
(b) Payments to Hired Nonconstruction Workers and
Specialists.
In 1955, collective farms spent 2.4 billion rubles
for hired construction labor 2L7/; these payments are made from the
indivisible fund. In all probability these investment expenditures for
labor represent the bulk of all collective farm expenditures for hired,
labor, for at least two reasons. First, because the heavy agricultural
machinery used on collective farms is owned and maintained by NTS's,
collective farms use less skilled labor than state farms. Second, in
order to allocate their meager cash resources as thriftily as possible,
collective farms are more likely to use available funds for hiring
construction labor than for hiring labor for current operations, in
view of the large labor supply resident on collective farms. No in-
formation is available on the amount of payments to visiting hired
specialists, such as agronomists and veterinarians, or to seasonal
harvest hands. In order, however, to make some allowance for hired
nonconstruction labor, it is assumed that collective .farms spent for
this purpose about one-half of their outlay for hired construction
labor, or approximately 1.2 billion rubles.
(c) Additions to Inventories.
(See II, C, 3, a, P- 53, above.)
(d) Materials for Current Operations.
This category is a residual representing the
difference between total estimated production expenditures, 16.3
billion rubles, and the sum of expenditures for hired nonconstruction
labor, money payments to MTS's, and additions to inventories, 2.7
billion rubles. It is estimated (see II, C, 1, a, (3), p. 40, above)
that, of total materials purchases for current operations of 13.6
billion rubles, 3.4 billion rubles were purchased within the Agri-
cultural Enterprise Sector and 10.2 billion rubles were purchased
from the Nonagricultural Enterprise Sector.
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(6) Administrative-Economic Expenditures.
By statute this category of expenditure is not to exceed
2 percent of total collective farm money incomes. 218 Miss Nimitz of
the RAND Corporation points out in an unpublished paper that scattered
postwar evidence indicates that actual administrative expenditures have
been somewhat less. Therefore, it is assumed that administrative-economic
expenditures in 1955 were about 1 billion rubles, or slightly less than
1.5 percent of total outlays. Arbitrarily, 0.8 billion rubles of this
sum are allocated to administrative wages and the balance to office sup-
plies, travel allowances, and the like.
(7) labor-Day Payments.
A Soviet statement published in January 1956 asserts that
"many" collective farms in the RSFSR distribute up to 40 percent of gross
money income as cash labor-day payments. 219/ It seems certain that this
40-percent share represents the achievement of the more profitable areas
of the RSFSR. At the same time, the RSFSR, predominantly a grain-farming
region, lags behind the average of the rest of the USSR in agricultural
prosperity. Therefore, 40 percent of total collective farm money income
of 75.6 billion rubles in 1955, or 30 billion rubles, appears a reason-
able approximate estimate for total cash labor-day payments. In view of
official statements about increases in recent years in cash labor-day
payments, which in 1955 were 30 percent greater than in 1954 and 94 per-
cent greater than in 1952, 220 a much smaller figure for 1955 than 30
billion rubles would render this compensation implausibly low in 1954
and 1952. Competing outlays from the money incomes of collective
farms -- especially investments -- appear not to have increased in
recent years on a scale that would absorb what would remain if cash
labor-day payments were smaller. On the other hand, a surprisingly low
level of labor-day payments is reported in case studies in Sergeyev's
extensive monograph. 221 Consequently, whereas the 40-percent share
appears a reasonable estimate, it is by no means conclusive.
2. Farm Household Sales and Market Fees.
This portion of the appendix has two objectives -- to derive
estimates of farm household sales of farm products and to obtain an
estimate of collective farm market fees paid by collective farmers.
a. Farm Household Sales.
In 1955, sales of farm products were the single most important
source of money income of rural farm households. The other major source,
cash labor-day payments to collective farmers, has been estimated in section
1 of this appendix. Wage incomes in state agriculture have been discussed
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in detail in II, C, 2, a, p. 48, above. The remaining source of farm
household money income, earnings from labor services rendered outside
agriculture on a seasonal or temporary basis, cannot be estimated,
because of the complete absence of data.
In the following discussion, farm households are divided
into rural and urban households. The former group includes collective
farmers and also the private plot activity of state farmers, MTS
workers, and other rural residents who are not collective farmers. The
latter group includes the private plot activity of urban workers and
employees.
In Table 11 the four types of sales by farm households are
listed and summed to obtain total gross income from sales. Each type
of sale is discussed in detail below.
Farm Household Sales of Farm Products in the USSR
1955
Tyke of Sale
Rural
Households
Urban
Households
Total
Collective farm market sales
36.0
3.9
39.9
Sales to state procurement
organizations
3.0
1.0
4.0
Commission sales
1.6
0
1.6
Sales of livestock to collective
farms
1.2
0
1.2
x+1.8 4.9 x+6.7
(1) Collective Farm Market Sales.
In the absence of data on total rural collective
farm market sales, only sales on the urban collective farm market are
considered in the estimate of farm household income from collective
farm market sales. Sales on the rural market by farm households to
other farm households are excluded from both debits and credits in
the Household Appropriation Account (see II, A, 2, p. 7, above).
The commodities involved in such rural sales are not, however, ,ex-
eluded from the estimate of total consumption. Because no allowance
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is made for their sale in the distribution of gross output in 4, p. 121,
below, they are assumed to have remained in the possession of the house-
holds which produced these commodities or received them as in-kind labor-
day payments and therefore to have been consumed as income-in-kind. The
assumption that these commodities were consumed as income-in-kind instead
of being sold to other rural households has only a limited effect on the
estimate of total consumption. This effect consists of the possible
difference between the prices imputed to these commodities in the estimate
of income-in-kind and the prices at which these commodities were actually
sold on the rural collective farm market. The impact of this difference
on the estimates of total consumption and of income originated in agri-
culture is considered to be very small.
Total urban collective farm market sales in 1955 amounted
to 48.9 billion rubles. 222 To obtain sales by farm households, sales
by collective farms must be deducted. It was reported by a Soviet source
that receipts of collective farms from "-collective farm trade" were 15.6
billion rubles. 223 The author is not explicit on the composition of
this trade, but it seems probable that "collective farm trade" refers to
sales by collective farms at free prices, in and outside the collective
farm markets, of all agricultural products except animals on the hoof,
which farms are not generally permitted to sell to individuals. A
leading authority on Soviet agriculture, Dr. Naum Jasny of Washington,
D.C., has reported that collective farm receipts from "collective farm
trade" must include not only sales on the urban collective farm market
but also sales on the rural collective farm market and direct sales to
urban institutions outside the urban collective farm market. This
interpretation results partly from the logical necessity of accounting
somewhere for sales by collective farms on the rural market and their
direct sales to institutions and partly from knowledge of collective
farmers' incomes from free market trade in earlier years. Deduction of
the entire 15.6 billion rubles of "collective farm trade" from the urban
collective farm market total of 48.9 billion rubles would leave a re-
sidual for farm household sales that seems too small in comparison with
previous years. Some indication of the importance of rural sales is
provided by information for 1940, when urban collective farm market
sales were 29.2 billion rubles and rural collective farm market sales
11.8 billion rubles. 224 Although no precise estimate can be made for
1955 in the absence of specific evidence, it appears plausible to assume
that free market sales in rural areas amounted to perhaps one-third of
"collective farm trade," or approximately 5 billion rubles in 1955. If
this assumption is made, the free market sales by collective farms in
urban areas become 10.6 billion rubles. Charging 1.6 billion of this
10.6 billion rubles to direct sales to institutions by collective farms
which go unrecorded in official estimates of collective farm market turn-
over (see II, C, 1, e, (2), (b), p. 44, above) leaves 9 billion rubles for
the sales of collective farms on urban collective farm markets. Deduction
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of this latter sum from total urban collective farm market sales of 48.9
billion rubles leaves 39.9 billion rubles for sales by farm households.
Total household sales must then be distributed between
rural and urban farm households. It is assumed that urban plots con-
tributed 25 percent of total private plot production, on the basis of
certain key indicators of the relative importance of urban plots in
total private plot activity. In 1955, urban plots accounted for 27.5
percent of private plot sown area, 33.1 percent of privately owned large-
horn cattle, 36.1 percent of privately owned cows, and 16.1 percent of
privately owned pigs. 225 Soviet estimates indicate that urban private
plots furnish one-fourth of the urban population's consumption of potatoes
and one-third of its meat. 226 These data on the sources of urban food
supply confirm the generally held opinion that urban plot owners retain
for their own use most of what they produce, marketing only a small share
of their total output. Although.a precise estimate is impossible, it
appears that the share of urban plot owners in total urban collective
farm market sales is minor. Consequently, an estimate of.10 percent of
total sales seems a plausible order of magnitude. Deduction of 10 per-
cent, or 3.9 billion rubles,. from total household sales on urban collec-
tive farm markets leaves 36 billion rubles for rural households.
