Soviet grain procurement crisis of 1928

Last updated

The Soviet grain procurement crisis of 1928, sometimes referred to as "the crisis of NEP," was a pivotal economic event which took place in the Soviet Union beginning in January 1928 during which the quantities of wheat, rye, and other cereal crops made available for purchase by the state fell to levels regarded by planners as inadequate to support the needs of the country's urban population. Failure of the state to make successful use of the price system to generate sufficient grain sales was met with a regimen of increasingly harsh administrative sanctions against the Soviet peasantry. The state of national emergency which followed led to the termination of the New Economic Policy and spurred a move towards the collectivization of agriculture in 1929.

Contents

History

Background

The Russian Revolution of November 1917 ushered in a period of civil war and economic dislocation, in which the ruling All-Union Communist Party (bolsheviks) (VKP) made use of forced grain requisitions (Russian: prodrazvyorstka), trading to the peasantry currency with little purchasing power for an underdeveloped consumer goods market. [1] Viewed by most Soviet contemporaries as a temporary wartime expedient, this system of "War Communism" was extremely unpopular with Russia's grain-producing peasantry and the cause of a massive wave of unrest and revolts that threatened to fatally destabilize the government. [2]

This force-based system of War Communism was abandoned in the spring of 1921 with the adoption of the so-called "New Economic Policy" (NEP), under which a stable, gold-based currency was restored and a return made to the market system. Instead of forced requisitions of all marketable surpluses, a food tax (Russian: prodnalog) was implemented which necessitated peasant households providing a limited portion of their production to the state, after which households would be free to sell its remaining surplus not needed for household survival on the open market. [3] By 1924 this system of prodnalog had been replaced by a money tax, with Soviet state grain requisitions accomplished via buying and selling. [4]

Although the return to the market system in agriculture was ideologically problematic for many Bolsheviks, the years from 1922 to 1926 were successful in practical terms, with total agricultural production by the peasant-based economy fully returning to pre-revolutionary levels. [5] Production of cereal grains approximated pre-war figures, potato production greatly exceeded such figures, and livestock populations, gravely affected during the war, returned to normalcy for pigs and sheep while the count of horses was slowly and steadily restored. [6]

The period of War Communism saw Soviet cities largely depopulated when former peasants returned en masse to their native villages amidst the ongoing economic collapse. This trend was reversed under NEP and industrial facilities were restored and restarted, approaching the pre-war levels of output during the second half of the 1920s. [7] Further growth of the economy and improvement of living conditions, it was felt by Soviet planners, would require new investment in factory facilities and capital goods. With access to world capital markets severely restricted to the revolutionary Soviet regime, these funds that would need to be generated by the state either through a loosening of the backing of the gold-based currency, a raising in the level of taxation of the largely rural population, or some combination of these factors.

Communist Party penetration of the countryside remained weak, amounting to an average of 1 rural Communist for every 6 village soviets [8] — a mere 0.52% of the rural population vs. 1.78% of the total population in 1927. [9] Moreover, these rural Communists, who took leading roles in village soviets and cooperatives, included a disproportionate number of comparatively well-to-do peasants — a social group, party and non-party, which dominated local administration. [10] This persistent strength of so-called "kulaks" in the Soviet countryside further contributed to the dissatisfaction with the economic status quo on the part of many members of the largely urban Communist Party.

From the end of 1926 demand among planners and party activists for a new program of mass industrialization that would modernize the largely peasant country. [11] Although NEP was seen at the time as a permanent structure throughout 1927, the 15th Congress of the VKP(b), held in Moscow in December 1927, acceded to this sentiment, approving a new program for the industrialization of the USSR — an acceleration which would ultimately prove incompatible with a small peasantry freely exchanging a comparatively small fraction of its production in the marketplace. [12]

Collectivization of agriculture was held by the Communists to be the essential corollary of any successful industrial campaign, it being faithfully maintained that collective organization would eliminate the inefficiencies inherent in capitalist agriculture, thereby expanding production and making a greater quantity of grain available to the state for conversion to capital goods.

