JPRS ID: 9741 USSR REPORT AGRICULTURE

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• Content Type: REPORTS

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JPRS L/9741 .
- . 19 May 1981 ~
- USSR Re ort ~ -
p
AGRIC~ILTURE
(FOUO 3/81)
- ~BIS FOREIGN BROADCAST It~FORMATION SERVICE
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~ . JPRS L/9741
19 May 1981
~SSR REPORT
~ AGRICULTURE
(FOUO 3/81) -
CONTENTS
~ ~
LIVESTOQC
~
Increasing ~ffectiveness of Cattle Raising ~
, (N. Korina; VOPROSY EKONOMCZI, Dec 80) . . � . . . . . o-o : . . . . o . o 0 0 1
AGRO-ECONOMICS AND ORGANIZATION
Grain Seed Production in Talsinskiy Rayon, Latvia Discussed. -
(AGROTEKHNICHESKIYE SOVETY KOLKHOZAM I SOVKHOZAM, Feb 81) 11
Intensified Role of Contracts iu Agroindustrial Complex Urged
(Ivan Nikolayevich Buzdalov; VOPROSY EKONOM~I, Mar 81)........ 16.
- a - [II~I - U5SR - 7 FOUO]
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LIVI:STOCK
INC~ASING L'FF1~.CTIV+;;i~ESS UF CATTL'r'. ?tAISII~iG ~
Moscow VUPROSX Ei~0:d0:~tIi:I in I~ussian No 1~2, Dec ~i0 pp 69--77
"
[Article by N. Korina~ ~ _
[Text] It was pointed out in t}~e decisions of the July (1978) Plenum of tihe CPSU
Central Committee ttiat "ttie whole course of development o~ the country's economy
and a steac~y growt~l of tt~e material level of the people's life now bring to the
forefront the task for a more rapid rise of animal husbandry." The successful im-
plementation of these tasks depends to a s3.~nificant depree on raising th~e econrnaic
eFfectiveness of cattle raisin~ on the basis of its industxiaXizatjon. ~
The indus trialization of animal husbandry has the same features as industrialization
_ of agriculture as a whole. But there are differences here, stemming from the actual
specifics of animal izusbandry. This presents greater demands on providing the sec-
tor with capital structures, fodder storages, anima].-husbandry �arms with a specific _
regime of temperat~ire and humidity w:Cthin them; feed balance as to nutxient conterit;
medicines; special transport and so on. Thus, industrialization o~ anin~al husba.*~dry
sl~ould be aimed at ~roviding this sector with fixed and working capital in the quan-
titative and quality composition and correlation which would permit the c~eation of
conditions for the furtY?er expanded production of animal-husbandry products in plan-
ned volume ~aith simultaneous reduction of socially necessarq expenditures of labor
per product unit.
Living and past labor participate in the process of production o� animal-husbandry ,
_ pr~ducts. At the same time, the share of embodied labor in overall outlays per
unit of animal-tiusbandry product is corstantly growing. AC kolkhozes in 1978, feed
outlays in tt~e structure of outlays for production of milk amounted to 40 percent,
for the production of. catCle--54.2 percent; at sovkliozes--45.5 and 58.4 percent, _
respectively. On ttie whole, the relative share of past labor,with accoun~ beinR
taken of amortization deduczions in overall outlays,reached about 50 percent in
tt~e production of nilk at kolkhozes and 63~";percent ~n the praduction of cattle ,
weigtit increase--63 nercent and at sovkhozes--56 and 67 percent, respectively.
Tliese figures show t~ie need for rational use of past labor and the influence of the
given factor on the effectiveness of cattle raiaing (on growth of labor productiv-
ity, reduction o� G~roduction expenditures and so on). .
Gver Che course of an extended period of time, aFriculture, especially animal hus-
bandry, w as,compared to other sectors of the national economy~ at a Iower level of
technical equipm+~nt. In recent years, aa intensive process has been proceeding
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of saturation of animal husbandry with fixed and working capital. Thus, the value
of fixed production cagital in the period from 1965 to 1978 increased by a factor
- of 3.4; at the same time, this value of fixed production capital of animal husb and-
ry grew by a factor of 3.7. Durin~ 1971-1978 alone, approximately 3 billion rubles
were alloca~ed for ttie construction r~f animal-husbandry cmnplexes. In this peri-
od, the capital-labor ratio of agricultural workers increased significantly. In
1965, it amounted to 2,200 rubles; in 1918, it had,~rown to 7,900 rubles, that is, ~
by a factor of 3.6. The intensive animal husbandry s capital provision resulted in -
tIie growth of the capital-output ratio of animal-husbandry production.
Table 1. Tlynamics of Capital-Cutput P.atio in Cattle Itaising -
Capital-output ratio of fixed
production capital per ruble 1976, in % ,
of gross production (in rubles) �f 1965
- 1965 1970 1975 1973 ~
holkhozes
;~.ilk 1.48. 1.66 1.88 2.33 157 ~
- weif;~it gain of cattle 1.38 1.40 1.68 2.15 156
:~ovkhozes ~
- '.[ilk - 1.42 1.41 1.90 2.10 148
:1e-i~tit gain of cattle 1.43 1.15 1.37 1.85 130 ,
indicated by tlie data, the ca~ital-output ratio of ai13~ production at Ir.ol&hazes
.~ucre~sed 57 percent and meat
56 percent, at sarekhozes--48 a~d 30 percent, respec-
tively. iiie capital-outFut ratio of cattle Yaising ~s reflecte~d evea ~or~ in tbe i`-
~ indicaCor of fixed prod~ucti~r cagital as cae~guted per prodnct nmit. At Icolkhozes i
_ in 1965, the production of one quintal of ~illc e~glo~ped fized production c~pitai.
valued at 26.u3 rubles; in 1978, its production had inc.re~sed to 53.99 n~les, =
that is, oy a factar of 2. .
Tne va~cce of ffxed ,~rac:uct~rni capftal invalved in t&e productian of one quiatal of :
wei~et ~ain of cattTe increased ~ore t~an 2.6-fold. A siaflar situatian is to be
fo und at sovkhozes .~,Il ttnis means t~at in tfie prodnctian of one ~it of aataal-
i~us~a~~ry gro~uctioa r~ore fized prodnctioa caQital is involved at the preseat tiae -
(expr~ssed in valu~ ~era~s) tinan Tnas been ia prec,edfng ~eais.
lecnx~ic~l pro~ress ~ri.ngs a~out grwt6 of the tecbnical-output of labor, vhich
s~rve~ as a precan~ition of rafsin~ its productivit3r. ~t kolkhozes in 1978, out~
. ;~ays o� ~nan~-~nours c~ ti~e productian of one quintal of ~]yc decreased by 50 peroeat
r.o~pare~ to 1965 ana oa t.aie weight gaia of ane qudntal of cattle by 43 gerceat aad
at ka~lsixazes--42 and 36 peraent~ respectively. 1"f~us, t~ae ~ravth of the capital-
oc~tpu[ ratio of pro~uctioa of at?ricultural products is a l~rfnl process uader Whose -
ir.fluer~ce there occur in tlie structure of outlays a reductlon in the share of liviag
~ lsbor and a~ fncrease in the share o� e~obodied labor. Thus, fn the total s~ of out
lags, t~e relative ~~~iare of outlays on wa~;es in 1978 coopared to 19~5 drapped by 52.3
gercent at kolklnazts in the procPuction of milk and fro~ 40.6 to 19.0 perceat for cat
tle; at sovk~?ozes, tk~e figures vere, respectively fram 34.0 to 24.1 perceat and fra~ '
21.4 to 15.5 perceat.
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- Une of ttie most im~~ortant conditions of ensuring a 1?i~ti rate of development for tt~e
natiuual economy is to be found in greater effectiveness of use of production capi-
tal. At rhe present time, fixed production capital of agriculture amounts to more
tnan 18U billion ruules, including more than 84 billion rubles for animal husbandry,
for whicli reason its rational utilization is especially important. In increasin~
the value of fixed production capital without an advancing rise in ~he value of
gross production, th~ capital-output ratio drops. In recent yeaLS, the Rrow~:h rate
�
of the value of fix~d production capital significantly surpassed the growth rate of
tne value of gross production. Thus, in the period from 1965 to 1978, the value of
fixed production capital of animal husbanury at ko1kY?ozes grew 3.1-fold, while the
volume of gross production increased only 92 percent and the output-capital ratio �
decreased 65 percent. At sovktiozes with a 4.3-fold growth of the value of fixed
production capital and a 3.1-fold increase in the volume of gross production, reduc-
tion of the output-capital ratio amaunted to 71 percent.
