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Comprehensive mechanization of production and improvements in technology and labor
organization have made it possible to improve productivity 11.8 percent and free
a certain number of workers from heavy operations, At the same time, the lack of
means of mechanization for the auxiliary sections, where more than 25 percent of
the total number of workers are engaged, and also in measuring out small bread,
fancy bread and rusk products, is holding back labor productivity growth and the
degree of mechanization in labor.

During the period 1981-1985 steps are envisaged to further develop the baking
industry. When the long-term plan was being drawn up, factors such as maximum
satisfaction of demand for an extensive range of bread and bakery products, popula-
tion increase, the reduction in the norms for bread, comprehensive mechanization
and automation of production processes, the introduction of progressive technology
and improvements in labor productivity and production efficiency were taken into
account.

- During the llth Five-Year Plan, the main avenues in the development of the baking
industry sector are as follows:

the buildup of production capacities by means of constructing bakeries and moderniz-
ing existing enterprises;

improvements in the structure of the range of bread and bakery products in order
to satisfy more completely consumer demand for various kinds of products;

the further introduction at enterprises of nonpackaged transportation of main and
secondary raw material;

the assimilation of progressive technologic processes for making dough using units
and installations that permit comprehensive mechanization and automation of dough
making;

the introduction of lines, including comprehensive mechanized lines and continuous-
flow lines, for processing shaped and baked bread, long loaves, small bread and
fancy bread and rusk and bread roll products;

the development and introduction of baking ovens of new design with oil-and-gas
and electric heating;

the mechanization of loading and unloading operations at grain stores and bakery
dispatch offices through the introduction of mechanized complexes and container
transportation of bread into the trade network;

the automation of production processes and the development of automated control
systems,

During the period 1981-1985 it is intended to increase the production capacity of
the sector by 11,000 tons through the construction of new enterprises and the
modernization and expansion of existing enterprises. Together with the introduc-
tion at existing plants of 330 warehouses for nonpackaged storage of flour this

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Of late, unfavourable trends have grown in the field of family and marriage
relations, The number of divorces has increased, as has that of single men
and women, The absolute number and the proportion of families with one child
or without children keep growing. According to the 1979 population census,
of the 66.3 million families, 58.6 per cent consisted of two or three persons
and most of them were families with one child or without children.

Under the Eleventh Five-Year Plan, steps will be made to improve the material
well-being and living conditions of families with children and young couples,
grant them greater privileges and material aid, improve the education of
children as members of society and family, better medical aid and health-
building facilities. It is particularly important to create more favourable
conditions for women to allow them to combine active participation in social
production with their role as mothers, improve their working conditions,
rationalise and reduce household work, develop children's facilities in every
way possible, and introduce a paid leave of absence for women to look after
the child. In the first place, we shall increase privileges and advantages
to working women with children.

The development of social security schemes will be aimed at further improving
the conditions of life and work of pensioners, the promotion of their labour
activity, the growth of pensions, particularly minimum pensions and the bringing
closer together of the conditions and levels of the pensions of industrial
workers and collective farmers, In 1981-1985 it is planned to gradually draw
closer together the size of the earlier established pensions and those fixed
for the workers of similar skills at present. The pension is calculated as
part of the wages of a worker at the time of his retirement and the size of
the pensions of this manpower category does not change, as a rule, in the
future. As a result, we have substantial differences between the pensions of
the workers of similar skills, fixed in different years. The average size

of the old-age pension established in 1979 was 12 per cent higher than that
of 1975, 36 per cent above the 1970 pension and 60 per cent above the 1965
pension. That is why the correlations between these pensions and present-day
wages differ, although they were nearly equal at the time when these pensions
were established. Raising the earlier pensions, with an eye to the growth

of wages, will make it possible to improve correlations between pensions
granted in different sears.

The social programme of the Eleventh Five-Year Plan provides for the solution

of the housing problem, a major social issue. In the current decade, the task
is to give every family an unshared flat. In 1980, 80 per cent of the families
in cities lived in unshared flats, compared with 75 per cent in 1975, In 1985
the per-capita provision of Soviet citizens with housing will average 13.7 square
metres. Under the Eleventh Five-Year Plan, we shall complete the change-over

to the construction of housing to standard designs with better layout and
built-in amenities. (In 1979 the new generation of blocs of flats accounted

for 40 per cent of the housing built by the state.)

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foodstuff products, there are, as noted in the “Basic Directions,” shortcomings in
providing the population with certain foodstuff items; in agriculture insufficient-
ly effective use has been made of the resourvesallocated to it.

During the last three five-year plans about 400 billion rubles were invested in
agriculture, but the yield, as was noted in L, I, Brezhnev's speech at the Nov-
ember 1979 Plenum of the CPSU Central Committee, is still obviously too small. An
increase in the effectiveness of agricultural production requires a guarantee of
the high quality and preservation of the output produced, as well as its delivery
without losses to the consumer. It must be noted that because of shortcomings

in this matter at times more than one-fourth of the total volume of production of
vegetables, fruits, and potatoes is spoiled in the process of transport and storage.

Such a situation is brought about by a number of causes. Frequently this occurs

as the result of a negligent attitude on the part of trade workers to the matter
entrusted to them, irresponsibility in observing the storage procedure, the lack

of an elementary procedure in the acceptance, storage, and transport of agricultural
produce.

However, it is necessary in a number of cases to also considerably raise the quality
of agricultural produce being provided by kolkhozes and sovkhozes to trade enterpri-
ses and organizations. According to the court data, the percentage of substandard
and deficient fruit and vegetable produce and potatoes being delivered to state

and cooperative trade, including that delivered to the All-Union stocks, amounts

to something on the order of 10--14 percent, and at times even mores moreover,
during the last few years this percentage has hardly decreased at all. This is
partially explained by the fact that the kolkhozes and sovkhozes lack a suffi-
cient material interest in the quality of the produce being delivered, since it

is not motivated to a sufficient degree by the purchase price.

Often, proceeding from the correct position that all agricultural produce grown
must be received and stored, trade has been imposed upon by substandard produce.
It is hauled into the cities, stored in warehouses over a period of many months,
and then it turns out that it is impossible to use it. The appearance of fulfil-
ling the delivery plans is created, and transport and storage facilities are
overflowing with the surplus.

Of course, we do not mean to exclude the necessity of receiving even substandard
fruits and vegetables, as well as other highly perishable produce, which are
suitable for use in a fresh or processed form. As is known, the procurement
organizations are permitted to accept such produce on conditions and at prices
which have previously been negotiated. However, it is necessary to provide
incentives for the delivery of actually standard produce.

It would be feasible, in our view, to carry out the purchases of substandard
produce from the kolkhozes and sovkhozes without recording them in the plan ful-
fillments, and to stimulate the motivation of the kolkhozes, sovkhozes, and agri-

cultural organs for creating in the localities capacities for processing such
substandard produce.

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development factors. Production expenditures, that is, investment and fixed
- capital, were outpacing national income and, hence, resources allocated for
consumption. Compared with 1970, in 1980, with national income, used for
consumption and the accumulation of capital, having increased by 55 per cent,
investment went up by 66 per cent and fixed capital by more than 100 per cent.

A major additional source of raising public well-being was an increase in the
share of the consumption fund in national income (in current prices), which
rose from 70.5 per cent in 1970 to 75.3 per cent in 1980. However, this did
not make up fully for a fall in the increment of the resources used for con-
sumption because of a drop in the growth rate of national income, which resulted
in lower relative increases in some indicators of the growth of public well-
being. Real per-capita income increased by 17 per cent under the Tenth Five—
Year Plan, compared with 24 per cent in the previous five years, and non-
productive fixed assets by 32 per cent, as against 37 per cent, respectively.

Overcoming the downward trend of economic development rates registered in
recent years, stepping up these rates, and improving correlation between the
growth of production resources and the results of economic performance is a
major prerequisite for the stable rise of public well-being in the future.

L. I. Brezhnev at the 26th CPSU Congress said that "making the economy more
intensive and efficient consists, above all, in having production output grow
faster than inputs, in achieving more while involving relatively fewer re~
sources in production." Under the Eleventh Five-Year Plan, with the relative
increase in investment te be more than halved, and fixed capital to be reduced
by 50 per cent, national income will remain approximately on the level of the
previous five years, while the output of industry, agriculture and other sectors
will exceed the relevant figures for the Tenth Five-Year Plan. As a result,
whereas in the past five years 10 per cent of the increment in investments
accounted for 7.2 per cent of the increment in national income, and 8.3 per cent
of the increment in industrial output, under the Eleventh Five-Year Plan these
figures will grow by 13-15 per. cent and 19-22 percent, respectively, In
1976-1980 10 per cent of the increment in basic production assets were
responsible for 4.8 per cent of the increment in national income and 5.6 per
cent of the increment in the industrial output, in 1981-1985 these figures

will be 5.8-6.5 per cent and 8.4-9,0 per cent respectively. Better correlation
between these indicators with smaller relative and absolute increases in invest-
ments can be achieved under the current five-year plan only by substantially
raising investment efficiency, a major prerequisite of high and stable growth
rates in the 12th five-year period.

