Khrushchev's Economy - Agriculture

Virgin Land Scheme​

Aim​

• Hoped to increase Soviet Agricultural production by turning unfarmed land into new farms
• Agricultural investment grew from 3% a year to 12.8% between 1954 and 1959​

Success!​

• Overall production increased by 35% from 1953 – 1958​

• Improved standard of living​

• Led to 400% rise in income of farm workers​

However...

• Expensive

• Farms in Kazakhstan needed sophisticated irrigation systems (expensive to run and maintain)

• Failed to lead to further growth

• Harvests in 1959 and 1960 were slightly below the 1958 levels
• Below the targets

The Corn Campaign September 1958

• Encouraged farmers in Ukraine to grow maize

• His plan was to shift production of wheat to the Virgin Lands while maize would be grown in the traditional farms

• The maize would be used to feed animals and would increase the amount of meat available

Failure…

• His initiative was based on the success of US farms

• Soviet farms were only able to produce 50% of the corn per hectare

• Growing more corn meant that Soviet farms produced less hay

• The amount of animal feed dropped by 30% between 1958 and 1964

Khrushchev's Economy - Industry

Industry


The Seven-year-plan : Light industry in January 1959


The plan was designed to boost agriculture by investing in light industry. He hoped that more chemical production would lead to better fertilisers and therefore increased production of crops as well as synthetic fibres. He thought that chemical production through light industry would encourage growth in the 2 sections of the economy. He believe that further investment in heavy industry was unnecessary.


Production of chemicals ad consumer goods increased between 1959 and 1965.There was a 60% increased production of consumer goods, which is 5% below Khrushchev's target. 


However, the reforms were often counterproductive or so short that they did not have time to work.


* In Feb 1962 Khrushchev divided the Party in two; one half was responsible for agriculture and the other half for industry. These reforms were unpopular and took place in the middle of the 7 year plan.
* Khrushchev changed targets of the Plan in 1962 to more ambitious goals.
* Factories produced light fittings that were too heavy to hang on the ceiling.


Military spending:


The economy did not produce enough wealth to continue high levels of military spending and improve living standards. Military spending fell from 12% of GDP in 1955 to 9% in  1958. However, in 1962 Khrushchev increased military spending again due to series o nuclear stand-offs between Soviet Union and USA. This means that by 1962, military spending was around 11%.  Increased military spending led to a reduction in economic growth.


Khrushchev's vision:


In 1962, he stated that the Soviet Union would achieve Communism by 1980, at which stage housing, transport and food would be all available freely, and consumer goods would be cheap and widely available.