by state enterprises, and one-tenth was due from collective enterprises.
Wholesale and retail trade accounted for 36 percent of the outstanding
loans; industry and construction were each liable for 28 percent.
Short-term loan balances of agriculture amounted to less than 8 percent
of the total sum, and balances of the services sector constituted less
than 0.2 percent. The largest part of short-term loans was granted for
working capital purposes, including the procurement of farm products. A
balance of almost 1 billion leva, however, was outstanding on loans for
the completion of building construction, including a small amount for
housing.
A very small, though increasing, volume of consumer loans for the
purchase of durable goods and clothing has been granted by the State
Savings Bank. The volume of such loans--36.5 million leva in 1966, 48.2
million leva in 1967, and 45.4 million leva in 1968--was equivalent to
slightly more than 1 percent of retail sales in the commercial trade
network. The outstanding balances of consumer loans at the end of the
year rose from 49.1 million leva in 1968 to 102.1 million leva in 1971.
Consumer loans may not exceed the sum of 500 leva and may be used only
for the purchase of designated goods. In 1969 the authorized list
included twenty-three categories. A sample survey in 1969 indicated that
about two-thirds of the loan volume was used to acquire television sets,
furniture, and motorcycles; another 20 percent was spent on radios,
sewing machines, and scooters.
Apart from consumer loans, the State Savings Bank grants small loans to
licensed private craftsmen for working capital and to collective and
state farmworkers and other qualified applicants for the purchase of
productive livestock, seeds, fertilizers, small tools, and other farm
perquisites. The bank also makes loans for adapting premises to the
needs of tourism; for current building repairs; and for meeting personal
emergencies, including loans to newlyweds for the acquisition of
furnishings. Depending upon the purpose of the loans, loan ceilings
range from 150 to 800 leva, and maturities extend from ten months to
eight years.
The volume of consumer loans was reported to have reached 116 million
leva in 1972. Under the economic plan for 1973, the State Savings Bank
was scheduled to make loans to individuals for the purchase of consumer
goods and other needs in the amount of 203 million leva and for home
construction in the amount of 180 million leva. The bank was also
expected to lend 141 million leva to people's councils.
Loan funds of the State Savings Bank have been derived from personal
savings deposits and, presumably, from interest payments. The bank also
conducts state lotteries for the benefit of the state budget. There is
no evidence as to whether the bank retains a portion of the lottery
proceeds for its own operations. Savings deposits increased almost
fivefold in the 1960-71 period to a level of about 3.6 billion leva--a
sum equivalent to 64 percent of total retail sales or 150 percent of
food sales through commercial and institutional channels in 1970.
According to preliminary data, savings deposits rose by 630 million leva
in 1972, and they were scheduled to increase further by 870 million leva
under the economic plan for 1973. The bulk of savings deposits has been
channeled into the budget.
The repayment record on loans by the State Savings Bank was excellent,
at least through 1969. The proportion of delinquent loans was reduced
from 3.1 percent in 1966 to 0.01 percent in 1969. This result was
achieved by a regulation that provided for penalties to be imposed on
paymasters throughout the economy who failed to withhold or to report to
the bank monthly loan payments. According to a bank official, there had
been no need to impose any penalties because the regulation itself
proved to be an adequate deterrent.
The loan repayment record of enterprises, trusts, and other economic
organizations has not been nearly so good and led to a tightening of
credit provisions in 1971. The proportion of overdue short-term loans in
the production sector increased from 10.7 percent in 1966 to 11.8
percent in 1971. Similar information on long-term loans has not been
published.
The penalty interest rate on delinquent loans is 10 percent (it was 8
percent through 1970), compared to a normal range of 1 to 5 percent on
loans for working capital. Whenever a bank loan or supplier credit is
delinquent for more than three months and the delinquent amount exceeds
20 percent of the borrower's working capital, the borrower becomes
subject to a special credit and repayment regime, the specific
conditions of which are not known. The ultimate sanction is the refusal
of credit and, at times, even the replacement of the trust or enterprise
director. The special credit regime is also applied whenever a trust or
its branch (enterprise) stockpiles unneeded inventories; procures
materials for production without guaranteed outlets for the output;
undertakes a construction program without adequate financial provisions;
increases its obligations; or suffers a worsening of its financial
condition for any other reason.
Interest costs in excess of those planned lower the economic
organization's income and, under the prevailing incentives system, also
reduce the funds available for the payment of wages, salaries, and
bonuses. Loan delinquency and the associated penalty interest rate,
therefore, often bring about the reduction or elimination of bonus
payments and, in extreme cases, the withholding of a portion of regular
pay. Application of the more severe sanctions entails a serious
deterioration of the economic organization's finances that adversely
affects its production program. Through close contact with borrowers and
detailed supervision of their operations the bank endeavors to forestall
delinquencies and the attendant losses to the economy. In December 1972
the Council of Ministers adopted a decision to enhance the role of the
banking system in administering the economy by intensifying its
participation in the formulation of economic plans and by expanding its
authority in monitoring plan fulfillment.
Currency
The currency unit of the country is the lev, divided into 100 stotinki
(see Glossary). It is a nonconvertible currency with a variety of
exchange rates, usable only in domestic transactions. Since January 1,
1962, the lev has been officially defined to contain 759.548 milligrams
of fine gold--equivalent to 1.17 leva per US$1 at that time. This
exchange rate was valid only for commercial transactions. In the wake of
the United States dollar devaluation on December 18, 1971, the official
commercial exchange rate was set at 1.08 leva per US$1 (greenback--see
Glossary). A further revision of the exchange rate was put into effect
on February 13, 1973, which established a parity of 0.97 leva per US$1.
The subsequent decline in the value of the dollar in foreign markets did
not call forth another official exchange revaluation to mid-1973.
The official tourist exchange rate for so-called capitalist currencies
underwent similar revisions and was set at 1.65 leva per US$1 on
February 14, 1973. The noncommercial rate for ruble area countries,
based on a parity of 0.78 leva per 1 ruble, was equivalent to 0.64 leva
per US$1 until that date; thereafter, at the new ruble-United States
dollar parity, it was equivalent to about 0.59 leva per US$1.
In addition to the official exchange rates, there are three varieties of
clearing account rates. The multilateral transferable ruble is used to
clear accounts with other European members of the Council for Mutual
Economic Assistance (COMECON--see Glossary). Socialist bilateral units
arise from bilateral trade agreements with other communist countries.
Neither of these two exchange varieties has private markets abroad.
Bilateral clearing units arise from bilateral trade and payments
agreements with about thirty noncommunist trading partners. These
clearing units are traded sporadically abroad at varying rates of
discount.
The lev has been traded on the black market in exchange for so-called
capitalist banknotes or gold coins. The black market rate of the lev
fluctuated between 4.60 leva per US$1 in January 1963 and 2.58 leva per
US$1 in June 1972.
Except for small remittances or travel allocations to other communist
countries, the lev is nontransferable for residents; resident status
applies to all physical and juridical persons who have resided in the
country for more than six months, regardless of their citizenship.
Ownership of or trade in gold, foreign currencies, or so-called
capitalist securities is prohibited, as is the import and export of
Bulgarian banknotes. There are no investments by noncommunist country
nationals in Bulgaria.
Exchange transactions are administered by the Bulgarian National Bank
jointly with the Ministry of Finance, the Ministry of Foreign Trade, and
the Bulgarian Foreign Trade Bank. Bulgaria is neither a member of the
International Bank for Reconstruction and Development nor of the
International Monetary Fund. Statistics on currency in circulation, the
public debt, foreign exchange reserves, gold stocks, and the balance of
payments have not been published.
