when they do occur they usually spread over vast regions and increase the incidence of cattle death two or three times over.
If the agencies that undertake insurance against ordinary, normal losses of cattle were also required to pay in cases of cattle epidemics, then they would be ruined by the very first epidemic. If they were to demand increased insurance contributions, this might, of course, soften the blow for those who had lost their cattle. But it would considerably diminish the value of insurance for cattle-rearing as a whole.
Therefore, insurance against epidemic diseases cannot be undertaken by the methods used for insurance against the ordinary death rate. It is impossible to use the method of spreading out losses from ordinary cattle death over the largest possible number of livestock. What is necessary is to spread out the losses over the greatest possible number of years, so that they can be paid off by instalments. This can be achieved either by means of credit or else by a special fund of reserve capital, of which more will be said below.
Thus our first step must be to treat insurance against epidemic diseases as a separate undertaking and to organize it on special principles. Such are the foundations on which insurance becomes possible. Let us now look at the organizational forms through which this possibility is realized.
Among all the countries of Western Europe, the most highly evolved as well as the simplest and cheapest forms of co-operative insurance are to be found in Belgium and France. Already at the beginning of the nineteenth century, there existed in the heart of the Belgian countryside peasant associations that were free from outside control, were not registered with the authorities and had their own somewhat distinctive arrangements. They had no money capital; but whenever an animal died whose meat was fit for consumption, the members of the association undertook to buy the meat from the owner in proportion to the number of cattle which they had insured, at current market prices. And in the event of the meat being unfit for consumption, the owner was paid by his colleagues the amount of money which they would have had to pay for the meat had it been fit for consumption.
When operations were expanded, societies of this type - which were not very convenient for their members - were superseded by other types of society which built up a certain amount of capital out of annual contributions. This capital was used to pay benefits, without troubling all the members on each occasion. The most usual of these evolving systems was one which required the society to pay, out of its funds, the difference between two-thirds of the value insured and the sum which the owner had been able to fetch by
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selling the animal's carcass. This system gradually developed into a purely monetary system whereby an owner immediately received two-thirds of the value of an animal which had died, while the society itself undertook to sell the carcass for its own profit.
A good many primitive systems of the same kind can be observed in France.
THE INSURANCE OF CROPS SOWN AND HARVEST PRODUCTS
We now turn from the insurance of cattle to the insurance of crops. In this case, there is a difference not only in the subject matter of the insurance, but in the nature of the economic problem which has to be resolved. The loss of cattle for reasons unrelated to epidemics is a normal economic phenomenon which can - in relation to large herds - be predicted with a high degree of accuracy and can be allowed for when preparing annual estimates for the cost of maintaining cattle. By contrast, bad harvests, losses due to hail damage or plagues of locusts, phylloxera or other pests are elemental disasters which are almost always unexpected and which do not occur by any means every year. Furthermore, damage to crops from these causes has always covered entire zones of land, extending over large regions, and has afflicted literally every farm in the region.
In all these respects, the financial and material losses relating to crops resemble losses of cattle through epidemics. Co-operatives that insure cattle are careful, as we have seen, to treat this as a separate problem, which in most cases they refuse to handle.
A certain degree of stability in the incidence of losses for risks of this kind may be achieved either by extending the areas of the territory insured to areas approximately equal to, or greater than, the territory of a state, or else by calculating the rates of loss by reference not to a single year but to a period stretching over several years. The rates of loss from damage caused by hail or by locusts or other pests will, if averaged out over the decades, give us comparatively stable coefficients and can provide a basis for insurance calculations.
Such are the special features which make the insurance of crops an exceedingly difficult problem not only for co-operatives but also for other kinds of insurance organization.
The most basic and the most important of these kinds of insurance, namely the insurance of crops against bad harvests, has scarcely been fully achieved in practice anywhere in the world. The only attempts we know of in this field were the storage of grain for
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the possible 'bad year' which at one time took place in the Russian countryside and provided its food reserves; and the state insurance of rice crops in Japan. Among the schemes for crop insurance now being drawn up in the USSR, what merits the most attention is not the attempt to insure the crops of individual owners, but the measures aimed at enabling local co-operatives and local authorities to get resources to help with sowings, as well as the measures to combat the risks of famine.
We have considerable experience with regard to the insurance of crops against episodic mishaps due to damage from hail, destruction by frost, pests and all kinds of diseases. A significant proportion of this insurance work in the West has been undertaken by public bodies with legally enforceable powers as well as by private insurance companies. But besides that, a good deal of experience has now been built up in the field of co-operative insurance.
Summing up the experience of co-operative work accumulated in this field, we can sketch the following organizational outline of cooperative insurance against damage caused by hail.
Every member of the co-operative is required, during the spring, to declare for insurance purposes all the crops which he has sown which are to be insured by the association; and he must attach to his declaration at least a rough plan showing where these crops have been sown on his land.
The owner of the crops sown is himself allowed to estimate the anticipated yield of the harvest and its future value. The insurance premium is levied accordingly. The owner is warned, however, that compensation for any losses of crops due to hail damage will be paid at their real value and will not in any case exceed the anticipated value of the crops shown in his declaration. He is also warned that if only a part of the crops is damaged by hail, then the losses will be met up to an amount not exceeding the declared value of this particular part.
The owner must indicate in his declaration whether he is insuring grain by itself, or whether he is also insuring straw. Insurance is accepted for a period which usually runs from 1 May to 15 September, after which the harvest is presumed to have been gathered and the co-operative begins work on financial settlements with its insurance policy holders. Co-operative insurance is usually based on the principle of constant premiums. The level of premiums is determined on the one hand by reference to the climate in the area where the crops are sown; and on the other hand by reference to particular plants.
What was probably the earliest example of this kind of initiative where grain was concerned were the associations set up in France to
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combat the cockchafer (the 'Syndicats de hannetrage'), the first of which was formed in the Garron district of the department of Magenne. This syndicate, which was founded in 1866, served as a model for others. It set out to organize a concerted and vigorous campaign in all village settlements throughout its area, for the purpose of getting maximum results in alleviating the devastation caused by the beetle and its maggot. Landowners each paid 25 centimes per hectare into a common fund. The syndicate paid for all beetles collected in its area. It paid, at a price fixed by its council of management, out of money which had been raised, donated, bequeathed or provided in the form of grants. During the appropriate seasons it also sent out groups of workers, who were paid at fixed rates, to search for beetles in places which had been devastated by beetles. Lastly, it allowed farmers, peasant farmers and members of the syndicate to have the use, free of charge, of ploughshares, harrows, sprayers, and so on, to help them to extirpate caterpillars from the soil.
Associations Concerned with Land
Associations connected with the land hold a very special position among co-operative organizations. All the co-operative organizations that we have studied so far - for credit, purchasing, marketing, reprocessing, machinery and cattle-rearing - based their cooperative principles on the socialization of various parts of the economic turnover. By contrast, co-operation which is concerned with land does not affect either the productive, or any of the other, processes of the turnover of valuable resources within the household. Its purpose essentially amounts to the organization of the main territorial base for agricultural production.
The basic task of co-operation concerned with land is to organize the land area on which a farm will be set up; this applies equally to melioration associations and to associations for land tenure or for the joint purchasing or leasing of land. The most widespread of all these has been the melioration association.