(2) Sales to State Procurement Organizations.
These sales include obligatory deliveries, contract sales,
and above-quota state purchases but exclude commission sales to consumer
cooperatives. According to a listing of the types of procurements in
1955, 22 collective farmers were required to make obligatory deliveries
of potatoes and various livestock products. Provision was also made for
the sale of some commodities at state purchase prices, but-in all prob-
ability obligatory deliveries far exceeded the latter in volume, for
collective farmers prefer to sell their surplus at the higher prices
offered on the collective farm market. Sales to. state procurement organ-
izations by collective farmers are estimated at 3 billion rubles, the
difference between total sales to procurement organizations by collective
farms and collective farmers, 55..3 billion rubles, and estimated-sales by
collective farms, 52.3 billion rubles.
In 1955 the total state procurement bill for sales by
collective farms and farmers was 29 billion rubles greater than in
1952, 228 J when, according to Khrushchev's secret speech at the 20th
Party Congress, 22 it was 26.3 billion rubles. The bill in 1955 was
therefore 55.3 billion rubles.
According to Bochkov, the income of collective farms from
obligatory deliveries, contract sales, and sales at purchase prices and
at above-purchase prices to state and cooperative organizations totaled
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55.2 billion rubles in 1955. 230 This figure, however, probably includes
commission sales to cooperatives, which are not included in the total pro-
curement bill of 55.3 billion rubles calculated above. Commission sales
must therefore be deducted in order to obtain the share of the collective
farms of the 55.3-billion-ruble total procurement bill.
Commission sales by collective farms may be calculated
from data in the Soviet handbook of trade statistics, which lists a
14-item breakdown of the products included in commission sales, the total
quantity of each product, and the-quantity sold by collective farms. 231
The collective farms' share for each product was applied to the handbook's
15-product breakdown of the. ruble value of sales, 232 by allowing collec-
tive farms the same percentage for the additional item "other fats" as
they had for butter in the 14-product quantity distribution. The result
of this calculation is a total of 3.2 billion rubles for commission sales
by collective farms, constituting 65.3 percent of total commission sales
of 4.9 billion'rubles. 233
This value of salesf however, includes the commission of
the cooperatives, which must be deducted to obtain the return to the
collective farms. The total commission on 4.9 billion rubles was re-
ported as 0.4 billion rubles. 234 On the assumption that collective
farms' share of the total commission was the same as their share of total
commission sales, or 65.3 percent, 0.3.billion rubles are deducted from
the 3.2 billion rubles of commission sales by collective farms to obtain
a net return.of 2.9 billion rubles.
Deduction of 2.9 billion rubles from the collective farm
income of 55.2 billion rubles from sales to state and cooperative organ-
izations leaves 52.3 billion rubles for the share of this total which
was paid out of the state procurement bill of 55.3 billion rubles. If
collective farms received 52.3 billion rubles of a total of 55.3 billion
rubles, collective farmers then received 3 billion rubles.
It was estimated above that urban plots account for 25
percent of plot production and rural plots 75 percent. Accordingly, it
is assumed that urban households made deliveries worth one-third of
those from rural plots, or 1 billion rubles.
(3) Commission Sales.
It was estimated above that collective farms received
2.9 billion rubles `of the 4.5 billion rubles paid by cooperatives after
deducting their commission of 0.4 billion rubles from total sales of
4.9 billion rubles. This leaves 1.6 billion rubles for payments to
collective farmers.
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(4) Sales of Livestock to Collective Farms.
It is well-known practice for collective and state farms
to purchase privately owned livestock in order to build up their herds.
By far the greater share of these purchases is made by collective farms
from collective farmers, who must observe legal limits on the number of
animals in their possession. This report assumes, therefore, that pur-
chases by state farms and sales by urban farm households were negligible.
Livestock sales by collective farmers to collective farms have been esti-
mated at 1.2 billion rubles (see II, C, 1, e,:(2), (a), p. 43, above).
b. Collective Farm Market Fees.
Daily fees levied on sellers in the collective farm markets
vary with the space used to conduct sales. Sales from trucks. are taxed
at 10 rubles per day, from wagons at 5 rubles, and from tables at 1 to
2 rubles; sales of cattle are taxed at 3 to 5 rubles per head..235 For
the most part, collective farms sell from truck and wagon beds and pay
the largest unit fees, whereas collective farmers, selling from small
counters and even the ground, pay smaller fees. It might therefore be
assumed that fee payments by collective farms and farm households were
roughly equal, even though collective farms are responsible for only
20 percent of sales on the urban collective farm market.
No precise estimate of fee payments is possible with avail-
able data, but some approximation may be obtained from Mikoyan's 1953
statement that half a million collective farmers went to the collective
farm markets every day of the year. 236 If it is assumed that each
farmer paid 2 rubles per day in market fees, total fees would be a
million rubles a day, or perhaps 0.3 billion rubles per year.
3. Income and Outlay of State Farms.
The purpose of this section of the appendix is to derive state
farms' materials purchases from the Nonagricultural Enterprise Sector
as a residual calculation on the outlay side of their income-outlay
statement. The income-outlay statement in Table 12* therefore shows
only their income from sales and subsidies and the outlays made from
these funds; it excludes both budget grants for capital purposes and
the expenditures made with these grants.
Total sales of state farms, both within and outside the Agri-
cultural Enterprise Sector, were estimated `at 23.1 billion rubles (see II,
C, 1, e, (2), (a), p. 43, above).
* Table 12 follows on p. 119.
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Income and Outlay of Soviet State Farms a
1955
Billion Rubles
Income
Outlay
Sales
23.1
Basic wages
15.5
Subsidies for Operations
2.0
Social.insurance
0.7
Materials for operations
4.9
Materials for capital
repairs
0.6
New fixed investment
1.0
Indirect taxes
0.4
Profits
2.0
25.1 Total
a. Excluding capital grants from the budget and capital ex-
penditures made with these grants.
b. Subsidies for Operations.
Only a tenuous estimate is possible for this item. Explicit
Soviet data for total subsidies to state farms have not been published
in the postwar period. Scattered and indirect information on subsidies
of state farms of-the All-Union Ministry of State Farms is available,
notably in the annual Soviet budget announcements. Although the data
sometimes mention the profits and losses of farms of this ministry,
it is not always clear whether the figures refer to gross or net profits
and losses.
Perhaps the most relevant information for 1955 is the state-
ment that "losses" of state farms of the All-Union Ministry of State
Farms amounted to nearly 2 billion rubles. 237 These "losses" were not
equal to subsidies, however, if, as regulations specify, some of-the
profits of the more successful state farms were redistributed to offset
some of the losses of other farms. 238 If subsidies to the All-Union
Ministry of State Farms were therefore something less than 2 billion
rubles, it remains to estimate subsidies to state farms (and subsidiary
agricultural enterprises) of other ministries. About all that-is known
about the latter point is that state farms of the All-Union Ministry of
the Food Industry, most of which raise the valuable sugar beet crop, are
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said to be rather profitable enterprises. Q91 State farms of the All-
Union Ministry of State Farms include three-fourths of all state farms. 240
On the assumption that other state farms, accounting for only one-fourth
of the total, required considerably less subsidization than those of the
All-Union Ministry of State Farms, it appears. reasonable to Assume that
total subsidies to state farms in 1955 were about 2 billion rubles. In
earlier years, when state farms' delivery prices were much lower than in
1955, subsidies were undoubtedly much larger.
c. Basic Wages.
Basic wages, excluding supplements from distributed profits,
have been estimated at 15.5 billion rubles (see II, C, 2, a, p. 48, above).
d. Social Insurance.
(See II, C, 2, b, p. 51, above.)
e. Materials for Operations.
This category is calculated as a residual on the outlay side
of the statement. It should be emphasized that this estimate pertains
only to state farms' purchases from the Nonagricultural Enterprise Sector.
The total value of materials used in operations, including self-produced
seed, fodder, and plants, would of course be much greater.
f. Materials for Capital Repairs.
State farm capital repairs, made from amortization allowances,
were estimated at 1.6 billion rubles (see II, C, 3, a, p. 53, above), of
which it was estimated that 40 percent, or 0.6 billion rubles, represented
materials purchases and 60 percent, or 1 billion rubles, represented wages
(see II, C) 1, e, (3), (c), p. 45, above). These wages are included in
the figure for basic wages above.
g. New Fixed Investment.
