Friday, May 30, 2014

7 ALEXANDER CHAYANOV The Theory of Peasant Co-operatives

If during the winter, the labour of a peasant family is profitably employed, an agronomist will do the most good by promoting the distribution of threshing-machines, thus freeing a significant amount of peasant labour for productive activity of other kinds. But if, during the winter, the peasant has nothing to do except thresh his crops, then the dissemination of threshing-machines can scarcely be seen as anything but an unproductive outlay of peasant capital, which is meagre enough as it is.
Kirsanov very aptly points to a case where the aims of a self-employed peasant farm may come into conflict with the mechanization of labour, even though mechanized work may perhaps - from a book­keeping point of view - be extremely profitable.
We shall not give any lengthy description of the managerial bodies of the machinery users' association, nor of the other details of its internal organization, which resemble those of other co-operatives. We shall, however, concentrate on the four most important organizational problems which determine the association's work in relation to the joint utilization of agricultural stock.
The first of these problems concerns the methods of raising capital for the purpose of acquiring the necessary stock. A certain proportion of this capital comes from the share contributions of participants. However, stock can easily be sold off in the event of the association going into liquidation. Therefore, share capital may serve as no more than a guarantee against losses in the event of such a sale of assets; and most of the necessary funds come from long-term loans which are repaid through surcharges over and above the usual charges for the use of the machines. Given the association's solvency, which is in any case guaranteed by the stock itself and by the share contributions, co-operative credit centres can finance them without any misgivings; and can do so even in the absence of any provision in the association's statutes making members liable for the association's affairs.
We know of cases, however, where machinery associations based on loan capital as well as on small share contributions have consolidated their financial position by introducing a limited liability on the part of members over and above the members' share contributions.
After they have, in one way or another, sorted out the financing of the machinery association and obtained the capital needed to buy the stock, the association's organizers then have to resolve the second organizational problem: they have to decide on what principles the association's machinery is to be selected.
Sometimes this problem is settled extremely simply. It is
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Table 24
Name Productivity Duration Productivity   
of machine per day of the during the   
season season   
when it   
is used   
Seed drill 4 hectares 18 days 72   
Disc-harrow 3 50 " 150   
Reaping-machine 3 10 " 30   
(with two horses) 20 quintals 80  " 1,600   
Winnowing-machine 40 80  " 3,200   
Separator 60 100  " 6,000  
If we now apply the productivity rates of these machines as shown above to the calculation which concerns us here, we get the result shown in Table 25.
Such, in outline, are the calculations. But when they are applied in practice, there are a great many complicating circumstances which have to be taken into account. Thus:
1. Machines, if they are to be used by a large number of small farms, must be mobile, and it takes time to move them. The beginning and ending of the work may very often be such that a machine is used for less than a whole day, which also leads to a waste of time available for the machine's use.
2. If a machine is to be fully employed during the season, people have to queue to use it; and this queue can itself be extended
ascertained in the members' households exactly what kind of work the association can help to mechanize. Then, once the productivity of each kind of machine has been determined, a calculation is made as to how many of these machines are needed in order to carry out the work in question. Thus, for instance, if an association has 40 members and if each member has sown an average of 10 hectares with cereal crops, then the total area served by the machinery association will be 400 hectares. Assuming a harvest yield of 12.8 quintals per hectare, this will provide a total yield of 5,120 quintals.
In order to exploit this area, use may be made of the machines listed in Table 24 which would be beyond the means of small farms acting on their own:
158  Machinery Users' Associations
Table 25 Number of machines required to service a land area of 400 desyatiny [1,080 acres] sown with grain
Name of Volume of Seasonal Number   
machine work norm required   
'Randal' harrow 400 hectares 150 hectares 3   
Seed drill 400 72     " 5   
Reaping-machine 400 30     " 14   
Threshing-machine 5,120 quintals 1,600 quintals 4   
Winnowing-machine 5,120 3,200 2   
Separator 5,120 6,000 1  
over the entire season. The longer it proves possible to extend the season for the user, the more fully the machine will be used and the lower will be the cost for each individual farm.
