T H E E C O N O M I C W E E K L Y March 12, 1960

Agriculture in a Socialist Economy A Case Study of Yugoslavia

V S Vyas

R E C E N T discussion on the pattern of agrarian organization most

suited to India has centred on co­operative fa rming . There are some who believe that cooperative farm­ing is the ult imate solution for a sizable section of agr icu l tu ra l pro­ducers. Others doubt the efficacy of this solution. More and more peo­ple are now coming round to the view that, at least on a theoretical plane, cooperative fa rming has dis­t inct advantages. It helps a more economic f o r m of product ion by en­ab l ing the use of progressive tech­niques of f a rming . I t helps in the mobi l i za t ion of marketable surplus, which is a factor of key importance in a r ap id ly indust r ia l iz ing coun­t ry . By making disguised unem­ployment overt, i t helps in the mo­bi l iza t ion of surplus labour for the capital bu i ld ing projects. A n d i t leads to more egali tarian dis t r ibu­t ion of income in ru ra l areas. On these and several other anc i l la ry advantages of cooperative fa rming there is a greater unanimi ty today than there was, say, two years ago when the idea was seriously mooted for the first t ime.

Despite general agreement about the theoretical superiori ty of the cooperative fo rm of organization, a number of people remain uncon­vinced about its pract ical feasibi­l i t y in the Ind ian context. Usual ly two arguments are advanced. First, it is asserted that the Ind i an farmer is so deeply attached to his land that no amount of ra t iona l expla­nat ion w i l l convince h i m about the desirabi l i ty of collective ownership. Cooperative fa rming in our country, according to this view, can succeed on ly w i t h coercion and State f iat . Secondly, it is maintained that what­ever might be the theoretical advan­tages of cooperative organization, in rea l i ty they w i l l be nu l l i f ied by un­avoidable bureaucratization.

These are challenging arguments. A n y one who wishes to make co­operative f a rming a success in this country should find out democratic ways by which the feudal attach­ment to land gives place to a more ra t ional view—regarding l and as an inanimate object meant for the ser­

vice of human beings. Some bui l t -in mechanism has to be devised to assure socialist organization of the countryside wi thout st if l ing the i n i ­t iative of the producers. Though the solutions have to be found in the context of the t radi t ions and genius of our own people, the expe­rience of other countries might also be of some help to us.

EXPERIMENTS IN YUGOSLAVIA

The current experiments in Yugo­slavia promise a new direct ion of approaching the problem of agri­culture in a socialist society. Yugo­slavia was one of the poorest and most underdeveloped countries of Europe. The agrarian sector pre­sented, by every cr i ter ion, a picture of a typ ica l ly backward agriculture. Before the Second W o r l d War , more than 76 per cent of the populat ion depended on agricul ture for live­l ihood . Machinery, equipment, fer­tilisers and i r r i g a t i o n facil i t ies were also meagre. The over-all technical facilities in agricul ture , deficient as they were, suffered heavy losses dur­ing the War . It is estimated that 56 per cent of inventory, 55 per cent of cattle and 61 per cent of horses were lost. Over 20 per cent of bui ld ings were destroyed and 1.7 mi l l i on lives lost du r ing the War .

The reorganization of agriculture in the immediate post-war years fol lowed basically the model of Soviet Russia and East European countries. By a decree in 1945, Government sequestered the lands of large landowners, private capitalist enterprises, joint-stock companies, banks, churches, monasteries and a l l others who owned land which they d id not cultivate. A ce i l ing of 20 to 30 hectares, depending on the qual i ty of land, was imposed on the remaining holdings. These steps provided a state land pool of over 1.5 m i l l i o n hectares. More than hal f of this land was distr ibuted in small lots to the poor peasantry, thereby setting up about 316,000 poor pea­sant families on land .

A l l higher-powered machinery and equipment were mobilised and then dispersed in the countryside by establishing a network of agricul­tu ra l machinery centres. State

model farms and livestock pools were also set up on a large scale.

Immediately afterwards pressure was brought on the peasantry to j o i n the collective farms. This pressure was more economic than administra­tive in the beginning. Independent peasants were subjected to a much higher levy of foodgrains compared wi th their counterparts in collectives. Tax and credit pol icy also discri­minated against the peasant proprie­tor. Pressure was accentuated and coercion applied after the break f r o m Soviet Russia and the East European block in 1948, when Yugo­slav leaders were out to prove that they were as devout Marxists, as communists in other countries.