The technical process on which it is based is essentially that of the so-called radical improvement of the soil. When we observe various pieces of land, we can notice that some of them are totally unfit for agricultural use; or that even if they are cultivated, they yield extremely negligible results. In most cases the reasons for the unsuitability of the land is that it is affected by an abnormal combination of the physical factors which determine fertility. Inadequate moisture will make it quite impossible for any of the ordinary cultivated plants to grow. Conversely, an excess of water leads to the swamping of the soil and to high acidity. Soil made up of quicksand which lacks humus to ensure its cohesion, or stony soil which makes cultivation difficult, or the formation of ravines which
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erode the surface of the land - all these abnormalities will hamper agricultural cultivation.
However, from the point of view of modern agronomy, none of these obstacles is insurmountable. Modern techniques enable us to dry out swamps, to irrigate deserts, to stabilize quicksands and to convert stone rocks into vineyards - in short, to turn 'empty places' into fertile fields and meadows.
From a technical point of view, melioration provides virtually unlimited opportunities for human genius. For an agronomist of the present day, the land is nothing more than a surface illuminated by the life-giving rays of the sun. But he is able to determine as he chooses the physical condition of this surface in the way required to absorb solar energy through the chlorophyl.
The crux of the question is: what will be the cost of this? And in our case, will the costs of melioration be repaid by the economic results of the improvements undertaken?
From the vantage point of an ordinary capitalist farm, the melioration of any piece of land is possible provided that the economic effect of this melioration - measured in terms of an increase of agricultural rent - is greater than, or at least equal to, the normal percentage return on the capital invested in the melioration. If the cost of the melioration is such that the rate of interest on the capital expended on it amounts to a sum greater than the increase in the net return which results from the increase in the harvest yield produced by the improvements made in the soil, then obviously the radical improvement which was envisaged cannot be profitable. The farmer will be obliged to abandon it, despite all its technical feasibility and attractiveness.
For this reason the state, which has an interest in melioration for the sake of the national economy as a whole, will quite often create special funds for the granting of credit on preferential terms, for the purpose of such projects for melioration. The reinforcing of ravines, the straightening out of river-beds, the fight against quicksands and other similar measures simply cannot be undertaken except on the basis of credit on preferential terms.
But economic calculations as to melioration are drawn up in a rather different way in the case of self-employed peasant family farms. In one of the early chapters of this book, we demonstrated through a detailed analysis that such family farms interpret profitability in their own particular way, which differs from the interpretation used by farms employing hired labour. We know that for a self-employed peasant family farm, net profit, from a bookkeeping point of view, can be ascertained only tentatively; and that the earning of such a profit is not the actual purpose of such a farm.
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A peasant family invests the labour of its members, and the capital that it owns, in its farm; and it seeks - while achieving the full reproduction of its capital - to derive the maximum remuneration for the labour which it has invested in the farm. The higher the remuneration per unit of this labour, the more successful the farm's organization should be deemed to have been. We should also remember that the main purpose of the peasant family farm is to provide for the family's annual consumption; and that therefore what matters above all is the remuneration for the year's labour as a whole and not the average remuneration per unit of labour.
Therefore, because its opportunities for profitably applying its labour are limited, the peasant household directs its effort to the growing of crops or to activities which, even when they yield a low remuneration per unit of labour, nevertheless enable the family's manpower to be more fully used, thus considerably increasing the remuneration of labour during the year as a whole. Accordingly, a peasant farm may expand its allotments by planting labour-intensive crops, even though they yield a lower remuneration per unit of labour, provided they make it possible to apply five times as much labour to the same piece of land. In just the same way, the peasant household will expand the area to which it can apply its labour, by taking land on lease at prices far above the ground-rent; and by buying pieces of land for sums of money which considerably exceed the capitalized rent.
These characteristics are also bound to affect the peasant household's capacity to undertake melioration. It can easily be understood that radical improvements, achieved through an expansion of the land area fit for exploitation, will of themselves help to satisfy the basic need of peasant households in regions which suffer from agrarian over-population - that is, the need for families engaged in economic management to extend the opportunities for applying their labour. Therefore, melioration work has an importance which is similar to the expansion of labour-intensive crops, the organization of earnings from cottage industries, and so on.
Our conclusions are especially important for the purpose of ascertaining the economic limiting factors of melioration. In the case of an enterprise run on capitalist principles, the rate of profit, corresponding to the usual rate of interest on capital, constitutes the economic limiting factor of melioration. Radical improvements will obviously make a loss if they produce an increase of rent below the usual rate of interest, calculated as a proportion of the capital spent on melioration; and such improvements will cease to have any point for a capitalist farm.
But for a peasant farm the economic limiting factors for melioration
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are considerably more flexible. A whole number of radical improvements, which would be beyond the reach of a capitalist farm, are possible for a peasant farm seeking ways of extending the application of its labour.
To put it another way, a peasant family farm is subject to a different limit, where the profitability of melioration is concerned. This limit cannot be conceived as some definite percentage return on the expenditure on melioration, since, as we have already demonstrated, the rate of return on capital in a peasant family farm is not a purely economic concept.
We are inclined to the view that, in general, this rate of return cannot be established by any purely objective calculations. It depends on the extent to which the families engaged in economic management are provided with the means of livelihood; on the amount of surplus work which they undertake; on the possibility or otherwise of finding alternative ways of expanding the application of their labour; and also on other conditions which are difficult or impossible to measure.
The only objective yardstick on which to base our approximation is, in our opinion, local land prices and, in particular, the prices for those economically significant tracts of land which melioration work itself serves to create.
The level of land prices paid by peasant households bears no direct relation to the level of net returns and is determined by precisely the same conditions as determine the opportunities for melioration.
Both the acquisition of land and the making of radical improvements to the land, provide increased scope for the application of labour by expanding the area of usable land. And it is obvious that a peasant household will not, for example, undertake the drying out of a swamped meadow if the cost of so doing is greater than the price for which meadowland can be bought in the district. On the other hand, if a peasant household seeking greater scope for the application of its labour buys fresh land at prices higher than the capitalized rent, then it is also obvious that any expansion of usable areas through the radical improvement of its own land will be profitable for the household, provided that the cost of this melioration work is below the selling price of the land, even though the increase of rent expected as a result is below the normal rate of interest on the capital expended.
It may be pointed out that most melioration work is undertaken with borrowed capital; and that the main condition laid down when credit for melioration work is granted is that the increase in rent must be used in order completely to pay off this credit. In cases where melioration work is undertaken, but where the increase in rent is not enough to pay even the interest on the borrowed capital,
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a self-employed peasant farm will have to repay the capital out of its 'wages'.
We cannot, of course, regard such a state of affairs as either favourable or desirable. But when we are considering the economic limits of melioration, we have to envisage that when such radical improvements are undertaken, self-employed peasant family farms will have to repay loans incurred for the purpose of melioration out of their 'wages', just as their 'wages' are used to pay rent for the land they lease; and just as 'wages' were used before the war to repay debts to the peasant bank for land which had been acquired at prices above the capitalized rent.
These, then, are the most general theoretical considerations relating to the economic opportunities for melioration in a peasant family farm.
The nature of such a farm does enable it to undertake melioration work of a kind which would be beyond the reach of a capitalist farm. Nevertheless, even in the case of a peasant family farm, the provision of cheaper credit for melioration makes it infinitely easier to carry out because such credit enables the farm to make these improvements without reducing the remuneration of the labour which it applies to the land on which the melioration work is being undertaken.
