Area Handbook For Bulgaria Part 28

ORGANIZATION

The organizational structure of agriculture in all its aspects is in a state of transition, which will not be completed for several years. The reorganization was decided upon by the Central Committee of the BKP (Bulgarian Communist Party--see Glossary) in April 1970 on the initiative of Zhivkov. The latest of several laws and decrees published in this context appeared in June 1972 with an effective date of January 1, 1973. The new organizational policy represents a tightening of central controls over agriculture.

Agroindustrial Complexes

The basic unit in the new organizational system, which is relied upon to realize the leaders.h.i.+p's agricultural policies, is the agroindustrial complex. The agroindustrial complex is an organization comprising several previously independent, contiguous collective and (or) state farms having similar climatic and soil conditions. The complex may also include other organizations that are engaged in the production, processing, and distribution of farm products or in other activities related predominantly to agriculture.

In the fall of 1972 there were 170 agroindustrial complexes formed through the consolidation of 845 collective farms and 170 state farms; including the private plots of collective and state farmers, they contained 92.5 percent of the cultivated land and accounted for 95.4 percent of the farm output. Except for a few experimental units created in 1969, most agroindustrial complexes were established toward the end of 1970 and in early 1971. Only a small number of private farms located in difficult mountain areas remained outside the new system.

The average agroindustrial complex is composed of five or six farms having a cultivated area variously reported as 59,000 to 68,000 acres and a permanent work force of about 6,500 people. Although the large size of the complexes has been questioned by several economists on grounds of efficiency, Zhivkov was reported to have suggested the possibility of eventually merging the existing complexes into only twenty-eight districtwide units.

Types and Aims

The announced purpose of the reorganization is to increase productivity through concentration and specialization of agriculture on an industrial basis in accord with the requirements of the current scientific and technical revolution and with the achieved level of maturity of the country's economy. The reorganization is intended to increase output, improve quality, reduce costs, and increase the exportable surplus. It is also expected to bring about social improvement in the countryside by raising the farmworkers' incomes and helping to reduce the differences between town and country. Government officials intend to complete the transition to the new organizational structure by 1980.

The original aim of the new farm policy in the late 1960s was to create large-scale regional organizations to handle all aspects of the production, processing, and distribution of foods and the supply of machinery, fertilizers, and other farm needs through vertical integration of the consolidated farm organizations with industrial and distribution enterprises. This aspect of farm policy is to be realized gradually over a period of years. In the meantime vertical integration will be based predominantly on contractual relations.

A first step in vertical integration of agriculture and the food industry was taken in December 1972 with the establishment of an agroindustrial trust called Bulgarian Sugar. Seven agroindustrial complexes were to be created around an equal number of sugar mills grouped in the newly formed trust. The complexes were to average 100,000 acres in size, one-fourth of which would be used each year for the production of sugar beets. The first such complex was established in Ruse in January 1973. The crop rotation is to include wheat, corn, and fodder crops which, together with by-products from the sugar production, are to provide the feed base for livestock keeping. All farmlands in the new organization are to become state property, and farmworkers are to acquire the status of industrial workers subject to the provisions of the Labor Code.

Two basic types of agroindustrial complexes are provided for by the regulations. The first type is a members.h.i.+p organization in which the const.i.tuent farms retain their juridical ident.i.ty and a certain measure of economic independence. The second type is a centralized organization in which the const.i.tuent farms are merged and lose their separate ident.i.ties. A further distinction is made depending upon the nature of the const.i.tuent farms and other economic organizations. Agroindustrial complexes composed only of collective farms and other collective organizations are called cooperative complexes. Those const.i.tuted by state farms and other state economic organizations are known as state complexes. If both state and collective farms or other organizations are members, the complex is referred to as state-cooperative. The distinctions have both legal and economic implications.

In early 1971 the form of the 139 agroindustrial complexes established up to that time was: collective, seventy-seven; state, seven; and state-cooperative, fifty-five. Six complexes were created as centralized organizations in which the const.i.tuent farms lost their legal independence. The largest of these complexes covered an area of 145,000 acres.

Legal and Economic Aspects

The legal and economic aspects of the farm consolidation are extremely involved, and most of the problems raised by consolidation have not been worked out even theoretically. Activities of cooperative and state-cooperative complexes are governed by the Provisional Regulation issued in October 1970 and by earlier regulations concerning collective organizations in matters not covered by the Provisional Regulation.