FOREIGN TRADE
Foreign trade is a state monopoly. Trade policy is formulated by the BKP
and government leadership; it is translated into a complex set of laws
and regulations designed to encourage the expansion and qualitative
improvement of production for export, to promote import substitution,
and to bring about greater efficiency in production and foreign trade
operations. Control over foreign trade is shared by the Ministry of
Foreign Trade, the Ministry of Finance, and the Bulgarian National Bank
through the Bulgarian Foreign Trade Bank.
Along with other elements of the economic structure, the foreign trade
apparatus and the laws and regulations governing foreign trade have been
frequently modified. As a result, there are two basic types of foreign
trade organization: those attached to and serving individual economic
trusts with a large export volume and organizations serving several
trusts whose export activity did not justify a separate export
department. Two foreign trade organizations that imported most
industrial materials were attached to economic trusts responsible for
the domestic distribution of supplies. Foreign trade organizations
affiliated with trusts retain their legal identity and are not
considered to be branches of the trusts they serve. Relations between
foreign trade organizations and the trusts whose products they handle
are governed by contracts, the framework of which is provided by
official regulations. As a rule, foreign trade organizations carry on
their activities for the account of the trust. There are a few
organizations, however, that trade for their own account, and there are
also a few economic trusts that have the right to engage in foreign
trade activity directly.
Export plans are approved by the Council of Ministers for each economic
trust in physical and value terms and by major trading areas, that is,
member countries of COMECON, other communist countries, Western
industrialized nations, and developing countries. Trusts pass their
trade plans to foreign trade organizations. The plan of a single trust
may be apportioned among several foreign trade organizations, and many
foreign trade organizations receive plan assignments from several trusts
so that their own foreign trade plan is a composite.
Under the regulations of 1971, as amplified in 1972, and unlike earlier
conditions, the financial results of export operations are directly
reflected in the producer's profit position. This circumstance is
counted upon by the leadership to motivate trusts toward attaining
optimum efficiency in export production and toward adjusting output to
foreign market requirements. Financial incentives to surpass official
foreign trade targets are provided by allocating the producers and
foreign trade organizations a portion of the receipts from excess
exports and a portion of savings made on imports through import
substitution. Excess exports may not be made by diverting output
scheduled for the domestic market, and savings on imports may not be
made at the cost of quantitative or qualitative deterioration of the
domestic supply.
Producers for export are obligated both to produce the items called for
by the export plan in accordance with specifications and to meet
contractual delivery dates; with few exceptions, they have no direct
contact with foreign buyers. It is the responsibility of the foreign
trade organizations to seek out the most profitable markets and to
handle all physical and financial details of the trade transactions. It
is also their duty to keep producers currently informed about changing
conditions in world markets and to make them aware of needed adjustments
in production.
Standard subsidies per 100 leva, differing by trading area, are granted
on all exports. These subsidies, in effect, modify the official exchange
rate so that trade is actually conducted on a multiple exchange rate
basis. Subsidies from the state budget are also provided for exports,
the returns from which do not cover costs. Special bonuses are offered
to economic trusts and their branches that fulfill or surpass their
export assignments to noncommunist markets. Proceeds from exports are
credited to the economic trusts and not to the foreign trade
organizations.
Relations between economic trusts and foreign trade organizations are
determined in broad outline by government regulations. Specific details,
however, including precise financial arrangements that are the core of
the relationship, must be worked out by the parties to the contract.
This situation provides opportunities for friction that may be harmful
to the export program. Trusts and export associations were therefore
enjoined to undertake negotiations in a cooperative spirit and to avoid
taking advantage of their monopoly position as producers or exporters.
Disputes that threaten to involve financial losses are to be settled by
the Ministry of Foreign Trade and the Ministry of Finance.
Total trade turnover increased more than 3.5 times in the 1960-71 period
to a level of 5 billion leva, including 2.55 billion leva in exports and
2.45 billion leva in imports. The growth of trade was erratic,
particularly in the case of imports. Over the entire 1960-68 period,
however, the average annual growth of exports and imports was almost
identical--13.9 and 13.8 percent, respectively. In the subsequent three
years exports rose almost twice as rapidly as imports, though at a
lower rate than in earlier years. The change in the relative rates of
growth during the 1969-71 period--10.5 percent for exports and 5.6
percent for imports--helped reverse the consistently negative trade
balance of the earlier period and produced trade surpluses in three
consecutive years.
The great bulk of the trade has been carried on with communist
countries, primarily the Soviet Union. The share of these countries in
total trade, however, declined from 85 percent in 1961 to 78 percent in
1970; it had fallen to 73 percent in 1966. Communist countries outside
COMECON, primarily Cuba and the Democratic Republic of Vietnam (North
Vietnam), accounted for only 3 to 4 percent of the trade annually. The
Soviet Union alone provided more than half the imports and absorbed an
equal amount of exports. The German Democratic Republic (East Germany)
and Czechoslovakia were the main COMECON trading partners after the
Soviet Union, but the volume of trade with these countries was very much
lower. The share of East Germany in the total trade had been 10.5
percent in 1960 but ranged between 8 and 8.6 percent in the 1965-70
period. The proportion of trade with Czechoslovakia declined from 9.7
percent in 1960 to only 4.8 percent in 1970.
The orientation of trade toward the Soviet Union has been based largely
on political factors but has also been dictated by the shortage of
export goods salable in Western markets and the inadequacy of foreign
exchange reserves (see ch. 10). Trade with COMECON members is conducted
on the basis of bilateral clearing accounts that do not involve the use
of foreign exchange. Furthermore, the Soviet Union has supplied Bulgaria
with a large volume of industrial plants and equipment in exchange for
the products of these plants. In the 1971-75 period trade with the
Soviet Union is scheduled to increase by 60 percent over the volume in
the preceding five-year period, and the share of the Soviet Union in the
total trade volume is planned to reach 68 percent.
Trade with noncommunist countries rose from about 15 percent of the
total volume in 1961 to 27 percent in 1966 but declined thereafter to 22
percent in 1970. From three-fourths to four-fifths of this trade was
accounted for by Western industrialized nations, primarily the Federal
Republic of Germany (West Germany), Italy, France and Great Britain. The
balance of the noncommunist trade was with developing countries, mainly
India, the United Arab Republic (UAR), and Iraq. Trade with the United
States has been negligible.
There has been a gradual shift in exports from agricultural to
industrial commodities and from raw materials to manufactured and
semiprocessed products. Yet in 1970 exports of agricultural origin still
constituted 55 percent of the export volume, including 8 percent of raw
farm products. The share of industrial exports rose from 25 percent in
1960 to 45 percent in 1970, of which 13 and 27 percent, respectively,
consisted of machinery and equipment. In 1972 the proportion of
machinery and equipment in exports was reported to have risen to 34
percent.
Machinery and equipment have been exported almost exclusively to
communist and developing countries. In 1968, the last year for which
information was available, machinery and equipment constituted only 1.8
percent of exports to Western industrialized nations.
Imports in the 1960-70 period consisted predominantly of machinery and
equipment, fuels, raw and processed industrial materials, and raw farm
commodities. Imports of foods and industrial consumer goods were limited
to about 10 percent per year. Machinery and equipment constituted from
40 to 44 percent of imports; fuels and industrial materials accounted
for about one-third; and agricultural raw materials made up the balance.