Goods shortage

Throughout the early years of the Russian revolution the peasantry faced a shortage of basic farm and household items, including agricultural implements, construction material, cloth, and finished consumer goods. [13] This marked a continuation of the wartime situation, in which industrial production had been moved from a consumer orientation to fulfillment of the military needs of the state in the war against the German empire. [13] The Bolshevik regime had never been able to catch up with pent up demand, and state and cooperative supplies remained spotty, while the prices demanded by private traders remained high. [13]

A so-called Scissors Crisis had developed in the early years of the New Economic Policy as prices of consumer goods escalated while market prices of agricultural products fell. [13] Early in 1927 the Communist Party decided to address the disparity by lowering the selling prices of industrial goods by approximately 10%. [13] Although this pricing decision was meant to undercut the high prices charged by private traders, in practice it only exacerbated the miserable supply situation as goods were snapped up from the market, leaving the inventories of state supply agents barren. [14] Those goods which were available tended to be committed to larger towns, located along railway lines, rather than to smaller villages deep in the countryside. [13]

The net result of this situation was a goods famine that provided an inadequate incentive for peasants to participate in grain sales to state grain purchasing agents, who had little of practical value to offer the peasantry in exchange. [13]

Emergence of the crisis

The Soviet economic year (October 1 to September 30) 1925/26 had generated state grain procurement of 8.4 million tons. [15] This was far exceeded in 1926/27, when a post-revolutionary record harvest of 76.8 million tons resulted in a state procurement of 10.6 million tons at stable prices. [15] No upward price adjustment had been necessary owing to the massive size of the harvest, which resulted in a supply glut. [16] Expectations for the coming year were raised accordingly, with planned procurement for the coming economic year 1927/28 exceeding quantities obtained during the previous year of record harvest. [17]

In addition to planned establishment of a new state grain reserve of 819,000 tons, economic planners sought increased quantities of grain for export to the European market as a means of generating the foreign currency needed for purchase of capital goods from abroad. [18]

Calls for an official policy of centrally-planned industrialization had emanated from the Left Opposition headed by Leon Trotsky throughout the middle 1920s, with an explicit criticism levied in a September 1927 program of a "frank and open drift to the Right," to accommodation with the most wealthy segment of the peasantry to the detriment of national industrialization and further development of a socialist economy. [19] This demand was easy to ignore when grain was readily available to the state on the market and unused factory capacity remained to be restarted. However, late in 1927 the pervasive optimism associated with the boom period of NEP began to dissipate. [19]

A severe slump in state grain collections began in October 1927, following the new harvest of wheat and rye. [18] This trend continued in November and December, with planned total procurements for the quarter of 7 million tons missed by a massive 2.1 million tons. [18] This quantity was not only insufficient for creation of the planned grain reserve and the meeting of export targets, but was viewed by planners as insufficient for the feeding of the nation's cities and the members of the Red Army. [18] Reasons for the decline set off a fierce debate in the ranks of the VKP(b). [18] Party leader Joseph Stalin depicted the shortfall as political in nature, the result of "sabotage" by the rich peasantry in an effort to force the state to raise grain procurement prices. [20] This Stalin likened to blackmail — forcing the state to abandon its industrialization plans in favor of filling their own pockets with the proceeds of sales to the market. [21] Stalin's joint leader of the party during previous years, Nikolai Bukharin, regarded this perspective as a "fairy tale," instead arguing that rather than hoarding and speculation the cause of grain supply difficulties was a poor harvest, combined with insufficiently attractive procurement prices that deterred sales to state grain collectors. [21]

The crisis in grain collections caused a split of the top leadership of the Communist Party, with a majority of party activists rallying around Stalin, who had now begun vigorously espousing the virtues of rapid industrialization previously associated with Trotsky and the Left Opposition. [22] Only a minority supported Bukharin and his call for continued social peace between the state and the peasantry and his criticism of those who would "neglect a sense of moderation, to skip over necessary stages" on the slow and measured path to industrial development. [22]

Stalin and the rapid industrializers retained effective control over the VKP(b), controlling 6 of 9 seats of the party's Political Bureau, which handled matters of day-to-day governance, with Bukharin able to muster the support of Alexei Rykov and Mikhail Tomsky in favor of a moderate pace of industrialization and social peace. [23] Behind the scenes Stalin organized diligently, obliquely criticizing moderates in speeches to groups of party activists and with his new right-hand man, Viacheslav Molotov maintaining effective control of the official party daily newspaper, Pravda, and efforts being made to take over editorial control of the party's monthly theoretical magazine, Bolshevik. [24]

