BEHIND KHRUSHCHEV'S $1,000;000,000 ORDER FOR WHEAT
By E. Germain
The Soviet Union today faces grave difficulties in food supplies, perhaps the gravest since the death of Stalin. Two successive bad harvests coupied with a considerable increase in requirements -- due to a rise in population and an increase in grain=fed livestock -- have | resulted in a big deficit in cereals this year. The deficit can be made ‘up only by heavy purchases of wheat and corn from the capitalist countries, since reserves in the workers states have been systematically lowered in order to stabilize food supplies for the cities during the past decade. ve
Various figures have been cited as to the extent of projected Soviet purchases, the most reliable being $1, 000,000,000 of which more than $600,000, 000 is earmarked for Canada, from #250, 000,000 to $300, 000, 000 for the U.S. and the balance for Australia and Prance. | Last yar the USSR bought $250,.000,000 worth of wheat (mostly in Canada
In addition to the $1,000,000,000 order, Czechoslovakia, Hungary and Bulgaria are in the market for’ wheat.
Payment will be made in gold and “Eurodollars" (so-called "account~ ing units" used for exchanges within the Common Market area). During
September alone the USSR sold $220,000,000 worth of gold (around 200 tons), an amount equal to total Soviet gold sales during all of 1962, The Soviet government generally prefers to pay for its purchases in dollars -- even if they must be bought or borrowed at high premium -because of the difference between the cost price of gold in the Soviet Union (commonly estimated at about $60 an ounce) and the official purchase price of gold in the capitalist countries, which oscillates around $35 an ounce. As long as this cost differential exists, the Soviet economy suffers heavy losses with every big sale of gold in the West.
It has been denied in some quarters that economic necessity forced Khrushchev to seek these huge quantities of wheat in the capitalist countries. According to this view, the current commercial operations are a clever maneuver through which the Kremlin is developing its policy of "peaceful coexistence." -
This is, of course, nonsense. Many foreign visitors have noticed the marked deterioration of food supplies during recent weeks, Even’ bread queues have reappeared in some of the big cities. Khrushchev has publicly admitted that the harvest was bad this year. His half-hearted essay at self-criticism was all the more damaging, since his reputation ~was staked on rapid solution of the agrarian problem in the Soviet Union. The Soviet press is full of stories about grave neglect in the agricultural sector -- part of the harvest rotting in the fields of Kazakhstan because of delay in harvesting, the usual accounts of tractors breaking down because of lack of spare parts, etc., etc. Finally, frantic public appeals by the bureaucracy not to use bread or wheat as food. for chickens and hogs have underlined the seriousness of the situation.
It is true, however, that heavy Soviet purchases of wheat in the capitalist countries, especially the projected deal of $250,000,000 to $300,000,000 in the u. S., have the objective consequence of helping the Kennedy administration, if it wishes, to remove barriers to rapprochement with the Soviet bureaucracy.
Current overproduction of wheat in the U.S., which resulted in -enormous surpluses, is one of the main economic problems of the Middle West. This is the classical area of isolationist sentiment and a stronghold of the extreme right-wing opposition to collaboration with the Soviet bureaucracy. The wheat deal will most probably help the Kennedy administration to soften this opposition and to bring the isolaticnists around to abandoning their resistance to extending commercial relations. with the Soviet Union. The sale of industrial equipment (in the field oF plastics and chemical fertilizers, for example) may well be a coming step,
A sector of the American bourgeoisie, including some of the more intelligent Eastern bankers and heads of Pinance capital, have long considered that congressional resistance to widening trade relations with the Soviet Union is absurd and detrimental to the interests of American imperialism -- especially when Wall Street's main competitors, the British, German, Japanese, French and Italian imperialists, are. selling an increasing amount of: heavy industrial equipment to the Soviet Union, the East European workers states and even China...
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The truth remains, however, that these consequences of Soviet entry into the American wheat market are only a by-product (like the unexpected windfall to U.S. imperialism of an amelioration of its deteriorating balance of payments problem). Essentially the purchases were made as a result of the permanent agricultural crisis in the Soviet Union, of the inability of the Soviet bureaucracy and its present Khrushehev leadership to take decisive steps toward solving this crisis.
The permanent crisis of Soviet agriculture has ‘two basic roots: (1) a price and supply structure of agricultural versus industrial consumers goods that takes away the incentives for a constant increase in agricultural production in the countryside; (2) an enormous investment lag in agriculture. Soviet farms, even today, have less mechanical .| horse-power at their disposal than live: horses before Stalin's forced. ~ collectivization, The insufficiency of. fertilizers is notorious.
The result is tremendous wastage of man-power in the countryside, -theaverage productivity of the Soviet kolkhoznik being not much more ' than ten per cent of that of the American farmer. While Soviet industry measures up to the highest standards of technology and productivity, Soviet agriculture remains essentially at the level of primitive, extengive methods, even though 1,500,000 tractors are in use. a
In 1953, Malenkov and Khrushchev frankly recognized the sad state of affairs in Soviet agriculture and began to try to remedy the situa~ tion by radically increasing the prices which the state sets for deliveries from the kolkhozes. Later, Khrushchev made various other concessions to the peasants, the most spectacular being the sale to the kolkhozes of tractors and heavy agricultural equipment which up until then had been property of the state-owned MTS (Machine Tractor Stations).