In the 1960-70 period the country's overall trade balance was negative
each year with the exception of 1969 and 1970. The trade deficit for the
entire period amounted to 580 million leva, including 530 million leva
in the trade with noncommunist countries and 50 million leva in the
trade with communist partners. A breakdown of the trade balance by all
four trading areas was available only for the 1965-70 period. For that
period the overall trade deficit amounted to 278 million leva. Whereas
trade with communist and developing countries had positive balances of
148 million leva and 154 million leva, trade with developed Western
countries accumulated a deficit of 580 million leva. Almost all of this
deficit was incurred in the years 1965 through 1967, when government
controls over foreign trade were temporarily relaxed in an aborted
economic reform. Under the system of bilateral agreements governing
Bulgaria's trade, the surplus in the trade with communist and developing
countries cannot be used to offset the deficit with Western trading
partners.
Data bearing on the balance of payments have never been published. The
Soviet Union has granted substantial loans to Bulgaria since 1946, some
of which were used to finance imports from that country. Bulgaria, in
turn, has made some loans to developing countries to help finance its
exports. A portion of the deficit with Western trading partners may be
offset by income from the rising Western European tourist trade,
particularly with West Germany. A reputable Western source reported
Bulgaria's indebtedness to Western nations to have been US$88 million in
1971, but the basis of this estimate and the degree of its reliability
are not known.
CHAPTER 13
AGRICULTURE
In the spring of 1973 the country's political and governmental
leadership expressed serious concern about the uneven growth of
agriculture over a period of several years. Although wheat production
had progressed satisfactorily and reached a record level in 1972, and
good results had also been obtained in the cultivation of tobacco and
tomatoes--both of which are important export crops--the expansionary
trend in fruit growing was reversed in 1968, and cattle raising had
stagnated for at least a decade.
The situation was particularly disappointing to the leadership because
in 1970 it had embarked on a comprehensive long-range program for
raising agricultural productivity and output through the introduction of
industrial production methods on the farms. To that end the country's
farms were consolidated into 170 agroindustrial complexes intended to
bring the advantages of scientific organization, concentration and
specialization of production, mechanization, and automation to all
phases of agricultural work. Planning for these complexes has been
concentrated at the highest government level, and any modification of
the obligatory plans requires the approval of the Council of Ministers.
In this process the traditional distinction between state and collective
property has been blurred and is slated for gradual elimination; the
same is true for the differences in status of industrial and farm
workers. The new approach to farm organization was taken despite severe
shortages of adequately trained management and technical personnel and
in the face of the demonstrated superior productivity of tiny farm plots
cultivated for their own benefit by individual farm and industrial
workers.
It is difficult to arrive at a comprehensive and balanced assessment of
agricultural development and of the situation in the 1972/73
agricultural year because of the continuing changes in the agricultural
regime and the lack of essential data. All published information,
including critical comments, emanates from controlled official sources.
The press output tends to concentrate on problem areas, treating other
aspects in uninformative generalities. Officials and press have been
especially silent on the question of the farmers' reactions to the new
agricultural order, beyond claiming the farmers' whole-hearted support
for every new agricultural edict.
CLIMATE AND SOILS
Natural conditions are generally favorable for agriculture. Fertile
soils and a varied climate make possible the cultivation of a wide
variety of field crops, fruits, and vegetables, including warm-weather
crops, such as cotton, tobacco, rice, sesame, and grapes. Frequent
summer droughts, however, lead to wide fluctuations in crop yields and
necessitate extensive irrigation.
The Stara Planina (literally, Old Mountain), or Balkan Mountains, divide
the country into several climatic and agricultural regions. The broad
Danubian tableland that lies north of these mountains has a continental
climate, except for a narrow strip along the Black Sea coast. Cold
winter winds sweep across the plateau from the Eurasian land mass,
causing prolonged periods of frost, which tend to damage orchards and
vineyards. There are 180 to 215 frost-free days in the year, and summers
are hot. A continental climate also prevails in the Sofia Basin and in
the region surrounding the headwaters of the Struma River.
In the Thracian Plain, south of the Stara Planina, the continental
climate is modified somewhat by the influence of the Mediterranean Sea.
Compared to the Danubian plateau, winters are less severe, and summers
are longer and warmer. The number of frost-free days per year ranges
from 198 to 206. A near-Mediterranean climate prevails in the valleys of
the lower Struma, Mesta, and Maritsa rivers; in the Arda basin; and on
the southern slopes of the Rodopi (or Rhodope Mountains) (see ch. 3).
The mountains protect the inland valleys and basins from strong winds;
summers there are hot, and winters are mild. Yet winters are not mild
enough for the cultivation of Mediterranean crops, such as olives and
citrus fruits.
The Black Sea coast is warmer than the interior of the country in winter
but cooler in summer; from 241 to 260 days in the year are frost free.
Frequent gale storms and hot winds resembling the African sirocco,
however, have an adverse influence on crops.
Although annual rainfall is reported to average about forty inches on
the higher mountain slopes and to reach seventy-five inches in the Rila
mountain range, precipitation in most farming areas averages only twenty
to twenty-five inches per year. Rainfall measures even less than twenty
inches in the Plovdiv area and in the coastal districts of the Dobrudzha
region in the northeast. Most of the rainfall occurs in the summer
months, but the amount and timing of precipitation are often unfavorable
for optimum crop growth. Drought conditions reached crisis proportions
in 1958 and 1963 and were serious also in 1968. In 1972 most crops were
adversely affected by a spring drought and excessive rains in the early
fall; the grape crop was an almost total loss.
Soils of superior and intermediate quality make up almost three-fourths
of the country's surface. The Danubian plateau contains several grades
of chernozem (black earth), which gradually give way to gray forest
soils in the foothills of the Stara Planina. A degraded chernozem called
_smolnitsa_, or pitch soil, predominates in the Thracian Plain, the
Tundzha and Burgas lowlands, and the Sofia Basin. This central region is
encircled at higher elevations by a belt of chestnut and brown forest
soils. Similar chestnut soils are also found in the Strandzha upland, in
the basins of the eastern Rodopi region, and in the Struma and Maritsa
valleys. Brown forest soils and mountain meadow soils occur in the Stara
Planina and in the Rila, Pirin, and western Rodopi. Alluvial soils,
often of good quality, are found alongside the rivers, particularly the
Danube and Maritsa, and also in several basins.
LAND USE
In 1970 agricultural land comprised almost 15 million acres, or 53
percent of the country's land area. Sixty-nine percent of the
agricultural land was suitable for field crops; 4 percent consisted of
meadows; and about 6 percent was devoted to vineyards, orchards, and
other perennial crops. Natural pastures constituted more than 20 percent
of the agricultural land. Bulgarian economists have repeatedly pointed
out that the per capita acreage of farmland in the country, excluding
pastures, is among the lowest in the world.
According to official statistics the area of agricultural land increased
by 840,000 acres in the 1960s as a result of the expansion of grazing
areas by 1.1 million acres and the simultaneous loss of 270,000 acres of
cultivated land. The loss of cultivated acreage was caused by the
diversion of land to industrial and other uses and by severe soil
erosion. The acreage devoted to vineyards and orchards nevertheless
increased by 100,000 acres, or 12 percent.
Land Protection
More than half the cultivated acreage is subject to erosion.
Increasingly large areas degraded by erosion have remained uncultivated
each year, but they continue to be included in the annual statistics on
farmland acreage. The unused area of plowland expanded from 720,000
acres in 1960 to 1.26 million acres in 1970. Another 1.5 million to 2
million acres have been reported to suffer from erosion to a degree that
will make it necessary to abandon them unless corrective measures are
quickly taken. Only 70 percent of the acreage under fruit trees and
vineyards bore fruit in 1970.