It follows from what has been said above that the first way in which co-operatives can assist melioration work by peasant households consists in the granting of cheap, long-term credit. The search for special credit funds which can be lent for long periods at low rates of interest is a direct obligation of the general co-operative credit system, which the latter has quite consciously set out to fulfil.
However, co-operative assistance to melioration work need not be confined to the financing of such work on preferential terms.
In most cases, melioration work will succeed only when it covers substantial areas of unusable land. The drying out and drainage of large areas of swamped meadows, the irrigation of substantial tracts of territory affected by drought - all this provides scope for melioration work on a large scale and thus significantly lowers the costs per unit of the area on which the work is carried out. This kind of expansion of the area of melioration work is very often essential not only from the economic, but from the technical point of view -since the achievement of results is technically possible only when the improvement is undertaken comprehensively and on a mass scale.
Because of this need for the comprehensive inclusion of large tracts of land covering several hundred or several thousand farms, co-operatives concerned with melioration work have certain distinctive features.
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One of the main foundations of co-operation, as we know, is the principle that farms should join the co-operative voluntarily. However, this principle cannot be applied as a matter of course to a co-operative which is embarking on joint melioration work over a large tract of land. For a co-operative of this kind, it is essential for technical reasons that not a single farm on the land in question should be able to avoid taking part in the melioration work. Therefore, those in charge of melioration work have always striven to obtain legislative recognition of the right of melioration associations to have powers of legal enforcement when performing their public functions. The most important thing here is the association's right to insist on compulsory membership for the minority of farms on the land undergoing melioration, which are unwilling for some reason to join the association voluntarily.
Laws on melioration in various countries, accordingly, lay it down that if the majority of the farms on the tract of land intended for melioration form a special association for this purpose, then the dissenting minority can be compelled to undertake improvements to their soil and may not refuse to do the appropriate work on their land, or refuse to make the appropriate contribution to the cost of the melioration as a whole.
There are, it is true, various legislative provisions intended to safeguard the rights and economic interests of minorities; but only in so far as these minorities refrain from hindering the carrying out of the basic tasks. An owner is not exempted from sharing in the expenditure on melioration work unless he can prove that the melioration would involve him in loss. It must be noted that there are many foreign enactments on melioration associations which contain no reservations whatever with regard to compulsory participation. Nor does the relevant clause in our co-operative statutes contain any such reservations. It provides that:
Where land melioration work, which has been entrusted to an association, cannot, for technical reasons, be carried out without affecting pieces of land whose users have expressed no desire to join the association which is being formed, or where the use of structures connected with the melioration work is bound to affect these pieces of land, then the persons and organizations which use these pieces of land can be required to join the association. For this purpose it is necessary that the members of the association should own at least two thirds of the land on which the melioration work is to be undertaken; and that the resolution which set up the association should have been approved by the votes of two thirds of all users of such land.
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An association formed in this way needs, first of all, to obtain resources to carry out its work. Only in very rare cases do these resources come from the contributions of the members themselves; the passive funds of the association usually come from borrowed capital. Most commonly of all this capital, which is advanced on preferential terms, comes from the state or from some other public source. It is also not unusual for private capital to be attracted.
In order to attract private capital for the purposes of melioration, the most recent legislation on melioration lays down special preferential terms for the granting of loans for this purpose. More specifically, it gives them a right of priority: that is, it lays down that in the event of the non-payment of loans for melioration, claims for their recovery take precedence over claims for the recovery of mortgages, secured loans or loans of other kinds.
In some countries, the actual task of recovering annual redemption payments plus interest payments on loans for melioration is undertaken on the same principles as the collection of taxes. Sometimes the task is even performed by the same collectors, who bypass the association's accounts departments.
It is clear that such preferential terms for debt recovery are a very impressive guarantee that the debt will be repaid; and for every private owner of capital, the investment of resources in loans for melioration will be one of the soundest capital investments. This is bound to result in lower interest rates on credit granted for melioration.
In Western Europe, a loan advanced for the purpose of melioration is usually secured by the land of the farm which takes out the loan; and is therefore a loan in the nature of a mortgage. However, among those engaged in melioration work there is no unanimous agreement as to exactly which land constitutes the security for such loans. Some suppose that in the interests of easing the burden which loans for melioration impose on the peasant household, it is enough to grant such loans solely on the security of the particular land on which the melioration is being carried out. Others, however, regard this security as inadequate in precisely those cases where steps have to be taken to compel the repayment of the debt, that is, where melioration has failed. They insist on the need to mortgage not only the land on which melioration is being carried out but all the land belonging to the farm; although they recognize, of course, that such a demand may deter the peasants from undertaking the melioration work itself.
Under the land tenure regulations obtaining in the USSR, the mortgaging of debts in respect of melioration is impossible owing to the impossibility of selling land. Therefore, other kinds of security
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have to be found. Among these, the right of priority which we mentioned above does for the moment provide creditors with a certain guarantee.
When resources have been obtained and a detailed scheme for melioration work has been drawn up, the association embarks on its implementation, often with the help of its members' manpower, which appreciably reduces the cost of the work.
When the work has been completed, the association and its board of management do not cease to exist, since they are responsible for:
1. The winding-up of monetary relationships and the arrangements for repayment of the loans; and
2. Repairs, as well as the cost of making good any defects in the melioration which has been carried out (for example, the repair of overgrown ditches, damaged drains and so on).
If the melioration work involved irrigation, the association takes responsibility for managing the water supply for the irrigation network: it apportions the water supply and carries out work incidental to this, as well as raising the resources needed for the annual running costs.
Such, in the most general outline, are the basis of co-operatives for the purpose of melioration. Closely akin to them in their economic character are the associations set up for the purpose of jointly organizing land tenure on rational principles.
It quite often happens that the fields of various owners are dispersed and divided up into strips to such an extent that the sound management of a farm becomes extremely difficult. The area of 5 or 6 hectares which is used by the farm may be split up into numerous small plots which are often very far apart from one another.
Even in Western Europe the division of land into strips continues to be the scourge of agriculture. For example, an account of 19 ordinary peasant households in the neighbourhood of Weimar1 revealed that in only one case was farming carried out on only three plots of land. All the remainder were based on five plots or more; while half the total possessed land consisting of ten or more plots. Because of this dispersal of land, the average distance between the fields and the farmstead in these cases exceeded 1.5-2 kilometres; and the distance to the most remote piece of land might be as great as 6-9 kilometres.
An even greater degree of land dispersal is encountered in the Russian communal system of farming, where it is not uncommon to find an allotment of 6 or 7 desyatiny [between 16.2 and 18.9 acres] fragmented into 40 or more strips whose form and location are of the
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most inconvenient kind from the economic point of view.
This situation with respect to economically important areas of land usually arises for historical reasons from one generation to another, as the result of the division and private transfer of land under a system of private land ownership; or else it arises as the result of communally held land being redistributed for the purpose of equalization. But it seriously erodes one of the most important of all the advantages of small-scale farming, namely the shortening of distances within the farm and the consequent reduction of transport costs within the farm.
The small-scale farm which remains small and organizationally weak begins to acquire all the disadvantages of large-scale agriculture in relation to transport within the farm.
