Supervision and Efficiency in Socialized Agriculture

University of Glasgow

Supervision and Efficiency in Socialized AgricultureAuthor(s): Michael E. Bradley and M. Gardner ClarkSource: Soviet Studies, Vol. 23, No. 3 (Jan., 1972), pp. 465-473Published by: Taylor & Francis, Ltd.Stable URL: http://www.jstor.org/stable/150213 .

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SUPERVISION AND EFFICIENCY IN SOCIALIZED AGRICULTURE

By MICHAEL E. BRADLEY and M. GARDNER CLARK*

IN this article, we are concerned with an important but frequently overlooked cause of the perennial problems of inefficiency, low labour productivity and high costs of production on collective and state farms in the Soviet Union. The poor performance of socialized agriculture in the Soviet Union and Eastern Europe has been amply documented in Western and Soviet studies. The evidence includes comparisons of factor productivity (labour, land, capital) between the USSR and other countries, comparisons of collective versus private plot farming within the USSR, the poor showing of socialist agriculture in East Europe, its virtual abandonment in Yugoslavia and Poland, reports of visiting experts, and the endless criticisms by Soviet authorities and experts themselves.

The inefficiency of Soviet agricultural labour can be appreciated by making direct comparisons between Soviet and American farms. In one such comparison a dairy farm near Moscow was compared to its 'twin' in New York State. The two farms were remarkably similar with regard to acreage, equipment, livestock numbers and production, but strikingly different in one respect. The American farm had a permanent labour force of seven whereas the Soviet farm had 2I .1 The contrasting size of the individual farm labour force also stands out in comparisons of national averages, as shown in Table i.

On the other hand, when Soviet and American factories are com-

pared, the comparisons remain in the same general magnitude. For example, Soviet and American steel mills which are equal in physical size and level of production would exhibit differences of the order of 25-30% in numbers of workers employed. In other words, both Americans and Russians are able to operate factories efficiently with thousands of employees, but the Russians have great difficulty operating farms with hundreds of full-time workers, and Americans almost never

* The authors with to thank Jerry Pohlman for assistance and suggestions. 1 M. Gardner Clark, 'Productivity and Incomes on a Soviet Dairy Farm', ILR Research, Fall I958, pp. 3-9.



SUPERVISION AND EFFICIENCY

even attempt to do so. Why? We believe that the answer to this question has not received the attention it deserves.

TABLE I

AVERAGE SIZE AND LABOUR FORCE OF SOVIET AND AMERICAN FARMS

USA* USSR, USSR, Collectives** State Farms**

Acres per farm 35I16 26,508 99,578 Workers per farm I.9 506 635

Sources: Narodnoe khozyaistvo SSSR v 1968 godu: statisticheskii ezhegodnik (M., 'Statistika', 1969), pp. 330, 423, 438; US Department of Agriculture, Agricultural Statistics, 1969 (GPO, Washington, D.C., I969), pp. 428-43.

*'964 **'968

The answer is not to be found primarily in the basic nature of the incentive systems. Firms in Soviet and American industry and agriculture employ systems that appeal primarily to the self-interest of the individual worker. Why do materialistic incentives directed primarily towards the self-centred drives which work reasonably well in American industry and agriculture and Soviet industry, nevertheless work so poorly in the case of Soviet agriculture? We suspect that the answer is to be found in the peculiar difficulties of supervising farm operations. The factory-oriented incentive system in Soviet agriculture has been unable to deal successfully with the unique and difficult problems of supervising large numbers of agricultural workers in physically huge enterprises.2

American analysts have found that farm management is subject to a number of serious handicaps which interfere much less with factory management. Management supervision and coordination of farm operations are complicated by the sequential nature of the agricultural production process and the spatial dimension of the agricultural enterprise. In agricultural production, unlike industrial production, the process typically spans several months with significant time lags between stages (ploughing, planting, etc.). The stages are separated by waiting periods, because the biological processes take time to complete. In factory production a large number of different stages are continuously being performed by many different persons at different places in the plant.3 In farming, because the stages are strung out over a long time period, relatively few persons must be employed at any given time.

2 In rare cases, such as monastic farms and the Israeli Kibbutz, socialist farms have elicited unsupervised initiative from their workers by appealing to non-selfish other-directed motivation. However, the communist states, including China, have had little apparent success with such appeals to their farmers.

8 J. Patrick Madden, Economies of Size in Farming (Washington, D.C., Economic Research Service, US Department of Agriculture, 1967), p. 9.