State agroindustrial complexes are subject to the same regulations that apply to all state economic a.s.sociations (trusts). The Ministry of Agriculture was directed to prepare a draft statute for agroindustrial complexes by the end of 1972, which was to be submitted at an indefinite future date to the first agroindustrial complex conference for discussion and adoption.

Official statements and doc.u.ments have emphasized the voluntary and democratic nature of agroindustrial complexes. Zhivkov's report to the Central Committee plenum stated that farms would be free to opt whether or not to join a complex and which complex to join if they decided to do so. They were also to have freedom of decision concerning the establishment of joint enterprises. The plenum's decision used a broader formulation by referring only to voluntarism in the formation of agroindustrial complexes on the basis of mutual advantage. The Provisional Regulation contains a clause that permits farms and other organizations to withdraw from the agroindustrial complex at their own request.

Other provisions governing the establishment of agroindustrial complexes, however, conflicted with the principle of voluntarism. The composition, size, and production specialization of each complex was to have a scientific foundation, and arbitrary decisions--as they were called--as to which farms to include in a particular complex were not to be tolerated. The requirement of territorial unity also nullified the right of independent choice for most farms. Except for those located on the borders of adjoining complexes, farms had perforce to join the complex formed in their area. The speed with which the agroindustrial complexes were formed throughout the entire country, with considerable loss of independence for the farms, also suggests that the voluntary nature of the complexes is a fiction. Available sources have contained no reference to any change in the affiliation of farms from one complex to another, let alone to the withdrawal of any farm from a complex. The decree on the organization and management of agriculture that went into effect on January 1, 1973, contained no provision for a farm's withdrawal from an agroindustrial complex.

The major tasks a.s.signed to the agroindustrial complexes include: the creation of large specialized units for the various types of agricultural production; the introduction of mechanized industrial methods of production; the efficient application of human and material resources; and the equitable distribution of income to workers and managers in a manner that will provide an incentive for conscientious work. Only preliminary official directives have been issued to guide the agroindustrial complexes in these matters. Economists, agricultural scientists, and officials have labored to develop a scientific basis for the effective solution of the problems of transition.

One of the basic issues raised by the creation of agroindustrial complexes concerns the owners.h.i.+p of land in the new organizations, particularly in complexes that unite collective and state farms.

Legally, collective farm members retained owners.h.i.+p of the land they contributed to the collective, although they have been unable to exercise any owners.h.i.+p rights. Until 1961 collective farm members received a rental payment for the land in the annual distribution of the farm's income. There is an apparent official reluctance for political reasons abruptly to convert collective property to state owners.h.i.+p.

Public statements have indicated that the difference between collective and state property may be eliminated by transforming both into national property. Under the prevailing economic system the distinction between state and national property is purely verbal.

Private Farm Plots

In the current reorganization of agriculture there is no intention to eliminate the time-honored inst.i.tution of private subsidiary farm plots held by collective farm members, state farm and industrial workers, artisans, and other individuals. In the 1965-70 period private plots const.i.tuted only 10 percent of the farmland, yet in 1968 they accounted for 22 percent of the crop output and 33 percent of the livestock output. In 1970 the proportions of livestock products contributed by the private plots were: milk, 23 percent; meat and wool, 31 percent; eggs, 50 percent; honey, 70 percent; and silk, 89 percent.

Despite the support of private farm plots by the leaders.h.i.+p, many local officials consider them to be incompatible with the socialist system and place various obstacles, often illegal, in the way of their operation.

In the directives for the Sixth Five-Year Plan the party reaffirmed the importance of private farm plots as a reserve for the increase of farm output and particularly of livestock production. In a subsequently published decree, which lifted restrictions on livestock rearing on private plots, the party and government again stressed that private plots will be an important source of products for their owners and for sale to the state.

The growing importance of private plots for collective farmers was disclosed by income data published in the spring of 1973. In the 1960-70 period the average annual income of permanently employed collective farmers from private plots increased from 251 leva to 620 leva, while the average remuneration for work performed on the collective property rose from 458 leva to 847 leva. Whereas the growth of income from collective farm work amounted to 85 percent, income from private plots advanced by 147 percent.