However, if the queue begins too early or ends too late, this will be extremely inconvenient for farmers, because it will upset all their economic calculations. For this reason an association has to cope with a sharply intensified demand at the height of the season; and under the pressure of this demand it has to increase the number of machines for which there is a demand over and above what is required by the norms of profitability. The result is that machinery associations have more machines than are needed, and the machines are never fully utilized. 3. The two circumstances just mentioned both make it necessary to increase the number of machines operated by the association over and above the guidelines set out earlier. There are, however, other considerations which tend to reduce this number. For example, it is quite possible to imagine that many farms do not wish to mechanize all work which is capable of being mechanized and that they will leave many kinds of work, such as harrowing and reaping, to be performed manually or by means of rudimentary implements. Moreover, some of the larger farms will prefer to buy for themselves some of the machines - such as winnowing-machines - which they rent for use on small areas of land. Both these circumstances tend to reduce the number of machines which the association requires.
Thus, the real demand for machinery may not coincide with rudimentary theoretical calculations of such demand. A machinery users' association therefore has to weigh up the considerations just
Machinery Users' Associations   159
It is desirable that everything possible should be done to remove
mentioned and it has to decide, gradually and by a process of trial and error, what to include in its equipment.
Usually, however, financial considerations alone will prevent the association from buying its equipment all at once. The machines are acquired gradually, starting with those most in demand; and the association's board of management always has the opportunity to adapt to the requirements of everyday life. It should be recognized, in any case, that for a machinery users' association as an enterprise, a surplus of machines - that is, an extensive underemployment of machines - has been more dangerous than a partial shortage of machines.
So far as the collection of machines is concerned, one is bound to highlight and emphasize the point that an association must, during its first years of existence, be able to provide the most profitable and efficient machines, both in order to build up the association's reputation in the eyes of the peasantry, and also in order to strengthen the association's internal capabilities as an enterprise.
But to follow this rule consistently is not as easy as it might seem. To begin with, machinery users' associations are usually formed at the time when the most profitable machines are already being used, either privately by a large number of farmers or else by groups of two or three homesteads jointly. Even so, these machines are, of course, used only to a very small extent and they do not work out cheaply for their owners. Thus, for example, P. Vikhlyayev, who in 1910 made a study of the flax district of the Moscow province, has written that:
Provided that threshing-machines are evenly distributed over the land and provided that these machines are all used to the same extent, it requires in all only 8 days to thresh the entire crop in a year with an average harvest. And for particular sub-districts [volosti] such as the Kul'pin and Bukholov sub-districts, it takes only 5 or 6 days to put the whole crop through the existing threshing-machines.
The average crop can be winnowed in two days with the winnowing-machines accounted for in the census of 1910.
This results in an actual surplus of grain-harvesting machinery in peasant households. The mainly private ownership of the best equipment tends to produce the same result: it leads to the extreme under-utilization of the machinery. In these conditions, it is not very productive for the population to spend money on acquiring improved equipment.5
160  Machinery Users' Associations
such equipment from private use by individuals and transfer it to co­operative use. This will, in the first place, save national economic capital; and it will, secondly, do much to strengthen machinery users' associations.
However, the peasantry's innate individualism and the perceived advantages of private user lead farmers to cling very tenaciously to these machines; and to offer machinery users' associations only the equipment which is either totally beyond the handling capacity of individual farms or is of a kind whose value is unclear and uncertain. A good deal of tact and skilful effort is needed in order to steer an association away from the pursuit of a ruinous course in these matters.
Many machines which are not very well known also turn out to be not very suitable. There is no demand for them on the part of the members; and the machines stand idle and become an unnecessary burden - a kind of junk. Moreover, when machines are of different types, each one of them needs its own particular spare parts and repairing equipment, which immensely complicates repair work. When all the machines are of the same type, they are serviced by the same repair equipment; and where the need arises, or in the case of serious breakages, it may be possible to convert two broken machines into one, which can be operated immediately without waiting for a capital repair. These considerations relating to repair are not only a matter of convenience. They also demonstrate how repairs - and therefore the use of machinery - can be made less costly.
Therefore, in the older machinery users' associations, the variety of types of machine has been gradually reduced; and these associations seek, for working purposes, to collect machines of one type only. This also settles the basic economic task of this kind of co­operative, which is to provide for the joint user of large machines which are beyond the means of small individual farms. The association's economic planning and the whole of its organization have to be adapted to this basic task - which the association tries to fulfil in the most satisfactory way possible.