Economic intensification enhances the role of labour productivity in increasing
production and raising public well-being. In the 1980s higher labour productivity
becomes particularly important because of a sharp fall in the increment in man-
power resources due to birth drops in the 1960s and a simultaneous increase in
the number of people reaching pensionable age. In the llth and 12th five-year
periods, the active population is expected to grow by 3.3-3.2 million as

against 11.2 million under the Tenth Five-Year Plan,

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will make it possible to bring the annual volume of nonpackaged deliveries to 11
million tons annually in 1985.

During the 11th Five-Year Plan we have to introduce at bakeries some 400 installa-
tions for the reception and storage of additional raw materials: salt and sugar
solutions, liquid fats, dairy products and yeast milk; we must also deliver yeast
only in the form of yeast milk in cities where there are yeast plants.

Progressive methods of doughmaking will be introduced: rye dough in large dense
fermentation with the use of hoppers, and liquid fermentation; wheat dough in
liquid leavening containers, large dense leavening containers, and also rapid
leavening using various units and installations.

The 18-KhAG-6 and LCh-KhAG-13 hopper-type doughmaking units will be replaced by
series-produced I8-KhTA-6 and I8-KhTA-12 units. It is planned to set up about 900
doughmaking units and installations at bakeries. Mechanization of doughmaking pre-
paration processes will make it possible over five years to make redundant about
2,000 workers engaged in manual operations. The extensive introduction of compre-
hensive mechanized and mechanized lines is planned in order to effect comprehensive
mechanization of measuring, pastrymaking and bread-baking processes.

Type R-2-59M and KhPA-40 pastrymaking units with emptying devices, along with the
P-104 electric oven, will be installed at plants for the production of shaped rye
and wheat bread. A baking unit with a type PKhS oven employing a swinging-tray-
and-chain conveyer has been developed for processing shaped bread in tunnel-type
ovens.

Lines will also be introduced for preparing baked bread, long loaves, and bakery
and fancy bread products.

Particular attention must be paid to the mechanization of processes in the pruduc-
tion of fancy rusk and roll products and cakes, for which demand is growing. It is
essential to disseminate leading experience in the preparation of these products
more extensively and to introduce comprehensive mechanized lines for their pro-
duction.

The operation of emptying and transfer devices on continuous-flow lines will
eliminate the present manual operations now needed at the sections.

During the period 1981-1985, within the sector 1,000 comprehensive mechanized lines
will be introduced and about 4,000 workers made redundant. By 1985 it is intended
to bring the amount of bread processed in polymercoated tins up to 4 million tons
and save about 4,000 tons of vegetable oil. In addition, the requirement for
workers engaged in greasing tins will be reduced.

Bread storage and delivery requires much mechanization work, Particular attention
will be paid to the storage and delivery of the product in 16-18-pan containers
that are loaded into the bread trucks by a hinged releasing device at the back of
the truck. Using this method of transportation, bread can be delivered in the

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Often when the population's demand is not satisfied--because of a shortage of cer-
tain items in the market, the sectors of the industry (ministry) producing it are
fulfilling and over-fulfilling their production plans and bringing out fine econo-
mic indicators according to which their activities are appraised favorably. Such
a situation can hardly be considered as nomal.

In working out the plans for producing items, especially those in mass demand, it
is necessary to proceed precisely from the requirements of the population and not
only the demand. In this connection it is necessary, in our view, in appraising
the activities of individual sectors of the national economy and ministzies to take

- into consideration not so much the fulfillment of the production plans or the pro-
duction growth rate as the satisfaction of the population's requirements; this is
the goal of socialist production. This is also necessary because the appraisal of
work by percentages of plan fulfillments engenders an attempt to achieve the adop-
tion of lowered plans and to conceal existing reserves.

The draft of the "Basic Directions" indicates the necessity of an increasingly com-
plete satisfaction of the population's requirements for consumer goods as the prin-
cipal task of the country's economic and social development.

As is known, the volume and structure of requirements for various items are sup-
posed to be reflected in the requisitions which trade presents to industry. These
requisitions are essentially formal in nature, since by themselves they do not in-
volve any sort of responsibilities on the parties concerned: neither on trade for
their economic grounds and guaranteeing markets, nor on industry for their satis-
faction. Necessarily serving as an important means for increasing the responsibi-
lity of the parties concerned are the five-year agreements recommended for adop-
tion by the decree of the CPSU Central Committee and the USSR Council of Ministers,
"On Improving Planning and Increasing the Influence of the Economic Mechanism on
Increasing Production Efficiency and Work Quality"; these are agreements between
the main administrations of the USSR Ministry of Trade (the wholesale offices of
the Union Republic ministries) and the associations of the industrial ministries
yherein the volume of goods to be delivered along with their distribution by in-
dividual years must be reviewed. We must speed up the introduction of these mea-
sures, and for this purpose it is necessary to specify the structure of the above-
mentioned agreements (a definite list of organizations between which they will be
concluded), to establish a list of items in a group assortment in accordance with
which they will be concluded, etc. Of course, increasing the responsibility of the
ministries and departments (especially the main ones) not only for fulfilling the
plans for producing consumer goods and their delivery in accordance with concluded
agreements but also for satisfying the population's demand in accordance with the
requisitions of the trade organizations will require considerable improvement in
the methods of studying demand and a more rapid restructuring of production.

The need to increase the responsibility of industry and trade, as well as that of
the planning organs for satisfying the population's demand is also dictated by the
following circumstances. It would seem that the saturation of the market with
goods, an increase in their reserve supplies in amounts exceeding the norms, would
have to induce industry to improve the assortment and quality of the goods, as well
as turning out new variants of them with new consumer qualities, facilitating a
speed-up in sales. Trade should also facilitate this by intensifying advertising,

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CONSUMER TRENDS AND POLICIES

METHODS OF SATISFYING CONSUMER DEMANDS EXAMINED

Moscow VOPROSY EXONOMIKI in Russian No 2, Feb 81 pp 45-53
[Article by M. Darbinyan: “Ways of Satisfying the Population's Requirements"/

[text] The successes in developing the national econony during the 10th Five-Year
Plan comprised a major step in the implementation of the economic policy which had
been worked out by the 24th and 15th CPSU Congresses.

The further increase in the population's well-being found its expression, in par-
ticular, in the growth of the retail goods circulation of state and cooperative
trade, which during the period of the 10th Five-Year Plan increased by 24.5 per-
cent in comparable prices. Favorable shifts also occurred in the structure of re-
tail goods circulation. During these five years the sales of livestock-raising
products increased by more than 15 percent, and even higher were the growth rates
in the sales of confectionery goods (18 percent), vegetables and fruits (36 per-
cent), fish and fish products (36 percent).

Changes likewise took place in the sales of non-foodstuff commodities. The sales
of fabrics, clothing, and underwear increased during the indicated period by ap-
proximately 30 percent, knitted-wear and hosiery items by 25 percent, leather
footwear by 22 percent, soap and cleaning compounds by more than 35 percent. Sales
of everyday and household items increased at a high rate--by almost 46 percent.
There were significant increases in the population's purchases of electric vacuum
cleaners, motorcycles, cameras, furniture, metallic kitchenware, porcelain, glass,
and many other items.

However, the achievements in the development of the economy and in the solution of
social problems, as noted in the draft of the CPSU Central Committee for the 26th
CPSU Congress, “Basic Directions of the USSR's Economic and Social Development for
the Years 1981--1985 and for thePeriod Until 1990," could be more substantial. A
certain negative influence was exerted by deficiencies in the mechanism of admini-
stration and planning, in the accounting methods, as well as by violations of labor
and performance discipline, etc, This made difficult a sharp increase in effici-
ency and the transition of the national economy to a path of intensive development.
Thus, despite the achievements in agriculture and the growth in the consumption of

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CONSUMER GOODS PRODUCTION AND DISTRIBUTION

BAKING INDUSTRY IN THE 11TH FIVE-YEAR PLAN
Moscow KHLEBOPEKARNAYA I KONDITERSKAYA PROMYSHLENNOST' in Russian No 3, Mar 81 pp 2-3

[Article by A. S. Grishin, USSR Ministry of the Food Industry Administration for the
Baking Industry: "Main Directions in the Development of the Baking Industry during
the llth Five-Year Plan"]

[Text] In the "Main Directions for the Economic and Social Development of the USSR
for the Period 1981-1985 and for the Period through 1990" pride of place is given
to further social progress in Soviet society and improving the well~being of the
people. An important role in solving these tasks belongs to the food industry,
which during the llth Five-Year Plan has to increase output by 23-26 percent.

In the baking sector much work is being done to further develop technically re-
equip and improve the range and enhance the efficiency of production.

At the November (1979) CPSU Central Committee Plenum the need was indicated to
improve the range of baking products in order to provide most fully for the popula-
tion. In this connection the USSR Ministry of the Food Industry Administration
for the Baking Industry has drawn up measures aimed at considerably improving the
range and at making the most complete use of capacities on comprehensive mechanized
lines and other equipment, and improving the production of bread, bread roll and
fancy bread products, rusks and cakes.

In 1980 USSR Ministry of the Food Industry output of bread and bakery articles was
20,993,000 tons, which is 954,000 tons or 4.8 percent more than in 1975. This
modest increase in output is explained by the per capita drop in demand for bread
to 6.4 kilograms during the period 1976-1980. The structure of the range available
has been improved as the result of increased processing of bread and bakery pro-
ducts from various varieties of better ground flour, and of dietetic products.

