BENSON BRIEFING

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP62S00545A000100090090-8
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 18
• Document Creation Date: December 9, 2016
• Document Release Date: July 17, 1998
• Sequence Number: 90
• Publication Date: June 1, 1958
• Content Type: REPORT

2E.14-0,1 6r44.1
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A. Introduction (Briefing Aid - (1) U.S.. 81 USSR Agricultural Statistics 1957)
(2) Comparison of U.S. and USSR Average Diets
B. Agriculture in the 25 years between 1928 and 1953
1. First Five-rear Plan 1928
2 Collectivization of agriculture began the same Niched
full-aving by 1930.
3. Purpose of collectivization: to secure State control over the
food supply, both to feed the urban population and to secure capital
for industrial development., o take advantage of the benefits, of
large scale agriculture. Also had ideological overtones.
These purposes were a reflection of Soviet economic policy which
called for industrial growth at the fastest possible pace and for
treating consumption es a residual to be minimized. This policy
gave an overriding priority to heavy industry and led to virtual
neglect both of agriculture and of the industries producing con.
sumer* goods.
5. There were three basic agricultural netitutionsafter coflectivi-
sMioni
Collective tara-Wainei1y riot State institutions, and not
supported by State budget. The collective farms: make compulsory
deliveries to the State at fixed and relatively by prim).
Over quota deliveries are required by the States but at higher
prices. The telance of their output can be freely *ad. The
net income of the collective farms is shared by the collective
farmers, in accordance with the quantity and quality of work
performed.
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Cellective farmer* are allowed to retein some
land in private plots. At the present time the
output of the plots maybe freely eadbythe
ollective farmer on the open market. The average
size of private plots in the USSR is a little less
than one acre.
The private plots are ant in the
$ 47% of the
case of livestock and potatoes. In
cattle, 56% of the comes 38% of the pigs, and 31%
of the sheep and goats in the USSR were on private
;lots In recent years the private plots have
produced about half the Soviet harveat of tatess.
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basis. State budget provides some inveatment funds, meets
losses, and gets net income.. All the output acid to the State.
Agricultural workers are paid wages.
e. Mechine tractor stations? State institutions h originally
had. both a political and an economic role.
served as a device for control over the coun
latter they provided the service of machinery
farms in return for payment in kind. The MTS
cost accounting basic. Their receipts and expenses are both
in the State Budget on a gross basis.
By 1953 the USSR had become the second largest industrial. country
in the world, but its agriculture was stagnant Grain production
was not as great as before World War Z, and livestock numbers were
less than in 1928.
7. Light industry, which depends on agriculture for many of its raw
materials also made little progress during this period
Rscsnt Agricultural Programa
1. Since 1954 the USSR has eabarkad on several important programs in
the field of agriculture. They have all been the handiwork of
Nikita Khruschev.
2. One of these is the so-called New Lands Programinaugurated in 1954.
a. This program involve, the cultivation of previously virgin and
idle land. So far 86 nillion acres have been added to the
cultivated area in the USSR, about half in Kazakhstan and half
in Western Siberia.
former they
In the
Ileetive
a
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USSR New Lands Program; Canada Spring
Region The program extended agriculture into highly
marginal region*, in terms of rainfall, and length of growing
season. The drought risk is very great.
TO date the New Lands Program cannot be called eitheran
unqualified success or an unqualified failure. It has helped
to boost grain production and has provided insurance against
crop-failure in the Ukraine, but the program has been very
costly, has apparently not met the expectations of its planners
and involves long-run risks.
NEW LANDS
ORAN
Bugairper
Acre)
Production
gill= metric
tons)
195A
10,600
15.7
4,500
5
1955
45,750
6.5
7,950
1956
64000
16.2
28,000
22
1957
64 OW
7.5
13?000
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3.
second important program is the corn program.
The basic aim is to effectuate substantial improvement in the
supply of fodder so as to permit increases in the production
of livestock, and livestock products, and to improve the quality
of the Soviet diet.
The corn program may have received its impetus from the visit
of the Soviet agricultural delegation to the U.S. in 1955.
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corn acreage was slightly less than 11 million acres.
The goal is 70 eillion acres by 1960
acreage increased rapidly to 60 million acres in 1956,
but fell off to 47 million acres in 1957. It will be about
th same in 1958.
e* Khrushchev has waxed ed, and vexed again on corn*
of this program was at a minimum In 1957 and early this year;
Khrushchev seemed to switch his affections to an increase in
potato production. Recently he has again been beating the drum
for corn
f. Production of corn in 1954 was 3.8 million metric
tans. Pros-
ductian peaked at 14.8 million metric tons in 1955, fail to
12.6 million metric tone in 1956 and to 71 million metric tone
in 1957. These figures include ensiled immature ears of corn
converted to a grain basis but exclude corn which did not form
Shag. totalled 52 Wilton tons in 1957.(mmy- be double
g.
uctive crop in the USVRon a la
the rn belt. The Sharp increase in acreage and
production reflected initial enthusiast; the subsequent drops
farmer doubt* Our studies show that the food value of corn
and tillage in most of the USSR in only slightly greater than
for amell grains on the game land and at much greeter cost
Khruabcherts goal is to produce 12 to 16 tons of silage per
acre. The U.S* average is only 6 to 9 tone.