See also

Footnotes

  1. ↑ Alec Nove, An Economic History of the USSR. London: Allen Lane/Penguin Press, 1969; pg. 74.
  2. ↑ Nove, An Economic History of the USSR, pg. 83.
  3. ↑ Nove, An Economic History of the USSR, pp. 83-84.
  4. ↑ Nove, An Economic History of the USSR, pg. 84.
  5. ↑ R.W. Davies, The Industrialisation of Soviet Russia: Volume 1: The Socialist Offensive: The Collectivisation of Soviet Agriculture, 1929-1930. London: Macmillan, 1980; pg. 4. Henceforth The Collecitivisation of Soviet Agriculture.
  6. ↑ Davies, The Collecitivisation of Soviet Agriculture, pg. 4. Note especially Table 1 (pg. 419) and Table 2 (pg. 420).
  7. ↑ Naum Jasny, Soviet Industrialization, 1928-1952. Chicago: University of Chicago Press, 1961; pg. 54.
  8. ↑ Daniel Thorniley, The Rise and Fall of the Soviet Rural Communist Party, 1927-39. New York: St. Martin's Press, 1988; pg. 15.
  9. ↑ E.H. Carr, A History of Soviet Russia: Foundations of a Planned Economy, 1926-1929: Volume 2. London: Macmillan, 1971; pb. 179. Henceforth "Foundations of a Planned Economy, Vol. 2."
  10. ↑ Thorniley, The Rise and Fall of the Soviet Rural Communist Party, 1927-39, pp. 14-15.
  11. ↑ Thorniley, The Rise and Fall of the Soviet Rural Communist Party, 1927-39, pg. 13.
  12. ↑ Jasny, Soviet Industrialization, 1928-1952, pp. 51-52.
  13. 1 2 3 4 5 6 7 James Hughes, Stalin, Siberia and the Crisis of the NEP. Cambridge, England: Cambridge University Press, 1991; pg. 109.
  14. ↑ Hughes, Stalin, Siberia and the Crisis of the NEP, pp. 108-109.
  15. 1 2 James Hughes, Stalin, Siberia and the Crisis of the NEP, pg. 102.
  16. ↑ Hughes, Stalin, Siberia and the Crisis of the NEP, pg. 103.
  17. ↑ Hughes, Stalin, Siberia and the Crisis of the NEP, pp. 103-104.
  18. 1 2 3 4 5 Hughes, Stalin, Siberia and the Crisis of the NEP, pg. 104.
  19. 1 2 Carr, Foundations of a Planned Economy, Vol. 2, pg. 56.
  20. ↑ Hughes, Stalin, Siberia and the Crisis of the NEP, pp. 104-105.
  21. 1 2 Hughes, Stalin, Siberia and the Crisis of the NEP, pg. 105.
  22. 1 2 Carr, Foundations of a Planned Economy, Vol. 2, pg. 57.
  23. ↑ Carr, Foundations of a Planned Economy, Vol. 2, pp. 60-61.
  24. ↑ Carr, Foundations of a Planned Economy, Vol. 2, pg. 61.

Further reading

Related Research Articles

<span class="mw-page-title-main">Five-year plans of the Soviet Union</span> Series of nation-wide centralized economic plans in the Soviet Union

The five-year plans for the development of the national economy of the Union of Soviet Socialist Republics (USSR) consisted of a series of nationwide centralized economic plans in the Soviet Union, beginning in the late 1920s. The Soviet state planning committee Gosplan developed these plans based on the theory of the productive forces that formed part of the ideology of the Communist Party for development of the Soviet economy. Fulfilling the current plan became the watchword of Soviet bureaucracy.

<span class="mw-page-title-main">Collectivization in the Soviet Union</span> Forced economic reforms of collective ownership of the means of production

The Soviet Union introduced forced collectivization of its agricultural sector between 1928 and 1940 during the ascension of Joseph Stalin. It began during and was part of the first five-year plan. The policy aimed to integrate individual landholdings and labour into nominally collectively-controlled and openly or directly state-controlled farms: Kolkhozes and Sovkhozes accordingly. The Soviet leadership confidently expected that the replacement of individual peasant farms by collective ones would immediately increase the food supply for the urban population, the supply of raw materials for the processing industry, and agricultural exports via state-imposed quotas on individuals working on collective farms. Planners regarded collectivization as the solution to the crisis of agricultural distribution that had developed from 1927. This problem became more acute as the Soviet Union pressed ahead with its ambitious industrialization program, meaning that more food would be needed to keep up with urban demand.