Tne rise of the capital-output ratio of product output and a certain reduction in
- ttie output-capital r-atio occur in part because of intensive capital equipment of _
regiuns of the middle zone and the northeastern regions, where agricultural land is _
less productive and ti~e value of capital cazstruction ia hi~her.
t~
In recent years, most animal-husband.ry complexes have been constructed mostly in
the regions of the No~ichemozem Zone. Kastery of the use of production capacities,
as of new equipment, costs more than the operation of ad~usted production equipment.
These factors are ob~ective, dictated by the need of s trengthening tlie economy of
the I~oncnernozem 'Lone. At the same time, there are a number ot factors of ~ sub-
~ective character ttiat can be eliminated. Some of them directly depend on agricult-
ural workers, wtiile others are the consequence of special develc+pmental features of
tlie �ational economy as a whole. For example, in a comprehensive approach to the
industrialization c~ animal husbandry provision is ma3e for an opt~mal correlation _
bet*aeen the capacities of animal-husbandry enterprises and factories for processing
of teed of the necessary quality. But in practice, Chis condition is not observEd.
A comprehensive approach to the formation of fixed production capital is one of the
cond:.tions of its effective utilization. But even this condition cannot always be .
rulfilled because cf. st?ortages of individual machines and equipment.
Ti~e role of different a~;ricultural fixed production capital varies in the creation
of iiew value. Some of it can be conditionally included in the active-part group,
cons.istiug of agricultural machines, engines, equipment, electric installations, _
productive livestock, wliile anott~er part of it can go into the passive-part gr~up: -
buildinF,s, irrigation structures, roads, con~maunications and the like. The active
part of fixed prodi~r_tion capital more quickly transfers its value to newly crexted
products and the passive part--more slowly. Consequently, the str.ucture ~f fixed
production capital influences the rate of transferring its value to newly created
va�lue, wtiicl~ to a certain degree determines the effectiveness of its use, that is,
tlie level of the output-capital ratio. Let us examine the structure of fixed agri-
cultural capital of :coll:hozes, sovkhozes and other state farms in its dynamics
(Tal~le 2) .
11ie most significa:~t relative share in the structure of fixed production capital
consists of buildin~;s, struct~lres, transmission equipment, that is, the passive
part of the capital. In 1965, this part of the capi~al comprised less than 50 per-
cent; in 1~78, its relative share had grown to 62.1 percent of the total value of
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Table 2. Structure of Fixed Production Capital ~
- of Agri~culture (in 9:) '
1965. 1978
~ Fixe~=~agri.cultural production capital, total .100 .100
includit:g :
buildings, structures, transmission equipment .
and so forth 43.5 62.1~
macliines and equipment 22.0 17.2
means of transport, 4r,3 3.5
productivz'livestock ~YS:7 10.3
otlier fixed agricultura~ production.capital 9.5 6,9 ' i
� r
the capital. At tile sane time, the relata ?e share of all element:s of the acttye i
part of t~e fixed production capital had~dropped by 1978: machinE's and,equip~ment--
from 'L~.O to 17.2 percent, means of transport--from 4.3 to 3.5 percent, while the
relative share of tt~e mos t impor.tant parE of the 'production~~~capital, of animal� hus- ~
~und ~roductiv~ livestoci:--dro~ ed 'from 15.7
~ P percent in 19~;5 to 10.3 percent in
1~> 7 ~3 . ~ , ~ i
~ i
As analysis of thc dynaaiics of the structure of fixed production capital, sliows, i_
tt~e ~roE~tii of its ~7assive part occurs at an advancinp, raCe, which is likewise
confirtied by structural shifts of capital inveEtment in agriculture. Thus, the re- i-
l.atice share of capital investu?ent foi construction and equipment of animal-husband-
cy f3rws ~nd ~,~ater-Q:anagement construction in 1978 rose as compared to 1965 from '
4~~~ 7 to 41.3 percen t. 'i'he relative share of t~~e active part of the production cap-
ital in tne total afigregate' of 'capital investment was~ reduced! for exannple, in the ~
: ac~{uisition of tractors, transport equipment, agricultural machinery and sa on frmn. j
38.9 percent to 33.7 percent. , ~
'Lne increase in the share of capital investment aimed at the devel'opment of the pas- '
, sive part of tiie fixed production capital ~reatly contributed to increasing the '
capiCal-output ratio of production and reducing the?'output-capital ratio. Of raa3or ~
i signiFicance to a~;r~culture is the level of. provision of equipment and various mech- j
anisuLS (mectianical lines for milkin~~ fodder distribution, manure removal and the
~ like). ldlien they are inadenuate, capital structures are not used efficiently and '
~ there takes place overexpenditure of labor and material resources. But at the pre-
' senC time, a process is taking place of reducing the relative share of the active
part of t~ie capital. Farms are::experien~cin~ difficulties in the acquisition of
tec!?nical ec~uipment, especially spare parts for machines and equipment.
~:o less an important factor influencing the effectiveness of cattle raising is op- -
tinal correlation of simultaneously used means and ob~ects of labor._ In aninal hus-
_ bandry, t~~is is manifested in the need of providing productive livestock on hand
with fodder in the required anount and quality Rnd proportion, which determine the
success of tlie,,operational activity. Growth of both passive and active parts of i
capital (particularly the basic number of livestock) without expansion of the feed j-
base resulCs not in ~;rowtn.of productivity of the livestock and an increase in ~
a . ~
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4. . . ~ i
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the total volume of production but in a higher cost per production rsnit aad reduced
~ effectiveness in ti?e use of fixed capital.
Uver the course of many years, the greatest of attention was devoted to the problem =
of bread grain and a lot less to the problem of forage grain. This can be seeti l~rom
- the analysis of tiie dynamics of se?wn areas in the country occupied by grain crops.
In 194U, 4U.3 millio~i.hectares of land were occupied by spring and winter wheat and
.r in 1978 the figure was 62.9 million hectares, that is, 56.1 percent more. Sown
_ areas under forage ~.cain crops grew insignificantly or were reduced. For example,
the area imder spring oats for tliis period decreased from 20.2 million hectares to
Z2~.1 million hectares, that is, by 40.0 percent. In 1978, of the total mass of pro-
- duced grain.cropa, bread grains constituted about 70 per~ent and forage crops only -
3U percent.
llespite the fact ti~at tt~ere has recently emerged the tendency of a gradual inerease
in areas occupied by sowings of forage crops and of a certain curtailment of areas
occupied by bread rrains, forage grain is still being inadequately produced, as a
result of wt~icli a shortage of feed protein is being felt in animal husbandry; this
is partially covered by concentxated feeds produced from wheat. According to our
calculations, about 30 million tons of wheat are used foz~ feed in animal husbandry
to compensate for deficit feed protein, which is a poorly productive and ineffec-
tive use of grain and in the final analysis of labor and material resources. This
results first of all in in creasin~ the cost of the feeds themselves and increasing
the production cost of a unit of ani~al-husbandry productian. Thus, Che cost of
one quintal of fodder units f rom concentrgted feeds in 1965 xt kolkhozes was 4.67
~ rub].es in 1965; i.n 1919, the cost had risen to 9.79 rubles, that is, by a factor of _
2.1.
The increase ~n tYie cas t of feeds and animal-tiusbandry products is aided by the ir-
rational use of milk for feed purpose. Thus, for ttie feeding of calves in 1979,
7.1 u?illioc~ L-ons of mill: ai:d auout 14.1 million tons of skim milk were used on the
country's kolktiozes and sovki~ozes. Altogether about 10 percent of produced milk
and almost iialf of tlie milk protein produced in the country as a whole.(in highly
developed countries 2 to ~ percent of the milk goes for these purposes) were spent .
on feeding livestock. Ttie use of milk and milk protein fer feed purposes
leads to tiigher prices for feed and and correspondingly to a rise of rou~hly 6-8
~ercent in the cost of a production unit and~',to a reduction in the use of whole ~
- milk and dairy products by the country's population amounting to 3-4 percent.
At the present tirn~:, when specialized animal tiusbandry is bein~ intensively devel-
oped on an industrial basis, the problem of proving feed in the necessary quantity
and rec~uired quality is becoming especially acute. As we know, progressive tech-
nol~gy in specialized animal husbandry is effective only in the case of use of spe- _
cial feeds. For example, stetzcx mixed feeds and regenerated milk without which in-
tensive rearing of younf; stock is impossible are used. Lack of tiiese feeds, their
unsatisfactory quality result in a higher incidence of murrain of cattle at com-
plexe:; poorly supplied ~~ith feeds, wliich can be as high as 20 percent or more, and
l~otii reduced productivit;~ of cattle and tlieir low weigtit gain.