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A iciPA la t program is the ow for catching up with the US
in the per capita pakoduction of neat are milk, lbruabobev described the
success of ouch a program as more poverfa than the hydros.= bomb.
a? Ithrualebw soluounced this Whograstit Mal 1957 while be was verbal=
unduly exbneristed 13, the good, harvest Of 3.956
b.lie Indicated that his eammists had told him that goals could not
be achieved for maw years, but tut he bed overruled them.
c. Re aimed to catch with the US in per capitet vrnit production by
1958 and in per capita at production by 1960 or 1961.
d. KM production ha,s increased sharply on: the peat two years absolute
graduation is now not much less then that in tlwat (48.2 vs 57?3 In
1957). The production at meat bao not Increased very much -- it was
lees than me-third US production In 1957.
e? Tim per capita goals will not be met. USSR silk proftetiork wad have
jump to 68 million Una? in 1958. The situation is much worse for meat
production would have to quadruple by 1960-61. Thiry require larger
supplies of fodder than could possibly be sr...Liable under the programs
plat3red for increasing fodder epUe?.
The *Arleta themselves have stmed taking obout exceeding our per
capita. milk iruction in 1958. At best they now talk about beating
cow absolute graduation.
g.Ibrtmeltev has also tbanged his tune manila* meat. Whereas he
used to say tbat the USSR would exceed US per capita levels,
be now says that they sill do so if atequate foddsr is supplied,
sald that 4-5 times as much fodder as is nowsroduced would
be required.
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ULUM:
5. Early this year* the USSR adopted a measure for the radical
reorganisation of the Machine Tractor Stations. Khrushchev
was again the moving force behind the change.
The Russians plan to sell the machinery now held by the
machine tractor stations to the collective farms and to
convert the machine tractor stations into repair and supply
stations. In the future collective ferns will purchase new
m*chinery from the repair and supply stations. The repair
tractor station, will also provide repair services* supplies
and the services of machinery Thrum-field work* such se
irrigation and road-building.
b. Khrushcher reasoned that MTS's were no longer required to
exerciee political control over the countryside. He also
argued that most collective farms had grown into economically
strong enterprises with sizeable incomes and considerable
wealth. He stated that collective farmers could now /ask*
better use of machinery than the NTS and that MTS's were
no longer needed to demonstrate the +advantages of large
scale collective farming or to serve as a source for the
sccumulatice of grain Re concluded that the US%1 should
end the aituation in which there were two masters and two
administrative organisstions on the same land.
e. The reorganizations according to Khruschev, is to proceed
elowly and in accordance with the ability of the collective
farmers to buy and 1130 the machinery. In some areas, the
transformation is virtually complete.
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implesentaticn of this change has just begun and it is too
early to evaluate its utimate affects. It seems Clear, how-
ever, that it mill improve efficiency in the countryside.
Zbruschev ha already warned that collective fermi most be
guided by the party in the purchase of machinery1 in order
that they not practice Wee economy.
The NTS reorganisation has created an ideologies
cf.4.4
Ihruechev felt it necessary to fimiess* the
of this move.
6. The past few 'wars have also seen a
sation of agriculture.
a. The Soviet Union plans for substantial increases in the pro
duction of machinery between now and 1960, but even in 1960
Soviet agriculture will not be as well at as U.S. agriculture.
b4 The mechanisation program is at present designed primarily to
increase output rather than to save labor.
0. The greatest emphasis is being put on the production of smiler
wheeled as opposed to larger track-laying tractors and an
tractor-mounted as opposed to tractor-drawn equipment.
4. The increase in the output of agricultural machinery is another
manifestation of the increased emphasis cm agriculture since
1953.
7. The Soviet authorities have also made greater use of incentives
in stimulating agricultural output?
e in the nechani-
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a. In 1954 and 1955 tht, USSR increased the prices paid for
agricultural products sold to the State both quota and
over-quo
b. Compulsory delivery quctas were reduced frr such important
items as grains potatoes, and vegetables
c. The agriculture tax was lowered.
A system was instituted for paying farmers monthly instead
of at the and of the year.
e. Bonne payments were instituted for programs receiving 'pedal
*aphasia (far examples a bonus for corn production in 1955).
f. Incentive meaaures related to cotton production were adopted
in August 1956
(1) Basic procurement prices were caseti.
2) The syytem of premium payments revised.