It was estimated above that, of total amortization allowances
of 2.6 billion rubles, 1.6 billion rubles were devoted to capital repairs
and 1 billion rubles to new fixed investment (see II, D, 3, a, (2),
p. 71) above). Because amortization allowances are made from sales
revenue, fixed investment financed from amortization allowances is in-
cluded here, although fixed investment financed from budget grants is
excluded from this table.
h. Indirect Taxes.
(See II, C, 1, b, p. 41, above.)
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i. Profits.
(See II, C, 2, a, (1), (b), p. 49, above.)
4. Farm Household Income-in-Kind.
Farm households in the USSR receive an important part of their
income in the form of income-in-kind, consisting of agricultural products
received as labor-day payments-in-kind and of agricultural products raised
on their own plots. In this section of the appendix the value of income-
in-kind in 1955 is estimated. First, the theoretical principles under-
lying the valuation procedure are discussed. Then the methods used in
calculating income-in-kind are set forth. Finally, the calculations are
presented.
a. Theoretical Principles.
As in the case~of all imputed transactions, farm household
income-in-kind is estimated by attributing a monetary value to a nonmonetary
phenomenon. Because farm households consume a share of the commodities which
they produce, this share passes from production into consumption without
being given a monetary valuation. In order to assign prices to commodities-
which are both produced and consumed by farm households, it is necessary to
break the identity of households as both producers and consumers by assum-
ing that production is sold or that consumption is purchased.
In Western economies, where a single farm selling price and a
single consumer buying price ordinarily prevail for each commodity, the
practice in national accounting is to value farmers' consumption-in-kind at
the prices which farmers would receive if they were to sell these commod-
'ities instead of consuming them. 241 These selling prices ordinarily
differ from the purchase prices paid by urban consumers by the amount of
-distribution and processing charges. This difference measures the value of
distribution and commercial processing services enjoyed by nonfarm con-
sumers but not by farmers when the latter consume their output at the point
of production and perform their own processing. Home processing, like the
services of housewives, is excluded in the valuation of household consumption.
The problem of assigning prices to Soviet farm household income-
in-kind is greatly complicated by the existence of multiple price systems
for both the sale and the purchase of agricultural products in the USSR.
The output of collective farms and collective farmers, for example, is sold
at obligatory delivery prices, contract prices, above-quota state purchase
prices, and collective farm market prices. Urban consumers purchase agri-
cultural products at state retail proces and collective farm market prices.
Because of the heavy reliance of Soviet fiscal policy upon the turnover tax,
an excise levied principally on food and nonfood consumer goods, urban
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consumers' purchase prices ordinarily differ from farm sale prices by
much more than the cost of distributing and processing farm products.
Therefore, valuation of farmers' consumption-in-kind in the USSR at
producers' selling prices does not render this consumption comparable
to that of urban residents. This is contrary to the case in Western
economies where, as noted above, valuation at producers' selling prices
is equivalent to valuation at consumers' purchase prices when the latter
are adjusted for distribution and processing charges.
Consequently, it appears more satisfactory to value farmers'
consumption-in-kind in the USSR at consumers' purchase prices, adjusted
for distribution and processing charges, than at producers' selling
prices. Valuation of farmers' consumption-in-kind at consumers' purchase
prices makes it comparable to nonfarm consumption and therefore makes it
possible to add the two to obtain total household consumption of goods
and services.
The method of valuation adopted in this report values farmers'
consumption-in-kind at a weighted average of the two prices paid by non-
farm consumers -- state retail prices and collective farm market;.prices.
It therefore differs from the methods used in the principal earlier studies
of Soviet national income and product. In these studiesy.farm household
income-in-kind was valued at a weighted average of'farm selling prices, 242
at state retail prices less distribution and processing charges, 24 or on
the basis of urban per capita food expenditures. 2)1)1/ In comparison with
these alternative techniques, the method used in this report seeks to
value farm household income-in-kind in prices more comparable to nonfarm
consumption without, however, assuming identical per capita consumption by.
the farm and nonfarm populations.
b. Method of Calculation.
Farm household income-in-kind is calculated in two main steps.
First, the disposition of agricultural commodities is. estimated in.order
to derive, as a residual, the quantity of each commodity that was consumed
by farm households as income-in-kind. Second., the quantity of consumption-
in-kind of each product so derived is valued in, accordance with the val-
uation principles set forth above. The estimates of the quantities of com-
modities consumed in kind by farmers and the estimates of the corresponding
monetary values are both subject to wide margins of error because of many
gaps in information. The monetary values, moreover, are subject to ad-
ditional uncertainty because of the assumptions required to weight the two
sets of urban food prices.
In Table 13* the disposition of the output of each product
among seed and feed use (Used in Production) and the various marketing
* P. 125,., below.
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channels (state acquisitions, commission sales, and urban collective farm
merket sales) is estimated. In the case of some.of the commodities in the
table, nearly every physical disposition had to be estimated from indirect
data, prewar experience, or approximations based on general agricultural
requirements. Because little is known about the quantities of the various
commodities which were sold on the collective farm market, assumptions and
guesswork about this marketing channel have a significant but indeterminable
effect on the residual column Farm Household Consumption-in-Kind.
In Table 15* the commodities composing farm household income-
in-kind are valued at prices which are weighted averages of the prices
paid by urban consumers. The weighting procedure is based on the as-
sumption that farmers, who for this purpose are regarded as purchasers
of their in-kind consumption, would have distributed their purchases of
each commodity between the two retail trade outlets -- the state and co-
operative trade network and the collective farm market -- in the same
proportions as urban consumers actually distributed their purchases of
each commodity in 1955. Because commission sales are made at prices
only slightly lower than collective farm market prices and are actually
a substitute for collective farm market sales, they are grouped for pur-
poses of this valuation with collective farm market purchases (in column H).
Table 13** shows the estimated quantity of each agricultural
product purchased.by urban consumers in collective farm markets, commission
sales outlets, and state and'cooperative retail outlets. From these esti-
~mates are derived the shares of each commodity purchased in collective farm
markets and commission stores, on the one hand, and in state and cooperative
stores, on the other. The quantity of each agricultural product purchased
by urban consumers in collective farm markets and commission stores is taken
from Table 13.** The quantity of each product purchased at state and cooper-
ative retail stores is assumed to be equal to total state acquisitions of
that product, also estimated in Table 13,** less military consumption.
State acquisitions are allocated not only to retail sales but also to mili-
tary consumption, exports, industrial processing, and stockpiles. More-
over, state and cooperative sales include imports, which are not included
in state acquisitions as calculated in this report. Available data per-
mitted an adjustment only for military consumption. Lack of data precluded
adjustments for foreign trade, industrial processing, and stockpiling.
The probable net effect of the omission of these adjustments is, in any
case, too small to influence appreciably the relative weights of state and
cooperative retail trade purchases and collective farm market purchases. .
The weights calculated on the basis of the quantities purchased
by urban consumers in collective farm markets and commission stores and at
below.
** P. 125, below.
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1
state and cooperative stores are then applied to farmers' consumption-in-
kind to determine the quantity of each product which they hypothetically
purchased through each trade channel. Finally, the quantity of each
product attributed to each trade channel is valued at the price of that
channel.
All commodities except grain and meat are valued at the
prices corresponding to their unprocessed state because this is the form
in which they are ordinarily consumed on the farm. In the case of grains,
because farm households consume flour (transformed into bread by home
baking) instead of the commercially baked bread ordinarily consumed by
urban households, the amount retained by farmers is converted into a flour
equivalent which is valued at the estimated mill (wholesale) price of flour.
This price is used instead of the retail price of flour because of the
artificially high level of the latter. In order to discourage home baking
and encourage the entry of women into the urban labor force, the Soviet
government has fixed the retail price of flour at more than the price of
an equivalent amount of bread; in 1955, for example, the retail price of
flour was almost double that of an equivalent amount of bread.
Finally, in order to reflect differences in the nature of
farm and nonfarm consumption, urban prices are adjusted to exclude charges
for transportation and marketing because these services are not enjoyed
by farm households. An allowance for these costs, labeled Trade Margin,
was deducted from the sums of in-kind consumption priced at state retail
and estimated collective farm market prices in Table 15.* Because of the.
lack of data, these allowances are only approximate estimates, particu-
larly the allowance for trade costs in collective farm markets, where
these costs are chiefly imputed charges for labor-day earnings foregone,
rather than explicit costs.
c. Calculations.