The government has long been aware of the need to arrest the loss of
cultivated farmland. An intensive program of reforestation has been
carried on over many years, but the rate of replanting has not been high
enough to halt the ravages of erosion. Proposals advanced by
agricultural experts to clear abandoned mountain farmland of noxious
weeds and to develop these areas into improved pastures--measures that
would also help control erosion--have not been acted upon.
In 1967 the continued loss of valuable farmland led to the promulgation
of a special law for the preservation of land; details of this law are
not available. In 1972 the Council of Ministers issued an order,
effective January 1, 1973, that provided, in part, for payments to be
made into a special land improvement fund in the event of diversion of
farmland for construction purposes. Depending upon the quality of the
land, payments into the fund range from 162 leva (for the value of the
lev--see Glossary) to 48,560 leva per acre. Land used for afforestation,
cemeteries, and housing or public works under the jurisdiction of town
authorities is exempt from the payment requirement. The exemption also
applies to land used for open pit mining on condition that the land is
rehabilitated in accordance with plans and within time limits approved
by the Ministry of Agriculture and the Food Industry (hereafter referred
to as the Ministry of Agriculture).
In 1970 the government created special district councils for the
preservation of cultivated land and, in May 1971, placed the councils
under the jurisdiction of the Ministry of Agriculture. The decree of
1971 required the ministry and district governments to take decisive
measures for the increased protection of farmland. The decree also
directed the chief prosecutor's office to increase control over the
expropriation of farmland for construction and other nonagricultural
purposes and to impose severe penalties on violators of the land
protection law.
The land protection measures were not sufficiently effective. The
acreage abandoned in the 1966-70 period was three times larger than the
area abandoned in the preceding five years. In January 1973 an inspector
of the Committee for State Control stated publicly that the farmland
problem had become increasingly more serious and that the committee was
obliged to intervene in order to identify shortcomings in the land
preservation work and to assist in eliminating the deficiencies. At the
same time the Council of Ministers reprimanded a deputy minister of
agriculture and the heads of two district governments for grave
shortcomings in the preservation and use of farmland.
In an effort to gain control over the deteriorating farmland situation,
a new land protection law that replaced the law of 1967 was passed in
March 1973. The new law explicitly provided that only land unsuitable
for agricultural purposes or farmland of low productivity could be put
to nonagricultural use. Under the law expansion of towns and villages
was to be allowed only after a specified density of construction had
been reached. Construction of country homes and resort facilities was
restricted to land unsuitable for agriculture. Provision was made for
regulations that would offer material and moral incentives to use
unproductive land for construction purposes, and more severe penalties
were prescribed for violations that result in the waste of arable land.
Irrigation
Somewhat better results have been achieved in the expansion of
irrigation. In the 1965-70 period the irrigable area increased at an
annual average of 44,000 acres from 2.25 million to 2.47 million acres,
or 21 percent of the cultivated land. Under the Sixth Five-Year Plan
(1971-75) 494,000 acres are to be added to the irrigable area, raising
the total irrigable acreage to 26 percent of the cultivated land. During
the first two years of the plan period 124,000 acres were equipped for
irrigation, and 80,000 acres were to be made irrigable in 1973. In order
to complete the five-year irrigation program on schedule, therefore, it
would be necessary to bring under irrigation 270,000 acres in the last
two years of the plan period--a task not likely to be accomplished in
the light of past experience and of available resources.
Only about 70 percent of the irrigable acreage was actually irrigated in
the 1965-70 period. Although the irrigated area of 1.7 million acres in
1970 represented an increase of 21 percent of the acreage irrigated in
1965, it was 17 percent smaller than the acreage irrigated in 1968.
Primitive gravity irrigation is practiced on about nine-tenths of the
irrigated area. Water is distributed over the fields from unlined
earthen canals by means of furrows dug with a hoe. The work entails hard
manual labor, and a single worker can handle only about 1.25 to 2.5
acres per day. The timing of the water application and the quantity of
water used are not properly adjusted to the needs of the various crops,
so that the increase in yields is only half as great as that obtained
under optimum conditions, and about half the water is wasted. The
network of irrigation ditches also impedes mechanical cultivation of the
fields. Improper irrigation and drainage techniques have raised the
groundwater level excessively in several districts and have caused
various degrees of soil salinization in areas totaling more than 39,000
acres.
The five-year plan program for new irrigated areas calls for the
construction of stationary sprinkler systems over 25,000 acres; 469,000
acres are to be provided with portable sprinkler systems. Reconstruction
and modernization of existing basic facilities are to be limited to the
lining of canals. The ultimate longer term goal is to establish fully
automated stationary sprinkler systems in most irrigated districts. The
main problems in carrying out the irrigation program, in the view of an
irrigation authority official, are posed by the paucity of investment
funds allotted for this purpose and the contradictory nature of some of
the program's aims. Additional difficulties are presented by the
shortage of irrigation pipes and materials for their fabrication,
inadequate experience in the manufacture of advanced irrigation
equipment, and the lack of facilities for experimentation and testing.
Cropping Pattern
The area of field crops amounted to almost 9 million acres in 1970; it
had declined by 887,000 acres after 1960. The proportions of this
acreage devoted to the major types of crops were: grains, 62.5 percent;
industrial crops, 14.6 percent; feed crops, 18.7 percent; and
vegetables, potatoes, and melons, 4.2 percent. In accord with the
government's policy of intensifying agricultural production, the acreage
of bread grains had steadily declined, so that in 1970 it constituted
somewhat less than half the total grain acreage. The area of feed grains
remained fairly stable; a decline in corn acreage was virtually balanced
by an increase in the acreage of barley. A slight reduction also took
place in the acreage of pulses, but the area under rice expanded by 70
percent.
Whereas the total area of industrial crops changed very little in the
1960-70 period, a significant shift took place in the relative size of
the individual crop areas. While the acreages of oilseeds and tobacco
expanded significantly, the acreages of fibers, particularly cotton, and
of essential oils and medicinal plants declined sharply.
The area devoted to vegetables expanded by 20 percent. The tomato
acreage expanded at about twice that rate and accounted for one-fourth
of the vegetable acreage in 1970; tomatoes constitute an important
export crop. The potato acreage, on the other hand, declined by roughly
20 percent during the period.
The area of fodder crops suffered a substantial decline, particularly in
the case of annual grasses and silage crops. The loss was only partially
offset by the expansion of the perennial grass acreage.
Rapid expansion also took place in the areas of apple orchards and
vineyards. The acreage of bearing apple trees increased by about 70
percent in the 1970-70 period. During the same period the acreage of
producing vineyards grew by 24 percent, while the acreage of table
grapes increased by 2.3 times. Fruits and grapes are also important
export commodities. Expansion of the total acreage under fruit trees and
berries, however, was much slower--17 percent in the 1960-68 period--and
a decline in the acreage set in after 1968. In the spring of 1973 Todor
Zhivkov, the communist party leader, called for decisive action to halt
the unfavorable trend. He reported that plans for orchard and berry
plantings were not fulfilled in 1972; that from 27,000 to 40,000 acres
of orchards had been uprooted over a period of a few years; and that the
vineyard acreage had declined by 25,000 acres compared with the acreage
in 1968. Reasons for these developments had not been made public.
The little information available on the subject suggests that price
considerations have been the major reason for the crop acreage changes.