But a second task - that of carrying out practical tests on new types of machines and encouraging their use by the peasantry -needs to be undertaken separately from the basic tasks. Where special resources are made available for this purpose, they are organized on their own and on different lines, without interfering with the entrepreneurial foundations of the associations' main work. Profits are not uncommonly used to create a special fund for the testing of new machinery as well as a fund for propaganda, and so forth. These have made it possible to conduct testing and
Machinery Users' Associations   161
1. Editor's note: The expression 'self-employed peasant farm' has been used here to translate the Russian term trudovoye [kresfyanskoye] khozyaistvo, which referred to a farm entirely dependent on the labour of members of the peasant family.
2. F. Begu, le travail agricole et la condition des ouvriers agricoles dans le Departement du Pas-de-Calais, Paris, 1909.
3. K. Linder, 'Die zeitliche Verteilung der Handarbeit in der Landwirtschaft', Tiel's Landwirt Jährbuch, Vol. 38.
4. Materialy dlya otsenki zemel' Khar'kovskoi gubernii [Data on Land Valuations in the Kharkov Province], Volume III, Kharkov, 1907.
5. P.A. Vikhlyayev, Vliyanie travoseyaniya na otdeVnye storony krest'yanskogo khozyaistva [The Influence of Fodder-grass Cultivation on Particular Aspects of the Peasant Economy], Volume 3, Moscow, 1913.
propaganda activities successfully and on a very large scale, but in ways which do not interfere with the associations' basic work and which are not motivated by considerations of entrepreneurial gain.
Dairy Farming Reprocessing and Cattle-rearing Co-operatives
Associations of peasant households for the purpose of dairy farming are the oldest form of co-operative, going back, so European writers assure us, almost to the fourteenth century. At all events, dairy farming partnerships appear to us to be the most well established, the most highly evolved and, we would say, the most classical form of co-operative organization among peasant households.
The economic problems that have confronted dairy farming co­operatives are of an extremely simple kind; their success has been obvious, their organizational forms have been clearly crystallized and their experience has been accumulated and systematized. All this enables us to describe them in greater detail and to use them as a typical model for the analysis of peasant producer co-operatives in general.
Our basic premise is that a peasant co-operative and its economic activity represent no more than a part of the economic activity of its members - a part which has been detached from the general organizational plan of the agricultural economy and socialized in the form of a co-operative enterprise, while nevertheless inseparably connected with the remaining sectors of the peasant economy. Therefore, when we talk about 'dairy fanning co-operation', we use this concept to refer not only to co-operative factories engaged in the manufacture of butter and cheese or to centres for cream production. We use the concept to refer to the whole system of co­operative dairy farming, starting with the stalls of co-operative members and ending with co-operative equipment.
It is, therefore, natural to begin our analysis by examining the economic foundation on which peasant dairy farming co-operation is
Dairy Farming Reprocessing and Cattle-rearing Co-operatives  163
Vologda province       Novgorod province
Number of members   
per family 5.3 6.9   
Number of workers in   
family 2.98 3.5   
Area under cultivation   
in the household 2.46 3.37   
Head of cattle 3.58 4.7   
cows 2.09 2.42   
calves 1.22 9.21   
Gross income of household 448.10 618.08   
Including income from:   
cattle-rearing 110.25 99.85   
dairy farming 62.71 63.90   
from the sale of dairy   
products 44.66 15.85   
Money income of household   
excluding income from cottage   
industries 94.78 63.35  
Sources: Materialy dlya otsenki zemeV Vologdskoigubernii ('Material relating to land valuations in the Vologda province'), Vol. II, Vologda, 1907; Byudzhety krest'yantskikh khozyaistv Novgorodskoi gubernii ('Peasant house­hold budgets in the Novgorod province'), Novgorod, 1918.
Thus in an average peasant household in Vologda, which owns 3.58 head of cattle, 24.6 per cent of overall gross income comes from the products of cattle-rearing and 14 per cent from the products of dairy farming; while 71.3 per cent of all dairy farming products are sold on the market. Receipts from the sale of dairy farming products make up 22.4 per cent of all money income and are second in importance to income derived from cottage industries and trades
based, namely, the peasant family farm itself which produces milk as a commodity.
Investigations of the budgets of peasant family farms provide us, in this respect, with a good deal of material. By studying the columns of figures in the statistical records for Vologda and Novgorod, it is possible, as shown in Table 26, to arrive at the following statistical picture of those peasant households which form the basis of dairy farming co-operation.