3) Payments in kind to the MTS were substantially reduced
(11) Mineral fertilisers were sold at wholesale prices.
(5) Irrigation water was supplied free of charge
g. Effective 1 January 1958 -- Compulsory deliveries from
private plots were abolished.
D. Agriculture and the Soviet Economy
1. Modification of priorities
The agricultural programs above reprasant gnificant modification
of the overriding priority once enjoyed by industry and the
military establishment. Heavy industs7 and the military Estill have
first priority.. But whereas Soviet leaders used to speak of the
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priority development of heavy industry, they now speak of the
siaultaneous development, for example, of industry and agri-
with priority to h.ay industry. This is a subtle
Change in phraseology, but represents a real change in policy
Under Stalin allocations to agriculture and consumer industry
were alnost automatically cut when any kind of pinch developed
in heavy industry or military production. This is no longer
true The modification of priorities in favor of agriculture,
as well as housing and consumer goods was probably made for
the following reasons:
a. A recognition that the harsh and coercive policies of a
Stain were no longer feasible or it
was necessary to provide greater material incentives to
the population.
b. The Soviets decided to challenge the U.S. to a c
not merely in the growth of heavy industry, but also in
the production of agricultural ocanodities and consumer
goods. They plan to surpass U.S. per capita production
in these fields and have called this the in economic
task will say more about this later.
According to Ihrushchev, the Soviet economy has grown so
large that it can do more in the agriculture and consumer
goods fields without sacrificing the priority develoratent
of heavy industry and the edliterr
2. ilamehehevls last stateeent is to a considerable degree true but
it is not IOU% true. gamy uatry, to be sure it still given
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priority, but it does not receive all the resources that it
could use for its own development. A look at the allocation
of investment funds and of labor will illustrate what I mean.
a. Agriculture now gets a larger share of State investment
funds than ever before ? Such outlays between 1955 and 1960
will be twice those between 1950 and 1955
b. In 1953 agriculture got 8.6% of total State investment.. In
1955 it got 13.3% and in 1957 it got almost 14%
e, In 1956 end in 1957 the UMA experienced shortages of key
raw materially largely because of past failures to invest
enough money for the expansion of basic capacity. Under
Stalin agriculture mould have been cut for the benefit of
industry. /n fact, 1957 saw increases in investment slims
Ur= to agriculture and to housing as well, as Compared with
1956. More investment fUnda were also provided to the basic
materials industries, particularly ferrous metals and coal.
But these were not at the expense of agriculture or the
consumer. Bather, immediate production goals were cut to
restore the balance between ray materials and production
until new capacity could be comPleted
d. Until 1953 agriculture served as a source of labor for industry.
Since 1953 the agricultural labor force has increased and
agriculture has on balance supplied no workers for industry.
Thus industry has been deprived of one source of the striking
production gains achieved in the pest.
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?. Briefing Ai Comparison o
tiployment 1957 Annual Averages; W-et4hoii4a4
-400deittSBIV.- Agriculture is still * heavy user
the potsitiilitiea for transforming labor to
good in the long run.
Th changed status of agriculture has implications far Soviet
conomic growth and partioulerly for the growth of industry. As
just noted,investment allocations to ogriculture are being
increased and so *re those to housing and the consumer industri
Because the total quantity of funds avnilable for inveetment has
gronn, the remaining investment funds might have been sufficient
to support a rate of growth in industry comparable to that achieved
in the past, if conditions were the same as in the past. But
apparently they are not. There in evidence that it now takes or
rebles of investment to secure a given increase in industkial out-
put than it did five years ago. This is becauset l) Reny of the
*ewe gains in output achieved in the past are no longer available,
(2) for this and other reasons, there has been a tendency for
investment costa to, rise in the USSR, (3) Investment is being
shifted into areas where investment costs par unit ,,are considerably
higher than in industry as * whole.
a. The Soviet leaders are therefore
complicated juggling act. They went to erain the priority
of heavy industry and tOilvaniid. weapons 83r4ems and at the
same time give more to agrioultura housing, and the consumer
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growth.
modifying their priorit i.e. in favor of
neumer welfare, they are making it more
in their previews rate of industrial
are trying
out of this dilemma throuah massive
increases in labor productivity.. They are attempting to do this
by greatly increasing mechanization and automation in industry.
They also hope that the recent reorganization of industry end of
the XT8 will lead to greater efficiency in the use of resource*.