For the purpose of satistyino tl?e need of enterprises of tlie industrial t,ype (kol-
khoz, interfarm and state) for starter mixed feeds, it is necessary to increase `
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- total pruduction ca~.acities fourfold in terms of their productivity. For the pro-
visiun oP effective industrial.cattle raising, regenerated anilk should be produced
seveci times more than ltas been tlie case up to now.
Thus, a further increase in tt?e effectiveness of cattle raising is primarily li~1d
bacl: by an unsatisfactory feed base, insufficiency and laa quality of feeds. The
problem lies LlOt onlf in an inadequate production of concentrated, coarse and suc-
- celent fodders in a~;riculture itself but also in an insufficiency of capacities for
inclustrial processin~; of feeds. Composition and balance of nutrients determine the
possibilities of their assimilation by animals and consequently fsed efficiency
(grain not processeu into specialized, concentrated feeds is not completely assimil-
ated by the animal or~anism) . Tlie relative share of concentrated feeds that have
not undergone indus~rial processin~ amounted in 1978 to. about 24 percent on kolkhoz- . ~
es and in prepared mixed feeds and feed mixtures in granule form--only 3e 3 percent.
An inadec~uate de~re~~ of processing of concentrated feeds and mixed feeds results in
ti?eir over-expendit�ire for all forms of animal-husbandry nroducts. Thus, in 1978
_ one hunc;reci fifty-t~.:o units were expended for one quintal of milk at kolkhozes and
1,25~ feed units for tiie weight increase of one head of cattle, which is 25-30 per-
- cent i~ij;tier than tnc rational norm. Growth of feed-production capacities, abetteii
by L-lie el~mination of non~roductive �eed expenditure, constitutes one of the si~nif-
icant r.:~erves for increasing rieat rroduction and achieving hi~h cattle wei~ht con-
dir.ion:; in sale to ti~e state, reduction of all production costs and higher effec-
tiveness of animal ~~usbandry as a whole. The results of selection and breeding work
- on improving tcie ytiality of all cattle also lar~ely depend on ttie c~e~ree of. availa-
T lity of iiecessary fe~:ds for the animals. Today, gains from work on improving the
_ di~;reed condition of the iierd are to a significant degree lower because o~ the un-
~:atisfactory condition of ttie feed base.
A deticit in ttie f~.~il value of feed protein and insufficiently high quality of feeds ~
i~ave been res~~onsiu~e for low growth rate of animal productivity. Thus, in 197$
comparecl to 1965, annual milk yield from one cow increased 20.2 percent, comprising
a co~intry average of 2,259 kg per cow; the average wei~;ht of one head of cattle sold
to the sCate increased by 41 percent, attaining 361 k~ on the average for all cate-
bori~, of farms. 'iiie la~ in the development of Che feed base has been responsible
for low growtti rate~ in the number of tiead (from 1965 to 1978, they increased 29.2
uerc~nt), whidi totether with an inadequate rise in cattle productivity determined
tne low rate of increase of gross production and higher outlays for this production.
T~:is can be seen from ti~e data of Table 3. ~
As shown by the ta~le's data, tize cost of one cattle-place [skoto-mesto] at kolkhozes
~i~:crease~ to 501.is r.ui~les (almost 2.4-fold), while the extra products obtained could
ue valuea at only 13'J.8 rubles (~n increase of 51.1 percent). At sovkhozes, addi-
tioiial outlays for ti~e maintenance of cattle amounted to 50a.2 rubles, while the
added ;~~roduction ot one cattle-~lace was valued at only 167.7 rubles, that is, a
2.1-f~~ld increase k~ad tatcen placc in the rising cost of one cattle-nlace with a ~
~ross ~,roduction ir.crease of only 53 percent. On the basis of tlie cited data, it '
can be said tiiat tl:e additLonal costs put into cattle raising have so far not pro-
ducecl ttie nec2ssary economic effect or growth of production volume canable of ensur-
iii~, ;.eductian of p1�ocluction costs (reduction of socially necessary outlays of i
la~~~r) . ~
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`Table 3. llynamics of Grass Production Output of One Cattle-Place and its Cost
1965 1970 1975 1978 1978, in %
of 1965
holkhozes
Cost of one cattle-place .
(in ruLles) 368.8 525.7 858.2 870.6 236.1 �
Cost of gross production
output of one cattle-place ~
(in ruhles) 256.2 339.9 431.0 387.0 151.1
Sovknozes
~ Cost of one cattle-place
(in rubles) 45U.5 541.2 848.8 958.7 212.8
Cos t of ~;ross production ~
- output of one cattle-place
(in rubles) 316.2 418.2 514.7 483.9 153.0
Production cost is one of the basic generaliain~ indicators determinin~; the effec-
~ tiveness of production. Volume and quality of production are in direct proportion
to tiie effectiveness of utilization of the elements comprisin~ producti~n cost
(fixed production capital, raw and other materials~ fuel, wa~es and so forth). The
observecl reduction of tlie ~utput-capital ratio attests to the irrational use of
' fixed and workin~; capital--to nonproductive use of social labor with its impact on
y;r~wth of production costs. K. ~Iarx wrote: "Rising labor productivity means name- _
~ l,y ttist Ctie share oE living labor is reduced, while tlie share of past labor is in-
creased, but increased iu such a way that the total sum of labor included in com-
moda.ties is reduced; ttiat, consequently, the amount of living labor is reduced more
*_cian tEie amount of past labor is increased."1 At the present time, in some sectors
of agriculture, part:icularly in cattle raising, the share of living labor is being
reduced as the result of its gra~~ing product3vity, while the share of past labor
cor..tinues to ~row. But it is increasin~ in such a way that the total sum of labor
included in commodities is not reduced, that is, the amount of living labor is n~t
- reduced more than rhe amount of past labor is increased.
Irrational and nonproductive utilization of past labor included in the means and ob-
,jec:ts oP labor tias ~een one of the reasons for lawer ;growth rates of labor produc-
tivity compared to tiie ~rowtn of the cost of expended means of production and on
this basis of the rising production cost of animal-husbandry products. Foz exsmple,
in cattle raising on kolkhozes, the production cost of one quintal of milk greco from ,
16 rubles in 1965 to 24.7 rubles in 1978 (54 percent) and of one quintal of wei~ht
gain of cattle frum 1U17 rubles to 178.5 rub les (76 percent), on sovkhozes, respec-
tively, of one quintal of csi.lk--from 16.3 to 27.2 rubles (67 percent) ancY :of one
quintal of w~igiit ;,a:tn of cattle--frrnn 105.2 to 191.6 rubles (88 percent) .
1. K. l~tarx azid I:ngels, "Socliineniya" [Works], Vol 25, Part 1, p 286. -
7
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A decree of the July (1978) Plenum of the CPSli Central Committee "On Further Devel-
oping USS)t Agriculture" points out the need "to launch a determined struggle for
econoniy and thrift, for lower cost of production and an a11-out increase in labor
~~roductiviCy at all operational echelons from bottom to top." Effectiveness of
cattle raising, ni~iier labor productivity and lower production costs directly deppnd -
on ratiorial and economic use of past labor included in the means of production.
� For this reason, tiie tasks set for agriculture at the July (1978) Plenum of the CPSU
Central Committee have to be solved in the direction of elimination of nonproductive
use of past lab or and a higher output-capital ratio and return on feed.
The use of the newest acYiievenents of science and tectinology and progressive pro-
cessing methods anu on their Lasis the further.development of production are not -
achievable on separate, even large, kolkhozes and sovkhozes. All this demands an
- increased scale of concentration of production. Interfarm cooperation permits all
multisectorial and all-round production of kolkhozes and sovkhozes and all sectors `
of agriculture to be converted to large-scale,tiighly mechanized production and the
creation of hi;hly concentrated production. In the Su~ary Report of the CPSL' Cen-
tral Committee anci in a number of otlier pronouncements, L.I. Brezhnev stated that '
specialization and concentration of production constitute the main line for the de-
velopment of our agriculture. "Rapid development of agriculture," L.I. Brezhnev
empti~~.sized, "leads ro increasin~ly broader spread of interkoll:hoz and state-kolkhoz '
, production associations, to the creation of agroindustrial complexes. Ttiey make
effective use of equipment; capital investment and labor resources and wider use of ~
industrial methods."1 I
Ttie concentration of production at interfarm enterprises and state-~?enterprises of !
