Agrarian and Industrial Conglomerate

a complex of specialized agricultural enterprises and industrial manufacturing enterprises with common territory, organization, and technology.

The conglomerate is a new type of production tie, arising as part of the scientific and technical revolution in agriculture; it marks the transition of agriculture to a mechanized basis, the transformation of agriculture into a special branch of industrial activity. Objectively, this produces the need to further specialize production, to integrate it with the industrial processing of produce. The tendency toward this kind of unification is an important step in the development of productive forces. Every agrarian and industrial conglomerate not only grows its own raw material but also carries out the industrial processing of much of the produce. The essence of this combination is the extended specialization of agricultural enterprises, the integration of agriculture and industry in the interests of economizing social labor, and the utilization of agricultural labor on a non-seasonal basis.

In developed capitalist countries—the USA, France, and Sweden—the formation of agrarian and industrial conglomerates is evident in the process of so-called vertical integration. These conglomerates represent a monopolistic form of a new type in production enterprises. Agrarian and industrial conglomerates are unique combines created by food and mixed feed firms, trading firms, and large farmers’ cooperatives. The integrating firms organize highly specialized and industrialized farming. Agrarian and industrial conglomerates are centrally managed.

Conglomerates have developed particularly extensively in the USA. At the beginning of the 1960’s agrarian and industrial conglomerates produced 95 percent of all broilers and eggs for incubation, 85 percent of the turkeys, approximately 30 percent of the horned cattle, and approximately 30 percent of the milk, and so on. The creation of agrarian and industrial conglomerates—a form of the penetration of monopoly capital into agriculture—intensifies the process of driving small and average farmers from the land; at the same time, it gives rise to a new process whereby working farmers are turned into agricultural workers and capitalist farmers become managers of sorts in the conglomerates’ agricultural sections.

In socialist economies, agrarian and industrial conglomerates are a new way to organize production; they follow a coordinated plan. In addition to the greater possibilities for cooperation in labor and equipment utilization that they offer, the organic unity of these enterprises creates a direct community of interests, a collective material incentive among industrial and agricultural workers for the improvement of indexes of production in every sector. The organization of agrarian and industrial conglomerates allows a more flexible management of industry and a more rational utilization of labor resources; it significantly reduces the administrative and managerial apparatus.

The creation of such conglomerates is the most effective mode of guaranteeing the best working conditions in agricultural and industrial enterprises, maintaining the necessary proportions among them, and utilizing the material and labor resources of the given area to the maximum in the interests of the growth of production. The organization of agrarian and industrial conglomerates is not possible everywhere, since such conglomerates must be based on large-scale specialized agricultural production, intensive agriculture, and livestock breeding. As industry and agriculture move closer together, the process of overcoming the differences between city and countryside is accelerated. The establishment of industrial enterprises with efficient organization of labor in the countryside has a favorable effect on all aspects of the development of agricultural production and on the transformation of the entire structure of rural life.

The program of the CPSU has determined the path for the development of the interrelations between agriculture and industry. “Gradually, to the degree that they are economically expedient, agrarian and industrial conglomerates are formed; in them, agriculture is organically combined with industrial processing of its products and there is rational specialization and cooperation between agricultural and industrial enterprises” (1961, pp. 84–85).

In the USSR there are kolkhozes which successfully combine agricultural production and the industrial processing of produce in the Crimea, Kazakhstan, Tataria, and in the Odessa, Kuibyshev, and other oblasts.

Agrarian and industrial conglomerates have also been created in the European socialist countries. In Czechoslovakia, for example, regional conglomerates have been created since 1967; they include cooperatives, state farms, machine tractor stations, purchasing and supply organizations, and manufacturing and food industry enterprises. In January 1968 these enterprises numbered 65. Agrarian and industrial conglomerates (combines) operate successfully in Yugoslavia; in 1968 they numbered about 100. They usually include dairy, meat, fruit, and vegetable product enterprises. In Hungary there are 14 canneries that have contractual ties with 1,106 cooperatives and 65 state farms. In 1967 canning enterprises on a contractual basis with cooperatives created enterprises for the initial processing of agricultural produce. At the start of 1968, 120 such enterprises were in operation.