Processing of bread from husked rye flour and first grade wheat flour has been
increased, along with bread, bread roll, and rusk products, and the volume of out-
put from scoured rye and wheat flour and second grade wheat has been slightly
reduced. Thus, in 1980 the output of bread from first grade wheat flour and the
best variety increased 16 and 19 percent respectively, bread and fancy bread pro-
ducts 8.8 percent and bread roll products 11.6 percent. The production of small
bread and fancy bread products up to 300 grams increased 48 percent, and products
weighing up to 50 to 70 grams by a factor of 4.7.

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Attaching great importance to transformations in the sphere of social labour,
it is also necessary to emphasise the rationalisation and greater efficiency
of work at subsidiary individual holdings which today account for nearly a
quarter of national farm output. At present, nearly 40 million families of
collective farmers and office workers have subsidiary individual holdings.
Two-fiftks of the manpower in this sector are pensioners and over half are
people of the working age groups. Nearly 90 per cent of them combine work in
social production with the tilling cf their subsidiary individual holdings.
Greater output of machinery custom-made for such holdings, better provision
of their owners with mineral fertilisers and greater technical aid to them
in doing labour-intensive jobs will considerably facilitate their work, reduce
time spent on subsidiary individual holdings and increase their output. All
this, in its turn, will help promote the labour activity of people in social
production and raise labour productivity in the socialized sector.

One of the main economic and social tasks today is to fuller meet consumer
demand, promote the growth of consumption, the quality of goods and the
expansion of their assortment.

In the past few years, the money incomes of the working people were growing
faster than commodity trade, mostly due to the underfulfilment of agricultural
assignments, Compared with 1975, in 1980, with the output of consumer manu-
factures having increased by 21 per cent and retail trade by 24 per cent, the
wage bill went up by 27 per cent and the public consumption fund by 29 per cent.
Imbalance- between public incomes and commodity resources undercut the efficiency
of measures for raising living standards, intensify the spontaneous redis-
tribution of incomes between people, and undermine motives for work.

Meat, milk and other livestock products and fruits are in heightened demand. In
1971-1979, per capita consumption of meat and meat products grew by 10 kilograms,
milk and dairy products by 12 kilograms, and eggs by 74, However, over the
recent years the rates of growth and sale of these products have become de-
celerated, which could not but have adversely affected the dynamics of the
provision of the public with these foodstuffs and their consumption, Thus,
in 1979 the sale of meat and meat products by state and cooperative shops made
10.2 million tons, the increase of 40 per cent on 1970. However, in 1979

the relevent figure remained on the level of 1975, In 1971-1979, milk and
dairy products sales increased by a third, and by as little as 6 per cent in
the first four years of the Tenth Five-Year Plan. Demand for milk and meat
was increasing not only because the growth of the population was outstripping
output, but also because of a marked fall in the role played by subsidiary
individual holdings and changes in the demand pattern of villagers. In
1976-1979, the output of meat and meat products by subsidiary individual
holdings did not increase, while that of milk continued to fall. Whereas

in 1979 collective farmers' subsidiary individual holdings yielded more
potatoes, other vegetables and fruit, eggs, and milk than their owners con-
sumed, 92 per cent of meat output was consumed by producers. Also, demand
for more nutritious foods rose considerably because of increases in the
incomes of the less well off families, which were growing particularly rapidly
in the past 10 or 15 years.

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the fullest satisfaction of people's material and cultural requirements is not on-
ly the highest goal of social production under socialism, as well as the goal of
the Party's economic policy, but also a persistent requirement of economic devel-
opment itself, one of the important economic prerequisites for the subsequent de~
velopment of production, an increase in its effectiveness, and the growth of labor
productivity. Present-day production presents ever-increasing demands primarily
on the workers themselves. Special skills, a high level of vocational training,
and general high standards of the workers have become obligatory conditions for
successful labor. And all this depends to a considerable extent on the standard
of living, on how fully the material and spiritual needs can be satisfied.

This means that raising the standard of living of the people ensures a planned de-

velopment of production and a growth in labor productivity. Only with a specific

level of satisfying needs appropriate to the nature and contents of labor can we

create the necessary conditions for raising labor productivity and the subsequent
3 development of production.

COPYRIGHT: Izdatel'stvo "Pravda", “Voprosy ekonomiki", 1981

2384
cso: 1827/34 END

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also correct is the outstripping rate of growth in the amount of fabrics directed
into the production of special work clothing. This has been brought about by

the process of the increased complexity of production, the raising of its standards,
hygienic requirements, and so forth. Likewise justified is the outstripping rate
of the use of fabrics for the needs of the state-budget organizations; this is
caused by the social achievements of our society, which are running ahead of the
commodity turnover growth rates of the social consumption funds, and certain other
factors.

During the years 1971--1979 the volume of cotton fabrics directed into industrial
consumption grew insignificantly--by 6,5 percent, including those directed into
the production of consumer goods (footwear, furniture, leather haberdashery, lino-
leum, sporting goods, and many others )--by 8.7 percent, into needs which are
partially connected with the production of consumer goods (milk filters, polishing
cloths, etc, )~-by 4.9 percent, while for production-operational needs this figure
even decreased by 12.8 percent.

what has been said does not, of course, exclude the need to replace cotton fabrics
by other materials--film, synthetic fabrics, non-woven materials, etc. The draft
“basic Directions" indicates the need for a maximum replacement of natural fibers
for technical purposes by chemical ones, while fabrics should be replaced by non-
woven materials, In order to speed up this process, it is feasible to provide
appropriate economic incentives. In particular, the price ratio between cotton
fabrics for industrial consumption and the materials which are replacing them
must stimulate the predominant utilization of the latter.

Analysis of the state of production and trade in cotton fabrics shows that in
order to eliminate the shortage of items made of cotton fabrics, it is necessary
first of all to increase their output. This pertains not only to the items given
above. What is required is a further significant growth in the production of
consumer goods, along with an upswing in the level of managing the economy on the
broadest possible plane and certain changes in its structure.

We need to increase our attention to developing the "B" industrial group and to

a certain reorientation in the practice of planning. Deficiencies in planning
the production and output by sectors of the "B" industrial group were mentioned
at the 25th CPSU Congress. The attention of the planning and economic organs,
the Party, Soviet, and trade-union organizations was drawn to the need for a
serious change of approach to the production of consumer goods. Noting that
‘he responsibility for the insufficient concern over the light and foodstuff
industries and the service field is borne by many, including the central planning
and economic organs, the following conclusion was made: "While continuing to
increase capital investments in the sectors of group "B" and their production
services, in trade and the service field, it is necessary to raise our requirements
for those who plan the development of this sector of the economy and who manage
it."

The development of our economy is characterized by a systematic growth in the
production of consumer goods. In 1979 such production was 10.5 times higher than
the 1940 level and 2.4 times higher than the 1965 level. However, requirements
have grown even more rapidly, and in a number of cases public demand for

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In the future, structural policy will be aimed at ensuring the priority develop-
ment of the capital goods sector, especially its segments decisive for scienti-
fic and technical progress, and at promoting qualitative changes in the material
and technical foundation of society.

A more resolute turn of the economy to raising public well-being requires the
accelerated growth of consumer goods output and the faster rates of growth of
both the consumer goods and capital goods sectors. Under the Eighth Five-Year
Plan, the rates of increment in the output of capital goods and consumer goods,
which were almost equal (51 per cent and 50 per cent) made it possible to raise
the share of consumer goods in overall industrial production from 25.9 per cent
in 1965 to 26.6 per cent in 1970. In the ninth five-year plan period, the
priority rate of increment in capital goods rose, compared with the relevant
figure for consumer goods, to 1.24 times. Under the Tenth Five-Year Plan,

this priority became stabilised, and in the past ten years the share of con~
sumer goods fell insignificantly, to 26 per cent. In 1981-1985 the output

of consumer manufactures will grow by 27-29 per cent and that of capital goods
by 26-28 per cent, The rates of increment in capital goods, projected for the
current five-year period, exceed the relevant indicator for the previous
five-year plan by more than thirty per cent.

Like under the previous plan, in the 11th five-year period the fastest rates

of growth in the consumer goods group will be shown by cultural and household
commodities. The output of the food industry will be stepped up considerably
and the rates of growth of light industry will be stabilised. For the five
years, the manufacture of cultural and household goods by heavy industry

will grow by almost 40 per cent, the output of the food industry by 23-26 per
cent, which is above the figure for 1976-1980, and the output of light industry
by 18-20 per cent.

Accordingly, structural changes will be made within the consumer goods sector.
Under the Tenth Five-Year Plan, such changes manifested themselves in the
growing share of consumer goods, primarily cultural and household articles,
manufactured by heavy industry, with the share of light industry going up a
little and the output of the food industry decreasing. The share of heavy
industry increased from 26.2 per cent in 1975 to 29.1 per cent in 1979, that
of light industry from 27.0 per cent to 27.5 per cent, and that of the

food industry fell from 46.8 per cent to 43.4 per cent. ‘The share of cultural
and household articles in the overall output of consumer goods grew from

13.6 per cent in 1965 to 15 per cent in 1979, The Eleventh Five-Year Plan
will see a further increase, albeit a relatively smaller, in the share of
heavy industry, a reduction in the share of light industry, as well as a drop
in the share of the food industry which will fall at decelerated rates.

