The Soviet grain procurement crisis of 1928, sometimes referred to as "the crisis of NEP," was a pivotal economic event which took place in the Soviet Union beginning in January 1928 during which the quantities of wheat, rye, and other cereal crops made available for purchase by the state fell to levels regarded by planners as inadequate to support the needs of the country's urban population. Failure of the state to make successful use of the price system to generate sufficient grain sales was met with a regimen of increasingly harsh administrative sanctions against the Soviet peasantry. The state of national emergency which followed led to the termination of the New Economic Policy and spurred a move towards the collectivization of agriculture in 1929.
History
Background The Russian Revolution of November 1917 ushered in a period of civil war and economic dislocation, in which the ruling All-Union Communist Party (bolsheviks) (VKP) made use of forced grain requisitions (Russian: prodrazvyorstka), trading to the peasantry currency with little purchasing power for an underdeveloped consumer goods market. Viewed by most Soviet contemporaries as a temporary wartime expedient, this system of "War Communism" was extremely unpopular with Russia's grain-producing peasantry and the cause of a massive wave of unrest and revolts that threatened to fatally destabilize the government. This force-based system of War Communism was abandoned in the spring of 1921 with the adoption of the so-called "New Economic Policy" (NEP), under which a stable, gold-based currency was restored and a return made to the market system. Instead of forced requisitions of all marketable surpluses, a food tax (Russian: prodnalog) was implemented which necessitated peasant households providing a limited portion of their production to the state, after which households would be free to sell its remaining surplus not needed for household survival on the open market. By 1924 this system of prodnalog had been replaced by a money tax, with Soviet state grain requisitions accomplished via buying and selling. Although the return to the market system in agriculture was ideologically problematic for many Bolsheviks, the years from 1922 to 1926 were successful in practical terms, with total agricultural production by the peasant-based economy fully returning to pre-revolutionary levels. Production of cereal grains approximated pre-war figures, potato production greatly exceeded such figures, and livestock populations, gravely affected during the war, returned to normalcy for pigs and sheep while the count of horses was slowly and steadily restored. The period of War Communism saw Soviet cities largely depopulated when former peasants returned en masse to their native villages amidst the ongoing economic collapse. This trend was reversed under NEP and industrial facilities were restored and restarted, approaching the pre-war levels of output during the second half of the 1920s. Further growth of the economy and improvement of living conditions, it was felt by Soviet planners, would require new investment in factory facilities and capital goods. With access to world capital markets severely restricted to the revolutionary Soviet regime, these funds that would need to be generated by the state either through a loosening of the backing of the gold-based currency, a raising in the level of taxation of the largely rural population, or some combination of these factors. Communist Party penetration of the countryside remained weak, amounting to an average of 1 rural Communist for every 6 village soviets — a mere 0.52% of the rural population vs. 1.78% of the total population in 1927. Moreover, these rural Communists, who took leading roles in village soviets and cooperatives, included a disproportionate number of comparatively well-to-do peasants — a social group, party and non-party, which dominated local administration. This persistent strength of so-called "kulaks" in the Soviet countryside further contributed to the dissatisfaction with the economic status quo on the part of many members of the largely urban Communist Party. From the end of 1926 demand among planners and party activists for a new program of mass industrialization that would modernize the largely peasant country. Although NEP was seen at the time as a permanent structure throughout 1927, the 15th Congress of the VKP(b), held in Moscow in December 1927, acceded to this sentiment, approving a new program for the industrialization of the USSR — an acceleration which would ultimately prove incompatible with a small peasantry freely exchanging a comparatively small fraction of its production in the marketplace. Collectivization of agriculture was held by the Communists to be the essential corollary of any successful industrial campaign, it being faithfully maintained that collective organization would eliminate the inefficiencies inherent in capitalist agriculture, thereby expanding production and making a greater quantity of grain available to the state for conversion to capital goods.
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