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IN SOCIALIZED AGRICULTURE

The industrial production process allows virtually complete specializa- tion of workers performing a single task. Farming, however, requires workers to shift repeatedly from one kind of work to another throughout the production season. This calls for considerably greater supervision per man in farming than in factories, where most workers perform essentially the same tasks month after month.4

Furthermore, the quality of performance at the beginning of the production cycle is generally not apparent until the harvest several months later, at which time it is generally very difficult (or impossible) to fix individual responsibility for poor performance. To ensure adequate worker performance, it is usually necessary to provide close supervision of farm workers at all stages of the production process, a task which is complicated by the fact that it is very difficult to evaluate the quality of agricultural work except in a very limited number of operations (viz., harvesting).5

Because many operations are carried on simultaneously in factory production, the rate of production and quality of any particular operation can be controlled by the flow of materials between operations. When, however, operations are performed one after the other in a time sequence, as in farming, control by means of mechanical control of the flow of materials is not possible. Supervisory control in farming, therefore, cannot be mechanical. It must be purposeful, depending on one's idea of the amount and quality of output that he envisages in later operations. The work pace cannot be controlled.6

Since industrial production is typically carried on within a relatively small physical space with specific areas assigned to particular operations, it is possible for a supervisor to keep a close eye on a relatively large work force. The ability of farm managers to provide the degree and quality of supervision mandated by the sequential nature of agricultural production is, however, seriously limited by the physical size of the farm and the dispersion of tasks to be done over a large area. A supervisor must travel back and forth over widely separated parts of the farm to keep abreast of changing conditions, and his ability to coordinate the work is hampered by his lack of knowledge of what is happening in different places.7

4 Ibid., p. Io. 5 See Michael E. Bradley, 'Wage Determination and Incentive Problems in Soviet

Agriculture', unpublished doctoral dissertation, Cornell University, 1967, p. 225. 6 John M. Brewster, 'The Machine Process in Agriculture and Industry', Journal of Farm Economics, February I950, p. 74. We do not imply, of course, that industrial supervision can be purely mechanical. The distinctions between industry and agriculture are of degree. 7 Madden, op. cit., p. I2. This problem is less serious in intensive types of farming that require a relatively small area, such as poultry raising and fattening

beef cattle in feedlots. Spatial problems can be partially overcome, as Madden points out, by improving

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In addition to spatial dispersion, two other aspects of farming greatly increase the difficulty of managerial coordination and supervision: lack of uniformity of natural resources and lack of predictable behaviour of resources and the environment. For example, a large farm with several different types of soil is more difficult to supervise, because some parts require more irrigation or more tillage than others, and the farmer often finds it easier to do the work himself than to be continuously advising a hired man less familiar with the soil charac- teristics.8 Such farmers find it more efficient to expand their operations by acquiring larger and higher-capacity machines, allowing them to cover more acreage without hiring another farm hand. Unpredictable and sudden changes in the weather require sudden changes in work routine and more supervision. The seasonal nature of farming also, of course, means that during many periods of the year there is little or no work for a permanent labour force.

The problem of supervision in American agriculture has been resolved by eliminating the source of the problem, namely, the permanent hired labour force. The agricultural sector in the United States has experienced dramatic labour-saving technological change in a basic institutional structure dominated by owner-operated ('family') farms, allowing fairly large units (in terms of output or sales) to be

operated by a single proprietor and the members of his family, with few-if any-permanent employees. In I964, approximately 74% of American farm workers were family workers, and American farms averaged about 0.5 hired workers per farm.9 The I964 Census of Agriculture, moreover, shows that only about I9% of all commercial farms, and approximately 60% of the largest commercial farms, in the USA employed hired labour on a regular basis.10

Most hired workers on American farms are not permanent employees of the farms, but are hired on a temporary basis. In the production of labour-intensive crops, farms generally meet their peak demand for labour by hiring temporary migrant labour. Thus, even in labour- intensive crops, the number of permanent employees is generally small.

the communication network within the farm, allowing managers to cover a wider area. This would require the expansion of roads, the introduction of electronic communications, the use of helicopters, etc., all of which would entail a high cost for adequate supervision. Even if the firm were willing and able to incur the necessary costs, however, supervision normally would not be as effective as that of industrial managers supervising workers concentrated within the relatively small area of the factory.

8 Madden, op. cit., pp. 11-12. 9 Agricultural Statistics, 1969 (GPO, Washington, D.C., I969), pp. 428, 443.

10 Table I above; I964 Census of Agriculture (Washington, D.C., US Department of Commerce, I968), vol. III, part 2, p. 14.

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It is also worthy of note that migrant labour is being replaced by mechanical harvesting operations in a number of crops, and that this tendency is fully consistent with our basic argument on the importance of supervision problems in limiting the efficiency of large-scale agriculture.