In Tables 13*- and 15,* respectively, the disposition of agri-
cultural commodities and the value of farmers' consumption-in-kind are
estimated. Each entry in these tables is explained below.
(1) Disposition of Output of Commodities Included in Farm.
Household Consumption-in-Kind (Table 13**).
(a) Grain.
i. Gross Output.
There are various sets of data relating to the.
Soviet grain harvest for 1955, each of which yields a slightly different
* P. 1I2, below.
Table 13 follows on p. 125-
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Soviet National Accounts, 1955:
Disposition of Output of Commodities Included in Farm Household Consumption-in-Kind
Unit
Gross Output
Used in Production:
Seed, Feed, and Waste
Total Marketed
Total State
Acquisitions
Commission Sales
Urban Collective
Farm Market Sales
Farm Household
Consumption-in-Kind
A - (B + C)
Grain, total
Thousand
metric
tons
103,000
46,000
41,000
39,800
200 a/-
1,000
16,000
Potatoes
Thousand
metric
tons
67,000
35,000
12,000
5,800
200
6,ooo
20,000
Vegetables
Thousand
metric
tons
16,000
2,400
8,500
3,300
200
5,000
5,100
Sunflower
seeds
Thousand
metric
tons
4,200
160
3,100
3,070
Negligible f
940
Flax fiber
Thousand
metric
tons
560
0
310
310
Negligible b
250
Meat, slaughter
weight I
Thousand
metric
.
tons
5,000
0
3,400.
2,500
100
1,600
Milk, whole
Thousand
42,000
6,300
16,300
13,500
100
19,400
metric tons
Thousand
0
230
230
Negligible b
0
metric tons
7,000
4,300
100
2,600
6,ooo
a. Grain and grain products.
b. Not listed in source.
c. Milk and milk.products.
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estimate. Partly, no doubt, the different answers are attributable to
rounding. Therefore, any estimate could be subject to some range of error.
The data used here yield a figure which appears to be reasonable, taking
into consideration the lowest and highest likely harvests.
It is given, according to the terms of the original
Sixth Five Year Plan, that the grain production goal for 1960 is 180 million
tons.* 245 It is elsewhere stated that the gross harvest of grain in
Kazakhstan in 1960 will be five times the 1955 level and that the share of
Kazakhstan in the total Soviet production of grain will increase from 4.5
percent in 1955 to 12.9 percent in 1960.246
If, in'1960, the production of Kazakhstan is to
be 12.9 percent of total planned grain production of 180 million tons,
or 23.2 million tons, and if the 1960 goal of Kazakhstan is five times its
production in 1955, then the 1955 production of Kazakhstan was one-fifth of
23.2 million tons, or 4.64 million tons. As Kazakhstan produced 4.5 per-
cent of all grain in 1955, total 1955 production was 103 million tons.
ii. Used in Production.
Grain used in production is the sum of allowances
for seeding, for feeding livestock, and for waste. The estimate of 17.3
million tons of grain used for seed is based on seeding rates compiled
from a recent study 24 and modified by regional data given in another
source. 2LII~/ An estimate of 22.9 million tons of grain fed to livestock
("dry" grain as well as equivalent ensiled corn ears) is based on live-
stock numbers, 249 seasonally adjusted from 1 October 1955 to 1 January
1956, and feeding rates of theearly,1930's. 250/ In addition, approxi-
mately 5.8 million tons were allowed for waste, on the basis of US loss
factors.
iii. Total Marketed Production.
This item was derived as the sum of Total State
Acquisitions, Commission Sales, and Collective Farm Market Sales
(columns D + E + F).
iv. Total State Acquisitions.
In 1955, sales and deliveries of grain to the
state were 147 million poods more than in 1954. 251/ In 1954, sales
and deliveries of grain to the state were 271 million poods more than
in 1953, 252 when 2.01 billion poods were sold and delivered to the
Tonnages throughout this appendix are given in metric tons.
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state. 2 3 Therefore, in 1955 state acquisitions of grain totaled
2,010 plus 271 plus 147, or (rounded) 2,430 million poods,'equal to
39.8 million tons.*
kind.
v. Commission Sales.
Commission sales are made by consumer cooper-
atives, which buy products from collective farms and farmers at prices
somewhat below collective farm market prices. The cooperatives resell
these products on the urban collective farm markets, earning a com-
mission of about 10 percent. Commission sales are not included in the
state procurement bill or in collective farm market sales. 254 There-
fore, a separate column must be introduced into the table in order to
obtain the correct residual figure for farm household consumption-in-
vi. Urban Collective Farm Market Sales.
In the absence of precise data, estimates for
the physical quantities of nearly all products sold on the collective
farm market are merely notional allowances. It is quite likely that
total sales of grain in the urban collective farm market are `several
times greater than those for 251 large cities, recently recorded in
the Soviet handbook of trade statistics. 256/ This hypothesis seems
plausible on the one hand because sales of food grains for privately
owned livestock are probably higher in less populous urban localities,
and on the other hand because the per capita supply of commercially
baked bread is probably somewhat smaller in smaller cities. It is
arbitrarily assumed here that 1 million tons is a reasonable estimate
for total urban collective farm market sales of grain products. The
actual quantity involved is probably not large enough, in any case, to
affect seriously the residual calculation of farm household consumption-
in-kind.
(b) Potatoes.
i. Gross Output.
It is known that Soviet potato production
in 1955 was 20 percent lower than in 1950. 257 The estimate of
67 million tons for total potato production in 1955 is based on an
estimate of 84 million tons in 1950.
In 1950, potato production was 21 percent
greater than in 1940. 2 8 Production in 1940, postwar boundaries,
amounted to about 84 million tons, given a yield of 109 centners per
Poods are converted at 61.1 poods per metric ton.
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hectare 259 and a sown area of 7.7 million hectares. 260 This figure,
however, is presumably calculated on a "biological yield" basis rather
than a "barn yield" basis, in view of the general Soviet practice at
that time. 261 Recently published data on sugar beet production im-
plies a difference of about 15 to 20 percent between barn production
and previously announced figures on biological production. 262 By
assuming a similar difference in the case of potatoes (as they are
also a root crop) the'1940 barn production is computed at 69 million
tons. As production reportedly increased 21 percent between 1940 and
1950, production in the latter year may be estimated at 84 million tons.
Then, 1955 production was 80 percent of 1950 production, or about 67
million tons.
ii. Used in Production.
Seeding rates I were adjusted 50X1
by regional data h to compute the total quantity 50X1
of potatoes used for seed in 1955 at 16.1 million tons. An estimate
of 12.4 million tons fed to livestock was made after considering the
relatively fixed requirements for food, seed, and industrial use. i++
Potato waste was computed as 10 percent of gross output.
iii. Total Marketed Production.
Marketed production is.estimated at about.
12 million tons, or slightly below the total marketed production of
12.5 million tons in 1952. 265 This estimate was derived by deter-
mining the quantity of potatoes required to meet estimated industrial,
military, and urban consumer demands in 1955.
The alcohol industry used about 1.9 million tons
of potatoes in 1955. 266 It is estimated, however,, that only about
1.1 million tons of this quantity can be counted in this estimate
of Total Marketed Production because of the extensive use of diseased
potatoes for industrial purposes. Procurement for this purpose is -
probably outside Total State Acquisitions, as it is most likely not
paid for.
Military requirements are estimated at about
1.1 million tons (see Military Consumption, Table 15*).
In 1954, production of potatoes on urban
.private plots, minus an allowance for seed requirements, was reported
at about 44 kilograms per capita, 267 thus making urban production for
consumption by.87 million urban dwellers ?L8/ about 3.8 million. tons.
It was also reported that in 1954 urban production accounted for about
*_-P.___142_ below.
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one-fourth of urban consumption of potatoes, 26 thus placing total
urban consumption in.1954 at about 15.3 million tons.
Because of the admittedly poor crop in 1955,
however, it was assumed that urban production, and consumption as
well, fell below that of 1951+. For 1955, urban production was esti-
mated at about 3.2 million tons and consumption at about 13"million
tons (1954 production of 3.8 million and consumption of'15.3 million
each being reduced by 15 percent, which is the estimated drop in the
total potato crop from 1954 to 1955.). Since 3.2 million tons were
produced by the consumers themselves, there remained some 9.8 million
tons to be bought through state and cooperative retail outlets and
collective farm market outlets.
Of. total State, Acquisitions of 5.8 million
tons (see below), 3.6 million tons were available for urban con-
sumption after deducting for industrial and military requirements
5.8 - (1.1 + 1.1) =3-g. With the addition of Commission Sales (see
below), the quantity available for urban consumers was 3.8 million
tons.. Therefore, there remained about 6 million tons to be purchased
in the urban collective farm market in order to meet the requirements
of urban consumers (9.8- 3.8 = 6).
