Contracting of Agricultural Products in the Ussr

a uniform system of state procurement of agricultural production.

First introduced in 1928–29, contracting (kontraktatsiia) was until 1933 the basic form of procurement of the most important agricultural products. Until 1958 the main industrial crops (cotton, flax fiber, flaxseed, sugar beets, tobacco, makhorka, tea leaves) were purchased from the kolkhozes through contracting. By the decision of the January (1961) plenum of the Central Committee of the CPSU and the decree of the Central Committee of the CPSU and the Council of Ministers of the USSR of Feb. 25, 1961, On the Restructuring and Improvement of the Organization of State Procurement of Agricultural Products (Collected Decrees of the USSR, 1961, no. 4, art. 21), the contracting of agricultural products became a uniform system of procurement of production from the kolkhozes as well as the sovkhozes and other state economic units.

Contract agreements are made by the state purchasing agencies with the agricultural enterprises in accordance with the state procurement planning of agricultural products, taking into consideration the necessity of above-plan purchasing of these products. In a developed socialist economy, the contracting method is the best means of broadening and consolidating the ties between agriculture and the processing industry. Through contracting, the Soviet state concentrates in its hands the greater part of farm produce, thus ensuring normal supply of the population with food products and of industry with agricultural raw products. The transition to fixed planning of purchases of farm produce for a number of years and the increase of the purchase prices of staple produce, which were instituted according to the decisions of the March (1965) plenum of the Central Committee of the CPSU, created firm economic and legal guarantees for the normal economic activity of the kolkhozes and sovkhozes, strengthened their economic independence, and increased the efficiency of capital investments.

The Twenty-fourth Congress of the CPSU (1971) pointed to the necessity of developing and strengthening in every way possible the direct ties of industrial and commercial enterprises with the kolkhozes and sovkhozes and of consistently implementing the transition to direct farm-to-enterprise shipments. Agreements are contracted on the basis of standard agreements confirmed by the Ministry of Procurements of the USSR in coordination with the Ministry of Agriculture of the USSR. Questions not stipulated by the standard agreements are resolved by mutual agreement between the parties. However, establishing conditions in contradiction to the standard agreements is not permitted. Surplus farm produce above the plan is sold to the state by the farms on a voluntary basis without the establishment of any additional quotas. The quality of the products must correspond to the standards, technical terms, or established conditions. The state purchasing agency must accept the produce delivered by the farm to the receiving center on the date specified in the agreement, provide a correct judgment of quantity and quality, pay for the value of the produce, and reimburse the delivery expenses in the established manner.

The decree of the Council of Ministers of the USSR of Apr. 23, 1970, On the Unification of Government Decisions of the USSR on the Question of the Organization of State Procurement of Agricultural Production (Collected Decrees of the USSR, 1970, no. 8, art. 163) obligated the corresponding agencies, in entering contract agreements, to ensure the fulfillment of the established plan of farm produce and also to make above-plan purchases of these products in quantities necessary to satisfy the requirements of the Soviet economy.

Failure to fulfill the provisions of the contract agreements creates a material liability, consisting of the payment of the fine and forfeit provided for in the agreement for late delivery or tardiness in acceptance, as well as the reimbursement of expenses for the delivery of the products and the losses sustained as a result of the tardy acceptance. The payment of a penalty, fine, or forfeit provided for in the agreement does not release the farm or state procurement agency from the fulfillment of obligations under the agreement. In case of a refusal to accept the contracted perishable goods as provided for under the agreement, the procurement agency surrenders the forfeit and also reimburses the farm the full value of the products and the transportation expenses for its delivery both ways. The fulfillment of the procurement plans and of the conditions of the contract agreement for the purchase of agricultural products is controlled by the Ministry of Procurements of the USSR.