~_ne indus tri.al Cype (complexes) is significantly higher than at kolkhozes and sov-
i~iiozes. Ta~us, in 1~78, concentration of productive head of cattle at kolkhozes was
on tiie average for one farm lower than at interfarm enterprises by a factor of 1.7 '
and at sovkhozes--~y a factor of 1.6. At the same time, the number of farms spe- I
ciallzino in Fattening was 275 at interfarm en te rprises. The level of concentratian
of younf; s tock bein~; fattened at these specialized enterprises was hi~her than at '
- kolkl~ozes or sovkhozes uy a factor of 1.5. The high level of concenCration and spe- ~
cialized production at iiiterfarn~ enterPrises tias made it possible to use pro~;ressive '
tecl~noloby, creatiu;; conditions for the rational utilization no~'~,only of living la-
l~or but also of Past laUor.f All this has ensured here a lower level of production i
cost:,. ~
1'rc~Fressive technolohies and tecimical equipment and specialization of production ' ~
~ave made it possi:,le to si~;nificantly reduce the laUor intensiveness of rearinp and
f att~ninfi of livas tock, as a result of wliich labor productivity on the whole has _
been raised at cattle-raisin~; interfarm enterprises. In 1978, the level of labor
uutlay:s for one c;t?intal of wei~ht gain of youn~� cattle at interfarm enterprises was
Iower by a factor of 3.5 than at kolkhozes and losser by a factor of 2.5 than at sov-
kiiozes. Un tne Lasis of ~ro~ressive te~nology, there nas also be2n achieved at
inter�arm enterprises rational utilization of material resources (first of all
feeds) .
1. "P:ater~aly 1~X1V ~"yezda KPSS" [Materials of the 24th CPSU Conyress]. Politiz-
ciat, 19 72 , pp SU-51.
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i7~e i;;gti lyroduction cost of one quintal of weight gain of cattle-raising production
at kuZkliozes and so~khozes at the present time is basically due to a constant short-
_ a~;e of feeds and an unbalanced diet in terms of feed valuss, particularly with re-
spect to' protein, r~ineral substances and vitnmi.ns. Ttius, the per-day feed expendi-
ture on one head of young stock and grown cattle being fattened amounted on th~ av-
_ erage for kolkhozes 4.16 feed units and for sovkhozes--4.65 feed units and average
daily weight gains--325 and 378 grams, respectively. At interf~rm enterprises, -
wliere rearing and fattening are done at specialized complexes oa an industrial basis, _
the average daily feed outlay per head amounts to 5.56 feed units. Average daily
weis;it gains durin~; rearing and fattening at interfarm enterprises amounted to 590,
at interfarm complexes--626 and at state complexes--756 grams and as an average for
all complexes--652 grams. At sor~,complexes even higher average daily weight gains
iiave been attained, for example 1;OG6 grams at the Voronovo Complex in Moscow Ob-
last. Ttie higher average daily feeding norms at complexes (19 percent compared to
sovl:hozes) and the use of full-value feeds have ensured higher productivity of the
animals being reared or fattened amounting to a factor of 1.7. ~
� With increased average daily weight gains of animals and their productivity, the -
time of growing and fattening of livestock is reduced, which ensures the highest
possible effecCive use of capital structures and all equipment. For the fattening
_ of an animal from 4~ to 450 kg, 1,000 days are required at kolkhozes and sovkhozes
and at specialized complexes complexes with average weight gains of 1,000 grams, a
total of only 405 days, that is, there can be produced at one cattle-place in an
equal interval of time rougntly 2.5-3.0-fold more production than.at kolkhozes and
sovkhozes. Time periods of fattening one head of cattle to a required weight are
even more compressed at interfarm enCerprises than .:3t kolkhozes and sovkhozes by
roughly a factor of~2.5. As the ~esult o� this in 1978 one cattle-place at inter-
farm enterprises was chea~~er by 42.7 percent at kolkhozes and by 57.2 percent at
sovkhozes. At the same time, 1 ruble of gross production at interfarm enCerprises
required existing fixed production capital in the amount of 1.~5 rubles, at kolkhoz-
es--2.25 rubles and at~ sovkhozes--1.95 rubles, that is more than at interfarm enter-
prises (at kolkhozes--by 45 percent and at sovkhozes--by 28 percent). Feed outlr~ys
at interfarm enterprises for one quintal of weight gain of cattle are lower than at
_ kolkhozes by 23.6 percent and at sovkhozes--by 28.6 percent, while the productivfty
_ of the anin?als is iiigher. The average weight of one head of young stock sold in
197~ to the state by interfarm enterprises was 378 kg, by kolkhozes--367 kg and by
sovkhozes--36U kg.
As tlie resulC of rational utilization of labor and material resources at interfarm
specialized enterpr.isesa lower level of production cost per unit of product ha:~ been
achieved. 'tfie prcduction cos t of one quintal of weight gain of cattle on them in
1978 was 128.b rubles, while on kolkhozes it was at the level of 178.5 rubles and
at sovkl~uz~:s--197.6 rubles, t}iat is, lower than at kolkho2es by 38.8 percent and
lower tiian at sovkiiozes by 53.6 percent. This means that in addition to higher re-
- turn on feed a significant reserve for boosting tlie effectiveness of utilization of
past ~abor and on tiiis basis the effectiveness of cattle raising as a whole .exists
_ in the furu?er development of concentration of production anc? in~tensification of ita
specializati.on.
Thus, there is observed at the present time a process of inc.reased capital provision
of animal tiusbandr~, thanks to which capital intensiveness ana material intensive-
ness of production output are increasing in it. The industrializ~cion of animal
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~
_ husbandry and risir?~; capital-labor ratio are cantributing to the growth of fts pro-
ductivity. ~ut higher ~rowtn rate of fixed capital compared to the growth rate of
working capital (first af all feed) brin~ about a lawer output-capital ratio, non-
- productive expenditure of a certain portion of past labor included in the mea~s of
production. Feed silorta~e and ita low quality result in insufficiently higt~ pro-
_ ductivity of animals, an underuse of fixed production capital, an overexper~diture
of feed and higher costs of production.
F'ar the purpose of improving the use of fixed and working production capital, it is
necessary to further strengtnen the feed base, to provide animal husbandry with
feeds not or.ly in the required amounts but also in the necessary quality, for which
purpase it ~s necessary to increase the production of forage grain and to expand ~
the capacities of t?ie feed processing industry. Specialization within the sector
should be directed a: making the processes of rearing and fattening independent pro-
duction operations, which would create conditions for high concentration of these
- production operations and for the introduction of progressive technology, ensu-ing :
Che rational utilization of livin~ and past labor, included both in the means and
objects of labor, first of all in feeds. The forming of fixed agricultural pxoduc- -
tion capital should be done comprenensively. Its structure (correlation af pas-
- sive and active parts) should be such that all constituent capital is used with the
highest return. Ail tnis will contribute to lowering socially necessary outlays of
labor and raising t~~e effectiveness of animal husbandry. ~
CUI'Yi;IGHT: Izdatel'stva "Pravda", "Voprosy ekonomiki", 1980
7097 i
CSO; 1824/'l06 ~ . '
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- AGRO-ECONOMICS .AI~D ORGANIZATION
9
GRAIN SEED PRODUCTION IN TALSINSKIY RAYON, LATVIA DISCUSSED
Moscow AGROTEKHNICHESKIYE SOVETY KOLKHOZAM I SOVKHOZAM in Russian No 3, Feb 81
/Article: "Grain Seed Growing in Agroindustrial Association"/
/Text/ The decree of the CPSU Central Committee and the USSR Council of Ministers
"On Measures for Further "improvement in the Selection and Growing of Seeds of Grain
and Oil-Bearing Crops and Grasses" (1976) stresses the great importance of indus-
trial seed growing. Its essence lies in specializing kolkhozes, sovkhozes and in-
ter.farm enterprises in the production of seeds and in maximally mechanizing all
processes.
The need to improve the system of growing seeds of agricultural crops and to ac-
_ celerate its transfer to an industrial basis is also discussed in "Basic T.rends in
the Economic and Social Development of the USSR for 1981-1985 and for the Period �
, Until 1990."
Farms in our country's nonchernozem zone are under complex conditions for grain
_ production (a short vegetative period and a high moisture of seeds during the har-
vest period). Therefore, technical and technological di.fficulties have arisen in
the introduction of industrial seed growing. In order to treat the seed heap ar-
riving from combines in one operation on the production line (by the flow method.),
while preserving arid improving the quality of seeds, it is necessary to have a suf- .
ficiently powerful material and technical base. Only industrial seed growing makes Q
it possible to solve these problems successfully.
Organization of Industrial Seed Growing
The f irst rayon agroindustrial association in the republic (and one of the first
in the country)'was established in Talsinskiy Rayon in the Latvian SSR. It in-
cludes nine kolkhozes, five sovkhozes, an experimental selection stand station and
enterprises servicing agriculture--the Latvgoskomsel'khoztekhnika Rayon Associa-
tion, a mobile mechanized column for reclamation construction and an interkolkhoz
construction organization. The transfer of seed growing to an industrial basis
takes place against the background of an accelerated economic and social develop- -
ment of the rayon's farms.
