Interkolkhoz Funds

the assets of several kolkhozes united on a shareholding basis for the purpose of organizing an interkolkhoz construction, production, or other enterprise; the assets may be in the form of cash or of materials, stocks, and equipment.

According to the Kolkhoz Regulations, kolkhozes may voluntarily pool their resources and undertake joint measures in order to develop kolkhoz production and improve cultural and domestic services for kolkhoz members. The main source of interkolkhoz funds are the subscriptions contributed by the participating farms. One particular form of interkolkhoz funds is the insurance fund, which is set up and added to by the kolkhozes in the form of contributions from income in kind for the purpose of providing aid to kolkhozes suffering from natural disasters. The formation and extensive development of interkolkhoz organizations and enterprises in the late 1950’s and early 1960’s served as the basis for the rapid development of interkolkhoz funds. In many union republics, including the Moldavian SSR, the Latvian SSR, and the Ukrainian SSR, republic-wide interkolkhoz seed, food, and fodder insurance funds have been established. In the Latvian SSR a fund for improving the facilities of interkolkhoz construction organizations was established in 1963. From 1961 to 1972 the total amount of subscriptions to interkolkhoz funds grew by more than five times and at the end of 1972 amounted to more than 1.5 billion rubles. There was a tenfold increase in the fixed assets of interkolkhoz organizations and enterprises during these years, and at the end of 1972 their value came to 4 billion rubles.

Problems in establishing and using interkolkhoz funds are resolved on the basis of the Model Regulations for Interkolkhoz Organizations and Enterprises in the areas of construction, live-stock-fattening, and primary processing of agricultural products. Despite all the variety in the specific forms and conditions of interkolkhoz associations, they function in every case on a contractual and self-supporting basis. The size of the contribution of each participating kolkhoz is determined as a rule by the consideration that the interkolkhoz association must have the resources necessary to function economically. The size of the subscriptions must be sufficient to provide the necessary fixed and circulating assets. The fixed and circulating assets are set up so that the association can function continuously. Depending on the nature of the association, it will be based on production funds (for example, for construction and processing) or nonproduction funds (for example, for houses of rest or hospitals). Interkolkhoz associations have also established statutory funds, amortization funds, and expansion and consolidation funds.

The shares subscribed by kolkhozes are by nature indivisible because of the special status of interkolkhoz property as cooperative property; that is, they cannot be distributed to the subscribing kolkhozes and can only be used for the designated purposes. In addition to the contributed subscriptions, interkolkhoz funds can sometimes finance themselves through their own capital investments. Since interkolkhoz associations are, as a rule, highly efficient, the part played by their own accumulations of capital as a source of interkolkhoz funds is increasing significantly as the associations develop. Of considerable and growing importance in establishing and developing these associations is state credit, a vital source of interkolkhoz funds. The spread of interkolkhoz cooperation requires further improvement in the system of establishing and using interkolkhoz funds. This applies above all to the economic relations between the specialized interkolkhoz associations and the subscribing kolkhozes (in such matters as defining how the size of the participant’s contribution is determined and how the net revenue received is distributed).