Table 26
Table 27 Turnover of valuable resources in cattle-rearing for milk production in average peasant homesteads in the Vologda district
Area Number Value of Cattle Labour Cost Paid Main Total   
sown of cattle bought expended of to tenance Expenses   
by house- at fodder herdsmen of herds-   
house- holds start for men and   
holds surveyed of pasture other   
(desyatiny) year and other general   
expenses expenses   
0-1.0 14 28.0 _ 10.8 15.7 0.8 2.6 57.9   
1.1-2.0 47 56.4 2.6 16.3 35.2 2.2 5.1 117.8   
2.1-3.0 42 70.6 3.9 19.8 52.4 3.1 6.6 156.4   
3.1-4.0 20 98.1 6.4 23.1 57.6 3.4 9.0 197.6   
4.5-6.0 9 103.5 - 25.5 72.6 4.5 9.3 220.4   
6.5 and   
above 4 224.3 24.4 37.2 138.3 4.1 20.6 448.9   
Average 136 73.1 3.8 19.4 47.3 2.6 6.7 153.0  
Area sown by
households (desyatiny) Value of cattle at end of year Cattle sold Manure produced Hides produced Meat produced Dairy
consumed Dairy
sold Total Receipts   
0-1.0 26.6 2.5 3.3 0.2 0.4 10.5 19.2 62.3   
1.1-2.0 57.2 9.2 6.9 0.7 2.5 17.7 37.0 131.2   
2.1-3.0 71.7 12.3 9.5 0.9 2.7 18.2 44.2 158.9   
3.1-4.0 105.0 8.4 10.8 1.4 4.8 23.6 51.6 210.1   
4.1-6.0 101.1 17.7 14.3 2.2 7.1 15.3 63.6 221.3   
6.1 and   
above 225.2 16.5 30.4 3.1 24.2 26.0 123.2 448.6   
Average 73.3 10.1 9.1 1.0 3.7 18.0 44.7 159.9  
166 Dairy Farming Reprocessing and Cattle-rearing Co-operatives
Households with a
sown area of: Desyatiny       Poods
0-1.0 37.0   
1.1-2.0 78.6   
2.1-3.0 97.9   
3.1^.0 124.0   
4.1-6.0 151.0   
Over 6.1 296.8  
[Note: One desyatina equals 2.7 acres; one pood equals 36 lb avoirdupois, approx.]
which makes up 50.1 per cent of money receipts. However, the proceeds from the sale of dairy products make up 47.1 per cent of money income derived from the sale of agricultural products.
Thus peasant households, which constitute the foundation of dairy farming co-operatives, are not households that specialize in the production of dairy farming products. Dairy farming accounts for only a small part of the economic activity of the peasant family. It is an activity that takes second place to agriculture and non-farming trades. Its main importance is that it is, by its nature, market-oriented. 71.3 per cent of all dairy farming products are sold on the market, whereas only 22.5 per cent of field products are disposed of in this way.
The money-oriented nature of dairy farming makes it extremely important as a source of money income.
We can get some idea of the way milk production is organized in peasant households from Table 27, which shows the turnover of peasant homesteads of differing sizes.
We can thus see that after deducting the cost of cattle from the debit and credit entries, the expenditure on cattle-rearing for the production of milk is mostly related to fodder (59.3 per cent); and to labour (24.3 per cent). 72.3 per cent of receipts from cattle-rearing come from the sale of milk and dairy products and nearly three-quarters (71.3 per cent) of all dairy products are sold. If we measure the quantities of milk sold in terms of poods [1 pood equals approximately 36 lb] we can calculate the quantities of marketable mük per average peasant household, as shown in Table 28.
As we have already explained, the main importance of dairy products for this economic organization is precisely the fact that these products are marketable. Therefore, the success of this sector
Table 28
Dairy Farming Reprocessing and Cattle-rearing Co-operatives  167
Table 29 Percentage of households which market their milk directly and through middlemen
Directly Through Mixed Total   
Area closest to Moscow (1)   
Households which keep a cow   
for only part of the year 16.7 83.3 0.0 100.0   
Households with one cow 33.3 63.6 2.1 100.0   
Households with two cows 54.9 39.4 5.7 100.0   
Households with three or   
more cows 71.8 23.1 5.1 100.0   
Remote area (4a)   
Households which keep a cow   
for only part of the year 0.0 100.0 0.0 100.0   
Households with one cow 2.0 96.3 1.7 100.0   
Households with two cows 8.7 83.1 8.2 100.0   
Households with three or   
more cows 19.5 73.2 7.3 100.0  
of the economy largely depends on the way marketing is organized and on the prices at which the dairy products can be sold.