The price system and official regulations governing farm production have
not always operated in the manner planned by the government. Farms, for
instance, have steadfastly refused to enlarge the acreage of irrigated
corn to the extent demanded by the government, preferring to use
irrigation for more profitable crops. In 1971 the farms failed to plant
the prescribed acreage of feed crops or to expand the production of
vegetables. Public statements by the government on the reasons for these
problems have been most guarded. After a thorough review of the
situation in the spring of 1972, the Committee for State Control issued
a release that concluded by stating that the reasons for the problems
were analyzed in detail and that, after discussion, specific proposals
were made to the appropriate ministries.
ORGANIZATION
The organizational structure of agriculture in all its aspects is in a
state of transition, which will not be completed for several years. The
reorganization was decided upon by the Central Committee of the BKP
(Bulgarian Communist Party--see Glossary) in April 1970 on the
initiative of Zhivkov. The latest of several laws and decrees published
in this context appeared in June 1972 with an effective date of January
1, 1973. The new organizational policy represents a tightening of
central controls over agriculture.
Agroindustrial Complexes
The basic unit in the new organizational system, which is relied upon to
realize the leadership's agricultural policies, is the agroindustrial
complex. The agroindustrial complex is an organization comprising
several previously independent, contiguous collective and (or) state
farms having similar climatic and soil conditions. The complex may also
include other organizations that are engaged in the production,
processing, and distribution of farm products or in other activities
related predominantly to agriculture.
In the fall of 1972 there were 170 agroindustrial complexes formed
through the consolidation of 845 collective farms and 170 state farms;
including the private plots of collective and state farmers, they
contained 92.5 percent of the cultivated land and accounted for 95.4
percent of the farm output. Except for a few experimental units created
in 1969, most agroindustrial complexes were established toward the end
of 1970 and in early 1971. Only a small number of private farms located
in difficult mountain areas remained outside the new system.
The average agroindustrial complex is composed of five or six farms
having a cultivated area variously reported as 59,000 to 68,000 acres
and a permanent work force of about 6,500 people. Although the large
size of the complexes has been questioned by several economists on
grounds of efficiency, Zhivkov was reported to have suggested the
possibility of eventually merging the existing complexes into only
twenty-eight districtwide units.
Types and Aims
The announced purpose of the reorganization is to increase productivity
through concentration and specialization of agriculture on an industrial
basis in accord with the requirements of the current scientific and
technical revolution and with the achieved level of maturity of the
country's economy. The reorganization is intended to increase output,
improve quality, reduce costs, and increase the exportable surplus. It
is also expected to bring about social improvement in the countryside by
raising the farmworkers' incomes and helping to reduce the differences
between town and country. Government officials intend to complete the
transition to the new organizational structure by 1980.
The original aim of the new farm policy in the late 1960s was to create
large-scale regional organizations to handle all aspects of the
production, processing, and distribution of foods and the supply of
machinery, fertilizers, and other farm needs through vertical
integration of the consolidated farm organizations with industrial and
distribution enterprises. This aspect of farm policy is to be realized
gradually over a period of years. In the meantime vertical integration
will be based predominantly on contractual relations.
A first step in vertical integration of agriculture and the food
industry was taken in December 1972 with the establishment of an
agroindustrial trust called Bulgarian Sugar. Seven agroindustrial
complexes were to be created around an equal number of sugar mills
grouped in the newly formed trust. The complexes were to average 100,000
acres in size, one-fourth of which would be used each year for the
production of sugar beets. The first such complex was established in
Ruse in January 1973. The crop rotation is to include wheat, corn, and
fodder crops which, together with by-products from the sugar production,
are to provide the feed base for livestock keeping. All farmlands in the
new organization are to become state property, and farmworkers are to
acquire the status of industrial workers subject to the provisions of
the Labor Code.
Two basic types of agroindustrial complexes are provided for by the
regulations. The first type is a membership organization in which the
constituent farms retain their juridical identity and a certain measure
of economic independence. The second type is a centralized organization
in which the constituent farms are merged and lose their separate
identities. A further distinction is made depending upon the nature of
the constituent farms and other economic organizations. Agroindustrial
complexes composed only of collective farms and other collective
organizations are called cooperative complexes. Those constituted by
state farms and other state economic organizations are known as state
complexes. If both state and collective farms or other organizations
are members, the complex is referred to as state-cooperative. The
distinctions have both legal and economic implications.
In early 1971 the form of the 139 agroindustrial complexes established
up to that time was: collective, seventy-seven; state, seven; and
state-cooperative, fifty-five. Six complexes were created as centralized
organizations in which the constituent farms lost their legal
independence. The largest of these complexes covered an area of 145,000
acres.
Legal and Economic Aspects
The legal and economic aspects of the farm consolidation are extremely
involved, and most of the problems raised by consolidation have not been
worked out even theoretically. Activities of cooperative and
state-cooperative complexes are governed by the Provisional Regulation
issued in October 1970 and by earlier regulations concerning collective
organizations in matters not covered by the Provisional Regulation.
State agroindustrial complexes are subject to the same regulations that
apply to all state economic associations (trusts). The Ministry of
Agriculture was directed to prepare a draft statute for agroindustrial
complexes by the end of 1972, which was to be submitted at an indefinite
future date to the first agroindustrial complex conference for
discussion and adoption.
Official statements and documents have emphasized the voluntary and
democratic nature of agroindustrial complexes. Zhivkov's report to the
Central Committee plenum stated that farms would be free to opt whether
or not to join a complex and which complex to join if they decided to do
so. They were also to have freedom of decision concerning the
establishment of joint enterprises. The plenum's decision used a broader
formulation by referring only to voluntarism in the formation of
agroindustrial complexes on the basis of mutual advantage. The
Provisional Regulation contains a clause that permits farms and other
organizations to withdraw from the agroindustrial complex at their own
request.
Other provisions governing the establishment of agroindustrial
complexes, however, conflicted with the principle of voluntarism. The
composition, size, and production specialization of each complex was to
have a scientific foundation, and arbitrary decisions--as they were
called--as to which farms to include in a particular complex were not to
be tolerated. The requirement of territorial unity also nullified the
right of independent choice for most farms. Except for those located on
the borders of adjoining complexes, farms had perforce to join the
complex formed in their area. The speed with which the agroindustrial
complexes were formed throughout the entire country, with considerable
loss of independence for the farms, also suggests that the voluntary
nature of the complexes is a fiction. Available sources have contained
no reference to any change in the affiliation of farms from one complex
to another, let alone to the withdrawal of any farm from a complex. The
decree on the organization and management of agriculture that went into
effect on January 1, 1973, contained no provision for a farm's
withdrawal from an agroindustrial complex.
The major tasks assigned to the agroindustrial complexes include: the
creation of large specialized units for the various types of
agricultural production; the introduction of mechanized industrial
methods of production; the efficient application of human and material
resources; and the equitable distribution of income to workers and
managers in a manner that will provide an incentive for conscientious
work. Only preliminary official directives have been issued to guide the
agroindustrial complexes in these matters. Economists, agricultural
scientists, and officials have labored to develop a scientific basis for
the effective solution of the problems of transition.
One of the basic issues raised by the creation of agroindustrial
complexes concerns the ownership of land in the new organizations,
particularly in complexes that unite collective and state farms.
Legally, collective farm members retained ownership of the land they
contributed to the collective, although they have been unable to
exercise any ownership rights. Until 1961 collective farm members
received a rental payment for the land in the annual distribution of the
farm's income. There is an apparent official reluctance for political
reasons abruptly to convert collective property to state ownership.
