Kolkhoz Funds

Kolkhoz Funds


in the USSR, a system of planned material and monetary funds, each of which has a designated purpose and legal regime. The procedures for forming, renewing, replenishing, increasing, and using kolkhoz funds are regulated by law. The organization of kolkhoz funds is stipulated in the Model Kolkhoz Regulations of 1969 and resembles the organization of the funds of sovkhozes and other state agricultural enterprises. Productive capital—fixed capital stock and circulating capital—is created at kolkhozes so that they may perform their basic activity. Like nonproductive fixed capital, productive capital is indivisible—that is, it is not subject to distribution among kolkhoz members. Deductions for increasing fixed and circulating capital are obligatory; the amount is established every year by a general meeting of kolkhoz members.

The fixed capital stock of kolkhozes includes fixed productive (agricultural and nonagricultural) and nonproductive assets in physical form, shares in interkolkhoz and state-kolkhoz enterprises and organizations, monetary resources from amortization deductions for capital investment and capital repairs, withholdings from income for the replenishment of indivisible funds, proceeds from the sale of fixed capital, and insurance compensation for damage sustained by objects classified as fixed capital. Kolkhoz circulating capital, which includes the value of production inventories and monetary resources for productive requirements, also includes the main and insurance seed stocks and the main and insurance fodder stocks. The monetary part of circulating capital is created in sufficient quantity to cover routine production needs and expenditures in various branches of the kolkhoz.

Guaranteed wage funds for paying kolkhoz members in cash and kind are created in accordance with the resolution of the Central Committee of the Communist Party of the Soviet Union and the Council of Ministers of the USSR of May 16, 1966, On Increasing the Material Incentives for Kolkhoz Members to Develop Social Production (SP SSSR, 1966, no. 9, p. 92) and paragraphs 28, 29, and 36–38 of the Model Kolkhoz Regulations. The composition and amount of these funds are planned in accordance with wage regulations adopted by kolkhozes on the basis of recommendations in a given Union republic and in accordance with instructions on the compilation of the kolkhoz production finance plan. The kolkhoz uses income from the sale of its products and other sources primarily to settle labor accounts with kolkhoz members in cash. The in-kind fund, created to satisfy kolkhoz members’ needs for agricultural products, is formed from the harvests of grain, feeds, and other produce; these may be given to kolkhoz members as remuneration for their labor or sold to them according to guidelines and in amounts established by a general meeting of kolkhoz members (seeLABOR PAYMENT IN KOLKHOZES).

Kolkhozes also create economic incentive and specialized funds, including the sociocultural fund, the social security and material assistance fund for kolkhoz members, the material incentive fund for kolkhoz workers and specialists, and the reserve fund. The sociocultural fund, formed annually in amounts determined by a general meeting of kolkhoz members, provides money to improve the sociocultural conditions of kolkhoz members, train personnel, purchase equipment for sociocultural institutions on the kolkhoz, and so forth. The social security and material assistance fund for kolkhoz members, formed annually from withholdings from in-kind and monetary income, is used to pay pensions, the amount of which is determined by the given kolkhoz, to disabled kolkhoz members who for some reason are not entitled to receive a pension from the centralized all-Union social security fund; the fund is also used to provide pensioners with additional payments, award one-time grants in aid, and pay for the maintenance of kindergartens and day care centers. The material incentive fund for kolkhoz workers and specialists is formed on the basis of deductions of up to 5 percent of kolkhoz net income but not more than 12 percent of the wages fund; bonuses are paid to kolkhoz members from the material incentive fund in proportion to their annual earnings and with due regard to their participation in the work. The reserve fund is a transitional fund used to ensure the established level of wages in kolkhozes and is created through annual deductions from net income in amounts determined by a general meeting of kolkhoz members in accordance with the production and financial activity of the kolkhoz; the reserve fund may be used to cover unforeseen outlays and to replenish kolkhoz funds. Kolkhozes also take part in the creation of interkolkhoz insurance funds, seed stocks, and food stocks.

Kolkhozes may also create other funds that they need for their production activity or for the satisfaction of the material and cultural needs of kolkhoz members; the housing construction fund is one such fund. The absolute size of kolkhoz funds depends on the level of economic development of a given kolkhoz and on its economic activity.