If a large consumers' centre, such as a town or factory, exists in the immediate vicinity, the peasant producer can establish direct contact with the ultimate consumer and can organize the marketing of his product directly, without the services of middlemen. However, the geographical area for such marketing is extremely limited. The radius was estimated to be 10-15 versts [approximately 6V2-IO miles] in a study of the milk market near Moscow which was carried out in 1911-12 by the Moscow Area Land Board, whose findings we shall utilize later on.1 Even within this area, however, the direct marketing of milk takes on average about six hours of the peasant's time on every occasion that he undertakes such marketing. It can easily be understood that this outlay only makes sense when the household has a sufficient quantity of milk which is saleable. For a small household with one or two cows, such direct marketing is only possible where there is a town in the immediate vicinity, or where the milk produced over two or three days is all sold at the same time, or, lastly, where the transport of the milk is incidental to journeys made for other reasons.
168 Dairy Farming Reprocessing and Cattle-rearing Co-operatives
Half a pail (5 mugs) 17.5 kopecks   
1 pail (10 mugs) 35.0   "   
IV2 pails (15 mugs) 52.0   "   
2 pails (20 mugs) 70.0   "   
3 pails (30 mugs) 105.0   "   
4 pails (40 mugs) 140.0   "  
[Note: a mug (kruzhka) is a standard measure equal to approximately 2.1 pints.]
It can be seen from looking at this table that if we compare the remuneration for delivering milk with the normal earnings from the use of a horse and its driver, there may be a certain advantage in direct deliveries of milk of IV2 pails or more - that is, of amounts produced by farmers with a large number of cows.
So far as areas outside the 10-15 verst radius are concerned, it can easily be understood that given the distance from the town, the transport of milk can be financially profitable only by deliveries of milk in larger quantities than any peasant household can provide. Therefore, in the area outside the 10-15 verst radius, the milk market becomes the kingdom of the middlemen who must, if they are to be sure of a definite income, accumulate a very substantial amount of milk.
Therefore, households which want to sell their milk but which do not possess it in large, marketable, quantities, have to rely on the services of middlemen, even within an area of 10 versts [6.6 miles] from the nearest town, as can be seen from Table 29.
We can see that, in a relatively remote area, direct contact with the consumers is maintained only by an extremely small group of households with a large number of cows (19.1 per cent of households with three cows maintain such direct contact). However, all the remaining households have already decided to sell to dealers. This, according to the findings of the study, takes about 0.55 hours, as against more than 6.6 hours which are spent when making direct deliveries to Moscow by horse transport. However, dealers naturally offer a lower payment for milk, since the price in Moscow is about 80 kopecks per pail [vedro: equal to approximately 21 pints), whereas dealers in remote areas offer 40-50 kopecks per pail.
Thus a journey of 6 to 7 hours involving human labour and the use of a horse is remunerated, according to the amount of milk sold, as follows:
Table 30
Dairy Farming Reprocessing and Cattle-rearing Co-operatives   169
Table 31 Prices paid for fresh milk and for milk in the form of butter, depending on the distance from the marketing town
Distance from town Price paid per pood of milk for:   
Fresh milk Milk in the form of butter   
0  versts 80 52   
5 70 51   
10 65 50   
15 60 49   
20 55 48   
25 50 47   
30 45 46   
35 40 45   
40 35 44   
45 30 43   
50 25 42   
55 20 41  
As we have already seen, direct marketing is virtually impossible for a peasant who has no more than two cows. Only where neighbours pool the milk which they have produced, so as to make up substantial consignments, will it be possible for producers to organize the direct marketing of milk on co-operative principles.
Associations which sought to replace the buyers dealing in cream arose and still exist in the outlying areas of large towns. A survey in Moscow noted the existence of 22 associations for marketing cream; they collected an annual average of 5,339 pails of milk, not counting other products with which they dealt; and the amounts which they collected varied from 363 to 14,675 pails for each association. Despite the fact that nearly all associations are joined into a central association, the co-operative apparatus has been waging an energetic struggle against dealers. It has so far been unable to crush them since it is precluded, as a matter of principle, from resorting to the methods used by cream dealers (for example, giving false measures, adulteration, deception, and so on).
There comes a point when the marketing centre is so far away that neither dealers nor co-operatives can market their milk while it is still fresh, because of the rising cost of railway transport and of transport to the railway station and the significantly higher proportion of the product which gets spoiled in transit. When these distances
170 Dairy Farming Reprocessing and Cattle-rearing Co-operatives

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