PLANNING AND MANAGEMENT

Agricultural planning has been highly centralized by the decree effective January 1, 1973. The system of planning has been made to conform to the system used for other sectors of the economy, with some allowances for the specific conditions of agricultural organization and production. Planning is to encompa.s.s long-range (ten to fifteen-years), five-year, and annual plans that must be coordinated with a general plan for regional development.

Planning in agriculture is to be based on the balancing of inputs and outputs and the use of government-determined long-range norms, limits, and indexes. Wide use is to be made of econometric models in the search for optimal solutions. The norms, limits, and indexes are to be elaborated in direct relation to the natural and economic conditions of individual agroindustrial complexes, crop varieties, kinds and breeds of livestock, farm technology, and the availability of physical resources and manpower. The norms, limits, and indexes are to be of such a nature as to contribute to a continuous upgrading of agricultural efficiency, that is, they will become increasingly more demanding as time progresses. They are binding for planners and managers at all levels from the central government authorities down to the farm.

In essence the agricultural plan consists of state-imposed production targets and estimates of resources to be allocated for their attainment, together with detailed directives for the use of the resources and for the introduction of technological improvements. Responsibility for fulfilling the planned tasks rests upon the management of the agroindustrial complexes. The planned targets and conditions for their attainment are formulated for each individual complex by the State Planning Committee together with the Ministry of Agriculture and the local district people's council; all plans are approved by the Council of Ministers.

Ten groups of norms, limits, and indexes enter into the formulation of plan targets. They specify progressive technical measures to be introduced; the physical volume of each crop and livestock product to be sold to the state; the volume of capital investment and its specific uses; consumption norms for all materials, parts, and products in accordance with a list approved by the Council of Ministers; allowable expenditures for each 100 leva of farm products and for labor remuneration per 100 leva of total income; norms for the formation of various operating and reserve funds and for material incentives; and limits for the development of social amenities within the agroindustrial complex.

The five-year plan tasks are broken down by years and may be changed only in exceptional cases. The required changes may be made by the Ministry of Agriculture, with the approval of the State Planning Committee, upon request made by the executive committee of the district people's council. Whenever a specific change is introduced, all necessary corrections must be made to maintain the overall balance of the plan.

The agroindustrial complexes must distribute the planned tasks handed to them from above among their const.i.tuent units in accordance with standards and conditions spelled out by the Ministry of Agriculture. The district people's councils are required to take an active part in the process of coordinating the plan and in measures for its attainment among the units of the agroindustrial complex. On the basis of the state plan each agroindustrial complex and its const.i.tuent parts must prepare what has been called a counterplan, that is, a plan that sets higher goals than those officially established.

The large size and diversified operations of the agroindustrial complexes place a heavy demand upon the expertise of management. Most of the available specialists do not have the requisite training to solve the numerous problems posed by planning and operational direction under the new conditions. Adaptation of agricultural school curricula to the new requirements and speedy retraining of specialists are therefore considered to be most urgent.

Some optimistic agricultural officials place high hopes in the introduction of computer-based automatic control systems. An electronic computer center was established at the Ministry of Agriculture in 1969, staffed by a group of 104 enthusiastic young specialists. They undertook the task of developing a single automated control system for agriculture and food production in the entire country by 1975, to be based on a number of integrated local and regional computer centers. By the end of 1970 the computer center had worked out annual plans for several farms and a plan for hothouse production in the country. It was in the process of finding a solution to a basic problem of the feed industry--a solution that would also drastically reduce the industry's transportation costs.

Considerable attention has also been given to the problem of communication in connection with the internal direction of the agroindustrial complexes' varied activities. Here, too, the idea has been advanced for automated control centers from which instructions would be issued to all operating divisions and workers in the field through radiotelephones or similar equipment. In this context a university instructor a.n.a.lyzing the management problems of agroindustrial complexes remarked that it was premature to speak of modern administrative and management methods as long as it was easier and faster to go by car from the farm center to any of the neighboring villages than to reach them by telephone.

LABOR AND WAGES

Official data on manpower and employment in agriculture are incomplete and incommensurate. The number of people gainfully employed in agriculture in 1970 was reported to have been 35.2 percent of the total in the economy, compared to 54.7 percent in 1960 and 44.9 percent in 1965. Full-time employment on farms of the agroindustrial complexes in 1970 was reported as 1,117,000 people--a reduction of 278,000 from the 1,395,000 employed in 1965. Yet the number of female collective farmworkers alone in 1969 was reported to have been 1,682,000, more than 1 million of whom partic.i.p.ated full or part time in the collective work of the farms. No explanation concerning the discrepancies in these reported figures was available. The Sixth Five-Year Plan is variously reported to call for the transfer of an additional 220,000 or 350,000 people from the farms to nonagricultural employment.