The further growth of public well-being is largely determined by the development
of the agro-industrial complex and more effective cooperation between all its
segments in order to achieve better economic results, first of all, to solve
the food problem. The goal of the food programme is the satisfaction of the
Soviet people's reasonable requirements for foodstuffs, the achievement of a
consumption level corresponding to scientifically grounded standards, and a
considerable increase in the quality of food. Tentative estimates show that

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In 1981-1985, the rates of increment in labour productivity will average

- 3.2+3.7 per cent a year, compared with 3.2 per cent in 1976-1980. Specifically,
labour productivity will go up by 4.2-4.6 per cent in industry (3.3 per cent)
and 2,.8-3.2 per cent (2.2 per cent) in construction, respectively. Labour
productivity in agriculture will grow, as a yearly average, by 22-24 per cent
under the Eleventh Five-Year Plan, compared with 16 per cent in the previous
five years. Higher labour productivity will account for no less than
80-90 percent of the increment in national income and over 90 per cent in
the increment in industrial output, as against 76 per cent and 75 per cent,
respectively, under the Tenth Five-Year Plan.

More rational use of materials, checking the downward trend of the output-
assets ratio and reducing material intensiveness are very important, if we
are to accelerate economic growth and improve its end results. Hindering

the growth of production efficiency, the falling output-assets ratio limits
the scale of increasing production and, in the final account, the economic
possibilities of solving social tasks, Under the Eleventh Five-Year Plan,

i the rates of reduction in the output-assets ratio are to be slowed down,
compared with the Tenth Five-Year Plan. However, this trend will not be
overcome in full. Despite the accelerated growth of labour productivity,
its growth rates will fall short of increases in the fixed assets-per
worker ratio which for the five years will rise 32 per cent in industry,

38 per cent in agriculture, and 20 per cent in construction, Tapping new
resources and possibilities for raising labour productivity, the output-assets
ratio and reducing material intensiveness in the process of elaborating

and carrying out the Eleventh Five-Year Plan is important for further stepping
up the growth of the output of consumer goods, developing services, increasing
resources to raise public well-being and, at the same time, for making the
manpower situation less tense.

More effective use of production potential will increase the favourable impact
of structural changes on economic development and the growth of public well-
being.

The Eleventh Five-Year Plan provides for further improvements in the structure
of national income and also for increases in the resources directly used to
boost public well-being. In 1981-1985 the share of the consumption fund's
increment in the overall increase in national income will reach 84 per cent.
Over 90 per cent of the increment in national income, compared with 82 per cent
in the previous five years, will be used for current consumption and construc-
tion in the non-productive sphere. As a result, the share of the consumption
fund in national income will grow to 77.3 per cent, as against 75.3 per cent
in 1980 and 73.4 per cent in 1975. This will allow us to channel over 10 billion
roubles in extra funds in consumption, which makes almost two-thirds of the total
to be spent in 1981-1985 on new centralised initiatives to raise living standards.
An increase in the share of resources used directly to promote the well-being

- of the people is an indicator of better performance results and higher production
ef ficiency.

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During the 10th Five-Year Plan, 110 new bakeries were built. The construction of
new enterprises and the modernization of those already in operation made it possi-
ble to increase their daily capacities by 9,890 tons.

The construction of bakeries with warehouses for storing flour without packaging
and the introduction of nonpackaging installations at existing enterprises have
provided an opportunity to bring the nonpackaged transportation of the main raw
material up to 56 percent. In 1980, some 8.9 million tons of flour were moved
using this progressive method, and the figure for the entire five-year plan is
about 40 million tons which is almost double the figure for the 9th Five-Year Plan.

About 1,150 installations for the nonpackaged storage of flour are now in operation
at the bakeries. The introduction of nonpackaged warehouses makes it possible not
only to mechanize loading and unloading work but also to improve efficiency in the
sector tanks to reductions on flour losses and packaging.

Much work has been done in the field of mechanizing dough-making processes. Hop-
pers, installations for continuous doughmaking and machines for high-speed mixing
have been introduced at bakeries. The production of bread using progressive tech-
nologic systems has increased from 11.2 million tons to 15.6 million tons, and now
accounts for 74 percent of ali bakery products made within the USSR Ministry of
Food Industry system.

In 1980 the output of bread and bakery products enriched with proteins, vitamins
and other additives increased to 10 million tons and is approaching about 50 per-
cent of the total volume.

The introduction of progressive methods for processing dough is making possible to
comprehensively mechanize doughmaking operations, intensify the process and reduce
technologic consumption of raw materials.

During the period 1976-1980 much attention was given to mechanization of processes
of measuring out the dough and baking the bread. During this period within the
industry more than 1,000 comprehensive mechanized and continuous flow lines for
the production of shaped and rounds of baked bread, long loaves and small bread and
fancy bread products were introduced. At many bakeries pastry-and-baking units
with blind-type ovens were installed for making shaped bread. The use of baking
tins coated with polymer materials is expanding. In 1980 the output of bread made
in these kinds of tins exceeded 1.8 million tons, and as a result the consumption
of vegetable oil for greasing them was substantially reduced.

At some enterprises up-to-date layouts have been introduced for the storage and
transportation of bakery products: a comprehensive mechanized bread storage facility
at the Kiev Prodmash Scientific and Production Association, and containers with
matching vehicles for delivering bread to the trade network.

During the 10th Five-Year Plan the conversion of production ovens and boilers to

progressive fuels (gas, liquid fuel) and electric heating was continued. Now, more
than 50 percent of bakeries are operating on modern fuels.

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The vast programme of social development and the growth of public well-being,
mapped out by the 26th CPSU Congress, aims at solving major social problems
and, at the same time, at increasing the impact of rising living standards
on the growth of the volume and efficiency of production. This approach
makes it necessary for the social programme to center on transformations in
work which constitutes the basis of the socialist way of life and which is
the main condition for the all-round development of the individual. For
these purposes, it is envisaged to further raise labour productivity, make
work more useful and better working conditions, on the one hand, and increase
the interdependence of the growth of living standards and the end results of
work, on the other.

To meet public requirements and, simultaneously, to raise the effectiveness

of economic and moral incentives, it is necessary to step up the reduction

of the volume of manual work, especially work requiring great physical effort,
and to make work more useful and creative in all fields. This is crucial for

gradually overcoming substantial differences between manual and mental work and
for turning agricultural work into a variety of industrial labour.

The solution of this problem largely determines possibilities for raising labour
productivity, the wages and cultural and vocational standards of manpower, for
making the spiritual life of workers richer and increasing their satisfaction
with work. A falling share of manual work will help substantially alleviate

the manpower problem, reduce labour turnover, and save on compensation payments
for adverse working conditions.

Compared with 1969, in 1979 thanks to mechanisation and automation, the share
of people doing mechanised jobs rose by 3.7 points in industry and 7.6 points
in construction. However, the share of manual work in the economy is still
large. The share of manual labour goes down slowly and not infrequently this
process is accompanied by increases in the overall volume of manual work. At
present, the following shares of manpower do manual jobs in different sectors:
nearly two-fifths in industry, excluding machinery repairs and adjustment;
over half in construction, and nearly two-thirds in agriculture.

It is particularly necessary to mechanise the manual jobs of auxiliary workers
who account for 50 per cent of industrial manpower. The work of 64 per cent
of manpower employed on basic operations in industry have been mechanised.
However, the relevant figure for auxiliary jobs is only 29 per cent. Studies
show that the mechanisation of auxiliary jobs and the release of the same
number of workers for empioyment elsewhere requires a fourth or a fifth of
the means invested in the mechanisation cf basic operations. However, nearly
80 per cent of the funds allocated for the mechanisation of manual work are
claimed by basic operations and only 20 per cent go to auxiliary jobs.

More effective solution of these problems in the 1980s will be ensured by the
accelerated retooling of the economy, making the social orientation of

scientific and technical progress more pronounced, shaping and carrying out
a specific integrated programme for reducing manual work.

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Considerable reserves for increasing the effectiveness of agricultural production
. and improving supplies to the population are contained within the organization
of produce storage in trade. At the beginning of 1980 the level of availability
of storage facilities for fruits, vegetables, and potatoes throughout the country
as a whole amounted in state trade to about 75 percent, and in consumer coopera-
tives--to approximately 50 percent. Herein we must take into consideration the
territorial unevenness of the production of fruits and vegetables and the distri-
bution of storage facilities; this reduces the coefficient of their loads to 61
and 40 percent respectively.

At the same time, if capital investments directed into agricultural production
and into the food industry have increased at quite high rates (which was fully
justified), capital investments in trade, including those for the development
of storage facilities for vegetables, fruits, and potatoes, over the course
of the last two five-year plans have not only not increased but at times have
even decreased.

At the October 1980 Plenum of the CFSU Central Committee it was pointed out that
we must seek out means to develop appropriate capacities for the processing and
storage of agricultural produce, including the use of a rational redistribution
of capital investments which are being allocated to agriculture. Up to now,
however, too little has been done in this regard. This is also extremely impor-
tant in connection with the fact that, as provided for by the draft "Basic
Directions," it is necessary to expand in all ways the acceptance of livestock,
milk, fruits, and vegetables in the places where they are produced and to ship
them out by transport to the procurement units: this requires the creation of
additional capacities for storing and processing agricultural produce in trade
and primarily in consumer cooperatives.