Public statements have indicated that the difference between collective
and state property may be eliminated by transforming both into national
property. Under the prevailing economic system the distinction between
state and national property is purely verbal.
Private Farm Plots
In the current reorganization of agriculture there is no intention to
eliminate the time-honored institution of private subsidiary farm plots
held by collective farm members, state farm and industrial workers,
artisans, and other individuals. In the 1965-70 period private plots
constituted only 10 percent of the farmland, yet in 1968 they accounted
for 22 percent of the crop output and 33 percent of the livestock
output. In 1970 the proportions of livestock products contributed by the
private plots were: milk, 23 percent; meat and wool, 31 percent; eggs,
50 percent; honey, 70 percent; and silk, 89 percent.
Despite the support of private farm plots by the leadership, many local
officials consider them to be incompatible with the socialist system and
place various obstacles, often illegal, in the way of their operation.
In the directives for the Sixth Five-Year Plan the party reaffirmed the
importance of private farm plots as a reserve for the increase of farm
output and particularly of livestock production. In a subsequently
published decree, which lifted restrictions on livestock rearing on
private plots, the party and government again stressed that private
plots will be an important source of products for their owners and for
sale to the state.
The growing importance of private plots for collective farmers was
disclosed by income data published in the spring of 1973. In the 1960-70
period the average annual income of permanently employed collective
farmers from private plots increased from 251 leva to 620 leva, while
the average remuneration for work performed on the collective property
rose from 458 leva to 847 leva. Whereas the growth of income from
collective farm work amounted to 85 percent, income from private plots
advanced by 147 percent.
PLANNING AND MANAGEMENT
Agricultural planning has been highly centralized by the decree
effective January 1, 1973. The system of planning has been made to
conform to the system used for other sectors of the economy, with some
allowances for the specific conditions of agricultural organization and
production. Planning is to encompass long-range (ten to fifteen-years),
five-year, and annual plans that must be coordinated with a general plan
for regional development.
Planning in agriculture is to be based on the balancing of inputs and
outputs and the use of government-determined long-range norms, limits,
and indexes. Wide use is to be made of econometric models in the search
for optimal solutions. The norms, limits, and indexes are to be
elaborated in direct relation to the natural and economic conditions of
individual agroindustrial complexes, crop varieties, kinds and breeds of
livestock, farm technology, and the availability of physical resources
and manpower. The norms, limits, and indexes are to be of such a nature
as to contribute to a continuous upgrading of agricultural efficiency,
that is, they will become increasingly more demanding as time
progresses. They are binding for planners and managers at all levels
from the central government authorities down to the farm.
In essence the agricultural plan consists of state-imposed production
targets and estimates of resources to be allocated for their attainment,
together with detailed directives for the use of the resources and for
the introduction of technological improvements. Responsibility for
fulfilling the planned tasks rests upon the management of the
agroindustrial complexes. The planned targets and conditions for their
attainment are formulated for each individual complex by the State
Planning Committee together with the Ministry of Agriculture and the
local district people's council; all plans are approved by the Council
of Ministers.
Ten groups of norms, limits, and indexes enter into the formulation of
plan targets. They specify progressive technical measures to be
introduced; the physical volume of each crop and livestock product to be
sold to the state; the volume of capital investment and its specific
uses; consumption norms for all materials, parts, and products in
accordance with a list approved by the Council of Ministers; allowable
expenditures for each 100 leva of farm products and for labor
remuneration per 100 leva of total income; norms for the formation of
various operating and reserve funds and for material incentives; and
limits for the development of social amenities within the agroindustrial
complex.
The five-year plan tasks are broken down by years and may be changed
only in exceptional cases. The required changes may be made by the
Ministry of Agriculture, with the approval of the State Planning
Committee, upon request made by the executive committee of the district
people's council. Whenever a specific change is introduced, all
necessary corrections must be made to maintain the overall balance of
the plan.
The agroindustrial complexes must distribute the planned tasks handed to
them from above among their constituent units in accordance with
standards and conditions spelled out by the Ministry of Agriculture. The
district people's councils are required to take an active part in the
process of coordinating the plan and in measures for its attainment
among the units of the agroindustrial complex. On the basis of the state
plan each agroindustrial complex and its constituent parts must prepare
what has been called a counterplan, that is, a plan that sets higher
goals than those officially established.
The large size and diversified operations of the agroindustrial
complexes place a heavy demand upon the expertise of management. Most of
the available specialists do not have the requisite training to solve
the numerous problems posed by planning and operational direction under
the new conditions. Adaptation of agricultural school curricula to the
new requirements and speedy retraining of specialists are therefore
considered to be most urgent.
Some optimistic agricultural officials place high hopes in the
introduction of computer-based automatic control systems. An electronic
computer center was established at the Ministry of Agriculture in 1969,
staffed by a group of 104 enthusiastic young specialists. They undertook
the task of developing a single automated control system for agriculture
and food production in the entire country by 1975, to be based on a
number of integrated local and regional computer centers. By the end of
1970 the computer center had worked out annual plans for several farms
and a plan for hothouse production in the country. It was in the process
of finding a solution to a basic problem of the feed industry--a
solution that would also drastically reduce the industry's
transportation costs.
Considerable attention has also been given to the problem of
communication in connection with the internal direction of the
agroindustrial complexes' varied activities. Here, too, the idea has
been advanced for automated control centers from which instructions
would be issued to all operating divisions and workers in the field
through radiotelephones or similar equipment. In this context a
university instructor analyzing the management problems of
agroindustrial complexes remarked that it was premature to speak of
modern administrative and management methods as long as it was easier
and faster to go by car from the farm center to any of the neighboring
villages than to reach them by telephone.
LABOR AND WAGES
Official data on manpower and employment in agriculture are incomplete
and incommensurate. The number of people gainfully employed in
agriculture in 1970 was reported to have been 35.2 percent of the total
in the economy, compared to 54.7 percent in 1960 and 44.9 percent in
1965. Full-time employment on farms of the agroindustrial complexes in
1970 was reported as 1,117,000 people--a reduction of 278,000 from the
1,395,000 employed in 1965. Yet the number of female collective
farmworkers alone in 1969 was reported to have been 1,682,000, more than
1 million of whom participated full or part time in the collective work
of the farms. No explanation concerning the discrepancies in these
reported figures was available. The Sixth Five-Year Plan is variously
reported to call for the transfer of an additional 220,000 or 350,000
people from the farms to nonagricultural employment.
The out-migration, mostly of young people, from agriculture brought
about a deterioration in the age structure of the remaining farm
population. The proportion of the sixteen- to twenty-five-year-old age
group on farms was only 9.2 percent in 1969, compared to 22.3 percent in
industry. Conversely, the proportion of persons fifty-five years and
older was 29.1 percent in agriculture, compared to 8.6 percent in
industry. The program for the modernization and intensification of
agricultural production and, more particularly, the planned high level
of mechanization demand the employment of large numbers of highly
skilled young people. A series of economic, social, and cultural
measures is therefore urgently needed to halt the drain of young
manpower from the farms.
By 1971 the agricultural school system had not adapted its training
programs to the actual needs of the emerging agroindustrial complexes.
At the same time a serious problem in the employment of available
technicians was presented by the scornful attitude of many farm managers
toward specialists with secondary education. In 1971 farms employed more
than 4,000 people without the requisite training in various professional
positions. Although some of them may have compensated by experience for
the lack of training, the situation was considered deplorable by a
number of agricultural economists.