Seed production is organized according to the following diagram (fig. 1). When it
was drawn up, the following factors important for the concentration of seed growing
were taken into account: standard of farming, provision of seed growing farms with
personnel, material and technical base, distance of seed transportation and so on. -
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Figure 1. Diagram of Production of Grain Crop Seeds in Agroindustrial Association
Experimental Selection Stand Station
Kolkhoz imeni V. I..Lenin Lubezere Sovkhoz Draudziba Kalkhaz
Kurzeme Okte Tsinya Royupe Valdgale Diimtene
Kolkhoz Sovkhoz Kolkhoz Kolkhoz Sovkhoz Kolkhoz
Laydzskiy ~
Lachplesis Sovkhoz- Dundaga `Tin'gere ~Virbi '
Kolkhoz Tekhnikum Kolkhoz Kolkhoz ~ Sovkho~~ i�
. ~
f
'l'he program for the specialization and concentration of seed grow3.ng was preuared
with due regard for capital construction and supply of machinery for the sector's
development in the rayon. The economic relations among farms producing and buying ;
seeds were built on a scientific basis. '
Whereas previously every faim received elite seeds of grain crops and propagated ~
them to the fifth reproduction, now only seed growing enterprises do this. Having ~
propagated elite seeds to the third reproduction, they sell them to kolkhozes and '
sovkhozes for the growing of commodity grain. This is.how the program for the pnr ~
_ duction of grain crop seeds on specialized farms in the rayon for the llth Five- ~
Year Plan looks (table 1). I
~
Table 1. Plan for Production of Grain Crop Seeds in Talsinskiy Rayon, tons i-
Farm 1981 1982 1983 1984 1985 ~
Draudziba Kolkhoz 1.27 1.57 1.88 2.18 2.56
Kolkhoz imeni V. I. Lenin 1.82 2.33 2.43 2.44 2.44
Lubezere Sovkhoz 0.95 1.00 1.10 1.20 1.30 ;
A Total 4.04 4.90 5.41 5.82 6.30
In 1977 seed growing farms organized a centralized delivery of treated seeds to -
the sowing units of purchasing farms. Schedule plans for sowing and transporting
5eeds worked out ~ind coordinated in advan~~e contribute to the efficiency ~f opera-
~tion. There is a constant radio and telephone communication among farms. The mo-
_ tor vehicles that deliver seeds are equipped with radio telephones. Owing to the
fact th~.t specialized seed growing enterprises and purchasing farms conclude ag-
reements annually, all operations are performed at the proper time. '
.
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- Material and Technical Base
Tlie success of industrial seed growing depends on the provision of farms with mate-
rial and technical equipment for the postharvesting treatment and storage of seeds.
5cientists of the Latvian Agricultural Academy in cooperation with the rayon~is spe-
cialists developed all the technical documents for farms in Talsinskiy Rayon.
The central station for the postharvesting treatment ~f grain r_rop seeds was re-
constructed on the Kolkhoz imeni V~. I. Lenin in 1977. Its drying unit consists of
two SZSB-8 dryers and 32 S-SOV67 ventilated hoppers. Since dryers and seed clean-
ing and sorting machines are placed under hoppers, it was not necessary to erect
walls and floors between stories. The construction of this enterprise was cheaper
- and its time was shortened. A similar station was also built on the Lubezere
Sovkhoz.
The S-50V67 ventilated hopper is designed for the storage of the seed bulk received
from combines for postharvesting treatment. In hoppers the moisture of the seed
bulk before treatment in heat dryers is leveled out and it is dried in a regime
close to the natural conditions of seed ripening. The seed bulk is ventilated with �
unheated a~.r. Hopper 5 is installed in an enclosure (fig. 3). This cylindrical
capacity with a conical bottom made of sheet steel 2.5 mm thick rests on four -
closed-section stands 3.
~
A ventilator 13 with an electric motor is under the hopper. A collector 1 is in-
stalled over its input flange. Fabric hoses 2 connect the collector's outlets -
with discharge chambers. To lift the structure by a crane truck (during installa-
tion), three loops 15 are welded on to the hopper's upper edge 5. They also serve
to secure the deflector 7, which distributes the loaded seed bulk evenly. In or- -
der to prevent the formation of bridges in the hopper's conical part during un-
loading and avoid the clogging of the discharge opening, there is a manual mixer
_ 12 in the hopper's lower part. A hatch 11 was made to inspect or clean the hopper.
The seed bulk is loaded into the hopper through the deflector's funnel.
In discharge chambers fabric valves are installed so that supply ducts not covered
by grain are disconnected (closed by valves).
- Horizontal air distributing ducts are welded in staggered rows inside the hopper.
They are of two types--supply and exhaust ducts. On the side of the entry of air
into the hopper supply ducts 3 are open and on the other, closed. Air.is.supplied
to them through two vertical discharge chambers 8. By using a fabric valve 6 to
close the supply ducts, it is possible to regulate its intake. The upper end of
the valve is bent through a roller 5 and connected with the other end with a rope
9. The valve can be easily moved by means of an endless cord 7 thrown through a
roller with a handle 4. By contrast exhaust ducts 2 ar~ closed on the side of air
supply and opened on the opposite.side.
The ventilator sucks in outdoor air through a net and supplies it to the fabric
hoses 10 and discharge chambers 8 through a collector 11. From them through the
_ open supply ducts 3 the air enters into the seed bulk, passes through it and is
carried away into the atmosphere. Thus, the seed bulk is dried slowly.
13
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,
' ; ~ 7 . ~
8 15 .
, -
, 9 Q - . .
~ ~ 10
_ ~ ~ ~ a
; ~
n~- ~
~ � d .
4 ~ ~ .
~4
t: 16
;3~ . 12 ~
2G ~ 13 / , ~
;
1~~ ; _ 1~
Figure 3. General View of the S-SOV67 Ventilated Hopper:
1--collector, 2--fabric hoses, 3--stanchion, 4--discharge chamber with a regulated
valve, 5--hopper, 6--level gauge, 7--deflector, 8--ladder, 9--supply ducts, 10--ex-
haust ducts, 11--inspection hatch, 12--mixer, 13--ventilator with an electric mo-
� tor, 14--discharge device, 15--loop, 16--clamp
Overall mechanization on the Kolkhoz imeni V. I. Lenin is also used in seed treat-
~ment. In this catie the service personnel and the environment are fully protected
from the effect of harmful substances. The warehouse for treated seeds is built
- of S-50A hoppers. The total capacity of this warehouse is 3,000 cubic meters. '
Hoppers are raised 4.2 meters above the ground level so that a truck--loader of
sowing machines--may freely pass under them. ~
Seeds are treated in the portable chamber over the hopper that is filled at a given
moment. The appropriate amount of seeds and seed treating suspension enters the ,
portable chamber for treatment. From the storage facility seeds are supplied by' ;
a belt conveyer and a bucket elevator. ;
- The seed treatinh suspension is prepared in a unit consisting of a capacity, a
mixer anci a dosin~ device (the ND-160/25 dosing pump with small changes in design).
Its productivity, if two hoppers are filled, is up to 30 tons of seeds per hour. '
Treatment is given 30 to 40 days before sowing. ;
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Tmmediately after treatment the germination energy nf seeds is 89 to 95 percent
and the germination capacity, 93 to 98 percent. Aftex 30 to 40 days of storage in
- capacities these indicators increase by 1 to 7 and 1 to 4 percent respectively.
Yn order that the quality of seeds during storage in capacities does not detierio~
- rate, their moisture should be no more than 13 percent. The loading of sowing ma-
chines with the use of MMZ-555 trucks takes place in 5 to 10 minutes.
_ The storage of treated seeds in capacities and the mechanized loading of sowing
machines enable the Kolkhoz imeni V. I. Lenin to save up to 7,500 sacks annually.
_ One person handles the treatment of seeds. Owing to mechanization the expendi-
tures on this operation were.lowered by 92,000 rubles.
- Economic Efficiency '
The mutually advantageous relations between specialized enterprises and purchasing
_ farms make industrial seed growing highly efficient. On the one hand, interfarm
accounting prices ensure the profitability of seed production (on the Kolkhoz imeni
V. I. Lenin it is 50 to 60 percent) and, on the other, do not exceed the expendi-
tures on seed growing on farms. Often these prices are lower than state purchase
prices (table 2). ~
- Tab1e 2. Accounting Prices of Seeds
~
Interfarm accounting price State price per quintal
per quintal of seeds of of seeds of fourth re-
fourth reproduction, first production, first grade
grade of the seed standard, of the seed standard,
~rop rubles rubles ~
Winter rye 19.10 23.80
Winter wheat ~ 17.30 23.80
= Barley 19.40 16.50
Oats 17.80 16.50
Peas 29.00 20.40 .