Bach of these concessions undoubtedly yielded results. Output. increased and the kolkhozes accumulated huge balances in rubles. But. in exchange for these rubles, the Soviet economy proved unable to offer _the peasants a growing stream of industrial consumers goods that would have served as incentive for constant increases in production. Instead, attempts were made to siphon away the rubles. Besides tractors, light industrial equipment was offered the kolkhozes, The machines could be used in the co-operative manufacture of such items as tinned food, sausages, cakes, etc., that could be freely sold in the cities in shops owned by the kolkhozes. But again the balance sheet proved to be too one-sided to attract the peasants to both increase output and to observe strict cost-accounting procedures.
Khrushchev again tried to get around the difficulty instead of solving it. He launched his campaign to turn to the "virgin soil" of Siberia and Khazakstan. Huge state farms -- sovkhozes -- were set up in these arid provinces and one million Soviet workers, principally youth, were sent there to create -- often under terrible Living conditions «= a plentiful supply of wheat and meat for the Soviet people.
Khrushchev had been warned, however, that without immense irrigation projects, the plowing up of these lands -- a project already | studied and abandoned in Czarist. times -- would be very dangerous,
av After a few years, the topsoil, stripped of grass and shrubs, its moisture depleted, would be picked up by the strong winds that sweep these huge plains unbroken by any natural obstacle, and the world's biggest dustbowl might be created,
Khrushchev disregarded the warnings -- perhaps because they were. underlined by the Trotskyists. He gambled -- and lost. For the third consecutive year, the harvest on the "virgin lands" of the Far East was. catastrophic. And the dust storms are affecting distant regions. Too late, the Soviet bureaucracy has come to the conclusion that only wide= spread irrigation and the massive use of fertilizers ~- a turn from con~ stantly widening the area of extensive agriculture to increasing inten- Sive agriculture on relatively smaller acreages -- can do the job.
For Khrushchev's prestige, the failure of the "virgin lands". adventure is a terrible blow. Even worse, the shortage of wheat spells. trouble in the animel products supply (milk, butter and especially meat) in the coming winter and next year. This is on top of last year's sharp increase in the price of meat and butter which signified a sudden arrest in the uninterrupted increase in the Soviet workers! standard of living for the past ten years.
Khrushchev! s policy is identified in -the eyes of the Soviet workers with the promise of a. better life. Consequently the Kremlin must do everything to bridge over the present crisis. Otherwise the position of the first secretary can soon come into serious question.
‘In view of all this, Khrushchev'!s boast not so long ago that by 1965 the production of the "socialist camp" would draw abreast or surmount that of the capitalist countries now sounds like a bad joke. The target date is not far off and there is not the slightest chance that Khrushchev can deliver on his promise.
Khrushchev also boasted that the level of per capita production in the U.S. would be equalled or surmounted by 1970-72. ‘The wheat deal is sad commentary on that promise -- unless Khrushchev meant that U.S. productivity will be outstripped by buying its unusuable surpluses!
And what should be said of a self-styled Marxist leader who speaks seriously about the Soviet Union having already achieved socialism and of now entering the stage of "communism" -- when the people lack even sufficient quantities of bread?
Lest we be misunderstood, we repeat once again what we wrote at the time of the Twenty-second Congress of the Communist party of the Soviet Union, Notwithstanding the contradictions and the enormous waste due to _ bureaucratic mismanagement, Soviet economy -- especially industry -- is. growing at a rate at least twice if not three times that of the U.S. economy. Already, in national production and wealth, absolute yearly increases are bigger in the Soviet Union than in the U.S. This means -other things remaining equal -- that the Soviet economy will.sooner or later attain the absolute industrial production and national income of the U.S., and still later reach its per capita output and income,
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But sober analysis of the economic situation makes this quite improbable for 1970 and even 1975. Only after that date, towards 1980, will the curves somehow cross. In the meantime, humanity will witness © colossal revolutionary uprisings and transformations, And these, not "veaceful competition" between the American and Soviet economies, will decide the fate of mankind, the victory of world socialism and the possibility of finally eliminating the danger of a nuclear holocaust. |
The Fourth International does not minimize in any way whatsoever ' the great thrust forward of the Soviet economy. It fully acknowledges the deeply progressive character of its successes, which, to quote . Trotsky, express the superiority of planned economy and socialized means of production in the language of steel, cement and electricity,
But the Fourth International fits-these achievements into the overall picture of world reality and of world revolution today. There they occupy an important but by no means decisive place. The latest dramatic expression of the permanent agricultural crisis in the Soviet Union is another reminder that it would be hopelessly utopian to stake everything ‘on rapid decisive successes of the Soviet economy. The revolutionary masses of the world -- and they alone -~ can successfully werthrow capitalism. To postpone tnis task until U.S. imperialism is beaten "economically" by a bureaucratically deformed Soviet economy implies fearful suffering for mankind and inordinate danger of nuclear destruc-~ tion. .
Fresh confirmation of the validity of relying on world revolution <- -,in opposition to the Khrushchevite policy of “economic competition" as | “the essential means for overthrowing capitalism -~ that is the conclusion which should be drawn from Khrushchev'!s billion-dollar wheat deal. October 10, 1963
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