Academic journal article East European Quarterly

An Analysis of the Variability of Agricultural Production in Independent and Soviet Lithuania, 1923-1989

Academic journal article East European Quarterly

An Analysis of the Variability of Agricultural Production in Independent and Soviet Lithuania, 1923-1989

Article excerpt

INTRODUCTION

With collectivization in the 1930s, the agricultural sector became the "Achilles' heel" of the Soviet economy. Despite relatively large amounts of agricultural investment over a long period, agricultural productivity declined and labor migrated to the cities. Evidence for the decline led many to support the hypothesis that socialized agriculture is inherently more unstable and thus less productive than private agriculture.(1) Using data on several East European countries before and during the Soviet occupation, Brada (1986) finds that socialized agriculture in Eastern Europe has led to greater instability in crop production with the main cause of the instability being the increased variability of land sown to various crops. However, his study ignores the experience of the former Soviet Union (FSU) because historical comparisons are believed to be difficult to make for the country as a whole.

While pre-1917 data may be difficult to find for much of the FSU, the Baltic region offers a rich source of data that can be used to compare two entirely different economic systems in the same geographic location within the boundaries of the FSU. Such a comparison is more than a historical exercise as many in the Baltics are now turning to the experience of the 1930s independence period for guidance during the present transition period. An explanation of what actually occurred during the interlude between Russian and Soviet occupation has perhaps never been more important. Previous studies of the independence period that do exist (including those done during the period), while valuable, are anecdotal and do not make use of economic theory and/or long time series data.

By looking at the most agrarian of the Baltic republics, Lithuania, this paper re-examines the question of whether socialist agriculture is relatively more unstable than capitalist agriculture using a region of Eastern Europe which was directly under Soviet occupation. Given the destruction of WWII, the delay of collectivization until 1949-50,(2) and the existence of active freedom fighters well into the 1950s in some Lithuanian rural areas, the paper also compares a late postwar period (1966-89) with the prewar period to control for any extraordinary variability introduced during the immediate postwar period.

SOURCES OF OUTPUT INSTABILITY

Variability of crop production can be decomposed into the variability of sown area and/or the variability of crop yields (Brada, 1986). Crop yields vary because of environmental, technical, systemic, and policy factors. Environmental factors include the weather, machinery, and fertilizer with the term "environmental" being used in a broad sense to cover the economic as well as natural environment in which the farm is situated. Since the effect of weather is lessened by the long time period covered, the most important environmental factors are such industrial inputs as machinery and fertilizer. Though prices are less variable under socialism, the haphazard nature of the physical material and supply system suggests environmental variability is greater under socialism than capitalism.

Technical factors that increase variability under socialism include the introduction of new higher-yielding varieties that increase variability and the introduction of pesticides that reduce yield variability.(3) Systemic factors include the lower risk for a farmer when agriculture is collectivized and cost considerations. On a collective farm, risk is less because the link between a farmer's income and yield variability is no longer clearly defined. The relatively larger size of socialist farms further lowers risk because risk is spread among more workers and varieties of crops. Finally, haphazardly supplied off-farm inputs to produce crops are used more intensively on socialist farms with a consequent further reduction in risk. Offsetting the risk dampening factors are various agricultural campaigns that cause confusion among collective and state farm directors who are already subjected to a varying degree of petty tutelage with basic farm-level decisions as to what, when, and how to plant and harvest the farm's crops. …

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