The solution of this problem requires a comprehensive approach. The draft "Basic
Directions" has provided for a concentration of efforts and resources to solve the
fundamental problems of the national economy, to guarantee a step-by-step implemen-
tation of the targetted comprehensive programs with respect to the most important
socioeconomic problems. Designated as having top priority is the foodstuff
prograt, which has been called upon to unite together the questions of developing
agriculture, procurement, storage, transport, processing, and sales of produce,
of the fvod industry and trade in foodstuff items. This ought to ensure a high
quality of agricultural produce, storage capacity, and evenness of sales for it
throughout the course of the entire year, given the seasonal nature of production.
The foodstuff program should be directed at guaranteeing the satisfaction of the
population's requirements in accordance with the norms of rational consumption
and the balance between demand and supply.

In order to successfully implement the foodstuff program, the draft "Basic Direc-
tions" has provided for a unity of planning, financing, and administration, gua-
ranteeing a proportional and well-balanced development of the agroindustrial
complex, improvement of the economic ties between sectors, organization of their
precise interaction with regard toincreasing production, improvement in its
storage, transport, processing, and delivery to the consumer, Furthermore, we
should bear in mind that the storage of produce received requires much less funds
than does an increase in its production,

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JPRS L/9824
6 July 1981

USSR Report

CONSUMER GOODS AND DOMESTIC TRADE

(FOUO 3/81)

FBIS;| FOREIGN BROADCAST INFORMATION SERVICE

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The growth of the consumption of goods and services, taking into account the
stability of prices in the 11th five-year plan period, will make it possible
to increase real per capita incomes by 16-18 per cent, to exceed the 1970
level by 1.7 times. At present nearly 75 per cent of real incomes of the
public comes from labour reruneration. With the projected increase in labour
productivity, under the current five-year plan the wages of factory or
office workers will increase by the average of 13-16 per cent and the labour
remuneration of collective farmers from the socialised sector by 20-22 per cent.
The average monthly labour remuneration of collective farms will make almost
75 percent of the wages of factory and office workers, as against 70 per cent
in 1975, and 63 per cent in 1970.

The 26th CPSU Congress stressed the necessity of ensuring in 1981-1985 the
priority growth of labour productivity vis-a-vis wages, a major condition for
increasing production and raising public well-being. The point is that in the
Past five years the growth rates of labour productivity came unduly close to

. those of wages, mostly due to the underfulfilment of plan assignments for labour
Productivity, which fact created new difficulties with balancing money incomes
and commodity resources. Thus, 1976-1980 one per cent of the increase in
labour productivity in industry accounted for 0,82 per cent of the increase in
wages, compared with 0,64 per cent in 1971-1975, The relevant figure in con-
struction was 1.43 per cent (0.62 per cent). Also, in these years the wages
in the non-productive sector grew faster than in production. Under the current
five-year plan, the projected 13-16 per cent increase in the average wages of
factory or office workers will be ensured with a 22-25 per cent rise in labour
productivity in industry and a 15-17 per cent productivity increase in
construction.

It is very important to improve the correlation between the growth of labour
productivity and labour remuneration in agriculture, particularly in the
collective farm sector, where labour remuneration was growing much faster than
productivity for a long time. Thus, compared with 1970, in 1979, with labour
productivity in the socialised sector of agriculture having grown by 23 per

cent, the wages of state farm workers increased by 45 per cent, and the labour
remuneration of collective farmers by 52 per cent, with the lead being 2-2.3 times.
Under the Eleventh Five-Year Plan, with the projected growth of labour pro-
ductivity in the social sector of agriculture by 22-24 per cent, the labour
remuneration of collective farmers will rise 20-22 per cent.

To increase the effectiveness of incentives, it is necessary to establish

closer dependence of wages on the performance of every worker and that of an
enterprise as a whole, raise the role of incentives as a productivity stimulant,
better the quality of output, ensure the fuller saving of resources of all kinds,
further raise the role of the wage-rate system, improve the forms and system

of wages in close contact with more effective quota-setting, increase control
over the measure of work and the measure of payment, and ensure the necessary
dependence of bonuses on the performance of a worker and that of an enterprise
as a whole.

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The social programme of the Eleventh Five-Year Plan gives a first priority to
the fuller satisfaction of consumer demand and overcoming the shortage of some
goods. The solution of this problem requires, on the one hand, the faster
growth of commodity resources vis-a-vis the money incomes of the population,
a better structure of commodity trade, and strict adherence to plan targets
for the growth of incomes, above all, to the wage bill, and more effective
control in this field, on the other. More extensive use of the possibilities
of subsidiary individual holdings and reducing the losses of farm produce
will help improve the provision of the public with foodstuffs.

In the current five-year period, retail state and cooperative trade will grow
by 22-25 per cent and its absolute increment will be much greater than in the
previous five years, while the volume of everyday services to the population
will increase by about 40 to 50 per cent. In 1981-1985, the money income of the
population will go up by 20-23 per cent.

By 1985, the output of meat will reach 17-17.5 million tons (slaughter weight),
as against 14.8 million tons in 1976-1980. The production of milk will reach
97-99 million tons, compared with 92.6 million tons for the previous five years,
and the output of eggs will make no less than 72 billion, as against 63.1 billion.
The corresponding increase in sales will considerably improve the supply of

the public with livestock products. The production and consumption of vegetables
and fruit will also increase.

Under the Eleventh Five-Year Plan, the sale and consumption of consumer goods
other than foodstuffs will grow appreciably, and the provision of families

with cultural and household goods will increase. Public demand for these goods
could be fuller satisfied even with today's volume of trade, if we raised

quality of output. However, the share of goods with state quality mark is still
low: at the enterprises of the USSR Ministry of Light Industry, it was 12 per cent
in 1980 (2.2 per cent in 1975).

Consumer demand will be met fuller, while the state retail prices of basic food-
stuffs and manufactures will remain stable, According to the USSR Central
Statistical Administration, in 1979, compared with 1970, the index of the

state retail prices of consumer goods stood at 102 per cent. The prices of
essentials, particularly foodstuffs, do not change. Rent, utility rates and
city transit fares also remain on the same level. Since these commodities

and services account for the bulk of the spending of the family, the stability
of prices, rent rates and fares largely predetermines the dynamics of the
general level of consumer prices. In this period, the prices of some non-
essentials increased, as did prices on the collective farm market. These are
cases of goods being priced higher, although their quality has not been improved.
Sometimes more expensive commodities are marketed, while cheaper goods, although
they are in demard, of the same category disappear from sale. That is why the
Guidelines for 1981-1985 point to the necessity of considerably increasing the
putput and sales of inexpensive high-quality goods which are in demand, intensify-
ing state and public control over prices, and raising the responsibility of the
heads of industrial associations, factories and other organizations for the
strict observance of prices.

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What has been said does not contradict the operative principle in a socialist so-
ciety of the predominant growth of Subdivision I of social production, the prin-
ciple of the outstripping growth rate of the means of production over the devel-
opment of the production of consumer goods; this is one of the basic positions of
the Marxist-Leninist theory of reproduction. At the same time the operation of
this principle does not signify the need for a constant or regular--every five-
year plan or every year--excess in the growth rate of Group "A" over Group "B". It
is rather a matter of conforming to principle as a whole; during the course of
certain lengthy period or in the future within the limits of which at separate
phases (years or even five-year periods) it is also possible to have the growth
rate of Group "B" outstrip that of Group "A".

It should be noted that we have had such periods. In the plans of the 2nd and the
9th Five-Year Plans provisions were made for the outstripping growth rates by
Group "B", The same thing was provided for in the year plans for 1968--1972 and
1979, 1981, while in 1953 and 1968--1970 the actual indicators of Group “B"'s
rate surpassed the indicators of Group "A".

The draft “Basic Directions" has provided higher growth rates for the Group "B" in-
dustrial sectors, as compared to those for the products of the Group "A" industrial
sectors: 27--29 percent as opposed to 26--28 percent. This ratioproceeds from the
necessity for an ever-fuller satisfaction of the population's requirements for con-
sumer goods, providing a balance between demand and supply under the conditions
which have taken shape. It requires radical changes in the practice of planning
(capital investments, raw materials and other materials, the wage fund, and other
indicators) not only with regard to sectors turning out and selling these items
corresponding to the infrastructure but also with regard to branches indirectly
connected with then.

In order to increase the proportion of consumer goods produced within the over-all
volume of industrial production, shifts are also necessary in the structure of pro-
ducting the means of production, directed at Subdivisions I and II of social pro-
duction. It is primarily necessary to provide the means of production to the ap-
propriate sectors of Subdivision it of social production--the light and food indus-
tries and others. Moreover, during the period 1971--1979 the output of the means
of production for Subdivision I increased by 79 percent, while that for Subdivi-
sion I rose by 70 percent. This tells us that during the next few years we can
hardly expect any sort of significant structural changes in the output ratios of
the Group "A" and "B" industrial sectors unless serious measures are undertaken in
this direction.

At the October 1980 Plenum of the CPSU Central Committee L. I. Brezhnev pointed
out the need for a greater enlistment of the machine-building sectors, including
those in the defense field, in the rendering of assistance to civilian machine
building and, in particular, to the light and food industry, as well as to ©
agriculture.