The need to rectify these shortcomings in the organization of the land area often becomes so acute that it turns into a social calamity; and it leads to the intervention of the state authorities, who then arrange for fresh surveys to be made, for strips of land to be exchanged between owners, for boundaries to be adjusted, and so on. This leads to the drawing of new boundaries; and all the farms concentrate their land, so far as possible, into a single piece of land which can easily be run from a farmstead in the centre. The economic benefits of such an improvement in land organization are incalculable; and state policy in this respect is one of the most important forms of state assistance to agriculture.
Despite the fact that arrangements concerning land are usually made the responsibility of, and are usually undertaken by, legally empowered public authorities, this task is sometimes also within the capacity of co-operatives. At all events, we know of special associations in France and Germany (for example, the syndicates in Mourecourt and Renil in the department of Seine-et-Oise) which make it their business to secure boundary re-adjustments, to see that boundary marks remain intact and, most important of all, to build and maintain roads for agricultural purposes.
This latter work is fundamentally important because of the exceptional importance of transport within the farm. A rationally planned road network makes it possible, first, to economize on the land area used for roads, and, most important of all, it makes it possible to reduce the cost and labour involved in transporting agricultural loads.
Associations for the arrangement of land are identical in their economic nature with the melioration associations which we have just been studying. We may therefore suppose that it quite possible to apply to them all the same basic organizational principles which apply to co-operatives for melioration.
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Both the types of co-operative which we have described have, from a technical point of view, transformed the land so as to facilitate its agricultural use. However, where land is concerned, cooperatives can also provide substantial assistance for the purpose of expanding land tenure. Associations for the joint purchase and leasing of land already have their own not inconsiderable history, and they have played an extremely beneficial part in organizing the national economies of agricultural countries.
What is of the greatest interest to us in this respect is the practice of collective leasing, which has become especially widespread in Italy. The idea behind it is extremely simple. The owners of estates who prefer to lease out their land instead of using it for economic purposes, will very often seek to avoid the burdensome and not very agreeable business of parcelling out their land among small peasant tenants. And they willingly hand over their land to special entrepreneurs who pay them a moderate rent and will then, in their turn, hand over the land in small plots to peasant farmers.
It goes without saying that entrepreneurs of this kind are ready, as it were, in their pursuit of high profits, to tear the shirts off the backs of the peasant farmers by fixing inordinately high rents for the particular pieces of land. In order to combat this kind of speculation at the expense of peasant farmers, societies for joint leasing were set up. These societies lease entire estates from their owners for long periods, for the purpose of subsequently distributing the land for use in accordance with co-operative principles. Cases have been known where agricultural workers jointly rent an estate on which they formerly worked.
Usually, when these joint leases are entered into, the tenants do not merely confine themselves to the signing of a general contract or to the distribution of the land between the participants in the cooperative. The fact of the joint lease will, of itself, have created the elements of a social nucleus, or even of a co-operative apparatus. The tenants will try to use this to the fullest possible extent: by instructing their board of management to organize joint purchasing and marketing, by setting up a butter-producing factory, by arranging for the joint use of machinery, and so forth.
A joint lease may quite often lead to attempts to set up a fully-fledged farming partnership, based on the labour of its members, that is, based on agricultural production. This is especially common when an entire estate is leased out, together with its buildings, stock and cattle and when the lease is granted to former workers on the estate.
However, the problem of joint agricultural production does not fit into the framework of the present chapter; and, since we believe this
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1. Dr Herbst, 'Guts- und Betriebs Verhaeltnisse bauerlishen Gueter', Thiel's Landwirtschaftlische Jahrbuch, 1908, p. 381.
problem to be a matter of very great importance for co-operative life, we shall make it the subject of the next chapter, to which the reader is referred.
Collective Farms or Total Agricultural Co-operation'
The forms of agricultural co-operation that we have investigated all entail the more or less general collectivization of particular sectors of the peasant economy, thereby making them economically and technically stronger while enhancing the stability of the peasant family household.
We know that the peasant economy collectivizes precisely those sectors of its economic activity in which a large-scale form of production has significant advantages over small-scale forms; and it leaves to the individual family farm those of its sectors which are better organized in a small-scale enterprise. From this point of view, by no means all sectors of agriculture fall within the ambit of the cooperative system. Co-operative collectivism operates within very wide limits; but it is, nevertheless, subject to certain limits - which leaves a considerable area of activity to the family farm.
However, a good many co-operative theoreticians assume that all the forms of co-operative work which we have explained above are merely stages which will gradually lead to the complete socialization of all processes of agricultural production; and to the creation of large-scale collective enterprises, into which individual family households will be totally dissolved. This view was particularly widespread during the first years after the revolution, when agricultural collectives and communes constituted the pivot of our agricultural policy. Our collective farm movement has now existed for many years. We are therefore in a position to sum up a number of its results and ascertain, with a far greater degree of precision and clarity, its place in our co-operative movement.
As the reader will have learned from our first chapters, we are
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inclined to regard agricultural co-operation as one form of vertical concentration of agricultural production. From this point of view, the gradual detachment of particular activities in the peasant household's organizational plan, and the organization of these activities into large-scale enterprises, which, as it were, stand above the general mass of small-scale family farms, represents not a stage of development towards something else, but the affirmation of a principle in itself.
The promotion of full-scale collectives and communes would represent the replacement of the principle of vertical concentration by that of horizontal concentration. At first sight these two principles appear to be contradictory; and it would appear that since we shall have achieved horizontal concentration on a mass scale, therefore the principle of vertical concentration becomes superfluous. However, it is not difficult to show that this proposition is mistaken.
The reader may recall the theory, explained in Chapter 2, of differential optima, which maintained that for every type of cooperative work it is possible, on the basis of the economic and technical nature of the processes to be brought within the ambit of co-operatives, to determine the most profitable scale for the enterprises. From this, the reader will clearly see that the overwhelming majority of these co-operative enterprises will - owing to the scope of their work - have to operate on a territorial scale many times greater than that of even the largest communes or largest collective farms. Dairy fanning associations operate within a radius of 3-5 versts [approximately 2-3.3 miles]. Those dealing with sugar beet and potatoes operate within a radius of about 10 versts [approximately 6.6 miles], while marketing, purchasing, credit and insurance associations operate over even greater distances, to say nothing of the alliances of agricultural associations. In other words, a collective farm, however large it may be, cannot replace the system of vertical concentration of agriculture but must - for the purpose of more fully achieving the concentration of agriculture - become a member of a local co-operative, just like a small peasant household. The only thing that an agricultural collective farm can replace is the small-scale machinery association. In this case, and probably in this case alone, the volume of a collective farm's economic activity does equal or exceed the optimal scale. But in other cases, the optimum scales are, as a rule, considerably higher than those of the very largest collectives.
Even if we were to suppose that literally all peasant households were ultimately merged into communes and were organized on optimum areas of 300-800 hectares [741-1,977 acres], this should in no way affect our basic system of co-operatives engaged in purchasing, credit, marketing and production, which would continue
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to be organized as before. The only difference would be that the membership of primary co-operatives, instead of being drawn from the small peasant households, would be drawn from communes.
A system of vertical concentration developed on a gigantic scale would, at its lower levels, be supplemented by the development of some measure of horizontal concentration. It must, however, be borne in mind that in order fully to implement the system of differential optima, agricultural communes would also have to detach a great many activities in their organizational plan and organize them in co-operatives on the scale of a larger agricultural enterprise.