Under previously prevailing conditions, payments to farmworkers differed
widely, depending upon the income levels of the individual farms. Under
the new law wages for all farmworkers are to be gradually standardized
on the principle of equal wages for equal work. Work input is to be
measured on the basis of uniform labor norms differentiated according to
natural conditions. In determining the wage level, consideration will
also be given to increases in productivity, cost reduction, and the
accumulation of investment funds by the farms. Distribution of the
farm's income is to be carried out on the basis of a resolution by the
Council of Ministers, details of which were not available in early 1973.
Its main import is that the total remuneration of farmworkers, over and
above their wages, will remain dependent upon the overall results of the
individual farms. All farmworkers are entitled to a minimum wage of 80
leva per month, and members of previously independent collective farms
retain their right to advance payments against their estimated final
income shares.
Little substantive information is available on the current practice of
remunerating people working on farms. The decree that went into effect
on January 1, 1973, directed that the formation and distribution of
incomes of all agroindustrial complexes and their constituent farms be
based on a uniform system and on the principle that each farm must be
fully self-supporting. Each farm must establish a wage fund calculated
as a percentage of its total income. In the event that this fund is
inadequate to cover legitimate wage requirements, the farms may draw
upon two other obligatory funds or resort to bank credits.
INVESTMENT AND MECHANIZATION
Investment
In the 1960-71 period annual investment in agriculture increased from
381 million to 548 million leva, but it declined as a proportion of
total investment from 28 to 15 percent. A substantial portion of the
agricultural investment was used to equip new state farms established on
previously collective farmlands. Investment funds were used for the
construction of farm buildings, machinery repair stations, and
irrigation facilities and for the acquisition of farm machinery. On the
basis of cultivated acreage, state farms received more investment than
collective farms, but the disproportion was gradually reduced and become
quite small by 1970. In that year state farms had about 15 percent more
fixed assets per acre of cultivated land than the collective farms.
With the formation of agricultural complexes discrimination in
investment between the two types of farms is being eliminated along with
other distinctions. Investment plans are to be uniformly based on the
needs of the entire complex regardless of the former status of its
constituent farms. Needs will be evaluated mainly on the basis of
government programs for individual kinds of production, the availability
of manpower, and the natural conditions of the farms and complexes.
Agricultural investment in the 1971-75 period was planned at about 2.7
billion leva. This sum constitutes only 13.5 percent of the total
planned investment and implies the maintenance of annual agricultural
investment at the level of 1970. It also reflects the continued
underinvestment in agriculture in favor of industry, despite the
grandiose, plans for agricultural transformation, considering that
agriculture contributed 22 percent of the national income in 1970. In
that year a Soviet economist observed that the small proportion of
national resources allotted to agriculture in the past was responsible
for the slow growth of that important economic sector and that the
increase in the mechanization of farms was not sufficient to offset the
loss of manpower. The leadership's policy of placing agriculture on an
industrial footing and mechanizing production demands increased
investment in machinery and other physical facilities. The low
investment decreed for the 1971-75 period is not in keeping with that
policy.
A national conference on construction in agriculture, convened in the
spring of 1972, was devoted to the study of shortcomings in capital
construction. The underlying causes of unsatisfactory performance were
analyzed, and persons responsible for the failures were identified. The
findings of the conference were not published, but an account of the
conference contained references to inadequate project planning, poor
design, acceptance of inferior equipment, delays in the completion of
construction, and cost overruns. A sympathetic foreign observer noted a
disproportionately large allocation of investment funds to building
construction compared with the funds allotted for farm machinery.
Mechanization
At the beginning of 1971 Bulgarian agriculture possessed about 53,600
tractors with a total of 1.4 million horsepower--the equivalent of about
sixteen horsepower per 100 acres of plowed land. The horsepower of the
tractor inventory increased by 2.3 times after 1960, but a portion of
that increase was offset by the loss of more than 358,000 horses and
buffalo. In 1970 Bulgaria had more tractor power per acre than any other
Eastern European communist country except Czechoslovakia and more horses
per acre than any of these countries with the exception of Hungary,
which had a slightly larger number.
Grain combines on farms numbered 9,340, or 2.4 combines for each 1,000
acres of grain crops. In this regard Bulgaria ranked above the Soviet
Union and at the average of the other Eastern European communist
countries. Nevertheless, according to the minister of agriculture, only
about 50 percent of the labor in wheat production was mechanized in
1972, even though wheat production was considered to be the most highly
mechanized branch of agriculture. In other production branches the level
of mechanization was extremely low.
According to scattered Bulgarian press reports the supply of farm
machinery is inadequate for the needs, unbalanced as to composition,
and inferior in design and physical condition. Many of the available
tractors and combines are overage and obsolete. The situation is
aggravated by chronic shortages of spare parts for both domestic and
imported equipment. Production of parts is inhibited by its relatively
low profitability, despite incentives offered by the government.
Under the Sixth Five-Year Plan farm machinery valued at 780 million leva
is to be delivered to agriculture from domestic sources and from the
Council for Mutual Economic Assistance (COMECON--see Glossary). This
machinery is to include more powerful tractors and grain combines,
milking machines, and sprinkler irrigation systems. Machinery is also to
be provided for the harvesting of corn, sugar beets, cotton, rice,
fruits, and vegetables and for the harvesting and processing of feed
crops. Adequate information on the progress of the mechanization program
during the first two years of the five-year period is not available, but
there is evidence that shortages of spare parts and trained operators
continued to immobilize substantial numbers of farm machines.
MARKETING
The marketing of farm products has been geared to the fixed five-year
plan quotas for sales to the state. It is based on bilateral contracts
between trusts in the food-processing industry and agroindustrial
complexes or their constituent units. Contracts are concluded for a
five-year period and are broken down by years. They cover the entire
farm output specified in the counterplans at prices officially revised
on January 1, 1973. The price system includes bonuses for quality; these
bonuses are payable only after a specified portion of the contracted
quantity has been delivered and vary in relation to the total volume of
product delivered. The intent of the bonuses is to stimulate product
improvement without encouraging production beyond the planned limits.
Excess production would destroy the balance of the plan.
Provisions of the marketing contracts were worked out by the Ministry of
Agriculture and the State Arbitration Commission with the agreement of
the government departments involved. Provisions concerning the
performance of contractual obligations were strengthened compared with
those previously in force. They established financial incentives and
sanctions not only for the contracting organizations but also for their
top managers as individuals, based upon the end results of their joint
work.
Each food-processing trust engaged in the procurement of farm products
must establish a fund for the promotion of their production, for
improving farming methods, and for modernizing the farm's physical
facilities. The funds are to be used in the first place for stimulating
the output of products required on the domestic market and for export.
The allocation of promotional funds is to be in accord with a program
worked out jointly by the trust and the agroindustrial complex; the
program constitutes an integral part of the procurement contract.
Farms, individual farmers, and private agricultural producers may sell
some of their products at retail directly to consumers in cooperative
markets at prices not exceeding those charged by state retail stores. In
some instances and for some products sale on a commission basis through
state and cooperative outlets is also allowed. The sale of meat, meat
products, and alcoholic beverages in cooperative markets is prohibited
as is also the sale of any product through middlemen. Cooperative
markets are subordinated to the trade organs of municipal authorities.
Violations of applicable regulations are subject to penalties the
severity of which depends upon the nature of the offenses. Information
on the total volume of direct sales by agricultural producers is not
available. The share of collective farms in cooperative market sales,
however, declined from 53 percent in 1959 to 16 percent in 1970.