Thus total marketed production 5f potatoes
in 1955 is estimated at 12 million tons, summarized as follows:
State acquisitions 5.8
Commission sales 0.2
Collective farm market sales 6.0
iv. Total State Acquisitions.
In 1956, sales and deliveries of potatoes
to the state were 2.9 million.tons more than in 1955 270 and were
more than 50 percent above the 1955 level. 2 1 Therefore, in 1955,
state acquisitions must have been no more than 5.8 million tons.
v. Commission Sales.
(See (a), v, p. 127, above.)
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vi. Urban Collective Farm Market Sales.
(See iii, p. 128, above.)
(c) Vegetables.
i. Gross Output.*
It is given that Soviet production of vege-
tables in 1955 was 42 percent greater than in 1950..272 The 1950
plan fulfillment report indicated a "good and satisfactory harvest,"
but no quantitative information was given. 273 On the basis of an.
estimated 11-million-ton crop in 1950, computed below, 1955 vegetable
production maybe assumed to have approximated 16 million tons.
The average vegetable yield over the period
1926-29, when almost all vegetables were cultivated intensively on
small plots, was estimated by Gosplan at 138 centners per hectare. 274
By 1953, small plots accounted for less than one-quarter of the total
area sown to vegetables, and collective, state, and institutional farm
accounted for 77.6 percent. 275 Yields in the Ministry of State Farms
alone-amounted to only 77 centners per hectare in 1952, considerably
below private plot yields of the late 1920's. 276 It is estimated that
the actual yield in the socialized sector in 1953 was about 85 centners
per hectare, compared with an estimated private plot yield of about 135
centners per hectare. Yield for all producers would then be estimated
at 95 centners per hectare, the rounded average of the private and
socialized yields weighted by their respective shares in sown area.
Thus total vegetable production in 1953 is calculated to have been about
13 million tons, given a sown area of 1.323 million hectares 277 and
a yield of 95 centners per hectare.
Vegetable production in 1954 increased an un-
specified amount over production in 1953 278 and is arbitrarily esti-
mated here at 14 million tons. As it is known that in 1954 vegetable
production was 27 percent greater than in 1950, 27 production in the
latter year may be computed.as 11 million tons. Thus,,as 1955 pro-
duction amounted to 142 percent of 1950 production, production in 1955
is estimated at about 16 million tons.
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An estimate of 15 percent of gross output
was made arbitrarily to account for low quality and spoiled vegetables
fed to livestock.
iii. Total Marketed Production.
This item was derived as the sum of Total
State Acquisitions, Commission Sales, and Urban Collective Farm
Market Sales (columns D + E + F).
iv. Total State Acquisitions.
In 1955 the state procured 787,000 tons more
of vegetables than in 1954. 280 In 1951+ the state procured 1+1+5,000
tons more of vegetables than in 1953, 281 when the plan for the de-
livery and purchase of 2.3 million tons of vegetables 282 was slightly
underfulfilled..283 If state acquisitions in-1953 are estimated at
about 2,100,000 tons, then in 1955 state acquisitions of vegetables
totaled 2,100,000 plus 445,000 plus 787,000, or about 3.3 million tons.
v. Commission Sales.
(See (a), v, p. 127, above.)
vi. Urban Collective Farm Market Sales.
After deductions for Used in Production and
Total State Acquisitions, 10.3 million tons of vegetables remain to
be. distributed among Commission Sales, Urban Collective Farm Market
Sales and Farm Household Consumption-in-Kind L16.0 - (2.4 + 3.3) =
10.7 Since 0.2 million tons were in Commission Sales, ,10.1 million
tons of vegetables were distributed between Urban Collective Farm
Market Sales and Farm Household Consumption-in-Kind. Logically, state
acquisitions should absorb the greater part of the production of vege-
tables by collective farms and all of this production by state farms.
Therefore, the remainder of 10.1 million tons of vegetables cAlculated
above should have been largely the product of urban and rural private
plot production. In view of the high rate of spoilage in vegetables
and the fact that obligatory deliveries of vegetables are not levied
on private plot production, it might be supposed that farmers eat as
much as half of their own vegetable crop. Given the higher population
numbers in the rural areas, the argument appears plausible. Therefore,
half of the estimated remaining vegetable output, or 5 million tons,
is assumed to be sold on the urban collective farm market, leaving 5.1
million tons for consumption-in-kind.
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(d) Sunflower Seeds.
i. Gross Output.
A "biological yield" of 8.6 centners per
hectare in 1950 is implied in Soviet official sources. 284
Khrushchev indicated in 1954 a differential, which may be taken
as an upper limit, of 3 centners per hectare between "biological"
and "barn" yields of sunflowers: "During the harvest of sunflowers,
losses of 2 to 3 centners per hectare are permitted because of the
absence of attachemnts on combines." 285 If this differential is
applied to 1950, a 34-percent discount is implied (from 8.6 to 5.6
centners per hectare). This discount is about the same as the im-
plied grain differential for "barn" as opposed to "biological" yields
and fits well with the general practices of harvesting that caused
high losses of grain.
If this discounted yield is accepted as
the actual yield, "barn" production of sunflowers can be derived, for
1955 on the basis of the Soviet official index for sunflower seed
production, 286 which gives 1955 production as 207 percent of 1950
production. If 1950 production is 3.59 million hectares 287 times
.5.6 centners per hectare, or 2.01 million tons, then the estimated
harvest in 1955 is 207 percent of 2.01 million tons, or 4.2 million
tons.
ii. Used in Production.
Four percent of 1955 gross output of sun
flower seeds was allowed for the 1956 planting, based on the following
calculations. The area sown to. sunflowers rose from 4.03 million
hectares in 1954 to 4.24 million hectares in 1955, 288 J and a similar
increase of 0.21 million hectares, to 4.5 million hectares, is esti-
mated for 1956. A typical seeding rate of 25 kilograms per hectare, 289
with an additional allowance of 50,000 tons to take care of higher seed-
ing rates in humid areas and for reseedings in case of frost, results
in seed requirements for 1956 of about 160,000 tons.
iii. Total Marketed Production.
In 1937-38, marketable production of sun-
flower seeds-amounted to 1.3 million tons. 2 0 This was 62 per-
cent of the harvest of 2.1 million tons. ?21J In.recognition of the
.postwar drive of the Soviet government to raise production and pro-
curement of oil crops, marketed production in 1955 is here estimated
at about 75 percent of the total sunflower seed harvest of 4.2 million
tons, or,3.1 million tons.
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iv. Total State Acquisitions.
It is estimated that total state acquisitions
constituted about 99 percent of total marketed production of seeds.
The other 1 percent is a token.amount estimated to have been sold in
the collective farm market to the populace for chewing.
to be negligible.
v. Commission Sales.
.vi. Urban Collective Farm Market Sales.
About 1 percent of total marketed production
is arbitrarily estimated to have been sold on the collective farm
market to meet the people's demand for seeds for chewing.
(e) Flax Fiber.*
i. Gross Output.
The Soviet official index of flax production
gives production in 1955 as 75 percent greater than in 1954s 2 2
when yields per hectare were stated to be highest in 37 years. =731
The highest known barn yield within the period named was 2.9 centners
per hectare in 1938, given an output of 0.546 million tons 294/ and
a sown area of 1.882 million hectares. 295/ Thus production in 1954
is estimated at about 320,000 tons, given a sown area of 1.11 million
hectares / and an estimated yield of 2.9 centners per hectare.
For 1955, flax production is therefore estimated at 175 percent of
320,000 tons, or about 560,000 tons.
ii. Used in Production.
Not applicable.
iii. Total Marketed Production.
This item was derived as the sum of Total
State Acquisitions, Commission Sales, and Collective Farm Market
Sales'(columns D + E + F).
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iv. Total State Acquisitions.
In 1955, sales and deliveries of flax fiber
to the state were 135,000 tons more than in 1954 297/ and were 76 per-
cent above the 1954 level. 298 Therefore, state acquisitions in 1954
must have been about 178,000 tons, and in 1955 about 310,000 tons.
. v. Commission Sales.
to be negligible.
vi. Urban Collective Farm Market Sales.
It is assumed that State Acquisitions account
for all of the significant marketing of this valuable cash crop.
(f) Meat.
i. Gross Output.
Data on state farm production and state farm
production as a percentage of total Soviet production were used to
derive an estimate of total meat production in 1955 of 10 million tons
live weight, or 5 million tons slaughter weight (converted at a ratio
of 2 to 1).