In short, agricultural collectives can in no circumstances be treated as being the opposite of the system of agricultural co-operation. They should not replace, but should merely supplement, the system of primary co-operatives. Therefore, the question of collective farms comes down, in effect, to the question of who will be the members of the primary co-operatives: individual family farms, or large farms or collective farms. The choice would not be between collectives and cooperatives. The essence of the choice would be whether the membership of co-operatives is to be drawn from collectives or from peasant family households. And even as regards this question, the solution is by no means always or everywhere clear.
There is no doubt that with regard to buildings, stock, the use of animal traction and a great deal else, the scale of operations of a collective farm possesses advantages, which can be measured in substantial quantitative terms. At the same time, however, it cannot be denied that if one examines the very long list of economic factors which were once cited by David and other Marxist-Revisionists as factors defining the advantages of a small-scale farm, one finds some which are very significant from the organizational point of view, and where the advantages of a small-scale - or, more precisely, an independently owned - farm can also be measured in substantial quantitative terms. These include, in particular, those advantages resulting from the intensity of working effort, the effect of increased attention and the nature of managerial decision-making, etc.
Therefore, if one approaches this problem, not from the point of view of ideological aspirations, but simply by comparing the economic strengths of different social types of economy and their capacities for resistance and for survival, then the question ceases to be an issue of principle and it will resolve itself into a quantitative comparison of the ways in which the two kinds of factors mentioned above influence the overall economic result. And this result will, in all probability, differ in different regions and in different types of agricultural productive organization.
It must be assumed that collective farms can and will have a
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significant advantage over individual peasant households in regions that rely on extensive economic methods, where labour is organized in ways that are simple and easily amenable to mechanization, where most of the work is automatic and where enlargements of scale result in clear quantitative gains. Here, the only obstacles to the extension of collective farms will be social tradition and the resistance of the stronger peasant households, which do not want to lose their individual identities.
In any case, some features of collectivization, such as the shared use of tractors and, in general, the joint cultivation of the land, will undoubtedly become very widespread in the above cases.
By contrast, collective farms cannot become so widespread in regions that rely on intensive methods of cultivation - such as the cultivation of orchards and market gardens, potato-growing, dairy farming, poultry-breeding, and so on. In these cases, the mechanization and automation of labour would not produce large quantitative gains; while the quality of care and attention given can lead to a considerable increase in income. One exception is, of course, those units of land that were formed from the acquisition of orchards or market gardens already in existence. Such units, because of their established physical organization as large farms, are able to maintain cohesion and discipline among the collective farm's work force. In other words, the fate of collective farms formed through a fusion of previously independent peasant households will vary in different areas. And it must be assumed that they will, in the main, collectivize the joint field-work, or perhaps only the joint tillage of the fields and use of meadows, while leaving their individual members to run those sectors of farming which offer no high benefit from the enlargement of scale.
Such is our understanding of the nature of different types of collective farms and of their possible future. When we go on to study the organization of this kind of agricultural co-operation, we must first of all note the very great diversity of the most fundamental organizational types. The term 'collective farm' may refer, on the one hand, to full-scale communes where socialization sometimes extends to personal consumption or even to certain items of clothing. The term may, on the other hand, refer to co-operatives where the only joint activity of the members is the ploughing up of their land whilst everything else remains in individual user. In between these extreme types, there is a whole number of intermediate, transitional forms of organization.
In order to keep our attention on the main point, our analysis will concentrate on an average form of organization, that is, on the full-scale agricultural association or partnership, where individual
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consumption is maintained while all agriculture is socialized. In this kind of partnership, all the economic activities of the members are carried on within the framework of the partnership's economic enterprise; and the members themselves do not engage in any separate or individual enterprises of their own. This is a fully defined type of organization and its work will help us also to gain an insight into the remaining forms of collective rural organization.
Unfortunately, the very extensive literature on collective farms and other kinds of agricultural collective contains scarcely a single piece of research into their organization as agricultural enterprises. It is obvious that the organizers of the collective farm movement, while rightly regarding collective farms as large-scale agricultural enterprises, also supposed that they were totally indistinguishable in organization from ordinary large-scale agricultural enterprises based on the use of hired labour. They would therefore be amenable to the same organizational principles and the same structure of organization as those appropriate to state farms and to large-scale enterprises in general.
However, this is a mistaken view. The social nature of the collective farm, mainly with regard to the way its labour is organized and owing to the impossibility in principle of recruiting hired labour, requires a major departure from the type of structure which has been usual in large-scale enterprises. These differences can be reduced to three main characteristics. First of all, a collective farm, so far as its labour is concerned, is made up of a workforce of members of this collective farm. Since the recruitment of hired labour is ruled out in principle, this workforce determines the volume of economic activity for the collective as a whole. The nucleus of workers in a collective farm can develop the farm only within the limits of their ability to cope with their work during the peak periods of the gathering of the harvest and the ploughing of the land.
But this fact means that this nucleus of workers is condemned to a peculiar kind of unemployment at all other times of year, when the volume of work on various types of cultivation is considerably lower than during the peak periods. In order to counteract this, a collective farm has to make considerable changes in its organizational plan; and it must try to combine work on cultivation with work on the various sectors of the farm in such a way as to ensure that its manpower requirements over the year are spaced out as evenly as possible.
Secondly, if all the collective farm members are the owners of the enterprise as a whole with absolutely equal rights, it is exceedingly difficult to regulate questions of labour organization; and it is difficult to resolve questions relating to labour remuneration, the skills involved in particular types of specialized work, the allocation of
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duties and labour incentives. In order to prevent all the workers from being levelled down to the lowest common denominator, one needs either a spirit of enthusiasm throughout the collective, or else a system of labour organization and incentives that is capable of ensuring the necessary degree of hard work by all members of the collective.
A third and perhaps even greater difficulty centres on the authority of the head of the collective farm to manage or organize; and on the measures taken to uphold labour discipline in this kind of enterprise.
The dependence of an elected board of management and of its head on the people who elect them, and the impossibility of expelling members from the workforce as a disciplinary measure, considerably undermines managerial authority and thereby deprives it of the importance which it has, and must have, in any large-scale enterprise.
It is precisely these three organizational differences between a collective farm and all other large-scale agricultural enterprises which make it necessary for us to be especially careful when we explain how production is organized in a collective farm.
We must carefully scrutinize all the connecting links in the organizational plan as well as the structure of the economic organization of the commune and of all other types of collective. We have to analyse each aspect of the economic apparatus from the point of view of the three special features noted above; and we have to modify its structure so as to remove the organizational weaknesses of the collective farm which inevitably result from these special features. If we fail to take account of these facts, or fail to foresee their consequences, we shall inevitably get an incompetent economic organization which performs no efficient work and which fails to produce the economic results which could be produced by a large-scale enterprise based on hired labour and organized alongside it on the same scale.
The whole history of our collective farm movement from 1918 to the present points to the necessity of such an organizational analysis. The numerous failures of communes, the gradual and successive revisions of working instructions, the changes of organizational plan and, sometimes, the examples of malfunctioning, in the sense of the recruitment of a large number of hired workers - these are the lessons of the years which have gone by since the collective farm movement came into being. Very often, these organizational failings outweighed the advantages resulting from a large-scale form of production; and they led the collective towards a kind of economic organization far less effective than that of the individual peasant household.
