Effects of the Command Economy on Soviet Agriculture (1928-1968)

by Raj Kothari, April 2001

The Soviet type command system effected the economic and social structure of all the Soviet Union states. Some countries were effected more than others and in different ways, as the existing level of industrialization and geographic landscape varied. The two most prominent outcomes of this system were the collectivization of agriculture and rapid industrialization. Examining the major changes in the Soviet Union, as a whole, is a good way to understand the effects of Soviet control on the individual countries in general. The change in the agriculture sector of the Soviet economies serves as a good example to see the effects of the command economy system. It is important to understand what exactly happened and also what factors lead to these end results.

Before the Soviets implemented the command economy system, there were a significant number of privately owned farms. By 1940, almost 97 percent of peasant households in the Soviet Union were collectivized. The fast collectivization was initiated by Stalin in 1929. To set the stage for collectivization, incredibly high taxes were placed on the larger landowners. The farmers now fiercely objected collectivization and large amounts of crops and livestock were burned in protest. The direct consequence was a significant decrease in livestock and agricultural produce. People on collective farms worked for low wages and for the most part lived in poverty; having to use much of what they produced for their own sustenance. 

The reason the Soviets wanted to implement collectivized agriculture was multifaceted; first of all the old arrangement consisted of small plots of land with large unused gaps in between, which served as boundaries. The new system allowed for all the farms to be connected, thus increasing the total amount of cultivated land and giving scope for mechanized farming. Increased mechanization would mean fewer workers were necessary to produce the same basket of goods; leaving more people available for labor in the industrial sector. The Soviet planning committee also saw collectivized farming as a way to produce more and collect the finished products in an easier, more efficient manner. Most importantly, eliminating privatized farming was essential to making the transition from capitalism to communism.

After the WWII the Soviet agriculture was slow to expand. In some regions, such as the Baltic's,  agricultural production actually dropped. significantly.  There are many factors which contributed to the stagnation of farm production. First of all, a large number of skilled farm workers was sent to the industrial sector and sufficient machinery was not provided to make up for the loss in labor. Another detrimental factor was the adamant resistance to collectivization by the peasants. People had less incentive to work as hard, since their profit was not related to the amount they produced, and out of resentment towards Soviet control many crops were destroyed. Another reason for the failure of collectivization was the excessively rigid and inefficient Soviet bureaucracy. The most significant factor in the decrease in production was the government's deliberate policy of draining wealth from agriculture to support the rapid industrialization. Not enough resources were used for farming and most of the focus turned to industrial investment. The central planning committee also did not allocate enough provisions for fertilizers and as a result there was not enough available for most crops. The bombings from World War II destroyed some farmland and livestock as well.

After the death of Stalin in 1953, the Soviets modified their agricultural system in hope of increasing productivity. After Stalin there was a period where several politicans vied for power, but in the end Khruschev won. He attempted to rapidly increase agricultural output. Adjoining units of farmland were combined, drastically reducing the total number of collective units, and many of these units were turned into large factory-type state farms. Also, individual units were now permitted to own and operate their own tractors and other farm machinery. This increased incentives to produce more as the government would no longer be able to keep track of total production, leaving more opportunity to sell goods in the black market. In general, each collective farm unit was given more freedom in making day-to-day decisions. Then in 1964 when Brezhnev and Kosygin came to power further reforms were made to help farmers. Since the introduction of collectivized farming, workers in the agriculture industry had been living in poverty. Wages were extremely low, taxes were high and the living conditions and amenities were not sufficient. Starting in 1964 the prices of farm products went up and so did wages. Living standards were raised in rural areas also by decreasing the cost of living in those regions.

Overall the Soviet Union did produce a sizable amount of the world's agricultural goods market in1968, however this was mainly due to the sheer size of the land. Compared to the United States the land and labor was used very inefficiently. In general, the command economy system hurt agricultural production and lowered the standard of living in the Soviet states. Although the situation got better after 1953, by the end of 1968 it remained far from the original optimal output expectations.


  • Arkadie, Brian Van and Karlsson, Mats. Economic Survey of the Baltic States. New York University Press, New York. 1992.

  • Kothari, Raj. EC396 Paper#2. The Effect of Soviet Rule on Lithuania's Economy. 2001.

  • Vardys, V. Stanley, ed. Lithuania Under the Soviets. Frederick A. Praeger, Publishers, New York. 1965.

  • Wheeler, Jr., Jesse H. Regional Geography of the World. 3rd edition. New York: Holt, Rinehart and Winston, Inc. 1969.




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