I.A.. Benediktov, Minister of the All-Union
Ministry of State Farms, in a monograph on state farms in the USSR,
has stated that in 1954 state farm production of meat constituted
7.5 percent of the total meat production of the USSR and that state
farm deliveries of meat constituted 19.2 percent of total meat de-
liveries to the state. It is not clear from the context, how-
ever, whether Benediktov is referring to state farms in the Ministry
of State Farms alone or to all state farms in the USSR. In another
source it was stated that in 1954 meat deliveries to the state by
state farms of the All-Union Ministry of State Farms constituted 16.5
percent of total deliveries.of meat to the state. 300 Because the
percentage quoted by Benediktov is larger than the percentage given
in the second source and because both percentages refer to the same
year, it is concluded that Benediktov's statement refers to production
and deliveries by all state farms in the USSR.
Elsewhere in the Benediktov monograph a table
is given which presents statistics of meat production and livestock
numbers for 1955 and the plan for 1960. 301 A comparison of. the
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livestock numbers given by Benediktov with numbers given in two other
sources 302 indicates that the livestock data in Benediktov's table
refer to numbers in state farms of the All-Union Ministry of State
Farms alone. Hence it is assumed that the production data which appear
in the same table also refer to production by state farms of the All-
Union Ministry of State Farms alone,. Thus his figure of 724,100 tons for
meat production by state farms 303 may be assumed to apply to the
state farms of the All-Union Ministry of State. Farms and not to pro-
duction by all state farms in the USSR.
Meat production by all state farms.may be
estimated on the basis of the probable share of the state farms of
the All-Union Ministry of State Farms in total state farm meat pro-
duction. Table 14* shows livestock numbers and live'weights on
state farms of the All-Union Ministry of State Farms and on all state
farms.
According to Table 14, in 1955 the state
farms of the All-Union Ministry of State Farms had livestock with
a total weight of 1.4 million tons, or about 90 percent of the 1.6
million tons of all state farms. If meat production is assumed to be
proportional to live weight of herds, then the 724,100 tons of meat
produced by the All-Union Ministry of State Farms was 90 percent of
total state farm production, which may therefore be estimated at
about 800,000 tons.
If it is assumed that meat production of
all state farms was 7.5 percent of total Soviet meat production in
1955 -- as was the case in 1954 (see above) -- then the 800,000-ton
output of state farms was 7.5 percent of total output, which is
therefore estimated at about 10 million tons live weight, or 5 mil-
lion tons slaughter weight.
ii. Used in Production.
Not applicable.
iii. Total Marketed. Production.
This was derived as the sum of Total State
Acquisitions, Commission Sales, and Collective Farm Market Sales
(columns D + E + F).
* Table 1 follows on p. 136.
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Table 14
Numbers and Live Weight of *Livestock on State Farms of the All-Union Ministry
of State Farms and on All Soviet State Farms a
1955
State Farms of Soviet Ministry
of State Farms
All Soviet State Farms
Animal
1936-38 Average
Live Weight b
(Kilograms per Head)
End-of-Year
Numbers J
Million Head)
Weight
(Thousand Metric Tons)
A x B
End-of-Year
Numbers
(Million Head)
Weight
(Thousand Metric
A x D
Tons)
Cattle
including
cows
260.
3.0
780
3.4
880
Hogs
90
3.0
270
4.2
380
Sheep
35
10.2
360
10.6
370
Total
16.2
1400
18.2
1,6oo
a. Totals have been rounded to two significant digits.
b. 304
c. 30
d. 30
136
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iv. Total State Acquisitions.
The state processed 2.5 million tons of meat
in 1955. 307 This quantity is assumed to represent the slaughter
weight of total deliveries of livestock to the state.
v. Commission Sales.
(See (a), v, p. 127, above.)
vi. Urban Collective Farm Market Sales.*
Total marketed output of meat in 1952 was
given by Khrushchev as 5 million tons live weight, 308 of which
3 million tons constituted state procurements. 30 The remaining
2 million tons should represent sales on the urban collective farm
market. Because, however, the coverage of Khrushchev's state pro-
curement figure is not known, in order to avoid an overstatement of
urban collective farm market sales, an additional 0.5 million tons
was deducted from total marketed output to allow for estimated de-
centralized procurement and deliveries by state subsidiary agri-
cultural enterprises. This deduction leaves 1.5 million tons live
weight, or about 0.7 million tons slaughter weight, as the amount of
sales on the urban collective farm market in 1952.
In 1955, sales of meat on the urban collective
farm market were 14 percent greater than in 1952, 310 or approxi-
mately 0.8 million tons.
(g) Milk.
i. Gross Output.
Data on state farm production and state farm
production as a percentage of total Soviet production were used to
derive an estimate of total milk production in 1955 of 42 million
tons. The technique followed is identical with that used in the
derivation of the meat output estimated above.
For 1954, Benediktov gave "state farm"
production of milk as 6.4 percent of the total milk production of
the USSR and state farm milk deliveries as 18.2 percent of total
milk deliveries to the state. 311 Because deliveries by state
farms of the All-Union Ministry of State Farms alone constituted
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16.2 percent of total milk deliveries to the state, 312 it was con-
cluded that the former statement refers to production and deliveries
by all state farms.
Milk production by all state farms may be
estimated on the basis of the share of state farms of the A11=Union
Ministry of State Farms in total cow numbers on all state farms. In
1955, end-of-year cow numbers on state farms of the All-Union Ministry
of State Farms were 1.2 million, 313 or 92 percent of the total of 1.3
million on all state farms at the end of 1955. 314 If milk production
is assumed to be proportional to cow numbers, milk output of 2.5 million
tons by the All-Union Ministry of State Farms 31 was 92 percent of
total state farm output, estimated therefore at 2.7 million tons.
If it is assumed that in 1955 production of
2.7 million tons of milk by all state farms represents 6.4 percent
of total milk output -- their share in 1954 (see above) -- then total
Soviet milk production would therefore be about 42 million tons.
ii. Used in Production.
On the basis of information on the fattening
of animals on collective farms, it is estimated that milk fed and
wasted constitutes-about 15 percent of gross output. 316
iii. Total Marketed Production.
This was derived as the sum of Total State
Acquisitions, Commission Sales, and Collective Farm Market Sales
(columns D + E + F*).
iv. Total State Acquisitions.
Milk deliveries to the state from 1 January
1956 to 1 November 1956 totaled 15.9 million tons, 2.4 million tons
more than during the whole of 1955. 31 Therefore, in 1955 milk
deliveries to the state were 13.5 million tons.
v. Commission Sales.
(See (a), v, p. 127, above.)
vi. Urban Collective Farm Market Sales.**
Total marketed output of milk in 1952 was
given by Khrushchev as 13.2 million tons, 318 of which 10.1 million
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tons constituted state procurements. 31 The remainder of 3.1 million
tons should represent sales on the urban collective farm market. Because,
however, the coverage of the state procurement figure quoted by Khrushchev
is unknown, in order to avoid an overstatement of collective farm market
sales, 0.8 million tons in addition was deducted to allow for estimated de-
centralized procurement and deliveries by state subsidiary agricultural
enterprises. This deduction leaves 2.3 million tons as the amount of
sales on the urban collective farm market.
Milk sales on the urban collective. farm market
in 1955 were 16 percent greater than in 1952, 320 or about 2.7 million
tons.
(h) Wool.
i. Gross Output.
Khrushchev stated that wool output in 1953
amounted to 230,000 tons, 21 which, according to the . Soviet. official
index for wool output,.322 is 92 percent of 1955 output. Therefore,
1955 output was 250,000 tons.
ii. Used in.Production.
Not applicable.
iii. Total Marketed Production.
This was derived as the sum of Total State
Acquisitions, Commission Sales, and Collective Farm Market Sales
(columns D + E + F *)4
iv. Total State Acquisitions.
In 1956, collective farms,.state farms, and
individuals delivered to the state 247,000 tons of wool, 17,000 tons
more than in 1955. 323 Therefore, in 1955, 230,000 tons of wool were
delivered.
v. Commission Sales.
negligible.
Table 13, p. 125, above.
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vi. Urban Collective Farm Market Sales.
As in the case of flax fiber, it is assumed
that all significant marketed production of this commodity passes
through State Acquisitions.
(i) Eggs. .
i. Gross Output.
Poultry numbers and egg yield per chicken,
together with the Soviet official index of egg production, were used
to derive an estimate of 1955 production of 15 million eggs.
