Soviet Union: Big Trouble on the Farm

Another poor harvest spurs talk of “political” problems at home

Like an aged shopkeeper, he dourly acknowledged that the shelves in the nation’s produkty (produce) stores were nearly bare. Nervous that empty shelves meant empty stomachs and that empty stomachs meant a cynical and disgruntled people, Soviet President Leonid Brezhnev decided that it was time for some straight talk. He declared: “The food problem is, economically and politically, the central problem of the five-year plan.”

It was an extraordinary admission for the leader of a country that fancies itself to be the most powerful on earth. References by the Kremlin to domestic “political” troubles are highly unusual. This one, Western analysts speculated, may have been spurred by fears of Polish-style unrest, which has been fueled by painful food shortages. Notes one Western diplomat in Moscow: “Poland shakes them. It worries them.”

Outlining the Soviet Union’s eleventh five-year plan to the Communist Party’s Central Committee, Brezhnev took great pains to reassure the Soviet consumers. “No matter is more important, more noble, than meeting the most vital needs of the people.” He promised a concerted drive to overcome the country’s seemingly intractable economic problems. His lament was that the transition from an agrarian economy to a technological society was proceeding at a snail’s pace. In the 1980s, he warned soberly, the Soviet Union could no longer afford to be wasteful and inefficient. Said Brezhnev: “The style of our economic activity and economic thinking, methods of planning and management system are not being restructured energetically enough.”

He discreetly kept the disastrous agricultural figures to himself, but the U.S. Department of Agriculture predicted that this year’s grain harvest will be only 175 million tons, 61 million short of the target. The USDA estimates that the Soviet Union will be forced to import more grain than ever before, some 43 million tons, perhaps a third of which will come from the U.S. Some experts predict that the poor harvest will set off a chain reaction of economic repercussions: food shortages, increased imports and diminished production.

Although bad weather has stunted the harvest for the past three years, shortsighted policies and poor planning have contributed heavily to Soviet agricultural woes. Prices of basic foodstuffs such as bread and meat have been virtually frozen in recent years, despite the fact that per capita income has climbed sharply. Soviet consumers have thus fattened their savings accounts while the government, which buys the food at high prices and sells it at lower ones, strains to dispense $40 billion in food subsidies. Says Marshall Goldman, the associate director of the Russian Research Center at Harvard University: “People are not spending their money. Not because they are satiated with goods, but because there is nothing to buy. So why should the peasants work?”

Waste and inefficiency are mind-boggling in the Soviet system. Western agricultural experts estimate that up to 40% of Soviet produce either spoils or gets pilfered before it reaches market. Two reasons: inefficient transportation and a shortage of storage space. This year, for example, the Soviets harvested tomatoes in the south but had no crates for shipping them elsewhere in the country. Writing in the London Times last week, Alec Nove, professor of economics at the University of Glasgow, noted that the Soviets were unable to improve production despite massive infusions of capital. Said he: “Some 27% of total investment goes to agriculture, a far higher figure than in any industrialized country.”

Traditionally, the Soviet economy counted on a never-ending supply of manpower as a source of productivity, but even this resource is running out. Although there are about 27 million agricultural workers, the Soviets must enlist millions of extra laborers to work the fields at harvest time. Overall, there is a dramatic decrease in the number of new workers entering the nation’s labor force. At the same time, the Soviet Union has been slow to mechanize; today 40% of Soviet wage earners are still in manual jobs in industry. Understandably, Brezhnev called for “a better use of manpower resources.”

Brezhnev also announced that capital spending for major construction projects would be cut $42 billion in the proposed five-year plan. One likely reason for the change: “complications” in the international situation, an apparent reference to stepped-up military spending in the U.S. The implication was that a large portion of these funds for improvements in other areas would be diverted to Soviet defense needs.

Brezhnev’s proposed solutions have a tired ring. Aside from the traditional call to cut waste and inefficiency, he denounced excessive government interference in local farm management. He advocated, instead, giving farm managers greater latitude for decisionmaking. “Collective and state farms should have the final say in deciding what should be grown on every hectare and when one kind of work or another should begin,” he declared.

In principle, at least, Brezhnev was clearly on the right track. Moscow planners are notoriously inept at judging local conditions in areas hundreds of miles away. Greater independence has certainly worked out well for farming. While accounting for only 4% of the land currently under cultivation, private plots contribute 30% of the overall crop value. In practice, however, attempts to decentralize farming will surely be stubbornly resisted. Says a U.S. analyst in Washington: “The party apparatus, which is itself highly centralized, regards agriculture as its own domain. It’s a traditional preserve of the party bureaucracy.”

Almost invariably, efforts to improve the economy create a Catch-22 trap for Soviet leaders. To stimulate output, they must increase incentives and loosen central control. But to do so means giving up some of their vested power, which they are loath to do. Moreover, Soviet preoccupation with defense prevents any substantial diversion of resources to consumers. “The Soviets don’t seem to take account of popular needs and wants as they should,” says a U.S. official. Adds Goldman: “They have a tired leadership and a tired economy. Coupled with the pressures from places like Poland, it’s a pretty scary situation.”

—By Richard Stengel. Reported by Erik Amfitheatrof/Moscow