Small farms commonly employ equipment and operators on a temporary contract basis. This 'custom work', however, poses no supervisory problem, since the number of workers employed is small. Also, there are no spatial problems involved in supervising 'custom work' because the faim owner typically works with the contractor.

Although most farms in the United States are of the owner-operator type in which the problems of supervision are to a large extent non- existent, the large 'corporate' farm is acquiring some significance as a form of agricultural enterprise. The emergence of the American corporate farm, however, does not invalidate our basic premise that supervision is a fundamental barrier to economies of scale in agriculture. Corporate farms are large in terms of total assets and sales, but they typically employ only small numbers of permanent workers. In addition, those areas of agricultural production in which the corporate farm has been most successful-viz., small grains, livestock feeding, egg and broiler production, etc.-are those areas in which highly capital-intensive techniques can be adopted most readily and/or in which production is not spatially dispersed. Thus, in general, the

corporate farm has been most successful in the United States in those

types of agricultural production in which the problems of supervision are minimal."

Because of the nature of agricultural operations and because supervision is so difficult, it is important that those who perform farm work exercise unsupervised initiative. The worker must adapt to special conditions, shift from one task to another, follow one complex operation from beginning to end, take the machinery to an out-of-the-way spot to do the work, shift and select the tools as needed. Those requirements are difficult to elicit by external controls, such as pay by the hour

plus close supervision, or by industrial-type (piece rate) incentive systems.

The owner-operated farm is ideally designed to elicit unsupervised initiative, because the owner-operator and his family bear directly all the losses and profit from the results of their own work. (If rain threatens to damage the hay if it is left in the field, the owner-operator will turn the lights on his tractor and work at night to bring it in, an

11 John M. Brewster and Gene Wunderlich, 'Farm Size, Capital and Tenure Requirements', in C. F. Christian (ed.), Adjustments in Agriculture: A National Basebook (Ames, Iowa State UP, x961), ch. 8.

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initiative almost unheard of in Soviet agriculture.) In those instances where non-family, full-time workers are employed on a permanent basis, the difficulty of supervision is minimized, because the number of such employees is typically very small, and because employees and farmers generally work together on the same tasks.

American agricultural experience seems to suggest that the most effective means of overcoming the unique problem of agricultural supervision is an institutional structure and production technique in which the problem of supervising large numbers of workers is virtually absent. Having minimized the problem of supervision by almost eliminating the permanent farm labour force to be supervised, the

profit and loss incentive system can appeal to the self-centred aspects of human nature and motivate the farmer to work hard and efficiently.

In direct contrast to the American experience, however, is the experience of socialist collective agriculture of which the Soviet model is the most obvious example. The Marxian economic tradition stresses

practically unlimited economies of scale in agriculture as well as

industry. As a result of the ideological underpinnings stressing economies of scale, an industrialization strategy based on expropriation of agricultural surpluses, and a desire to eliminate the political opposition of the kulaks, the Soviet government established very large agricultural enterprises-primarily collective farms-with large numbers of workers per farm. While these enterprises were successful in extracting the agricultural surplus to support rapid industrialization, their performance in terms of production, efficiency and worker

productivity has been very poor.l2 It is our contention that in ignoring the crucial and unique problems of agricultural supervision the Soviet

planners established uneconomically large units while retaining relatively labour-intensive production methods in the agricultural sector-i.e., agricultural enterprises in which the problems of supervision should be (and apparently are) at their worst. Soviet farms are physically huge by American standards, and-more importantly- they employ large numbers of permanent workers, as shown by the data in Table i above.

All available evidence indicates that the performance of collective and state farm workers on their household plots has been superior to their performance in the socialized sector. The higher level of incentive on private plots is reflected in the tendencies of collective farmers to minimize their effort on collective work, and to spend excessive time and effort on their private plots. In part, this discrepancy is the

12 Michael E. Bradley, 'Marxism and Soviet Agricultural Problems', in Jan S. Prybyla (ed.), Comparative Economic Systems (New York, 1969), pp. 89-95, and Bradley, 'Wage Determination .. .', pp. 267-8.