COPYRIGHT: Izdatel'stvo "Kolos",.1981
11,439
CSO: 1824/150
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- . r~,x u~�r~~ ~nt, u~r, UIVLY
AGRO-ECONOMICS ANn ORGANIZATION '
'INTENSIFIED ROLE OF CONTRACTS IN AGROINDUSTRIAL COMPLEX URGED
~
Moscow VOPROSY EKONOMIKI in Russian No 3, Mar 81 pp 91-100 ,
/Article by Tvan Nikolayevich Buzdalov, doctor of economic sc iences, seninr scien-
tific worker of the Institute of Economics of the World Socialist System of the
USSR Academy of Sciences: "The Economic Role of Contracts in the Management of ~
the Agroindustrial Complex"/
/Text/ The strengthening of the contractual prin.ciples of interrelationships in
the mechanism of planned management of the national economy and its structural ~
units is an indispensable condition for an increase in the eff iciency and ef.fect-
iveness of the entire managemen t system. In "Basic Trends in the Economic and So- ,
cial Development af the USSR for 1981-1985 and for the Period Until 1990" the de- ;
velopment of contractual relations (in particular,. an increase in mutual interest ~
3nd responsibility for the fulfillment of contractual obligations) is defined as ~
- one of the important tasks for the further improvement in economic planning work ~
in all national economic units. ~ j
i
The expansion of the functions and strengthening of 'zhe economic role of contrac- ~
tual relations are especially urgent for the agroindustrial sphere of the economy ,
with its complex system of intersectorial connections and diverse natural-geo-
graphic, technological, organizational and economic condition s and characteristics
of reproduction. In accordance with the decision s of the July (1978) Plenum of
- the CPSU Central Committee specific measures for an improvement in the methods of
~ planning and incentives in agriculture have been developed. They provide for an
elimination of excessive patronage of farms, in connection with which the number
oF planned indicators assigned te them is limited. A further regulation of prices
_ presupposing the inclusion of increments for an ab ove-plan sale of products in the
basic purchase price and a greater coordination of material incentives with the
end results and quality of work is envisaged. On the whole, c onditions are created
Eor the further development of the economic initiative of collectives of agricul-
tural enterprises. -
The realization ot the envisaged measures, especially in the part of creation of
conditions for mutual interest and responsibility for the final quantitative and
qualitative indicators of economic activity of kolkhozes, sovkhozes and agroindus- '
trial associations and expansion of the independenc e of farms in the planned orga- ~
nization of production is connected with an expansion of the functions of economic
contracts and increase in their economic role in the regulation of relationships
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,
among all the unil-.s of the system of the agroindustrial complex. The utilization
o� economic contracts not only'as the means of fulfillment of planned assignments,
but also as an active tool of planning and a direct lever of the system of manage-
r~ent of the complex,is an objective need. The economic contract appearing as the
tegal form of economic contractual relations performs the economic functions b~
- the regulator of excb.ange of labor activity.l The nnncorrespondence of the legal -
regulation of the economy to the tasks of improvement in the economic me~hanism
and the formality of economic contracts lower the interest of contracting parties
in the attainment of the best results of economic activity and tn the economy and
rational utilization of material and labor resources. -
A diverse system of economic contracts, which includes contracts for the sale of
agricultural products, matexial and technical supply and services for enterprises,
and associations, chemicalization of agriculture, freight transport, construction
and installation work and so forth, is now used in the economic mechanism of the
agroindustrial complex. Contractual forms of interrelationships are used in ~he
_ activity of consumer cooperatives and are developed ir relations between public
� and privaCe subsidiary farms of kolkhoz members, workers and employees of state
agricultural enterprises. '
In facL-, the overwhelming part of the exchange of labor activity in the form of
purchase and sale, various services, deliveries and so forth is now mediated by
contractual obligations and agreements. This foxm of interrelationships is must
widely used in the sphere of state purchases of agricultural products, whose vol- -
ume in current prices totaled about 80 billion rubles annually in the last few
years. The production relations of kolkhozes, sovkhozes and interfarm enterprises
and associations with the system of the State Committee for Agricultural Equipment
are also built on a contractual basis. The volume of mutual exchange in this
sphere, including the trade turnover of supply organizations, exceeds 30 billion
rubles annually. Contractual forms of relations are widely used in the relations
of farms with trade organizations and public dining enterprises.
Practice shows that, where contractual relations are ba~sed on the obligation of
observance of mutual interests and on material incentive and responsibility, an
active effect of contracts on the intensification and rational organization of the
= entire reproduction process is observed, the quality of products improves, losses
are reduced and the movement of foodstuffs from producers to consumers is accel-
erated. The act:ive effect of contractual forms of interrelationships on the end
results in the sph~re of sale of agricultural products by the organizations af
consumer cooperatives, public dining and trade is especially noticeable. This is
due primarily to the fact that contracting parties are partners with equal rights.
_ This enables them to systematically realize mutual interests and to utilize the
system of incentives and sanctions for the fulfillment of contractual obligations
in terms of date~ of delivery of products, their quality and so forth.
However, the proportion of the turnover in the indicated sphere of mutual exchange
of activity on a voluntary contractual basis is not yet significant. For example,
in 1979 agricultural enterprises sold products on the basis of direct relations
with cooperative and state trade organizations worth 3.1 billion rubles, which
comprised 4 percent of the total volume of purchases. However, nor are economic
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co~itracts always used as an effective lever of rational organization of the pro-
:iuction and delivery of products to the consumer in this sphere of interrelation-
ships on a contractual basis. In the sphere of direct directive planning contracts
ti~ve a weak effect on an improvement in the activity of contracting parties.
In our opinion, there are two basic reasons weakening the economic effect of con-
tractual relations on the reproduction process. The first is the lack of unified
normative acts for the utilization of contractual relations in the economic mech-
_ anism. Individual problems concerning the conclusion and execution of economic
- contracts are regulate~i in general form in "Fundamentals of Civil Legislation of
the USSR and the Union Republics" adopted in 1961. A more detailed (not uniform)
regulation of contractual relations is contained in the special decrees of the ;
USSR Council of Ministers for some.types of contracts. This regulation is speci- ~
fied, but often not in a coordinated way, by various ministries and departmants. ;
There are statutes on the contracts of farms with procurement organizations. A ~
new standard contract of agricultural enterprises with the organizations o~ the ~
State Committee for Agricultural Equipment and a statute on this contract wese ~
clrawn up not long ago. In addition to the fact that avery department has "its" ~
contract, diverse "nonstandard" forms of contracts and mutual agreements are used i
in various units oF the agroindustrial complex. For example, in addition to the
contracts concluded by kolkhozes, sovkhozes and other agricultural and agroindus- ~
- trial enterpri.ses and associations, contracts on cooperation, on creative collabo-
ration and so forth are used. As a result, owing to the lack of unified normative ~
prlnciples, departmental disconnection and the diversity of legal acts produced by !
- it, in fact, there is no unified system of afficiently organized contractual rela- ~
tic~ns. 2 ~
I
The second reason is the decrease in the functional role of contractual relations
as an economic to~l of planned management. This is a problem affecting the key
aspects of the entire economic mechanism, primarily the combination in it of cen- j
, tralized methods oF inanagement with the economic initiative of enterprise and as- j
sociation collectives in the planned organization of production; in this case, the
question of combination of the plan and the contract. In practice, in addition to ;
the assignment of the plan for the sale of speci~ic types of products from above !
to kolkhozes and sovkhozes, at the same time, they also conclude an economic con- ~
rract. But this is not a combination of the plan and the contract, but a simple ~
duplication by ttie economic contract of the directive planned assignment. The com- ~
bination of the plan and the contract is a qualitatively different approach to the
understanding and utilization of the principle of democratic centralism in planned
management, in wt~ich contractual relations have a direct regulating effect on pro-
duction, organically interacting with planning.
In our opinion, it is inadmissible to consider the problem of realization of the
ecc~nomic functions of economic contracts as a relatively independent lever of
{~lanned managemenr exclusively from the positions of economic law and the legal
role of contractual relations in production practice.3 The underestimate of the
economic essence of contractual relations has produced indefiniteness in the sci-
entific evaluation of their functional role and place in the economic mechanism
and formalism i.n the practical utilization of the system of economic contracts.
i
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The attitude toward the system of economic contracts as toward a secondary, purely
"auxiliary" element oE the economic mechanism, which exists in practice, is not
on.ly the result ~f the habit of excessive administrative regulation of interrela-
tionships, not onl.y the result of the practical complexity of reorientation toward
the contractual basis of relations,,toward economic contractual principles of foY-
mation of planned and evaluation indicators. The switchover to the economic con-
tractual basis of management in the agroindustrial complex requires a fundamental
refinement of the methods of planning with the use of the intersectorial and over-
all approach, improvement in price formation, in distributive and the entire sys-
tem of cost accounting relations and in the principles and forms of incentives and
their direct coordination wi~h the fulfillment of contractual obligations.
