MARKETING
The marketing of farm products has been geared to the fixed five-year plan quotas for sales to the state. It is based on bilateral contracts between trusts in the food-processing industry and agroindustrial complexes or their constituent units. Contracts are concluded for a five-year period and are broken down by years. They cover the entire farm output specified in the counterplans at prices officially revised on January 1, 1973. The price system includes bonuses for quality; these bonuses are payable only after a specified portion of the contracted quantity has been delivered and vary in relation to the total volume of product delivered. The intent of the bonuses is to stimulate product improvement without encouraging production beyond the planned limits. Excess production would destroy the balance of the plan.
Provisions of the marketing contracts were worked out by the Ministry of Agriculture and the State Arbitration Commission with the agreement of the government departments involved. Provisions concerning the performance of contractual obligations were strengthened compared with those previously in force. They established financial incentives and sanctions not only for the contracting organizations but also for their top managers as individuals, based upon the end results of their joint work.
Each food-processing trust engaged in the procurement of farm products must establish a fund for the promotion of their production, for improving farming methods, and for modernizing the farm's physical facilities. The funds are to be used in the first place for stimulating the output of products required on the domestic market and for export. The allocation of promotional funds is to be in accord with a program worked out jointly by the trust and the agroindustrial complex; the program constitutes an integral part of the procurement contract.
Farms, individual farmers, and private agricultural producers may sell some of their products at retail directly to consumers in cooperative markets at prices not exceeding those charged by state retail stores. In some instances and for some products sale on a commission basis through state and cooperative outlets is also allowed. The sale of meat, meat products, and alcoholic beverages in cooperative markets is prohibited as is also the sale of any product through middlemen. Cooperative markets are subordinated to the trade organs of municipal authorities. Violations of applicable regulations are subject to penalties the severity of which depends upon the nature of the offenses. Information on the total volume of direct sales by agricultural producers is not available. The share of collective farms in cooperative market sales, however, declined from 53 percent in 1959 to 16 percent in 1970.
PRODUCTION
Growth and Structure
As a result of continued emphasis on the country's industrialization, the share of agriculture in national income (net material product) was only 22 percent in 1970, compared to 31 percent ten years earlier. According to official sources, however, output continued to rise. It increased at an average annual rate of 4.8 percent in the 1960-67 period, declined by 10 percent in 1968, and regained the 1967 level in 1970. An increase of 8 percent in the next two years raised the farm output in 1972 to a level 50 percent above the output level in 1960. For the entire period the average annual increase in farm output was 3.4 percent.
Livestock production was reported to have increased more rapidly than crop production in the 1960-70 period; the respective average annual rates of growth in output were 4.1 and 2.9 percent. Crop output in 1970 was 33 percent larger than output in 1960, whereas livestock output was 50 percent higher. Available data are inadequate to reconcile the reported growth in the value of livestock production with a seemingly inconsistent rise in the physical output of livestock products and changes in livestock herds.
The structure of farm output in 1970 did not differ materially from the structure in 1960. The share of crops in the total output declined from 67.3 to 64.7 percent, while the share of livestock production rose correspondingly from 32.7 to 35.3 percent. The proportions of grains and technical crops were identical in both years. The share of vegetables, potatoes, and melons declined slightly, but the proportion of feed crops dropped from 9.2 to 6.2 percent. The lag in the growth rate of feed production has contributed to the difficulties in the livestock sector.