About 3 to 4 years of work ing of this collective system however, brought a l l its defects to the fore. Even after heavy investment in agriculture, agr icul tural product ion in 1952 was barely 2 per cent above the pre-war average. Livestock pro­duction was actually less, and per capita avai labi l i ty of food de­cl ined. The supply of agr icu l tu ra l raw materials was insufficient to satisfy demand f rom processing in ­dustries. F rom an agr icu l tu ra l ex­por t ing country, Yugoslavia turned into an i m p o r t i n g country. The im­ports of food and agr icul tura l raw materials caused a heavy drain on fore ign exchange resources.

RE-THINKING

This period also coincided wi th re- thinking on some of the basic tenets of socialism. Orthodox ideas were gradual ly discarded and a new approach to problems was t r i ed . Socialism was defined as "a social system based on the socialisation of means of production, in w h i c h social production is managed by an asso­ciation of direct producers, in which dis t r ibut ion is effected in ac­cordance w i t h the pr inciple of 'each according to his work' , and in which under the leadership of the work ing class ( which is itself changing as a class) a l l social rela­tionships are gradually freed f rom class antagonism and from a l l ele­ments of exploitation of man by man" .

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In 1953 the Yugoslav Government passed the Regulat ion fo r the Reorga­nisation of Peasant W o r k i n g Co­operatives. The regula t ion gave an opt ion to the peasants to remain in or leave these cooperatives. Most peasants opted to leave. O n l y 1,258 cooperatives were left in place of 4,000 which had existed prev ious ly . Simultaneously, the b i g state farms were converted into Socialist A g r i c u l ­t u r a l Estates. These Estates were organised l ike industries, and W o r k ­ers' Management was in t roduced in them.

The reorganizat ion of Peasants' W o r k i n g Cooperatives ( P W C ) d i d not i m p l y that the Yugoslav Govern­ment had renounced the b u i l d i n g of Social ism in r u r a l areas. I t was on ly a question of finding out the best way . An e x p l i c i t statement was made that " i t was necessary to choose between the economic and and adminis t ra t ive ways of achiev­i n g col lect ivisat ion in the v i l l a g e . "

THREE FORCES

Actua l ly , three forces are opera­t i n g in the countryside in the di rer-l i o n of Socialist t ransformat ion of vi l lages. In the f irst category are a g roup of regulatory measures. In 1945, as mentioned earlier, a ce i l i ng on land ho ld ing was placed at 20 to 30 hectares; it was reduced to 10 to 15 hectares in 1952. Be­sides, i n d i v i d u a l owners were pro­h ib i t ed f r o m o w n i n g large machines l i ke tractors, power-dr iven harve­sters or threshers, etc. These mea­sures were a imed at res t r ic t ing the possibi l i ty of using h i r ed labour on farms and prevent ing i n d i v i d u a l farms f rom o w n i n g the basic assets of large-scale p roduc t ion . These safeguards arc considered sufficient for preventing the re-emergence of capi tal ism in the countryside

The second force leading to this t ransformation is the expansion of socialist ag r i cu l tu ra l organizat ions. There are three constituents of the Socialist Sector in agr icu l tu re . A g r i ­cul tura l Estates (v iz , b i g State f a r m s ) , Peasant Producers ' Co­operatives, and General A g r i c u l t u r a l Cooperatives. Af ter the decree of 1953, this sector had shrunk to in­significant proport ions bu t recently there has been a steady expansion of the Socialist Sector, wh ich now embraces more than 10 per cent of arable land. This expansion has taken place by purchase and lease of land, and also to some extent by reclamation of waste lands.

A land market is an anomaly in a M a r x i a n Society, and more so a class of rentiers. In Yugoslavia , both exist and are in fact encoura­ged. The idea is to separate the question of advancement of agri­cul tura l p roduc t ion f r o m the ques­t ion of land ownership. W i t h its superior means of p roduc t ion , land in the Socialist Sector gives fu l le r employment to the farmers, who now act as workers. T h i s has a far-reaching consequence. W h e n a h i g h level of p roduc t ion is reached in the Socialist Sector, and the i n ­d iv idua l producer can get subsis­tence f rom his w o r k on the socialist f a rm, land w i l l not have the same ho ld over h i m as in the past, when ownership of land meant l i f e or death to h i m . In such a s i tuat ion, the nationalization of land is only a formal question.