The out-migration, mostly of young people, from agriculture brought about a deterioration in the age structure of the remaining farm population. The proportion of the sixteen- to twenty-five-year-old age group on farms was only 9.2 percent in 1969, compared to 22.3 percent in industry. Conversely, the proportion of persons fifty-five years and older was 29.1 percent in agriculture, compared to 8.6 percent in industry. The program for the modernization and intensification of agricultural production and, more particularly, the planned high level of mechanization demand the employment of large numbers of highly skilled young people. A series of economic, social, and cultural measures is therefore urgently needed to halt the drain of young manpower from the farms.

By 1971 the agricultural school system had not adapted its training programs to the actual needs of the emerging agroindustrial complexes.

At the same time a serious problem in the employment of available technicians was presented by the scornful att.i.tude of many farm managers toward specialists with secondary education. In 1971 farms employed more than 4,000 people without the requisite training in various professional positions. Although some of them may have compensated by experience for the lack of training, the situation was considered deplorable by a number of agricultural economists.

Under previously prevailing conditions, payments to farmworkers differed widely, depending upon the income levels of the individual farms. Under the new law wages for all farmworkers are to be gradually standardized on the principle of equal wages for equal work. Work input is to be measured on the basis of uniform labor norms differentiated according to natural conditions. In determining the wage level, consideration will also be given to increases in productivity, cost reduction, and the acc.u.mulation of investment funds by the farms. Distribution of the farm's income is to be carried out on the basis of a resolution by the Council of Ministers, details of which were not available in early 1973.

Its main import is that the total remuneration of farmworkers, over and above their wages, will remain dependent upon the overall results of the individual farms. All farmworkers are ent.i.tled to a minimum wage of 80 leva per month, and members of previously independent collective farms retain their right to advance payments against their estimated final income shares.

Little substantive information is available on the current practice of remunerating people working on farms. The decree that went into effect on January 1, 1973, directed that the formation and distribution of incomes of all agroindustrial complexes and their const.i.tuent farms be based on a uniform system and on the principle that each farm must be fully self-supporting. Each farm must establish a wage fund calculated as a percentage of its total income. In the event that this fund is inadequate to cover legitimate wage requirements, the farms may draw upon two other obligatory funds or resort to bank credits.

INVESTMENT AND MECHANIZATION

Investment

In the 1960-71 period annual investment in agriculture increased from 381 million to 548 million leva, but it declined as a proportion of total investment from 28 to 15 percent. A substantial portion of the agricultural investment was used to equip new state farms established on previously collective farmlands. Investment funds were used for the construction of farm buildings, machinery repair stations, and irrigation facilities and for the acquisition of farm machinery. On the basis of cultivated acreage, state farms received more investment than collective farms, but the disproportion was gradually reduced and become quite small by 1970. In that year state farms had about 15 percent more fixed a.s.sets per acre of cultivated land than the collective farms.

With the formation of agricultural complexes discrimination in investment between the two types of farms is being eliminated along with other distinctions. Investment plans are to be uniformly based on the needs of the entire complex regardless of the former status of its const.i.tuent farms. Needs will be evaluated mainly on the basis of government programs for individual kinds of production, the availability of manpower, and the natural conditions of the farms and complexes.

Agricultural investment in the 1971-75 period was planned at about 2.7 billion leva. This sum const.i.tutes only 13.5 percent of the total planned investment and implies the maintenance of annual agricultural investment at the level of 1970. It also reflects the continued underinvestment in agriculture in favor of industry, despite the grandiose, plans for agricultural transformation, considering that agriculture contributed 22 percent of the national income in 1970. In that year a Soviet economist observed that the small proportion of national resources allotted to agriculture in the past was responsible for the slow growth of that important economic sector and that the increase in the mechanization of farms was not sufficient to offset the loss of manpower. The leaders.h.i.+p's policy of placing agriculture on an industrial footing and mechanizing production demands increased investment in machinery and other physical facilities. The low investment decreed for the 1971-75 period is not in keeping with that policy.