The Third Period is an ideological concept adopted by the Communist International (Comintern) at its Sixth World Congress, held in Moscow in the summer of 1928. It set policy until reversed when the Nazis took over Germany in 1933.

<span class="mw-page-title-main">Agriculture in the Soviet Union</span> Overview of agriculture in the Soviet Union

Agriculture in the Soviet Union was mostly collectivized, with some limited cultivation of private plots. It is often viewed as one of the more inefficient sectors of the economy of the Soviet Union. A number of food taxes were introduced in the early Soviet period despite the Decree on Land that immediately followed the October Revolution. The forced collectivization and class war against "kulaks" under Stalinism greatly disrupted farm output in the 1920s and 1930s, contributing to the Soviet famine of 1932–33. A system of state and collective farms, known as sovkhozes and kolkhozes, respectively, placed the rural population in a system intended to be unprecedentedly productive and fair but which turned out to be chronically inefficient and lacking in fairness. Under the administrations of Nikita Khrushchev, Leonid Brezhnev, and Mikhail Gorbachev, many reforms were enacted as attempts to defray the inefficiencies of the Stalinist agricultural system. However, Marxist–Leninist ideology did not allow for any substantial amount of market mechanism to coexist alongside central planning, so the private plot fraction of Soviet agriculture, which was its most productive, remained confined to a limited role. Throughout its later decades the Soviet Union never stopped using substantial portions of the precious metals mined each year in Siberia to pay for grain imports, which has been taken by various authors as an economic indicator showing that the country's agriculture was never as successful as it ought to have been. The real numbers, however, were treated as state secrets at the time, so accurate analysis of the sector's performance was limited outside the USSR and nearly impossible to assemble within its borders. However, Soviet citizens as consumers were familiar with the fact that foods, especially meats, were often noticeably scarce, to the point that not lack of money so much as lack of things to buy with it was the limiting factor in their standard of living.

<span class="mw-page-title-main">First five-year plan</span> Economic policy of the Soviet Union from 1928 to 1932

The first five-year plan of the Union of Soviet Socialist Republics (USSR) was a list of economic goals, implemented by Communist Party General Secretary Joseph Stalin, based on his policy of socialism in one country. Leon Trotsky had delivered a joint report to the April Plenum of the Central Committee in 1926 which proposed a program for national industrialisation and the replacement of annual plans with five-year plans. His proposals were rejected by the Central Committee majority which was controlled by the troika and derided by Stalin at the time. Stalin's version of the five-year plan was implemented in 1928 and took effect until 1932.

<span class="mw-page-title-main">Scissors Crisis</span> 1923 economic crisis in Soviet Union

The Scissors Crisis was an incident in early 1923 Soviet history during the New Economic Policy (NEP), when there was a widening gap between industrial and agricultural prices. The term is now used to describe this economic circumstance in many periods of history.

The Ural-Siberian method was an extraordinary approach launched in the Soviet Union for the collection of grain from the countryside. It was introduced in the Urals and Siberia, hence the name. The Ural-Siberian method was a return to the drastic policies that had characterized War Communism in the period prior to Lenin’s New Economic Policy.

<span class="mw-page-title-main">Lev Gatovsky</span> Soviet Economist

Lev Markovich Gatovsky was a Soviet economist, being one of the first who tried to create a theoretical framework in which to understand the nature of the socialist project taking place in the Soviet Union from a political economy perspective. He became director of the Institute of Economics of the Soviet Academy of Sciences, later renamed Russian Academy of Sciencies, from 1965 to 1971. Apart from his general academic work, he contributed to several major economic developments such as the first two five-year economic plans and the 1965 Soviet Economic Reform, as well as editing the first Political Economy textbook of the USSR.

<span class="mw-page-title-main">Martemyan Ryutin</span> Soviet politician (1890–1937)

Martemyan Nikitich Ryutin was a Russian Marxist activist, Bolshevik revolutionary, and a political functionary of the Russian Communist Party. Ryutin is best remembered as the leader of a pro-peasant political faction organized against Soviet leader Joseph Stalin in the early 1930s and as the primary author of a 200-page oppositional platform. Ryutin was arrested by the Soviet secret police, along with his co-thinkers, in what has come to be known as the Ryutin Affair. He was executed in January 1937 as part of the "Yezhovshchina" conducted against political oppositionists and suspected economic "wreckers" and spies.