The t h i r d force in consolidating socialist t ransformation of agr icul­ture is the productive cooperation of cooperatives and other socialist organizations w i t h peasant farms, Th i s cooperation, which aims p r i ­mar i ly at integratat ion of peasant w i t h socialist agr icul ture , is faci l i ­tated by the existence of a more or less free market for agr icu l tu ra l produce and factors. A free mar­ket persuades the peasant farmer to produce not merely for subsistence but for the market as w e l l . The existence of the market at the same t ime makes it clear to the farmer that, he stands to lose by s t icking exclusively to his own small hold ing wi th on ly p r i m i t i v e tools and equipment. For these reasons, the farmers w i l l sooner or later be compelled to look for a way out of their restricted economy. This they can find in cooperation.

MORE EFFICIENT ORGANISATION

U n t i l 1956, these cooperative: were more or less s imi lar to service

-cooperatives in our country . They provided producers w i t h better qua­l i t y seed and a r t i f i c ia l fert i l izers, a n d ' ploughed their l and at a cost lower than what the peasants had to pay previously for an ox or a horse. Performance of these tasks gained the peasant's trust, and gra­dual ly he took a more active part in the product ion .

The l ink w i t h the ind iv idua l pro­ducer is forged in various ways. In some cases, an agreement is made between a cooperative and a pro­ducer, whereby the cooperative organizes product ion and he only provides the manual labour, after

which profits are d iv ided according to a prescribed percentage. Other agreements provide for supply by the cooperative of seed, specialised labour (agronomists, e tc ) , machines, and sometimes even unski l led la-hour ; profits are again d iv ided ac­cording to agreement. By these means the peasants are gradual ly and painlessly l inked to the socia­list economy.

This form of economic organiza­tion is not only socially desirable, but is also p rov ing itself more effi­cient economically Agr icu l tu ra l pro­duction in 1958, a bad year, was 21 per cent above the pre-war ave­rage. The performance of the Socialist Sector was even better. The yield of wheat on agricul tural esta­tes rose from 9.6 quintals per hectare in 1954 to 20.3 quintals in 1958. and in farmers work ing co­operatives from 9.3 to 21.3 quintals . The y ie ld of maize d u r i n g the same per iod rose on agr icu l tura l estates f rom 19.2 to 12 quintals and in the cooperatives f r o m 10.7 to 38.7 quin­tals. Though the progress achieved in livestock breeding in the socialist sector is not markedly superior to thai on peasant farms, the latter rely heavily on the services provided by cooperatives.

Undoubtedly, this f o r m of socia­list organization of agr icul ture dif­fers much from the fo rm prevai l ing in other East European countries. yet the results, tangible and intan­gible, are outstanding. We can compare the results achieved by socialist sectors in different com­munist countries. In Bulgaria, the socialist, sector embraced over 70 per cent of arable land in 1956, but accounted for only 60 per cent of total product ion. In Rumania, in 1957, the socialist sector included 51 per cent of arable land, hut con­t r ibuted only 36 per cent of total product ion. In Hungary, in 1955, the socialist sector possessed 40 per cent of cultivable: land, but pro­duced only 27 per cent of total out­put. Experience in Yugoslavia is much more hear tening: in 1958 the socialist sector w i t h 15 per cent of the surface under wheat provided 25 per cent of total product ion, while 13 per cent of the surface under maize p rov ided 31 per cent of total p roduc t ion .

LESSONS FOR INDIA

If we agree that in India also we are a i m i n g at an economically viable and socially just system in agr icul­ture. Yugoslav experience can help

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us in many ways. Some of the lessons can be p inpoin ted .

( 1 ) There should be a nucleus of socialist sector in agr icu l ture to start w i t h .

( 2 ) The socialist sector should be given f i r s t p r i o r i t y in the a l locat ion of resources, so that it becomes an economically viable system.

(3) There should be safeguards against the perpetuat ion or re-emergence of a capi tal is t system in peasant p ropr ie to ry sector, th rough a ce i l ing on land ownership.

( 4 ) The feudal attachement to land should be broken by m a k i n g land a means of l i ve l i hood rather than a way of l i v i n g . Small far­

mers should be encouraged to lease out thei r l and , preferably to co­operative societies.

( 5 ) Peasant economy should be progressively integrated w i t h socia­list agr icul ture th rough provis ion of services in the first instance and shar ing of product ion efforts later on. Socialisation of processes should be the g u i d i n g mot to .

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