Khrushchev's Economy Flashcards
What did Khrushchev do in 1954?
Khrushchev changed the relationship between the collective farms and the government in order to create incentive for higher production rates
Under Stalin, each farm had to produce…
a quota of goods, which was bought off the government for a very low price
Khrushchev reduced the quotas and introduced…
higher prices for everything that was produced in addition to the quota
Under Stalin, each farm had to produce a quota of goods, which was bought off the government for a very low price.
Khrushchev reduced the quotas and introduced higher prices for everything that was produced in addition to the quota - what did this lead to?
Led to a 250% rise in farm incomes between 1952-1956
Virgin Lands Scheme
Khrushchev’s most ambitious agricultural policy
The Virgin Lands Scheme was an agricultural initiative launched by Soviet leader Nikita Khrushchev in 1953, aimed at cultivating previously untouched lands in the Soviet Union, particularly in Kazakhstan and Siberia, to increase grain production and alleviate food shortages
The Virgin Lands Scheme initiative aimed to…
boost grain production and transform the Soviet Union into a major agricultural power to compete with the West
Launched in September 1953, the Virgin Lands Scheme required significant…
investment
Launched in September 1953, it required significant investment, so agricultural investment grew from…
under 3% a year to 12.8% a year of the Soviet budget between 1954-1959
Khrushchev’s corn campaign
Khrushchev introduced the Corn campaign:
From September 1958, Khrushchev encouraged farmers in the Ukraine to grow maize
Plan to shift wheat production to the newly created Virgin Lands farms, while maize would be produced in the traditional farms of the Ukraine
Maize would be used to feed animals and would therefore increase the amount of meat available to people
Corn Campaign consequences
Corn campaign was a failure
Whilst soviet farms were only able to produce 50% of the corn per hectare that the US farms managed due:
To differences in climate.
Lower labour productivity
And the inferiority of the Soviet tractors and fertilisers
The opportunity cost of producing more corn meant that Soviet farms produced less hay
As a result, the amount of animal feed produced by Soviet farms, reduced by 30%
Initially, the Virgin Lands Scheme was very successful
Grain harvests, meat and milk production all rose significantly between 1953-1958
Overall, agriculture rose by 35.3%
Virgin Land scheme led to a greater availability of food in Soviet shops
Better living standards for Soviet citizens
Greater production also led to a 400% increase in income of farm workers
Agricultural failures: 1954-1964
Soviet agriculture inefficient
Virgin Lands Scheme very expensive
Soviet agriculture was labour intensive
During the 1950’s and 1960’s, between 54% and 44% of the Soviet population worked on farms
By comparison, only 5% of the American population worked on farms, and still produced double the food that the USSR produced
Clearly, issues in efficiency in the USSR
Between 1960-1964, production slowly increased, so that overall agricultural production was around 15% higher in 1964 than in 1958. Although this was good…
it was no where near what Khrushchev was aiming for in his plans
Therefore, although being moderately successful, it didn’t meet his aims and therefore considered a failure.
Military spending under Stalin
Stalin deliberately kept living standards low for increased spending in military
How did Khrushchev and Stalin’s heirs differ from him in regards to military spending?
Stalin’s heirs were dedicated into increasing living standards for the people
Khrushchev began cuts in military in 1955
Consequently, percentage of GDP spent on military decreased from 12.1% in 1955, to 9.1% in 1958
Returned in 1962.
By 1964, military spending reached 11% of total GDP (Cuban missile crisis)
Rise in military spending coincided with the fall in economic growth
Therefore increasing military spending leads to a fall in economic growth.