In teat, the reorganization of industry seemed to be the answer
and the party to those principally among the
managerial and technical group --who were pessimistic about being
able to push ahead at a fast pace in industry. Finally, the Soviet
leaders hope that by increasing material incentives, workers and
peasants will produce more. this is to be done by increasing the
supply of agricultural commodities and consumer goods. In summary,
the Soviet* hope that the agricultural and consumer programs can
be carried out without serious cost to heavy industry, through am
increase in labor productivity, and that the agricultural and
consumer programs will themselves help to increase labor produc-
tivity by adding to the material rewards of the working population
This does not mean that the Soviets are facing a crisis or
anything like it. Wen with the greater emphasis on agriculturi
housing, and consumer goods industry and the economy will con-
tinue to grow
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b. loran 1951s.55, Soviet industrial production imreased by an
average of 3,.1% per year. In 1956 the increase was 10.7%
and in 1957, 10%. Thule rates are still high tout twice
those in tbe US.
e. **ever although moot of the
for 1960 II1 bemet, most of 'those for consumers goads will not.
d.To the longer rump lecraases in membizhittation will permit the
ralease of 'workers froa agriculture to indUlttryi
A word might also be said about the effect of the recent iculturel
the TESRis role as, en importer and exporter of agricultural
of agricultural
exports juage4
d. At no time since the revolution has the _ been an ortLmt
factor in world agricultural markets.
a.Sven though the USSR produces no true surplus* it eoul4 if it
withe& beams a substantial exporter of aggiculturel creasoditiee
right rtatt. This will not hanen, however,. without a highly
imprvbabla shift in *Mit policy. The Soviet leader's have
made many wedges to their people about Improveaente in their
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tandards of living. These promises are seriously intended-
to go back on thee would cause serious repercussions and
would constitute a risk that not even the leaders of a total'
tartan society would be prepared to take.
I. I have suggested that the corn and New loads pTOgraas are not
likely to achieve the success expected of than. Even if they
did the added supplies of small and coarse grains- would be
required tor the meat, milk and livestock program and far
other progrems to increase consumer welfare.,
g. Ca the import side no doubt the USSR would find it cheaper
to import many of the agricultural commodities they are trying
to grow at home at high cost Up to now, it has not been their
policy to import foodstuffs on any Lvrge scale because they
did not want to risk dependence on the outside world. In 1956/
1957, the USSR exported 6.7 million tons of grain, including
4.7 to the Moats and most of the rest to Western arope Total
import, were only 148 thousand tau.
h. The USSR could use substantial import* to assist it in carrying
out its present programa for increasing the level of living of
its people.
6. The agricultural progress that I have just discussed are all mixed
up with domestic Soviet politics.
a. As I have suggested earlier, all the iempar-- agricultural programs,
and those in the consumer field as well are associated with
Ihrushchev.
b. These programs fed by important members of the Soviet
hierarchy. inciudizw the Stalin., stn. whin felt theft tiler rtrresentea
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an undue degree of relaxation which could get out of control.
c. One of the charges levied at Malenkov, Molotov, Kaganovich,
Shepilovi who were ousted from their 461; and government
positions last June, vas that they opposed the Khrushohev
programs for agriculture
d. If these programs fail, the effect on Ihrushchevls.fortunes
maybe very great indeed We believe that there are still
opposition elements in the Soviet party and government who
would junp on Khrushchev at the first opportunity.
e. The internal liberalisation typified by the new agricultural
programs is not without its danger's to the Soviet regime as
distinct from Khruseher personally. It is possible for
example, that the Soviet people will become preoccupied with
material things and with improving their standard of living
and lose their interest in Comma= and the triumph of
Communism over capitalism. This would be long-term.
The new internal orientation exemplifeled by the agricultural
programs, and especially the drive to catch up with the U.S
fAis per capita production, have important international inplications.
a. Material success in increasing agricultural output and inproving
standards of living would have an enormousAmpact on the
uncommitted countries of the world, and would be a great Soviet
victory in its competition with the West
. The Soviet leaders expect nothing leas than the victory of
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socialism over capita1ta it thy e
Ihruahchev ham *aids The victory of
these objectives.
order will be
solved not by rockets nor by or hydrogen bombs, but
by the social order which insures more material and spiritual
good for humanity." Pravda has said: 'Oa the outcome of the
economic competition between the two systems socialise and
capitalise will depoUrthe outcome of the struggle of socialism
and capitalise."
c. At first thought, such claims my seen absurd and no doubt they
r. overdrawn Nonetheless, there is a great element of truth
in ham particularly with respect to countries of the world
ve not yet experienced an industrial revelution.
Our vn Director seid the following in this connections ?.....Le
under its present policy the USSR does not intend to
as. ita tary power in such * *oyes to rink a general way
it is post blip that the fateful bottles of a cold war mill,
in th. le future, be fought in the economic and sub-
versive arenas.'
rhj does not an that Mr. Dulles agrees sith the
I lave juat given, but it does mean that he like
maw other., takes a serious view of the impact of what the
Soviets are trying to accomplish.
It should be noted in thin ecnectic that althoughthe
economic challenge+, to the West are broadly *toted the pecific
programs have been highly selective e.g. meat, milk and butter
e.
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