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TITLE:             Low Farm Labor Productivity - A Problem in East European Agriculture
BY:                cz
DATE:              1969-7-10
COUNTRY:           Soviet Union

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EE 8, USSR: Agriculture
10 July 1969


Summary; The growth in labor productivity has
been termed the key to human progress. East
European communist agriculture systems, while
posting progress in overall farm output in recent
years, still fall short of meeting domestic needs
for many products. There is an excessive
concentration of peasants in agriculture which
makes for low labor productivity and low incomes.
Accelerated inputs of more capital goods, full use
of technology, and a sharp cutback in the number
of farm workers appear to be the only realistic
ways to establish a productive agriculture.

The growth of labor productivity is one of the
main keys to human progress. This theorum has become an
article of faith in economic planning in the communist
countries. One Soviet text even considers it has
political significance -- the superiority of the socialist
organization will enable the Comecon countries to surpass
the leading capitalist nations in the competition for
higher productivity of labor. [1]

In agriculture, the level of labor productivity
has decisive impact on a broad sector of the national
economy. It is the major means of raising the output
of farm products, and contributing to the profitability
of the farms and the welfare of its members. It creates
conditions for a reduction in the price of many consumer
goods, thereby raising the real income of non-agricultural
workers; it releases excess workers from agriculture for
employment into industry and urban activities. And
finally, it often strengthens a country's competitive
position in the world export markets.


(1) Ekonomika sotzialisticheskogo selskogo khozyaistva,
edited by Tiumin, Moscow, Kolos, 196 8, page 202.

[page 2]

Labor production effienciency is a complex field
of analysis, even when it is studied from the point of
view of an individual farm. Analysis of effiency from
the national standpoint centers on labor and capital,
since these are the resources which can be readapted
and moved between parcels of land, between farms, and
between farming regions. Land simply provides a
physical base over which other resources can be deployed.
While a hectare of land in the Danubian basin cannot
result in an economic product unless this resource is
combined with labor and capital, in combination with
these resources it can produce wheat, corn, or other
adapted crops. Labor and capital, however need not be
restricted to the production of wheat and corn in a
single location in the Danubian basin, but have alternatives
in producing tobacco in another section, fruit in another
area, or machinery in an industrial complex.

In communist countries the growth rate of the
productivity of farm labor is an integral part of the
economic plan. In the search for means and sources of
raising labor productivity, central planners, like their
western counterparts, have concentrated on choosing
factors that simultaneously raise productivity and lower
labor inputs per unit of product output. The principal
means of achieving the goals that fit into this analysis
is to substitute capital goods -- machinery, fertilizer,
chemicalization, construction projects etc.-- for labor.
These inputs, along with technological innovations and
good management, yield a larger product which should
sell for lower prices on an open market.

But the peculiar and distressing problem in the
agricultural systems of Eastern Europe is the large labor
force immobilized in the villages. The flow of population
out of agriculture has not kept pace with the world trend.
On a weighted basis the share of the rural population in
Eastern Europe and the USSR constitutes 45 percent of the
total population with three countries at or above the
half way point (Rumania, Poland, and Bulgaria). The
modern theoretical approach to national development stresses
that the fewer people there are engaged in agriculture,
the more dynamic the development of an economy will be.
On this basis, the Comecon countries have too large a
rural population to distribute the returns from agriculture,
which accounts for the low returns in farm income. There
exists an urgent need to reduce the number of farm workers
directly engaged in agriculture, either through such
state sponsored measures as voluntary migration, retraining,
or through the setting up of industrial processing plants
in the countryside.

[page 3]

While output per unit of land or livestock, the
degree of mechanization, and the level of technology
applied to production functions are the main input
determinants in the labor productivity equation, the
number of recipients participating in the income realized
determine in the end the level of labor productivity and
income. Given these input considerations, the fewer
workers engaged in farming, the higher the labor
productivity and personal income.

A comparison between the East European communist
countries and the representative Western countries
reveals the wide gap that exists in the bloc as a whole,
and in particular within some of the advanced countries
in two major factors of a prosperous agricultural system;
the degree of worker concentrations and the number of
hectares of cropland per farm worker. In evaluating the
indicators for each country it may be well to keep as a
reference the goals set by the Mansholt plan for
restructuring the E.E.C. agricultural system: less than
10 percent of the actively employed engaged in agriculture
and a ratio of 15 to 20 hectares of cropland per farm

[page 4]

Some Factors in the Level of Farm Labor Productivity; [2]

Cbmecon vs. selected Western countries


Economically active population

	In agriculture in millions	Percent in agriculture	Cropland per farm worker,hectares
Poland	6.3	42	2.5

Rumania	6.45	59	1.6

Bulgaria	2.6	59	1.8

Hungary	1.5 4	31	3.6

Czecho-Slovakia	1.02	16	5.3

USSR	39.0	33	5.3

USA	4.8	6	37.0

??nmark	0.33	15	8.2

France	3.6	18	17.0

(2) Data derived from FAO Yearbook, 1967, pp. 3, 18

USDA, Agricultural Situation in Communist Areas, 1969, p. 42

[page 5]

Rumania and Bulgaria, followed by Poland, have the
highest concentration of the economically active population
engaged in agriculture and are the least efficient in the
cropland-per-worker relationship. Their systems are also
the least Westernized. These factors are a serious drag on
labor productivity and farm income and present a gritty
problem to the regime's plans for an upsurge in agriculture.
The Soviet Union, with one-third of the labor force engaged
in agriculture, reflects the essential under-mechanization
of its system. Were it not for the many large grain farms,
the cropland-to-worker ration would be still worse.
Czechoslovakia, on the other hand, has the highest degree
of mechanization in Comecon, as well as the least number
of workers engaged in agriculture. If one applied the
Mansholt Plan standards by which EEC agriculture is to be
restructured (less than 10% of the population in agriculture,
and a 15-20 hectares cropland ratio per farm worker) the
lag of the Communist systems is evident and the task for
improvement is formidable.

The effective measures needed to raise labor productivity
are primarily a continuous, ever-expanding flow of capital goods
into agriculture, maximum utilization of technological
innovations in resources and management, and the movement of
a large part of the underemployed peasants out of farming and
into non-agricultural work. This process is costly and of
long duration, but it is the only road toward a productive
and prosperous agriculture.


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