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Therefore, an examination of the special organizational features of a collective is, one might say, the fundamental question of the moment. It is the task of our research institutes to make a real and thorough study of this question. Work in this field has recently been carried out at our Research Institute of Agricultural Economics and some of its findings will be quoted here. We shall try to outline them as briefly as possible.
Under the conditions of a modern commodity economy, upon which a contemporary collective must necessarily base its programme, the main goal of the collective as an enterprise must be to produce commodities, that is, agricultural products for selling. This aim naturally requires the organized production of those products which, in the conditions of the particular farm and in the particular market situation, yield the greatest profit, that is, products whose production cost is significantly below the price which they will fetch on the local market.
The drawing-up of calculations and the organization of this market-oriented sector is the focal point of the entire agricultural enterprise.
However, no matter how profitable the market sectors of the farm may be, no agricultural enterprise can ever use the whole of its land area for these activities. The reasons are first, that in most cases, the agronomic prerequisites for production necessitate crop rotation. If all agriculture were reduced to the growing of one or two of the most profitable crops, this would impoverish the soil very quickly indeed. For the sake of stable fertility of the soil, crops have to be supplemented by crops of a different type, mainly intertilled crops and grasses. Furthermore, in the case of a whole number of goods for personal consumption and, to an even greater extent in the case of goods used for fodder, we constantly find a situation where their production costs on the farm are below their market prices. Therefore, as long as the organization of the output of the market-oriented part of the farm requires fodder for its cattle and food for its workforce, it proves far more profitable to produce and consume them within the farm. It follows from this that side by side with the commodity sectors of the farm we also have to organize two other sectors - those which produce for consumption and those which produce fodder. The establishment of a proper balance between these three sectors is the basic task when planning the organizational pattern of the farm.
As soon as this pattern has been decided on, and has been implemented through the allocation of land according to its economic purpose and through the establishment of the rotation of arable land, we can take further steps in organizing the structure of the farm. We have to calculate how many units of traction power are needed for
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the running of the farm. We have to compare our estimate of the farm's fodder production base with the needs of the animals used for traction and, after taking account of resources, we also have to organize them to provide fodder for the productive cattle. After organizing the fodder base, we have to organize the cattle-rearing; and having done this, we can go on to consider the provision of fertilizers and the organization of orchards and market gardens. Having thus planned in outline all the farm's main areas of productive activity, we can tum to the organization of equipment, ancillary production and buildings.
A large-scale capitalist farm, once it has made all the calculations listed above, will thereby have established practically all the details of its organizational plan; and having checked the plan's profitability by calculations made on the spot, it will finally decide how many workers it will hire during which months of the year. That is to say, only at the very last stages of its calculations, does it begin to consider how to organize its labour.
It can easily be understood that in our collective farms this system is turned upside down, since, in most cases, the amount of manpower is determined by the existing membership of the collective farm. A capitalist also takes account of his labour situation. But he does so only for the purpose of providing himself with the cheapest possible labour. And therefore, if he makes any alterations in his organizational plan when making his final calculations as to manpower, he does this only in order to carry out partial reorganizations of production so as to use manpower as far as possible during the times of year when wages are at their lowest. In this sense, large farms, particularly those relying on intensive methods -such as those growing beet, or potatoes or engaged in distilling, and so forth - were able to achieve an extremely high degree of organizational perfection. Large farms in Poland, Germany and Austria employed only a small number of permanent workers and based their organization of labour on the hiring, three times a year or sometimes only twice a year, of cheap peasant labour which was often brought in from a distance of several hundred miles. The peak of labour activity on the large farms was often consciously designed so as to be inversely related to the peak of labour effort in peasant households, i.e. designed to achieve the maximum effort at exactly the times when peasant manpower was idle and could be hired very cheaply.
As well as trying to choose the best times for this purpose, many large farms tried to achieve the same result by the choice of location. It was not a region with good soil which was considered most profitable for a large farm; but a region in which the farm's vast fields
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were surrounded by the most land-hungry peasant villages, with large reserves of surplus labour which they would have to offer very cheaply on the market, owing to their half-starved existence. One has only to examine the organization of labour at a whole series of sugar beet farms in the pre-war period in order to become convinced that this was so.
It can easily be understood that this organizational pattern is -both in principle and in practice - totally inapplicable to the organization of even the largest collective farm. The whole of the collective farm's manpower is, in principle, drawn from its permanent workers. The hiring of labour on a day-by-day basis is virtually ruled out; and therefore any unevenness of working effort points either to an inability to cope with the sowing of crops on the farm; or else it points to the involuntary unemployment of the workforce.
Therefore, after completing the calculations for the organizational plan, we must, at each stage of the plan, treat the question of labour organization as the main criterion; and when all the calculations for the organizational plan have been made, the plan has to be checked not so much by reference to the profits shown in the accounts, but by reference to the use made of the labour activity of the collective farm's members. Labour organization which, in a capitalist farm, was a factor derived from the organizational plan, is, in the present case, a fixed factor determining the organizational plan, which is itself drawn up mainly with reference to the way labour is organized. The organizer of a collective farm often has to abandon profitable methods of organizing the farm, simply because they are beyond the capacities of the main workforce of the collective itself. It often becomes necessary, purely for the sake of an even distribution of labour, to resort to the cultivation of less profitable crops and to rely heavily on the mechanization of labour in order to cope with the peak periods of sowing and reaping. It is precisely in collective farms that tractors and harvesters need to be most widely used, because they will be profitable even when their profitability on paper is negligible or even negative. A tractor, which cannot compete with the cheap labour of peasant ploughmen hired in the neighbourhood, nevertheless proves to be a powerful instrument for enabling members of a collective farm to deal with larger areas of arable land during peak periods and thus protect themselves against enforced unemployment during the remainder of the year.
Besides mechanization, there is a need for great diversity in the choice of consumer and fodder crops as well as cash crops, in order to expand the period of full activity. It is also not a bad thing to take advantage of the different varieties of plant and of the different periods within which different varieties of one and the same plant
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mature; and even to hasten or delay the sowing, in order to cope with periods when the work-load becomes severe. The theoretical literature on the organization of farms is at present merely raising these questions; and we have unfortunately not come across a single account of the organizational plan of a collective farm which consciously put this principle to the test. Nevertheless, practice is nearly always in advance of theory; and it provides us, in the most efficient collective farms, with examples of the actual implementation of such principles. We have to become aware of these principles and formulate them as definitive propositions concerning organization. It is to be hoped that, in the years immediately ahead, this research work will be carried out.
No matter how competent the calculations may have been with regard to the organizational plan of the collective farm as an enterprise, the plan can only be realized if the members of this collective work with at least the same degree of effort as is to be found in large-scale enterprises based on hired labour.
Work, as opposed to play, is described as work precisely because it is burdensome to the organism that performs it and requires a considerable effort and willpower if it is to be continued. If this effort is to be made, it necessarily requires some kind of incentive.