In examining the ratio between industrial groups "A" and "B", we must take into
consideration the developmental characteristics of modern economics. The most im-
portant aspect of the interrelationships between production and the level of the
population's prosperity consists of the fact that, as was noted at the 24th and
25th CPSU Congresses and at the subsequent Plenums of the CPSU Central Committee,

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individual items has remained unsatisfied; this brings about the necessity for a
more accelerated development of their production.

Tt should be noted that in a number of cases the productions plans for Group "B"
have not been fulfilled. At times in the year plans the development plans for the
industries of Group "B" have been accepted at lover levels, as compared with those
provided for in the five-year plans, During the period after 1950 the actual coef-
ficient by vhich Group "A" exceeded Group “B" through all the five-year plans was
almost alvays higher than that provided for in the year plans, while in the latter
this increase vas often set higher than what proceeded from the five-year plans.
And even during the 9th Five-Year Plan, when the Directives of the 24th CPSU Con-
gress had specified an outstripping growth rate for Group "B" and the coefficient
of the ratio of the average annual growth rates of Groups "A" and "B" amounted to
0.94, this could not be carried out because of a number of reasons: according to
the year plans this coefficient amounted to 1.03 for the five-year period, but it
. actually was 1.21.

In the 10th Five-Year Plan a drawing closer together was noted for the growth rates
of Groups "A" and "B", If in 1975 the actual coefficient by which Group "A" out-
stripped Group "B" amounted to 1.22, in 1979 it was 1.06, and in 1980 the plan for
the economic and social development of the USSR provided for their equal growth
rate--4.5 percent for each of them. For 1981 a growth rate has been provided for
Group "B" which already outstrips that for Group "A": 4.2 percent to 4,1 percent.

It is necessary to ensure the optimum ratio between Subdivisions I and II of social
production and primarily between industrial groups "A" and "B". In our view, the
criteria of this optimum quality should proceed from the goal of socialist produc-
tion--an ever-increasing satisfaction of the population's requirements. Under the
conditions of developed socialism this makes it necessary to draw the growth rates
of the above-mentioned groups closer together. This is also being facilitated by
changes in the value structure of production, Embodied [veified labor has become
absolutely and relatively predominant, and scientific and technical progress is di-
rected not only at’ reducing manpower but primarily embodied labor--lowering the
outlays of fixed capital, along with the proportional expenditures of fuel, raw ma-
terials, and other materials; this brings about a drawing closer together in the
growth rates of Subdivisions I and II of social production and those of Groups

"a" and "B" of the industrial sectors.

The task boils down to such an outstripping of Group "A" and, consequently, of Sub-
division I of social production as will ensure to the greatest degree the expan-
sion of the scope of consumer goods, as ell as that of the boundaries of Subdivi-
sion II. We should bear in mind that "in the final analysis, production consump-
tion (the consumption of the means of production ) is always connected with perso-
nal consumption and always dependent upon it."* Nor should we exclude the neces-
sity of reviewing at definite intervals of time the outstripping growth rates of
Group "B", particularly when there are shortages of a number of items.

* VY, I, Lenin, "Polnoye sobraniye sochineniy” /Complete Collected Works/, vol 4,
pe.

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the full implementation cf the food programme will, apparently, go beyond the
current decade. However, the decisive step towards its fulfilment should be
made in the current decade, primarily in the 11th five-year period, which
provides for better provision of the public with foodstuffs, fuller satis-
faction of public requirements, and a substantial increase in the consumption
of more nutritious foods.

In agriculture, the current five-year plan accentuates the growth of the

output of cereals, fodder, and livestock products, the effective storage of

farm products and their sale in the best marketable form. In 1981-1985,

average annual farm output will grow by 12-14 per cent, as against 9 per cent

in 1976-1980. In accordance with the decisions of the July 1978 Plenary Meeting
cf the CPSU Central Committee, under the Eleventh Five-Year Plan the annual output
of cereals is to average 238-243 million tons, compared with 181.6 million tons
in 1971-75, and 205 million tons in 1976-1980 in order to bring per-capita
production to a ton.

In the past few years the redistribution of investments in favour of agriculture
has ensured the faster rates of growth of the basic fixed assets of agriculture,
compared with the relevant national average. Under the Tenth Five-Year Plan,
agricultural investments made over 27 per cent and under the Ninth Five-Year
Plan, 26 per cent of overall investments, as against 23 per cent for the

Eighth Five-Year Plan and 20 per cent for the Seventh Five-Year Plan. In
accordance with the decisions of the July 1978 Plenary Meeting of the CPSU
Central Committee, the Guidelines for 1981-1985 say that the share of agriculture
in overall economic investments should not go below today's level. A major
emphasis is laid on more effective use of the resources channelled in agriculture,
which is very important for improving national economic performance in general.

As the efficiency of production, particularly agriculture, will grow, conditions
will emerge for increasing resources to expand the non-productive sphere and
develop its material and technical foundation.

In the future the country will see a further redistribution of manpower between
the productive and non-productive sectors. However, of decisive importance

will be more rational use of the manpower currently empioyed in the non-productive
sector. Under the Tenth Five-Year Plan, the number of factory and office workers
in the non-productive sector grew by 4.8 million, more than the expected overall
increase in the workforce under the Eleventh Five-Year Plan. This underscores
the importance of raising manpower efficiency in the non-productive sector, the
retooling and modernisation of enterprises and a sharp reduction in the share

of manual low-skilled work which in this sector is 50 or 100 per cent above the
corresponding figure for the productive sector, The faster growth of assets

in the non-productive sector and an increase in the funds earmarked for this
sector are important for the successful solution of this task,

The 26th CPSU Congress stressed that the foundation for tackling social tasks

is being laid in the economic field, Today it is necessary to ensure a closer
contact between a real increase in living standards and the growth of production
and labour productivity. The role of the social factors of economic growth, that
is money and more stimulants to work, has grown, as has their impact on the
development of production and the attainment of high end results.

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containers directly to the store floor. This scheme for transporting bread is recom-
mended for most bakeries. At new and existing large-capacity enterprises it is
expedient to introduce the mechanized bread storage system used at the Kiev Prod-
mash Scientific and Production Association where provision has been rade for full
mechanization of loading and unloading and transportation operations--from the
stacking of the bread in the containers to the unloading of the containers with

the product in the bread trucks.

During the llth Five-Year Plan special attention must be given to questions of pro-
duct quality and the preparation of bakery products with improvers and whey, and
also to the rational consumption of raw materials and reducing losses at all stages
of the technologic process. One important factor in the work of the sector remains
the search for internal reserves and the most complete utilization of production
capacities. In order to expand product output and extend the bakery base it is
necessary to practice more extensively the modernization of enterprises and to
replace the technologic equipment being used with more productive equipment. The
efforts of the workers in the sector are aimed at solving the task of fully provid-
ing the population with an extensive range of good quality bread products and at
improving efficiency in the baking industry.

The decisions of the 26th CPSU Congress will be fulfilled.

COPYRIGHT: Izdatel'stvo "Legkaya i pishchevaya promyshlennost'", "Khlebopekarnaya
i konditerskaya promyshlennost'", 1981

9642
CSO: 1827/45

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expanding the trade netvork, etc. Nevertheless, this is not always the case. Ex-

panding the assortment and producing new items require additional outlays, and

this is connected with a certain risk for production, since these outlays may not

be recovered or may prove to be ineffective. Hence in a number of cases industry
- has not been motivated to carry out the above-mentioned measures.

At times even trade is not motivated to increase the volume of production, inas-
much as this requires a targeted formation of demand and, following this, an in-
crease in the scope of sales, improvement in the assortment, a growth of reserve
supplies, development of a retail trade network, stepping up advertisements, etc.
All this requires additional outlays. Study of the population's demand, supply of
items, formation of reserve supplies of items, their storage, and, finally, sell-
ing what is most complicated under conditions of a broad assortment of goods, their
surplus. Moreover, this is connected with the highest level of circulation expen-
ditures, a large risk of goods going down in price, a slowdown in the turnover of
operating capital hich could lead to a worsening of economic indicators.

Thus, industry and trade turn out to be not economically motivated to create a
"pressure of supply" in the market, whereby, in K, Marx's exemplary expression,
“supply takes demand by force." At times their interests close in on and amount
to suggestions with regard to curtailing production plans, since, thereby, the in-
dustrial enterprises, as a rule, adjust all other plan indicators, including fi-
nancial ones, and for trade this means fewer troubles.

At times the planning organs do not oppose the above-mentioned tendencies to the
extent yhich they should, and, as a result, suggestions on lowering the production
plans for certain items are adopted.

At the November 1979 Plenum of the CPSU Central Committee it was pointed out that
"USSR Gosplan does not sufficiently oppose the inrush of a bureaucratic approach
and seniority which are weakening the force of the plan and hindering the propor-
tional growth of the economy," adding that we must "exhibit greater firmness in de-
fending the general state interests." These positions are also fully pertinent .to
the practice of planning consumer goods.