Poultry numbers on 1 January 1951 were re-
ported to be 14 percent above the 1940 level, 324 presumably above
the level of 1 January 1941, when there were 183 million chickens. 325
On the assumption that chicken numbers increased in the same proportion
as total poultry, chicken numbers for 1951 were estimated at 209 million.
In 1927-28 the yield per chicken was 53 eggs. 326 If egg yield in 1951
is assumed to be about the same as that of the 1927-28 period, then egg
production in 1951 can be estimated at 11 billion. Therefore, 1955 pro-
duction, reported by the Soviet official index as 136 percent of 1951
production, 327 is estimated at about 15 billion eggs.
An allowance of 2 billion eggs was arbitrarily
estimated to be necessary for maintaining flocks.
iii. Total Marketed Production.
It was arbitrarily assumed that approximately
half of the total output of 15 billion eggs, or 7 billion, was marketed.
iv. Total State Acquisitions.
Because there was no information on 1955 egg
deliveries, the 1954 plan for total state procurement of 4.3 billion
eggs, 28 which is believed to have been underfulfilled since the
Russians made no mention of its success in the 1954 plan fulfillment
report, 32 was used as the estimate of 1955 total state acquisitions
of eggs.
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V. Commission Sales.
(See (a), v, p. 127, above.)
vi. Urban Collective Farm Market Sales.
This item was derived as the residual of Total
Marketed Production less the sum.of Total State Acquisitions and Com-
mission Sales Lcolumn C - (columns D + E) 7.
(2) Valuation of Farm Household-Consumption-in-Kind..
(See Table 15**).
(a) Commodity.
i. All Other.
The items listed in column A of Table,15 are
identical with those appearing in Table 13, with the addition of the-
residual category All Other. The valuation assigned to these other
commodities is necessarily a notional allowance, given the absence of
adequate production and marketing information concerning these items.
Products assumed to be included under the designation All Other are
fruits, nuts, berries, honey, mushrooms, fresh water fish, game animals
and their products, minor technical crops (fibers other than flax and
oilseeds other than sunflower), tobacco and makhorka, tea, herbs, and
firewood. The large number of products is in itself no measure of the
relative value of All Other compared with the specified products. The
object of consideration must be the typical Russian farmer, from whose
point of view the important agricultural commodities.consumed in-kind.
other than those specified in the table are fruit and fresh-water fish
and, to a lesser extent, mushrooms and game animals. The average
Russian farmer does not receive tea, herbs, tobacco, or even oilseed
products in-kind but rather buys them for cash in the market. On the
other hand, the typical farmer does heat his hut with firewood, most
of which he receives from collective farm and state forest lands
through his own cutting.
Precise measurement of All Other products
being out of the question, it is possible only to make some judgment
about a reasonable order of magnitude. It seems possible that the
value of the commodities in question may constitute 15 percent of
total farm household consumption-in-kind.
* Table 13, p. 125, above.
Table 15 follows on p. 142.
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Table 15
Valuation of Soviet Farm Household Consumption-in-Kind
1955
Purchases in
Commission Sales
Outlets and Urban
Collective Farm Market
D + E
(Thousand Metric Tons)
Not Applicable
6,200
5,200
30
Negligible
Total Marketed Total State Military
Production Acquisitions Purchases in Commission Purchases in Urban Consumption
C + D + E (Thousand Metric Sales Outlets Collective Farm Market (Thousand Metric
Commodity ,-(Thousand Metric Tons) Tons) (Thousand Metric Tons) (Thousand Metric Tons) Tons)
Grain, total a/ Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable
Potatoes 12,000 5,800 200 6,000 1,100
Vegetables 8,500 3,300 200 5,000 630
Sunflower seeds 3,100 3,070 Negligible 30 Negligible
Flax fiber 310 310 Negligible 0 0
Meat, slaughter
weight 3,400 2,500 100 800 360
Milk, whole 16,300 13,500 100 2,700 Negligible
wool 230 230 Negligible 0 0
Eggs 77,000 J 4,300 J 100 b/ . 2,600 J Negligible
All other c/ Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable
Total
Trade margin allowance
Total excluding trade margin allowance
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-Purchases in State and
Cooperative
Retail Outlets
C - F
(Thousand Metric Tons)
Not Applicable
- 4,700
2,670
3,070
310
2,140
13,500
230
4,300 J
Not Applicable
goo
2,800
Negligible
2,700 J -
Not Applicable
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Valuation of Soviet Farm Household Consumption-in-Kind
1955
(Continued)
Total Retail Purchases
G + H
(Thousand Metric Tons)
Farm Household
Consumption-in-Kind
(Thousand Metric Tons)
Quantity of J Valued at
State Retail Prices
G x j
I
(Thousand Metric Tons)
Prices for K: 1955
Moscow State
Retail Prices
(Rubles per Metric Ton)
Value of Share of
J Priced at
State Retail Prices
K x L.
(Million Rubles)
total a/
Grain
Not Applicable
16,000
14,000 J
1,600 /
22,000
,
Potatoes
900
10
20,000
8,600
700
6,020
Vegetables
,
7,870
5,100
1,700
1,200
2,040
Sunflower seeds
3,100
940
930
4,000
3,720
Flax fiber
310
250
250
21,000
5,250
slaughter
Meat
,
weight
3,040
1,600
1,120
15,000
16,800
whole
Milk
300
16
19,400
16,100
2,200
35,420
,
Wool
,
230
20
20
13,000 J /
260
Eggs
7,000 J
6,000 J
3,660 J
9J
3,290
All other J
Not Applicable
Not Applicable
Not Applicable
Not Applicable
15,000
Total J
Trade margin allowances
Total excluding trade margin allowance
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13,000
97,000
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Table 15
Valuation of Soviet Farm Household Consumption-in-Kind
1955
(Continued)
Quantity of J Valued
Value of Share of
at Estimated Collective
J Priced at Estimated
Total Value of
Farm Market Prices
Price for N: 1955
Collective Farm
Farm Household
J x J
Commodity (Thousand Metric Tons)
Estimated Collective
Farm Market Prices
(Rubles per Metric Ton)
Market Prices
N x 0
(Million Rubles)
Consumption-in-Kind
M + P
(Million Rubles)
Grain, total a/ Not Applicable
Not Applicable
Not Applicable
22,000
Potatoes ' 11,400
1,600
18,240
24,260
Vegetables ' 3,400
2,100
7,140
9,180
Sunflower seeds 10
4,000
40
3,760
Flax fiber 0
None
0
5,250
Meat, slaughter weight 480
15,200
7,300
24,100
Milk, whole 3,300
2,500
8,250
43,670
Wool 0
None
0
260
Eggs 3,34o
10 /
3,340
6,630
All other c/ Not Applicable
Not Applicable
8,000
23,000
Total d/
52,000
162,000
Trade margin allowance
4,000
17,000
Total excluding trade margin allowance
48,000 145,000
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Valuation of Soviet Farm Household Consumption-in-Kind
1955
(Continued)
a.
two
b.
C.
and
d.
e.
f.
9-
h.
i.
.1.
k.
Because the flour equivalent of grain is valued at the estimated mill (wholesale) price of flour, no weighting of sales through-the
retail trade channels is required.
Million units.
Includes fruits, nuts,'berries, honey, mushrooms, fresh-water fish, game animals and their products, minor technical crops, tobacco
makhorka, tea, herbs, and firewood.
Totals are derived from unrounded figures and do not always agree with the sum or the product of their rounded components.
In terms of the flour equivalent of grain, using an extraction rate of 85 percent for the milling of flour.
Estimated mill (wholesale) price of flour.
Estimated collective farm market price.
Contract sale price.
Obligatory delivery price.
9 rubles per 10 eggs.
10 rubles per 10 eggs.
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(b) Total Marketed Production.
(See Table 13.*)
(c) Total State Acquisitions.
(See Table 13.)
(d) Purchases in Commission Sales Outlets.
(See Table 13.)
(e) Purchases in Urban Collective Farm Market.
(See Table 13.)
(f) Military Consumption.
Data) give amounts of foodstuffs per
man per day. These amounts were adjusted to an annual basis and were
multiplied by the estimated number of Soviet militarized personnel in
1955. 331
(g) Purchases in State and Cooperative Retail Outlets.
This item is the difference between Total State
Acquisitions and Military Consumption (column C - column F).
(h).Purchases in Commission Sales Outlets and Urban
Collective Farm Market.
This item is the sum of purchases in commission
sales outlets and in the urban collective farm market (column D +
column E).
(i) Total Retail Purchases.
This item. is the sum of purchases in state and
cooperative retail outlets, in commission sales outlets, and in the
urban collective farm market (column G + column H).