To determine the place and functions of contractual relations in the system of
planned management and to intensify the role of contracts as the economic and le-
gal form of regulation of interrelationships in agroindustrial production, ob-
viously, it is necessary, fi-rst of all, to proceed fr~m the objective correlation
of the plan and the economic contract predetermining their organic interaction.
However, a parallel, essentially separate use of the plan and the contract, a kind
, of "division" of planned and contractual discipl.ine respectively, is now observed
in agriculture an~l in the agroindustrial complex as a whole. This leads to the
isolation oF the data of the units of the economic mechanism, in connection with
which the functions of both the plan and the contract are weakened and organiza-
tional-economic contradictions ari~se in the matter of an ef.ficient attainment of
the same goal--obtaining the highest end results of planned economic management.
The plan and the economic contract are relatively independent, but closely inter-
connected aspects of the same problem of management of the reproduction process
with the us2 of the commodity-money form of exchange of labor activity. Therefore,
the overall approach to planned management with a wide use of economic methods re-
~uires a switchover to a single system of planning and contractual relatians con-
~olidated by unif ied juridical and legal norms reflected in the obligations of
contracting parties4 and in incentives and sanctions for the observance of the3e
obligations.
Within such a unity and organic interaction of the plan and the economic contract,
under conditions when the latter does not duplicate the planned assignment, but
with initiative from below is used as an economic tool of its formation and re.~.li-
zation, the efficiency of cost accounting is increased considerably, its organiza-
tional basis is strengthened and the stability and reliability of cost accounting
relations are ensured. The sale of products and the acquisition of the means ~f
production necessary for rural areas on the basis of the economic contract enable
every enterprise to systematically use the principles of cos't accounting, primar-
ily the principle of self-support, and also guarantee the derivation of the neces-
sary profit. In turn, the strengthening of cost accounting principles and levers
contributes to a better realization of economic functions and, accordingly, of the
economic and legal principles of contractual relations. Owing to an intensifica-
ti.on of the economic role of contractual relations, a successful combination and
an organizational and economic coordination af physical and value criteria and in-
dicators of production planning are attained in the general system of cost account-
ing as a method of planned management.
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Tfie tollowing basic principles, whose utilization will make it possible to effi- -
clenrly develop ti?e planning and contractual system and on whose observance the
effectiv~ness of this mechanism depends to a decisive degree, should be singled
- out in the economic mechanism of management of agroindustrial production: Legal l~' -
equalit~ of parties, economic independence of partners, obligation of the coe-~ J
clusion and'-fulfillment of a contract, equivalence of exchange according to con-I~
tractual agreemenLS and material responsibility of parties for zhe fulf illment o':' .
planning and contractual obligations. :
The observance of the principles of the legal equality of parties, as well as of ~
the obligation of the conclusion and fulfillment of economi.c contracts predeter- ~
mining the activity of the entire system of planned management and the dynamic na-
ture and efficiency of relationships between production and other structural units
of the agroindustrial complex, is of special importance. Legal equa.lity as one of
the basic principles of contractual relations organically connected with the econ-
omic independence of these units--the most important principle of democratic cen- '
tralism in management and the condition for a normal exchange of labor activity--
_ rules out an administrative imposition of the terms of the contract by one p~rty !
to the agreement on the other. The obligation of the conclusion and.fulfillmer.t
of economic contracts increases the mutual interests of contracting parties and
the effectiveness of incentives and raises the organization of the entire economic ~
planning work on the regulation of the exchange of labor activity to a qualita- i
tively new level. The principle of obligation of su~ch an exchange on a contractual
basis contributes to the realization of the economic role of the contractual sys- ;
- tem--functions of the contract as a tool of planned regulation of the relations of '
partners in the reproduction process as a whole.
The need to intensify the economic role of contractua]. relations and direct cost ~
accounting contacts in agriculture and in the sectors and spheres of the economy ~
related to it was often stressed in party decisions. The contractual relations I
between primary and other structural units existing in the agroindustrial complex ~
are of a formal nature, which lowers their economic initiative in the selection of i
more ef:E'icient economic decisions on the production of agricultural products and ~
their delivery ta the consumer without losses and with a high quality. Farm man-
agers simply sign the comnleted forms of contracts with procurement officials,
without making their remarks and corrections. Such.a contract only duplicates the ~
planned assignment and sometimes its content is unknown even to farm specialists.
Approaching this contract formally, procurement officials often do not accept the
products delivered te% them in accordance with the contract on the date scheduled.
As a result, their quality~,is lowered sharply, many products are lost and farms and ,
society at large incur losses.
Tt~e contract of farms with organizations of production and techni~al supply, of the
processing industry and of the infrastructure and with other units of the agroin-
cju.~er.ial cc~mplex does not yet play an active economic role. The interests of farms :
and enterprises for production and technical services do not coincide, because the
former need equipment of a certain assortment and quality and in the necessary com-
bination, while tt~e latter are interested i.n selling or repairing with an appropri ~
ate, often burdensome, markup what was produced and delivered to their bases. Same-
' times farms, for the sake of acquiring the necessary spare parts, buy ma.chines ;
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which tiiey do not need at all and pay repair enterprises for services which they
did not perform. However, farms have no choice, because the contract is often of
a formal nature ar~d the entire system of interrelationships is reduced to claims
or orders of farms for the delivery of equipment, which are not binding in any way,
and to a one-sideci dependence of farms on the organizations of the State Committee
for Agricultural Equipment. The same is observed in relations with producers and
designers of equipment. The eff iciency of economic contracts in the sphere of con-
struction of waterworks, reclamation development and the practical use of improved
- land is still low. Actually concluded contracts hardly affect an improvement in
the activity of contracting parties and reclamation projects often are deZivered
with big deviations from planned norms. In the fi.r~al analysis this has a negative
effect on the yield and return on the vast investments in reclama.tion. An. inten- _
sification of the economic role of contracts could have a signi~icant effec~~ on an
increase in the eff iciency of investments in reclama.tion and in the measures.for
- the protection of tZatural resources used in the agroindustrial comrlex.
Using the experier~c:e in the development of contractual relations between the state
and the private subsidiary sector accumulated in a number of the country's regions,
as well as in other socialist countries, tt?e potential of the private subsidiary
sector in an improvement in food supply could be utilized much more fully. The .
contractual system of relations can place the sale by kolkhoz members and sovkhoz
workers of their products on a planned basis. The volumes of these products with-
in the framework of purchases by consumer cooperatives? organizations and enter- -
prises of the USSR Ministry of Trade and so forth in 1978, for example, for meat
comprised only 34 percent and for potatoes, 45 percent of the total volume of sale
of these types of products by private subsidiary farms. The transfer of fihe pur-
~
chases of products from the population and their surplus from kolkhozes and sov-
l:hozes to a f irm contractual basis directly in the localities will contribute to
an increase in production and to a reducti.on in the losses of products and labor
during an unorganized sale. The forced trips by rural residents for the sale of
sr.~all batches of goods to cities now lead to losses of work and free time tot.~.ling
200 million man-days annually, as well as to an increase in the prices on the kal-
- khoz market. ~
Direct contractual relations play an important role in the prevenCion of losses of
products. Contracts in the Hungarian People's Republic, which are an effective
lever of formation and realization of plar.s for social and economic development,
ensure great material interest of parties;in the fulf illment of obligations. The
right to chose a partner and direct cost accounting responsibility for damage con-
nected with the nonfulfillment of the contract, which is compensated from the in-
come of enterprises and organizations, are the conditions determining this. Plan-
ning assignments are presented to departments and are realized through contracts.
The same principles also aperate .in the n~utual exchange of activity on the basis
of contracts with suppliers of ineans of production to agriculture, of the service
. sphere and of the organizations and enterprises of the infrastructure.
Cost accounting conCractual relations ensure conditions for an accelerated devel-
opment and coordinated activity of primary production units within the framework
of interfarm cooperatives. Their importance has increased in connection w3.th the
wide popularization of industrial production systems in the agriculture of the `
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Hunbarian People's Republic. When the full legal and economic independence of
partners is retained, production associations are established under the management
of a so-called~gesztor firm, which organizes industrial production within the frame-
wor.k of an association on cost accounting planning and contractual basis. The
Farm.s that participate in industrial production systems conclude a detailed cort-
tract regulating their relations with the gesztor and each other. A control com-
mission observing the fulfillment of the contract is established.