Curtailing the production growth rate, based only on current demand, without taking
its prospective development into account, has led in a number of instances to a
sudden appearance, in our opinion, of an artificial shortage of certain items of
which there had been a surplus over the course of several years. This is what oc-
curred in due course with sewing machines, bicycles, and during recent years--with
skis, quilted blankets, washing machines, electric lamps, and certain other items.
Herein we cannot exaggerate the importance of the insufficient study of public
demand, the untimely delivery of goods, the weak influence of trade on production,
etc. In many cases the matter is considerably more complex. Thus, in recent years
breakdowns have been noted in the population's supply of cotton fabrics and arti-

3 cles made of cotton thread. This seems particularly incomprehensible in view of
the systematic increase in the harvest of raw cotton and its record crops in some
years, Attempts are frequently made to explain this by means of the irrational
utilization of cotton fabrics and by the reduced production of linen fabrics. The
principal reason for the deficit, however, is contained in the insufficient growth
in the production of cotton fabrics. During the period 1971--1979 the average an-
nual growth rate of their production amounted to 1.4 percent. The production of

25

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CONSUMER GOODS PRODUCTION AND DISTRIBUTION

RELATIONSHIP BETWEEN ECONOMIC GROWTH, PUBLIC WELL-BEING EXAMINED
Moscow APN DAILY REVIEW in English Vol 23 No 13, 11 Jun 8i pp 1-21

[Article by G, Sarkisyan, originally published in Moscow VOPROSY ECONOMIKI
in Russian No 5, 1981]

[Text] The 26th CPSU Congress stressed that the party approach, the political
approach to the economy has invariably been based on the programmatic require-
ment--everything for the same of man, for the benefit of man. Hence, the
emphasis on a more thorough regearing of the national economy to meet the
tasks of raising the living standards.

In pursuance of the decisions of the 26th CPSU Congress, the country accentuates
the greater social orientation of economic development and more effective use
of production and scientific and technical potentialities to facilitate the
growth of public well-being. It has now become more necessary than ever to
ensure the positive feedback of social progress and growing public well-being

to promote an economic advance and higher production efficiency.

Today the rates and proportions of the growth of production on the basis of
its intensification are the central problem of economic and social development.
High growth rates expand possibilities for increasing the social orientation
of the economy, manoeuvring with resources and making progressive structural
changes in social production, Better economic proportions are an effective
tool for stepping up economic progress and increasing resources allocated

for extensive reproduction and the growth of public well-being. The scale

and effectiveness of the solution of economic and social tasks depend on the
way intensive growth factors are used.

Developed socialist society is characterised by the plan-based growth of the
economy, the dynamic development of key economic sectors, and, the corresponding
increases in public well-being. Under the Tenth Five-Year Plan, the USSR

used over 1.6 trillion roubles from national income to boost public well-being.
This nearly equals the funds used for the purpose under the Seventh and Eighth
Five-Year Plans taken together.

However, in the past few years,economic growth rates have slowed down because
of a low increase in productiom- efficiency and the domination of extensive

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Along with state-financed housing, it is necessary to increase attention to
housing construction by building societies and individuals. The importance

of this segment of housing construction is particularly great now because

it can become an extra source of ensuring balance between money incomes

and commodity resources. Apart from that, housing construction in this

sector can be conducted with the participation of would-be owners. However,
plan assignments for housing construction by building societies are not carried
out in full and its proportion in the overall volume of new housing has been
dropping for the last few years.

Rational use of working time and an increase in leisure time are very important
for the harmonious development of the individual and for fuller satisfaction

of the spiritual requirements of the public. The importance of this problem

is explained, on the one hand, by the rising requirements of people, particularly
by the rapid growth of their social and spiritual requirements, and, a consider-
able share of household work in overall time free from work in production,

on the other.

Reducing the volume of household work and removing its mst arduous forms is

the main reserve of increasing leisure time, particularly that of women. On

a national scale, household work takes nearly 180 billion hours a year, slightly
less than time spent in production. The development of services, better housing
and the provision of families with all the necessary efficient domestic appliances
will considerably reduce time spent on household work and increase leisure time,
particularly that of women, which will favourably affect labour activity and
productivity in social production.

The growth of public well-being is organically connected with the further
consolidation and development of the socialist way of life, the fuller demon-
stration of its advantages, and the moulding of the new man.

Moulding the new man requires the harmonious combination of growing material
well-being with the enrichment of spiritual life, the cultivation of the sound
and rational requirements of the comprehensively developed individual. In
this connection it is important, first, that the material and spiritual
opportunities of every working person should be determined, above all, by the
extent of their participation in social production, their labour performance
and their relevant share of the consumption fund; second, the satisfaction

of the requirements of the public should meet the principles of the socialist
way of life; third, these requirements should be increasingly geared to the
interests of the comprehensively developed individual. The creation of condi-
tions for the gradual turning of work into the main vital requirement of man
plays a particularly important role in this respect.

Growing public well-being favourably influences social production, and stimulates
its fast development. The impact of growing public well-being on the develop~
ment of production has always been recognised in the theory and practice of
socialist construction. However, as a rule, an emphasis was laid on the
dependence of the growth of living standards on production, whereas their
feedback to production was frequently reduced to the stimulating function of
wages.

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At all stages of the construction of socialism and communism, the economic
development of Soviet society proceeded in organic unity with social develop~
ment and was subordinated to the solution of major social tasks. Under mature
socialism, economic growth becomes increasingly aimed at satisfying the
material and spiritual requirements of the people and creating the best
possible conditions for the all-round development of the individual.
Simultaneously, the growth of living standards produces an ever greater
impact on economic development. Ensurance of optimal interaction between
economic progress and the growth of public well-being, a greater stress on
the social orientation of the economy and fuller use of the social factors

of production development are major conditions for stepping up the advance

of the society of mature socialism.

(VOPROSY EKONOMIKI No 5, 1981. In full.)
OEKIVO-14483

- cso: 1812/54

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JPRS L/9824

6 July 1981

USSR REPORT
ConsuMER Goops AND DoMESTIC TRADE

(FOUO 3/81)

CONTENTS

CONSUMER GOODS PRODUCTION AND DISTRIBUTION

Relationship Between Economic Growth, Public Well-Being Examined
(G. Sarkisyan; APN DAILY REVIEW, 11 Jun 81)....6..eeeceeeeceeees 1

Baking Industry in the llth Five-Year Plan
(A. S. Grishin; KHLEBOPEKARNAYA I KONDITERSKAYA PROMYSHLENNOST" ,
Mar B1).eseeeeeeecerees se ceeeeeeeeeeeeeeee teteecececseneeceese 15
CONSUMER TRENDS AND POLICIES

Methods of Satisfying Consumer Demands Examined
(M. Darbinyan; VOPROSY EKONOMIKI, Feb 81)........ tee eeeeereeeee 20

-ae- (III - USSR - 38b FOUO]

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An important step in implementing this program would be to speed up the construc-
tion of kolkhoz and sovkhoz warehouses and storage facilities for fruits, vege-
tables, and potatoes where this is feasible; such a step would facilitate an
improvement in the quality of produce, a certain lessening in the load of transport,
and an improvement in the supply of food products to the population, In order

to provide incentives for this, we need to establish higher purchase prices on
agricultural produce for its production in the off-season, as compared to the
seasonal period. This would ensure not only a profitability in warehousing the
produce for storage in the places where it is produced but also a rapid recovery
of capital investments and, consequently, an incentive for building storage faci-
lities in rural areas.

At the present time questions of the comprehensive planning of the development
of production, transport, storage, processing, and sales of produce are most ur-
gent for the fruit and vegetable produce of agriculture.

During the last few years certain successes have been achieved in increasing the
production of consumer goods. At the same time breakdowns often occur in
supplying the population with certain items. Breakdowns in the sales of indivi-
dual items have their own peculiar characteristics. At times they occur under
conditions vhere the rate of grovth in their production and sales is actually
quite high. Thus, interruptions in the sale of soap and synthetic cleaning
compounds began in 1979, when the level of their sales amounted to 113 percent

as compared to the previous year and 240 percent as compared to 1966, Moreover,
over the period 1966--1978, when the market was saturated, the sales of household
soap even decreased by 26 percent. In a number of cases the breakdowns in the
sales of the above-mentioned items could not be prevented even by the above-normal
reserves on hand, At the beginning of 1979 the retail trade network had above-
normal soap reserves amounting to 40 days of circulation, or 30 percent over the
norm, and the corresponding supply of synthetic cleaning compounds was enough
for 24 days, or 133 percent of the norm. And this proved to be insufficient to
ban interruptions in their sales.

Often random breakdowns which have begun in one region or city, which have, it
would seem, a local nature, quickly spread over the country's territory and
assume very wide scope. This is explained not only by the integrated nature of
the commodity markets but also by shortcomings in the shunting of resources and

by the lack of an All-Union wholesale unit which would be capable of carrying out
this shunting on a countrywide scale. Under conditions when the price does not
limit the purchase of items by the population in amounts which are reasonable from
the point of view of the society, then even a brief deficit is created by the
population in the reserves of a number of items in amounts which exceed the
necessary normal consumption.

The draft "Basic Directions" takes special note of the necessity to exert an
active influence on the formation of the reasonable requirements of the popu-
lation. Workers in trade and industry must find the forms and means to exert
such an influence and to intensify their vork in this direction. This can greatly
curtail expenditures on increasing the production of individual items and arrange
their production in amounts corresponding to rational requirements.