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result of the fact that the worker's income per unit of labour input is greater, and the relationship between effort and reward is clearer, on the household plots than in collective production. However, the greater efficiency of the household sector can also be explained partially by the fact that there is no problem of supervision in private plot production. In the private sector, it appears that unsupervised initiative-resulting from the clear relationship between individual effort and individual income-is sufficient to generate high levels of worker performance. Attempts to deal with the problems of managing and supervising labour in the collectivized sector have been unable to produce the same kind of initiative, and-as the beleaguered hero in Abramov's A Day in the New Life illustrates-the peasants have been remarkably effective in evading the restrictions placed upon them by the managers.l3

In the post-Stalin era, Soviet economic policy has given increasing attention to the perennial problems of the agricultural sector, and agricultural policies have been undertaken to raise the level of agricultural output by increasing the level of agricultural investment and to improve the wages of collective farmers and state farm workers.14 These policies-while desirable and consistent with the goal of raising worker performance-are severely handicapped in their attempt to maximize the efficiency of collectivized agriculture, because they do not deal explicitly with the problem of supervision. The recent revival in the Soviet Union of the 'link' (zveno) system and the various pro- posals for subdivision of, and decentralization within, collective and state farms seem to indicate a growing recognition of the unique problems of supervising large numbers of workers in such physically large agricultural enterprises.15 By making a small group of workers responsible for production on a given piece of land for several years, the advocates of these reforms argue that the relationship between individual performance and income will be clear to the workers, and the need for close supervision would be minimal. In other words,

13 Fyodor Abramov, One Day in the New Life, translated from the Russian by David Floyd (New York, 1963). Abramov's novella is one of the best of a number of Soviet literary accounts of collective agriculture. Abramov's hero is a collective farm chairman who valiantly tries to meet his quota in the face of the bureaucratic rigidity of his superiors on the one hand and the individualism of the farm members on the other. See also Alec Nove, 'Peasants and Officials', in Jerzy F. Karcz (ed.), Soviet and East European Agriculture (Berkeley, Calif., 1967), pp. 57-72.

14 See, inter alia, Bradley, 'Wage Determination . . .'; Jerzy F. Karcz, 'The New Soviet Agricultural Programme', Soviet Studies, vol. XVII, no. 2 (October I965), pp. I62-97.

15 For example, see V. Zhulin, 'Kto ty, zemli khozyain?', Komsomol'skaya pravda, 7 August I965, pp. I-2. The zveno system is treated at length in Dimitry Pospielovsky, 'The "Link System" in Soviet Agriculture', Soviet Studies ,vol. XXI, no. 4 (April I97o), PP. 411-35.

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these reforms are aimed at generating the kind of unsupervised initiative which characterizes the private sector.

Our analysis of the problems of agricultural supervision and American and Soviet agricultural experience suggests some critical policy con- siderations for promoting economic growth in underdeveloped economies. Economic growth in these primarily agrarian economies requires an increase in the productivity of the agricultural sector which, in turn, generally requires a change in the traditional institutional arrangements in agriculture. Supervision problems would be minimized in an agricultural economy composed of owner-operated farms, but, if land were distributed among the peasantry in the form of very small individual farms, the farms would be too small to generate the necessary agricultural surplus. The American model of medium-sized farms and highly capital-intensive production is largely precluded by the scarcity of capital and surplus agricultural labour which tends to characterize agriculture in these countries. On the other hand, the Soviet model-as indicated by the experience of Eastern Europe and China-does not hold much promise of success because it ignores the difficulties of supervision in large farms with labour-intensive

production methods. Recognition of the critical problem of supervision in large-scale

agriculture suggests the following broad outlines of policies which would be most successful in raising the level of agricultural efficiency in developing countries:

First, priority should be given to technological improvements which are neutral with regard to scale and which do not involve massive substitution of capital for labour.'1

Secondly, and more important, institutional arrangements in the agricultural sector should minimize the need for supervision. In this regard, the formation of producers' cooperatives-or worker-managed farms in which the members bear the risks and realize the gains from

production-seems to hold considerable promise. In the formation of

cooperatives, however, it is essential that the cooperatives be established on the basis of the self-interest of the members and not follow the mould of the Soviet collective, which is neither a voluntary organization nor a true producers' cooperative.

The difficulties of agricultural supervision might also shed some light on the broader theoretical question of the nature of technological change in agricultural production. The dramatic labour-saving tech-

10 The arguments on this and other aspects of the role of agriculture in economic development are summarized in Bruce F. Johnston, 'Agriculture and Structural Transformation in Developing Countries: A Survey of Research', Journal of Economic Literature, vol. 8, no. 2 (June 1970), pp. 369-404.

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IN SOCIALIZED AGRICULTURE 473

nological change which has taken place in the agricultural sector in the United States, for example, may not be simply a matter of factor substitution in response to a rise in the price of labour relative to other inputs. Our analysis suggests that changes in agricultural technology would tend to be labour-saving in the absence of changes in relative factor prices because of the high cost of supervising agricultural labour.

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Supervision and Efficiency in Socialized Agriculture