<span class="mw-page-title-main">Soviet famine of 1930–1933</span> Man-made famine that affected the major grain-producing areas of the Soviet Union

The Soviet famine of 1930–1933 was a famine in the major grain-producing areas of the Soviet Union, including Ukraine and different parts of Russia, including Kazakhstan, Northern Caucasus, Kuban Region, Volga Region, the South Urals, and West Siberia. Major factors included the forced collectivization of agriculture as a part of the First Five-Year Plan and forced grain procurement from farmers. These factors in conjunction with a massive investment in heavy industry decreased the agricultural workforce. Estimates conclude that 5.7 to 8.7 million people died from starvation across the Soviet Union.

<span class="mw-page-title-main">Industrialization in the Soviet Union</span>

Industrialization in the Soviet Union was a process of accelerated building-up of the industrial potential of the Soviet Union to reduce the economy's lag behind the developed capitalist states, which was carried out from May 1929 to June 1941.

<span class="mw-page-title-main">Dekulakization</span> Political repression of prosperous peasants (kulaks) in the USSR (1929–1932)

Dekulakization was the Soviet campaign of political repressions, including arrests, deportations, or executions of millions of supposed kulaks and their families. Redistribution of farmland started in 1917 and lasted until 1933, but was most active in the 1929–1932 period of the first five-year plan. To facilitate the expropriations of farmland, the Soviet government announced the "liquidation of the kulaks as a class" on 27 December 1929, portraying kulaks as class enemies of the Soviet Union.

<span class="mw-page-title-main">Collectivization in the Ukrainian Soviet Socialist Republic</span>

Collectivization in Ukraine during the period when it was part of the Soviet Union, and was officially called the Ukrainian Soviet Socialist Republic, was part of the policy of collectivization in the USSR and dekulakization. It was pursued between 1928 and 1933 with the purpose to consolidate individual land and labour into collective farms called kolkhoz and to eliminate enemies of the working class. The idea of collective farms was seen by peasants as a revival of serfdom.

<span class="mw-page-title-main">Sergey Syrtsov (politician)</span> Russian-Soviet politician and statesman

Sergey Ivanovich Syrtsov was a Russian Soviet politician and statesman. Syrtsov is best remembered for having served as the head of the republic government of the Russian SFSR from 1929 until his removal in 1930 for plotting to remove of Joseph Stalin as head of the All-Union Communist Party (bolsheviks).

<span class="mw-page-title-main">Yevgeni Preobrazhensky</span> Russian-Soviet revolutionary, economist and sociologist

Yevgeni Alekseyevich Preobrazhensky was a Russian revolutionary, Soviet economist and sociologist. A member of the governing Central Committee of the Bolshevik faction and its successor, the All-Union Communist Party, Preobrazhensky is remembered as a leading voice for the rapid industrialisation of peasant Russia through a concentration on state-owned heavy industry.

The Great Turn or Great Break was the radical change in the economic policy of the USSR from 1928 to 1929, primarily consisting of the process by which the New Economic Policy (NEP) of 1921 was abandoned in favor of the acceleration of collectivization and industrialization and also a cultural revolution. The term came from the title of Joseph Stalin's article "Year of the Great Turn" published on November 7, 1929, the 12th anniversary of the October Revolution. David R. Marples argues that the era of the Great Break lasted until 1934.

<span class="mw-page-title-main">New Economic Policy</span> 1921–28 Soviet economic policy theorized by Lenin

The New Economic Policy (NEP) was an economic policy of the Soviet Union proposed by Vladimir Lenin in 1921 as a temporary expedient. Lenin characterized the NEP in 1922 as an economic system that would include "a free market and capitalism, both subject to state control", while socialized state enterprises would operate on "a profit basis".

<span class="mw-page-title-main">Economy of the Soviet Union</span>

The economy of the Soviet Union was based on state ownership of the means of production, collective farming, and industrial manufacturing. An administrative-command system managed a distinctive form of central planning. The Soviet economy was characterized by state control of investment, prices, a dependence on natural resources, lack of consumer goods, little foreign trade, public ownership of industrial assets, macroeconomic stability, low unemployment and high job security.

James Raymond Hughes is professor of comparative politics at the London School of Economics (LSE). Hughes' research interests relate to political violence and terrorism, secession, national and ethnic conflict in the former Soviet Union, the Balkans, and Northern Ireland.

Gigant is a sovkhoz located in the rural locality of Gigant in Salsky District of Rostov Oblast, Russia. The Gigant was the first grain sovkhoz.

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.