In the German Democratic Republic the system of cost accounting contractual rela-
Cions in the agroindustrial sphere was developed and legally formulated in the :
early 1910's. At the same time, as noted in the economic and legal literature, an ~
assumption was made that, when a contract appears as an active planning lever, the
plans of enterpri.ses should not detail their activity. In particular, this applies
to material and.technical supply and to the sale of products. Specific ob~~.gations ~
are fixed only by economic contracts. '
: The system of economic contracts in the agroindustrial sphere of the.German Demo- .
cratic Republic clearly establishes the quantity and quality of delivered products,
dates of deliveries and prices and envisages strict sanctions for the nonobservance
of contracts. In particular, the system of sanctions includes one-time fine~ for ;
the nonobservance of the contract: price sanctions, a fu11 reimbursement of losses ~
_ to an agricultural enterprise occurring through the fault of a procur.ement and
processing enterprise; sanctions against an agricultural enterprise for the nonob-
servance of the indicators of the volume and quality of products and the dat~s of
their deliveries, including refusal to accept them, specified by the economic con- -
Lract.
r, I
i
The contractual system of formation and realization of centralized economic plan- ~
ning decisions actively affects an increase in the return on investments in the ~
agroindustrial complex by means of material incentives and responsibili.ty 3n two
- basic directions: a production and technological balance and a more rational and
. efficient utilization of resources and products and prevention of their losses ~
caused by interdepartmental disconnection and economic isolation. Advanced shifts
- in production, iacrease in land productivity, savings of expenditures, improvement '
in the quality oi products, prevention of their losses and so forth�are the results '
of an overall uti.lization of all the factors in economic development. An intensi-
fication of the economic role of contractual relations in the system of planned
. management in ma.ny respects contributes to the attainment of this overall nature
and thereby determines the general degree~of effect of the economic mechanism on ~
the development and efficiency of production. Contractual relations are noted for
the simplicity of practical use and, at the same time, a high efficiency, especially
in the part of attainment of a mutual coordination of activity and elimination of ~
the interdepartmental lack of coordination, which is now the main reason for pro-
- ducticm clisproportions and for the organizational and technological disorder in ;
pro~uction.
Cxperience shows that the cost accounting contract performs economic funetions of.
a direct eff ect on an increase in the end results of development of the agroindus-
~rial compleY only if it appears as a relatively independent lever in the realiza- ;
tion of economic planning decisions and does not formally duplica te the.planned
assignme:~t. In order to lend the contract the economic functions inherent in it,
it is necessary, tirst of all, to change the very procedure of presentation of . ~
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planned assignments for the sale of products. These assignments should be pre-
sented to departments and then to rayon associations and procurement and other or=
ganizations and realized on the basis of contracts. At the same time, the system
of incentives and sanctions should be made dependent on the fulfillment of con- -
tracts. At the.level of enterprises and production associations it is necess$iy -
to more widely use effective economic contrac tual relations, which will become an _
efficient means of realization of state plans.
Direct responsibility for the fulf illment of contractual (in practice, planned)
obligations and a full r.eimbursement of losses from the cost accounting profit of
farms, procurement officials, suppliers and so forth are important conditions for
an efficient utilization of contractual relations. The realization of these con-
ditions will place the work of all the units of the agroindustrial complex on the
basis of self-support. The nature of activity of intermediaries, primarily the
procurement system and organizations and enterprises of material and technical
supply, will change accordingly.
The switchover to contractual relations, for example, direct relations in the Hun= -
garian People's Republic, eliminated the need to retain departments, such as the
Ministry of.Procurement and Soyuzsel'khoztekhnika. FarmS and associations of
- sphere II of the agroindustrial c omplex sell on the basis of contracts products to
the appropriate enterprises and organizations of sphere III, which store and sell
them at domestic and foreign markets: Material and technical supply and the serv-
icing of agricultural enterprises and their associations are based on direct con-
tractual relations with the appropriate subdivisions and their organizations _
(wholesale trade bases, repair enterprises and so forth of sphere I of the agro-
industrial complex).
State purchase organizations were abolished in the German Democratic Republic at
the end of the 1960's. The purchase of agricultural products was replaced by new
organizational forms based on an economic contract envisaging the equality of part- -
ners. Economic contracts for grain, meat and milk began to be concluded amon~ ag-
ricul~ural production cooperatives, state farms and processing enterprises of
neighboring combines. Direct contracts for the delivery of vegetables, fruits and
tab~e potatoes are concluded with trade enterprises. The system of stable co~i-
tracts became the prerequisite for the development of effective forms of agroin�-
dustrial integration, in par.ticular, ttie establishment of cooperative unions. A
total of 60 percent of the agricultural commodity output of t~he German Democratic
Republic is now produced and processed without losses within the framework of co-
operative unions. Losses connected with the nonfu lf illment of contracts are zully
cavered by the guilty party.
A similar principle was introduced in the People`s Republic of Bulgaria in 1979.
In accordance with the decisions of the March (1979) Plenum of the Central Commit- _
_ ~tee of the Bulgarian Communist Party the role of cost accounting in agroindustrial
' producCion complexes increases sharply. In the last few years the underestimate
of cost accounting has had a negative effect on the rates and end results of dev-
. elopment of agriculture and the entire national economic agroindustrial complex.
_ Agroindustrial enterprises and purchase organizations become partners with equal
rights working on the basis of self-support. The number of planned indicators and
specific assignments presented to agroindustrial complexes is reduced sharply. Qn
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- tt~e basis o� a limited range of assignments agroindusfrial complexes conclude ecrn-
omic contracts with appropriate purchase and other organizations. Of great import-
ance is the f act that t'_:p agroindustrial complex has the right to freely negotiate '
_ Che sale of products not included in the planned products list. The fulfillmert~ of
terms of the contract for the volume, assortment and quality of products and t~e '
derived profit becomes the criterion of evaluation of economic activity and, ac-
cordingly, of incentives for the results of this activity. At the same time,
these are also incentives for planned indicators, because in accordance with the
principles of the new economic mechanism the f inal indicators of the planned as-
signment of the agroindustrial complex proceed from the contract and are approved
only after its conclusion. ;
Contractual relations make the services of intermediaries superfluous. However,
if the latter exist, they should carry out their activity on the basis of cost ac- !
- counting and self-support as envisaged, for example, with respect to ~;rocurement ~
organizations. Operating on the basis of cost accounting, such organizations would
be interested, first of all, in the purchases of the cheapest and highest-~~uality ~
- products and, second, in the purchases of the volume that can be preserved and de-
_ livered to the trade network and the consumer. This also meets the intereats of .I
the farms themselves, which could sell the entire output in excess of the contrac-
tual volume, now used mainly to replace losses,,on Che basis of direct relations
on the kolkhoz market, that is, assign for an increase in tha end product of the
- food comolex and satisfaction of the population's needs. When the formality of
cnntracts is retai.ned, these mutual interests, as well as mutual responsibility, ~
including for losses of products, a.n practice, are absent. The damage for losses ~
incurred by farms when their products are not accepted is compensated at the ex- i
pense of society, not at the expense of the cost accountin income of !
g pr~curement
officials. The relations between farms and the system of material and technical
supply should ~e built similarly.
f
- Economically substantiated and balanced prices are important prerequisites for the (
efficiency and effectiveness of cont,ractual relations. For example, purchase
- prices of some products now create conditions for the derivation of 100 to 150
percent of profitability and more and of others, hardly make it possible to com-
pensate for expenditures. For example, the fattening of livestock for meat on '
kolkhozes and sovkh~zes gives minimal accumulations and meat and dairy industry
et~terprises obtain profit ensuring them profitability at the level of 30.percent
anci more. Inequality also exists in the relations of farms with the service ~
- sphere, in particular, the State Committee for Agricultural Equipment. The cost
acc;~~unting contract presupposes an equality of these conditions, because it makes '
no sense for. a highly profitable partner to negotiate, cooperate and join efforts
, Eor. the attainment of a conunon goal with an unprofitable partner. Of great im-
~ portance is the utilization of contractual accounting prices, especially .for the
regulation of interrelationships in the course of interfarm cooperation. The mate-
rial interest of cooperating partners working on a contractual basis depends on
how correctly contractual prices are fixed.
Coritractual accounting prices have become most widespread in the agroindustrial
- complex of the Germ3r. Democratic Republic. A common level of profitability for
aIl partners or, in any case, elimination of the possibility for an unsubstantiated
increase or decrease in profitability is the basic principle of the fixing of the
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