Why do collectivized farms fail? | AskHistorians Archive Observer

Just to add on to the linked answer of mine. If we're talking specifically about the 1930s - and I'll restrict myself to just talking about the USSR - part of the problem with collectivization is that it combined problematic aspects of both private businesses and state planning.

The collective farms, although they were organized by party activists and eventually with state oversight through Collective Farm charters, were not state enterprises in the way that a Soviet steel mill was. The farms were (in theory) organized by individual peasants joining in effect a cooperative, which they gave their privately owned means of production to (farm implements and livestock), and in return received a share of annual profits from. Now, most of these peasants didn't join voluntarily, so that is one major hurdle.

Another big issue is that collective farms, while technically not state enterprises (there were also state farms but at this period in question they were relatively rare), were basically government contractors. They were expected to produce whatever crops (usually grain) were required by state planners, and were sold to the state at a fixed price, that was often much lower than what market grain prices had been in the years when private trading was allowed in the New Economic Policy. This meant that regardless of how much effort farmers put into production, or how many problems they encountered, they were still expected to sell such-and-such produce at such-and-such a price. The reason for the relatively low prices were that the economic planners were trying to guarantee affordable bread and foodstuffs to industrial and urban workforces, who bluntly were a higher priority under the Five Year Plans.

On top of this, collective farmers didn't share in the collective farm's profit equally, or even at the rate of what they "invested" in the farm. Profits were distributed based off of earned "work hours", but different types of labor on a collective farm meant different rates of work hours - collective farm chairs and administrators earned at the highest rates (a chairman could earn more than 24 work hours in a day), and specialist positions like mechanics earning the next highest rates. These highest positions also had a chance to earn in-kind or even cash payments. Farm workers were at the bottom and got the least, which of course also meant that they had little incentive to improve productivity. Matters didn't help that those on collective farms were not guaranteed internal passports until the 1970s, and those with any means tried to gain passes to leave farms for better paying industrial and urban jobs (which meant that the farm population tended to become older and proportionately more female). On top of this, some private production and marketing of certain agricultural goods like vegetables, dairy and meat was allowed on farmers' garden plots, and so consequently a lot of effort was put into that production rather than production for the collective farm.

Collectivization has often been compared to a new type of serfdom, and there's a bit of truth to this - those on collective farms were more or less tied to the land, and expected to perform a certain amount of labor for a minimal fixed amount of return, and consequently there was little incentive to do this productively. Another parallel might be sharecropping in the US South (which ironically was also originally touted as a profit-sharing system), although even there that system "worked" in that landowners were still selling farm produce at market prices instead of fixed prices.