In a self-employed peasant family farm, the incentive to work stems from the needs of the family which have not yet been satisfied; and the degree to which they are satisfied depends on the degree of working effort. In a capitalist economy based on a piecework system, the incentive to put effort into work is the wages, paid in proportion to the effort. In the case of work paid for by the day, which is very common in agriculture, the incentive comes from the coercive influence of the management, which has an interest in this working effort, and from the fear of losing one's job, or, in some cases, it comes from fines imposed for carelessness.
A major peculiarity of the system of incentives for hired labour is that where this labour is paid by the day, the incentives often serve not so much to encourage the performance of the work for which the wages are paid, but rather to encourage the appearance of effort in this work. On the other hand, the incentive for the labour of a peasant household consists in achieving the results of the work; from which it follows that the peasant's work will, even with an identical amount of effort, be more purposive and/or more productive.
Some ideologists of collectivized agriculture argue that the advantages of economic collectivism are due precisely to its superior system of incentives for human labour, in comparison with those of a capitalist economy. They suppose that a collective, because it is based on the work of its members, will thereby acquire the same
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exceptionally powerful incentives which exist in the self-employed family farm; and that this will be further reinforced by the psychology of 'working in a collective'.
We shall not deny that in certain cases this claim may prove valid: in small collectives which are spiritually closely-knit or are inspired by some social or religious ideal, the incentives to work may be stronger than in any other kinds of economic organization. It is impossible, however, to deduce any general rules from these particular cases. In those numerous collectives where spiritual ties between the members are slight and where there is no strong enthusiasm for common action, the system of incentives just noted will weaken; and the principle will begin to prevail which can be crudely expressed by the statement: 'Why should I work harder than my neighbour when he and I get paid the same?'
When products are divided up equally among the mouths to be fed and when enthusiasm is lacking, the work of collectives differs little from work paid for by the day. And since the collective's coercive will is always less energetic than the will of a one-man proprietor striving for maximum profits, cases may arise when the system of incentives in a collective is considerably inferior to that of a capitalist economy, based on hired labour paid for by the day.
The mind and will of a collective are always less active and more sluggish; they hardly ever provide scope for the sort of intuition which is so important in any kind of entrepreneurial work. The will of the owner of a capitalist enterprise and of the head of a self-employed peasant family ensure the cohesion of the organizational plan and its steadfast implementation in practice. But the collective will is weaker, first of all, in the organizational and entrepreneurial sense, and secondly, in the coercive sense: since the agents of this will - personified by the board of management and by others who have been elected - are too heavily dependent on their voters to possess steadfast resolve.
Apart from these weaknesses of collective organization with regard to production, it is not an easy matter to ensure even the mere cohabitation of families within a collective farm. Hence the not infrequent disintegration of agricultural partnerships, which are quite viable from the economic point of view, but are torn apart by internal dissensions.
We must, of course, recognize that enthusiasm based on an idea or on religion can sometimes prove more powerful than all the shortcomings just enumerated. But one can hardly design a collective agricultural movement which is intended to be long-lasting and on a mass scale, by relying on enthusiasm.
For these reasons, the organizers of collective agriculture need,
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first of all, to resolve two fundamental questions: how to establish labour discipline within a partnership; and how to create within the collective a psychological incentive to work harder. The solution to these fundamental problems holds the key to everything: all the rest is, in effect, only a technical problem.
When we scrutinize the organization of particular activities in the sphere of collective agriculture, we see numerous attempts to mitigate the shortcomings of the system pointed out above. First of all, those sectors which are least successful when run by a collective or large-scale farm are detached from the enterprise as a whole and are left to be run individually by the families who have joined the collective. Thus, only a very few collectives at the present time socialize the housekeeping or prepare food on a communal basis. Cases are not uncommon where socialization extends only to field-crop cultivation, the care of the meadows and forests and the grazing of cattle. Cattle-rearing as such, as well as market gardening, often remain under the control of the individual family household. One can even find examples in literature where the term 'agricultural collective' referred to nothing more than the joint cultivation and harvesting of the land held on lease, while the cultivation of allotments continued in all other sectors of the farm on an entirely autonomous and individual basis.
There is no doubt that all the exceptions just listed did a good deal to strengthen the stability of collective partnerships as an economic instrument. But they nevertheless required further special measures in order to eliminate the shortcomings, mentioned above, of collective organization.
Even where the collective nature of agriculture amounts to nothing more than the common cultivation of the fields and harvesting of the crops, the organizers of a partnership will have to think about how to strengthen the managerial will and about how to reinforce the incentive to work.
Collectives usually choose a particular individual or collective board of management, endowed with a measure of absolute authority in their executive work, in drawing up the plan of work and allocating workers for each day's duties. In short, they perform a role corresponding to that of the proprietor in a capitalist Arm. Members of the collective farm are, however, often subject to an extra discipline backed up by a system of fines or deductions from the products distributed. However, these sanctions may remain merely theoretical if the authority created in this way lacks any adequate incentive to maintain the strict standards which would be demanded by the proprietor of a large enterprise concerned about his personal profits. In collective farms, this personal incentive has to be replaced
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by some kind of system to provide those incentives. Its absence may prove to be disastrous.
Thus, in the collectives which are most communistic in spirit, all the products obtained are distributed in kind among the families, according to the number of mouths to be fed. A family with one worker and three members who are not able-bodied will consequently receive twice as much as a family comprising two workers and no other members of the household. It can easily be understood that such a system of income distribution is the one least of all conducive to the encouragement of work for the sake of personal profit.
A slightly more effective system is that of distributing products among the workers only. In their desire to reinforce the personal interest of an individual in the success of his work, the organizers of such collectives have proposed a variety of arrangements for distributing the income obtained.
The most effective arrangement of all from this point of view has been the one whereby an enterprise run by a partnership is managed, in a formal sense, according to the capitalist model or, more precisely, on the substantive model of the Rochdale system of co-operation. This means that every member of the collective is regarded as a worker and is paid wages according to the amount of work which he has actually done, sometimes on a piece-work calculation. (It is true that he is not always paid in cash: a considerable part of the wages is credited to his account.) All produce obtained from the fields is deemed under this arrangement to belong to the entire collective, which sells the produce wholesale. The part of the produce which is handed over in kind to members of the collective is paid for by them either in cash, at market prices, or by deductions from the wages due to them. The result of this type of system is that at the end of the year, the collective will usually find itself with a considerable amount of profit at its general disposal. Some of this profit is paid into the collective's social funds, for the renewal and expansion of the collective farm's capital, and for purposes relating to the common benefit as well as for cultural and educational purposes. Another part of the profit is distributed among the members according to the amount of work contributed by each of them to the collective farm.
The system of distribution just described is sometimes provided for in the statutes of the collective farm; but in some cases, it is decided annually by a resolution of the general meeting.
The system just examined does provide an adequate system of work incentives. At all events, it does so to at least to the same extent as can be seen in a capitalist farm. However, with this system of financial settlements, a collective ceases to have the idealistic
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character of a free commune.
What matters more to us is not the psychology or ideology of the members of a collective farm but the economic realities of its existence and the kinds of collective which really are able to exist in the conditions of a commodity economy and competition without being propped up and without needing any shield to protect them. For this reason, the principles described above need to be put into practice and have in fact been put into practice by those collective farms which have achieved actual stability. However, these methods of organizing production incentives bring good results only if the members of the collective have themselves been well chosen. It may confidently be said that half the success of a collective farm enterprise depends on its personnel. It has long since been pointed out in literature that there are four basic requirements for the cohesion of the work force in a collective.