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NOTE

JPRS publications contain information primarily from foreign
newspapers, periodicals and books, but also from news agency
transmissions and broadcasts. Materials from foreign-language
sources are translated; those from English-language sources
are transcribed or reprinted, with the original phrasing and
other characteristics retained.

Headlines, editorial reports, and material enclosed in brackets
[] are supplied by JPRS. Processing indicators such as [Text]
or [Excerpt] in the first line of each item, or following the
last line of a brief, indicate how the original information was
processed. Where no processing indicator is given, the infor-
- mation was summarized or extracted.

Unfamiliar names rendered phonetically or transliterated are
enclosed in parentheses. Words or names preceded by a ques-
tion mark and enclosed in parentheses were not clear in the
original but have been supplied as appropriate in context.
Other unattributed parenthetical notes within the body of an
item originate with the source. Times within items are as
given by source.

The contents of this publication in no way represent the poli-
cies, views or attitudes of the U.S. Government.

COPYRIGHT LAWS AND REGULATIONS GOVERNING OWNERSHIP OF
MATERIALS REPRODUCED HEREIN REQUIRE THAT DISSEMINATION
OF THIS PUBLICATION BE RESTRICTED FOR OFFICIAL USE ONLY.

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cotton thread has also proceeded at this same low growth rate, and this has
brought about low growth rates in the production of knitted goods, stockings,

soc] , etc. Keanhile, the purchases of raw cotton have been more than twice as
high--3.3 percent, and the production of cotton fiber--1.8 percent. A gap has
‘been formed between the raw-material resources and the potentials for producing
fabrics and articles made of cotton thread; it is caused primarily by a lag in the
introduction of capacities in the cotton industry, especially spinning and ginning
capacities, There are also other reasons of no small importance: an increase in
a number of cases in the dampness, contamination, and greasiness of the raw cotton,
a reduction in the production of cotton thread by assortment (in particular, a
reduction in the proportion of thin-staple cotton), a lowering of its quality--a
curtailment in the proportion of the top grades and an increase in the proportion
of the lower grades, especially the sixth grade, which is of little practical use
in producing cotton fabrics, etc.

The annual increase in the production of cotton fabrics is in contrast to the more
considerable growth in the public demand, brought about by the increase in the
average uages of workers and office employees (3.3 percent), labor payments of
kolkhoz members (4.8 percent), wage funds (5.6 percent), and other factors. Here
we should note that in 1979 the production plan for cotton fabrics was underful-
filled by more than 300 million square meters, and for the 10th Five-Year Plan

as a whole there was a shortage in the production of cotton fabrics amounting

to more than one billion square meters.

A stepped-up development of production should be the main thrust in ensuring the
population with a sufficient supply of cotton fabrics and eliminating the shortage.
And references to deficiencies in the distribution of fabrics along the lines of
their utilization (although there are deficiencies in this regard) mask the true
state of affairs and do not assist in the correct choice of the main way to eli-
minate the deficit.

At times suggestions are uttered with regard to increasing the market stocks of
fabrics by means of reducing their outlays for other needs, but, in our opinion,
it is impossible to agree with this fully. The market stocks of cotton fabrics
(wy cost), as well as their industrial processing (sewing clothing, underwear,

and other garments’ increased during the years 1971--1979 on an average of 2.3
percent annually. The extra market consumption also grew objectively. The
average annual growth rate in the stocks of special work clothing during these
years comprised 4.8 percent, and the stocks of state-budget institutions (fabrics
for hospitals, sanitoriums, children's institutions, etc.) amounted to 2.4 percent.
‘The predominant growth in the amount of fabrics directed into industrial pro-
cessing, as compared with their retail sales, is feasible. This frees the
population from the necessity of excessive outlays of time spent on sewing clothing
and underwear, and it ensures a better and more economical use of fabrics as well
as a higher quality of garments. During the years 1970--1979 the proportion of
cotton fabrics directed into industrial processing increased from 57.7 percent

to 65.5 percent of their total amount in monetary terms. In analyzing the dyna-
nics of the structure of the outlaysof cotton fabrics, these two directions of
their use must be considered in their aggregate, taking into account the need

for a systematic increase in the proportion of fabrics being directed into indust-
rial processing.

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Another major direction of improving labour remuneration is to rationalise
rations between the wages of different categories of workers, taking into
account the complexity and importance of work, its conditions and intensity,
and also sectoral and regional specifics. It is a pressing matter to raise
the wages of engineers and technicians and to improve the correlation between
their wages and those of shopfloor workers. The wages of engineers and
technicians exceeded those of shopfloor workers by 45.9 per cent in industry
and 48.2 per cent in construction in 1965; 36.3 percent and 34,7 percent in
1970; and 15.9 per cent and 4,3 per cent in 1979.

In raising wages, particularly those of low-bracket workers, great importance
is attached to the reduction of manual and low-skilled work, to the growth

of skills, ard the combining of jobs. This is the main way to reduce the
absolute numbers of low-paid workers and their proportion in the national
labour force, raise their wages, and cut down gap between the labour remunera—
tion of different categories of workers. At the same time, a greater emphasis
on incentives and better performance, specifically higher quality standards,
may eventually increase the difference between the wages of various categories
of workers, which will promote the more consistent implementation of the
principle of equal pay for equal work.

In the future, the role of the public consumption funds in solving production
and socio-demographic problems will grow, as will the efficiency of using the
means allocated for these purposes. In the current five-year period, the public
consumption funds will grow by 20 per cent to 138 billion roubles in 1985.

4 The social programme of the Eleventh Five-Year Plan accentuates demographic
problems, particularly the higher social role and prestige of the family which
is the primary cell of socialist society, higher birth rates and the longer
life-span and active life of the people. The Soviet population grows at high
rates, by an average of over two million a year. In birth rates and natural
increase of the population, the USSR holds one of the first places in the
world, The Soviet Union is among the countries with low death rates. In
1979 natural increase per thousand was 8.1 in the Soviet Union, 7.1 in the
United States, 3.9 in France, 3.1 in Italy, 0.4 in Britain, and 2.1 in West
Germany.

In recent years, the sex and age composition of the population has worsened,
particularly in the countryside, and birth rates have gone down substantially
in the European part of the Russian Federation, the Ukraine, Byelorussia and
the Baltic republics. Whereas in 1961-1979 the population of the Soviet
Republics of Central Asia, Kazakhstan and Transcaucasia increased by 52 per
cent, the relevant figure for the Russian Federation, the Ukraine, Byelorussia
and the Baltic republics rose as little as 14 per cent, In the 1980s, in view
of the after-effects of the 1941-1945 war and the aging of the population,
regional differences in population dynamics may grow, which will affect the
regional distribution of manpower. Increment in the active population will
remain relatively high in the Soviet Republics of Central Asia and Azerbaijan,
and partly, in Armenia, Georgia, Moldavia, Southern Kazakhstan and some
autonomous republics of the Russian Federation. In the current decade, almost
the entire increment in the active Soviet population will come from these
republics.

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The importance of higher public well-being for promoting economic progress has
become particularly great in connection with the growing role played by the
subjective factor of social production in the context of the scientific and
technical revolution, i.e., the role of the worker, the harmonious development
and use of his abilities. Hence, the necessity of ensuring the more integrated
impact of public well-being on social production and the growth, on this

basis, of the stimulating role of public well-being.

The growing impact of the public well-being on production now that the latter
is being intensified, makes it necessary to further improve the ways of
raising living standards and the methods of implementing social undertakings.
In this connection priority is given to the ways directly connected with the
fuller use of intensive growth factors, labour productivity growth, and the
improvement of the quality of work. A particularly important role is being
assumed by more efficient use of resources directly used for raising public
well-being. The solution of these tasks requires the profound substantiation
of structural changes in the redistribution of the increment in resources under
every new plan, closer connection between the growth of the well-being of
different public strata and categories of the working people and the extent
of their participation in social production, and the improvement of the
planned-based mechanism used to carry out social undertakings.

Attaching the prime importance to transformations in the character of labour

and to raising its productivity, the 26th CPSU Congress stressed the necessity

and importance of improving the distribution of goods and services between
individuals, first of all, distribution of goods and services according to

one's labour performance to consolidate the socialist way of life, raise

public well-being and, simultaneously, increase production, As the main form

of the implementation of the principle of the distribution of goods and

services according to one's work, labour remuneration has the leading role to

play in promoting public welfare and in stimulating social production economically.

To stimulate production it becomes more and more important to use such ways of
raising public well-being as better housing, further rationalisation of the
allocation of housing, improvements in the content and conditions of work,
fostering the creative initiative of advanced workers, longer holidays and
conditions for adequate recreation geared to the labour performance of workers,
higher pensions, etc, At the present stage the growth of the stimulating
effect of living standards on production is inseparably connected with the
promotion of labour discipline and raising the responsibility of people for
their jobs.

The growth of public well-being and its stimulating impact on production are
accompanied by the intensification of the former's social aspects, thanks to
which it becomes possible to ensure closer interaction between the economic
and social functions of public well-being. The most optimal case is their
coordinated development, with the stimulating effect of living standards on
production growing in inseparable connection with the solution of social
problems, However, the stimulating function of public well-being can develop
if only it does not hinder social development, At the same time, the
preference is given to social development which increases stimuli to work.

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