(j) Farm Household Consumption-in-Kind.
(See Table 13.)
* P. 125, above.
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(k) Quantity of Farm Household Consumption-in-Kind
Valued at State Retail Prices.
For each commodity, the share of consumption-in-
kind valued at state retail prices is equal to the share of purchased
consumption obtained through state and cooperative retail trade
(columns I x J).
(1) 1955 Moscow State Retail Prices.
For some commodities, state retail proces are not
applicable. Therefore, other prices were used: for grain,.the mill
price of flour; for sunflower seeds, the collective farm market price;
for flax fiber, the contract sale price; and for wool, the obligatory
delivery price.
As explained in 4, b, above, the mill price of
flour is used here as the preferred price for valuing farmers' con-
sumption-in-kind of grain products. In view of historical experience
and the general impressions of many recent visitors and defectors,
ordinary rye flour may be taken as the typical constituent of the
Russian farmer's bread. A price of 160 rubles per 100 kilograms (kg)
of ordinary rye flour at the mill may be obtained by deducting the_
component processing and distribution costs from the retail price of
bread, according to the breakdown of these costs provided by Coogan. 332
It is assumed that the lower retail price for bread in 1955 relative to
1950, the last year covered by Coogan's data, embodies higher costs for
labor. On the basis of a state retail store price of 1.75 rubles per
kg of rye bread in 1955, 333 the following calculation. yields the
estimated flour price:
Rubles Per 100 Kilograms
Retail price of bread
175
Less:
Cost of distributing bread
15
Equals:
Cost of baking bread
160
Less:
Nonflour cost of baking bread
37
Equals:
Flour cost in bread
123
Equals:
Flour cost at bakery*
185
Less:
Transport costs from mill to bakery
25
Equals:
Flour cost at mill
160
* A bread-flour yield of 150 percent is assumed on the basis of data cited
by Coogan -- that is, it is assumed-that 100 kg of bread are made with 66.7
kg of flour. If 66.7 kg of flour, found in 100 kg of bread, cost 123
rubles, then 100 kg of flour cost 150 percent of this amount, or 185 rubles.
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ii. Potatoes.
iii. Vegetables.
iv. Sunflower Seeds.
The estimated collective farm market price was
used as the state retail price.
v. Flax Fiber.
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The state retail price for flax fiber is assumed
to be equal to the estimated contract price of 21,000 rubles per metric
ton. The estimate is based on the following information.*
In 1954, Belorussian collective farm deliveries
of 24,300 tons of fiber equivalent 336 and 21,300 tons of seed 337
were valued at 585 million rubles. 33 The base price per ton of seed
in 1954 was 70 percent 33 above the 1952.level of 800 rubles, 340
or approximately 1,360 rubles. The maximum value of seed, including
high-quality seed, was estimated at 3,000 rubles per ton. At this
maximum value per ton, the maximum value of 21,300 tons of seed deliveries
was about 64 million rubles. Deduction of the maximum for seed from
total value of deliveries of fiber and seed of 585 million rubles leaves
a minimum of 521 million rubles for fiber alone. Each of the 24,300 tons
of fiber, therefore, had a minimum average price of 21,000 rubles per ton.
The obligatory delivery price was computed from
data on prices for different grades of'wool announced in the livestock
decree of September 1953. 343
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ix. Eggs.
(m) Value of the Share of Farm Household Consumption-
in-Kind Priced at State Retail Prices.
This item is the product of the share of farm house-
hold consumption-in-kind valued at state retail prices and the corre-
sponding state retail prices (column K x .column L).
(n) Quantity of Farm Household Consumption-in-Kind
Valued at Estimated Collective Farm Market Prices.
For each commodity, the share of consumption-in-
kind valued at estimated collective farm market prices is equal to the
share of purchased consumption obtained through collective farm market
trade (columns I x J).
) 1955 Estimated Collective Farm Market Prices.
Because collective farm market prices vary widely
both regionally and seasonally, the few sample price quotations'found
in Soviet sources or in reports by visitors to the USSR do not provide
a sound basis for estimating average prices for the country as a whole.
As might be expected, free prices are higher in large cities than in
small cities and higher in industrial regions than in industrially
undeveloped areas. 345 On both counts, Moscow prices, for which the
best coverage exists, are far from typical. Some indication of the
unrepresentative character of Moscow collective farm market prices is
obtained by multiplying estimates of the.quantities sold in the urban
collective farm markets, given in Table 13,* by annual average Moscow
prices for those commodities. 346 The combined value of sales of
these specified commodities alone totals more than the 48.9-billion-
ruble figure given by Soviet authorities as 1955 sales in this market
outlet. 347/
Because of the inapplicability of available
collective farm market prices, average commission store prices are
considered the best available approximation to national average
collective farm market prices. By official regulation and intention,
commission sale prices are pegged at a level slightly below collective
farm market prices. The procedure of assuming collective farm market
prices to be equal to commission sale prices appears to result in less
P. 125, above.
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over-all distortion than the alternative procedures of using Moscow
collective farm market prices or of arbitrarily estimating national
average collective farm market prices.
Commission trade prices in 1955 are computed from
corresponding quantity and value data. 344 The milk price is for
milk and milk products excluding butter. The sunflower seed price
is estimated at one-quarter of the vegetable oil price, on the as-
sumption of 1 tons of seed per ton of oil and without any allowance
for value added in processing of seeds.
(p) Value of the Share of Farm Household Consumption-
in-Kind Priced at Estimated Collective Farm
Market Prices.
This-item is the product of the share of farm
household consumption-in-kind valued at estimated, collective farm
market prices and the corresponding estimated collective farm market
prices (column N x column 0).
(q) Total Value of Farm Household Consumption-in-Kind.
This item is the sum of the values of the two shares
of farm household consumption-in-kind, one priced at state retail prices
and~the other priced at estimated collective farm market prices (column
M + column P).
(r) Trade Margin Allowance.
aa. Share of'Consumption-in-Kind Priced at State
Retail Prices.
The trade margin on food sales by state and
cooperative retail outlets, excluding public dining establishments, is
estimated,at 12 percent on the basis of (1) the average markups in re-
tail and wholesale trade, (2) the relative importance of food and non-
food goods in total state and cooperative sales, and (3) the difference
in marketing costs between food and nonfood goods. ,
(1-1) The trade markup is the sum of costs of
operation and profits. In 1955, total state and cooperative retail trade
turnover, excluding public dining, was 4+3.1 billion rubles. 3 / In
retail trade, the markup of goods in 1955 was 34.7 billion rubles 3 0 ;
in wholesale trade, the markup was 7.6 billion rubles (the sum of total
costs of 5.8 billion rubles plus profits of 1.8 billion rubles). 351
The combined retail and wholesale markup was therefore 34.7 plus 7.6, or
42.3 billion rubles. This figure is 9.5 percent of total retail trade
turnover of 443.1 billion rubles.
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(2-2) In 1955, foodstuffs accounted for 49.5
percent, and nonfood goods for 50.5 percent of state and cooperative
retail sales (excluding public dining). 352
(3-3) A recent Soviet source indicates that
marketing costs for food goods are five-thirds the level of costs for
nonfood goods. 353/ Then, if X = the markup in fo d distribution and
Y = the markup in nonfood goods distribution, X 3 Y and 0.495 X
+ 0.505 Y = 9.5. Solution of these equations yields 11.9 percent for
X and 7.1 percent for Y. Therefore, it is estimated that marketing
costs in the state and cooperative retail trade network average 12 per-
cent of the value of food sales.
In the application of this estimate,
no attempt is made to allow for the large variations in the cost of
marketing different agricultural products in the USSR. 354 The list
of commodities composing farm household consumption-in-kind is by no
means complete, and the individual quantities of all the various pro-
ducts included under All Other cannot be specified. Therefore, a
general estimate of marketing costs for food is used instead of one
embodying individual adjustments for each commodity.
bb. Share of Consumption-in-Kind Priced at
Estimated Collective Farm Market Prices.
This allowance for costs incurred in col-
lective farm market trade is essentially notional. It is based on
the assumption that the chief element of trade costs, labor, is
appropriately assigned less value in collective farm market trans-
actions than in state and cooperative retail trade, because the
incomes of collective farmers are lower than those of urban workers
and employees. No reliable calculation of labor, transport, and
tax costs incurred in collective farm market trade is possible with
existing data. Therefore, it is arbitrarily assumed that trade
costs in collective farm market trade, as they are certainly.some-
what smaller than food distribution costs in state and cooperative
retail trade, may have amounted to 4 billion rubles, or about 9 per-
cent of the volume of turnover.
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