The members of the workforce must:
1. Have an adequate material interest in collective agriculture; that is, they must derive from it an income at least as large as what a member was getting before he joined the collective.
2. Be accustomed to agricultural work;
3. Be of more or less the same educational and social level; and
4. Possess an adequate social and technical capacity for collective economic management.
The size of the collective, and the area of land that it cultivates, must be sufficient for it to benefit from the advantages of a large-scale economy and a complex division of labour. At the same time, they must not be so large as to require a complicated system of management.
The size of collectives established in practice by the Dukhobor sect was of about 40 peasant households. In Italy, the size of collectives was equivalent in practice to an average of about 150 people; that is, about 60 peasant households. Our own usual figures are slightly higher. But if the size is large, this gradually gives rise to the problem of higher transport costs within the farm as well as the difficulty of maintaining a unified management.
The size of a collective's land tenure is defined by the size of the collective. The piece of land is either acquired, or formed by other means.
The impossibility of arbitrarily expanding or reducing the area of collective land tenure and the simultaneous need to make the fullest possible use of the manpower of its members will determine the size of the collective; and the collective will therefore be compelled - in
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contrast to all other types of co-operative - to reject the principle of the unrestricted admission of new members. For if the area of land tenure remains constant, a new member, if he is not to become a superfluous burden, will be able to join the collective only in order to replace a former member.
The impossibility of altering the area of land tenure likewise explains why collectives allow the hiring of workers from outside, in the event of members falling ill or leaving, because the remaining workforce is physically unable to cope with the whole land area. Moreover, as we have already noted, such hiring is sometimes allowed in collectives for the additional purpose of helping their members at the time of the harvest and at other times when manpower organization is crucially important, if the organizational plan is unable to ensure that work is evenly spaced out over time.
One difficulty which it takes great effort to overcome is that of creating a managerial will to run the collective farm as an efficient economic enterprise. For the purpose of running the farm's affairs, a board of management is chosen. It is sometimes supplemented by a special technical committee whose members take charge of particular sectors of the farm as a whole. It has a leader/chairman who is, as it were, a dictator in matters relating to work, embodying the authority of the collective.
The technical committee is made responsible for, among other things, the planning of the crop rotation and the planning of other aspects related to the organization of the farm run as a partnership. This organizational plan must, however, be confirmed by the general meeting of members of the collective. As soon as it is agreed, it is implemented by the collective's managerial bodies.
As we have already noted, work in these collectives is organized in the same way as in capitalist farms. The collective's chairman, acting on the instructions of the technical committee, compiles daily work directives which are binding on members of the collective. Members are paid ordinary wages for this work. Everything produced by the collective is deemed to belong to the collective as such. Part of it is sold to members at market prices; another part is sold outside, after the payment of wages and running costs. The income earned by the collective provides it with a common income. Part of this is used for the repayment of debts, amortization and the formation of capital; while the other part is distributed between members, according to the amount of work performed by each of them.
In addition to this, the collective's managerial bodies perform all the tasks which arise in other types of co-operative; and from this point of view they also provide services for the individual peasant
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households of members, if any of these remain.
In a formal sense, these are the tasks and rights of the collective's management. But the issue is not what is put on paper or decided by a show of hands at a general meeting. What is important is not the plan or the form of organization, but how the plan is implemented. The organizer of a collective farm has to overcome an endless number of centrifugal forces and frictions which arise in the functioning of this type of co-operation. An exceptional personal authority is needed in order to avoid all manner of complaints of unfairness and favouritism - if only over the allocation of heavy and light work between members. Many collective farms have gone to ruin owing to the fact that no one wanted to perform heavy unskilled work when other members were doing lighter or more agreeable work.
This difficulty has, it is true, been somewhat mitigated by the use of different scales in the remuneration of labour. The misfortune, however, is that if these scales are based on the rates laid down by the state or on the wage rates paid in practice, the result is to make heavy manual labour even more disagreeable, because it is least well paid.
Only the personal authority of the person elected to manage the work, and his influence on his partners, can guarantee smooth work where this is concerned. However, the very fact that personal authority is so important can itself give rise to a good many other dangers, because this personal authority can easily turn into personal dictatorship; and the collective can gradually be converted into the personal enterprise of its leader. Vacillations between these kinds of Scylla and Charybdis are indeed the basic problem which has given cause for disquiet in the development of collective farms.
We shall not dwell, in this outline, on the question of the organization of capital in our collective farms. But it must be noted that from the organizational point of view, this is one of the most positive features of the collective farm, since it is precisely the large-scale types of farming which enable us to exploit the land with only half or less than half of the capital required for peasant households based on the minutest parcels of land. As early as 1913, before the Revolution, A. Minin put forward the idea of collectivization as the only solution to the problems of those peasant strata who possess land but lack the means of production and money capital. These problems still remain at the present time; and they lead us to believe that collectivization and collective farms are a valuable form of organization for agricultural production in precisely those regions where land is relatively abundant but where there is a clearly visible shortage of the means of production.
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To this we might add that, in those cases where the collective's managerial will is weak and where labour incentives are also relatively weak, collective farms will stand to lose least in those regions where the forms of production are simple and mechanical and where the opportunity to make widespread use of tractors and agricultural machinery will have a disciplining effect on the workforce concerned. If these conditions hold good, we can easily understand that - in the case of collectives which are formed not through the exploitation of the farms of former landed estates, but which were created and developed through a combination of peasant households - the widest opportunities exist in the grain-producing regions, which rely on extensive farming methods, in the south and south-west of our country and in Siberia. This view is fully borne out by the cases of success of large-scale peasant collectives in these regions.
However, if we are to make them more stable and raise the productivity of their work to the maximum, then we must, in all seriousness and with a full sense of responsibility, place a further question on the agenda. This is the question, not just of studying the organization of collective farms, but of considering how best to draw up their organizational plans. This must be done not merely by applying the rules and guidelines of capitalist agriculture, but by developing the kinds of autonomous creativity which stem from the organizational foundations and principles of collective farms.
The Basic Principles of Organization of Agricultural Co-operatives
An attentive reader of this book who has read through the preceding chapters might justifiably criticize us on the grounds that while we have often described in great detail the way the co-operative system operates, we have nevertheless said practically nothing, or very little, about the societal apparatus that conducts these operations.
This is a real omission; but it was quite deliberate and the reasons are as follows. We wanted to describe, in the clearest way possible, the particular kinds of co-operative work and their connections with various aspects of the peasant economy. Therefore, we had to adopt a somewhat abstract approach, i.e. for the sake of clear explanation, we divided up co-operative work into a number of sections which were apparently independent of one another. In actual fact, by no means all the kinds of co-operation listed above exist in separate forms. In the overwhelming majority of cases, a variety of cooperative functions are performed by one and the same working apparatus. A Siberian butter manufacturing partnership undertakes the work of a consumer co-operative and the selling of oats; while a credit association will often undertake the buying, selling and insurance of cattle. In other words, the actual social mechanism of co-operatives is determined not so much by its technical functions, but rather by the general conditions of development of the cooperative movement in the country or region under review.
We must never forget that we are dealing with a co-operative movement of the peasantry - that is, with a broad social movement, which is constantly developing and moving from one phase into another, which exists in differing legal and economic conditions and which creates its organizational forms in accordance with these