PRODUCTION
Growth and Structure
As a result of continued emphasis on the country's industrialization,
the share of agriculture in national income (net material product) was
only 22 percent in 1970, compared to 31 percent ten years earlier.
According to official sources, however, output continued to rise. It
increased at an average annual rate of 4.8 percent in the 1960-67
period, declined by 10 percent in 1968, and regained the 1967 level in
1970. An increase of 8 percent in the next two years raised the farm
output in 1972 to a level 50 percent above the output level in 1960. For
the entire period the average annual increase in farm output was 3.4
percent.
Livestock production was reported to have increased more rapidly than
crop production in the 1960-70 period; the respective average annual
rates of growth in output were 4.1 and 2.9 percent. Crop output in 1970
was 33 percent larger than output in 1960, whereas livestock output was
50 percent higher. Available data are inadequate to reconcile the
reported growth in the value of livestock production with a seemingly
inconsistent rise in the physical output of livestock products and
changes in livestock herds.
The structure of farm output in 1970 did not differ materially from the
structure in 1960. The share of crops in the total output declined from
67.3 to 64.7 percent, while the share of livestock production rose
correspondingly from 32.7 to 35.3 percent. The proportions of grains and
technical crops were identical in both years. The share of vegetables,
potatoes, and melons declined slightly, but the proportion of feed crops
dropped from 9.2 to 6.2 percent. The lag in the growth rate of feed
production has contributed to the difficulties in the livestock sector.
Crops
With the exception of rye, potatoes, hemp, and cotton, output of all
major crops increased substantially in the 1960s (see table 16). The
production of rye declined sharply as a result of the diversion of rye
acreage to the production of more valuable crops. By 1970 rye output had
become insignificant--less than 1 percent of the volume of wheat
produced in that year. The decline in potato production was minor, but
the output of raw cotton declined by 15 percent. The largest increases
were attained in the production of alfalfa and table grapes--crops that
are important for livestock production and export, respectively. Barley
output, important for livestock and beer production, rose by 82 percent.
Wheat output surpassed 3 million tons in 1970; it reached 3.56 million
tons in 1972.
_Table 16. Bulgaria, Production of Major Crops, Annual Average, Selected
Years, 1958-60 to 1966-70, and 1970_ (in thousands of tons)
--------------------+-----------+-----------+-----------+----------
| Average | Average | Average |
Crops | 1958-60 | 1961-65 | 1966-70 | 1970
--------------------+-----------+-----------+-----------+----------
Wheat | 2,376 | 2,208 | 2,919 | 3,032
Rye | 97 | 58 | 35 | 28
Barley | 542 | 694 | 986 | 1,167
Corn (grain) | 1,298 | 1,601 | 2,147 | 2,375
Sunflower seeds | 281 | 338 | 462 | 407
Hemp (dry stem) | 62 | 49 | 62 | 55
Cotton (raw) | 54 | 39 | 46 | 36
Tobacco (oriental) | 77 | 101 | 109 | 112
Sugar beets | 1,328 | 1,440 | 1,862 | 1,714
Tomatoes | 525 | 738 | 716 | 685
Potatoes | 383 | 400 | 380 | 374
Alfalfa | 598 | 951 | 1,443 | 1,719
Apples | 265 | 315 | 402 | 363
Grapes | 721 | 1,006 | 1,133 | 884
(Table grapes) | (135) | (267) | (313) | (263)
--------------------+-----------+-----------+-----------+----------
Source: Adapted from _Statistical Yearbook, 1971_, Sofia, 1971, pp.
120-122.
Virtually all wheat grown in the country is a hard red winter wheat of
good quality, somewhat softer than durum wheat. Cultivation of durum
wheat has been almost completely abandoned because of its low yield. The
possibility has been suggested, however, that production of durum may be
resumed eventually on the basis of newly developed, more productive
varieties. Durum wheat requirements for the manufacture of noodles,
semolina, and other products have been imported against payment in
foreign currencies.
Increases in the output and yields of crops were reported to have been
achieved through the introduction of improved plant varieties and seeds,
better cultivation practices, expanded irrigation, greater use of
fertilizers, and more effective disease and pest control. The supply of
fertilizers to agriculture, in terms of plant nutrients, increased from
about 49,000 tons in 1956 to 842,000 tons in 1968 but thereafter
declined sharply to only 692,000 tons in 1969 and 635,000 tons in 1971.
In 1972 the fertilizer supply improved by a mere 10,000 tons. The bulk
of the decline was in phosphates and potash, imports of which were
drastically curtailed after 1968, presumably because of the shortage of
foreign exchange.
The supply of pesticides also depends very largely upon imports.
Deliveries to agriculture rose from less than 10,000 tons in 1960 to
almost 12,900 tons in 1965, declined to 11,150 tons in 1969, and then
surpassed the 1965 supply by 300 tons in 1971. The need for a drastic
increase in the use of pesticides and fungicides is indicated by the
official estimate that annual losses from crop diseases, pests, and
weeds amount to from 150 to 200 million leva.
Despite the progress made, agricultural technicians continue to call
attention to the persistence of faulty practices in all phases of crop
production--practices that tend to lower crop yields and retard
agricultural growth. Traditionally a single variety of wheat has been
grown throughout the entire country, despite variations in soil and
climatic conditions. Although yields generally rose with the successive
introduction of better varieties, they remained low and of inferior
quality in areas poorly adapted for the cultivation of a particular
variety. Specialists have stressed the need for diversification of
varieties, particularly under conditions of regionally defined
agroindustrial complexes.
A task force for scientific and technical aid to agriculture, formed by
the government at the end of 1965, uncovered the appearance and rapid
dispersion of new grain diseases. Dry rot, which had assumed significant
proportions in 1961, caused the most severe losses of wheat in 1970 and
1971, when 1.2 million acres were affected by the disease, mainly in the
northern grain-growing part of the country. Wheat flower blight, long
known in Bulgaria, became particularly widespread in 1965 after the
introduction of a new wheat variety highly susceptible to that disease.
Losses from this source reached about 15 to 20 percent.
Propagation of diseases has been aided by faulty cultivation practices.
Excessively heavy seeding has been used increasingly to compensate for
inadequate soil preparation. The resultant overly thick stands of grain
are prone to lodging, which facilitates the spread of disease through
greater contact of the wheatstalks. The tendency to lodging and, thus,
to the spreading of disease is also encouraged by the improper use of
fertilizers. To compensate for the shortage of phosphatic fertilizers an
erroneous practice has developed of increasing the application of
nitrogenous fertilizers, thereby upsetting the proper balance of plant
nutrients. The resultant excessive vegetative growth weakens the grain
stalks and induces lodging of the grain. Lodging also causes heavy
losses through the germination of kernels and through major difficulties
in harvesting.
Damage to wheat and barley crops from improper use of phosphatic
fertilizers has also been reported. Substantial losses have been
incurred in the production of sunflower seeds through inexpert use of
fertilizers and insecticides, inadequate thinning and weeding, improper
crop rotation, and poor harvesting methods. The basic underlying cause
of these difficulties is the widespread lack of familiarity with modern
production methods and the inadequate supply of technically trained
personnel to guide farmers.
Livestock and Livestock Products
Despite repeated government decrees concerning measures for raising
livestock production, including various incentives, no significant
success was attained in increasing livestock herds in the period 1961 to
January 1971 (see table 17). The numbers of cattle, hogs, and rabbits
actually declined; the flocks of sheep grew by less than 4 percent; and
only the numbers of goats and poultry increased substantially. An
increase in all categories of livestock other than sheep, however, took
place in 1971. In comparison with 1948 the total number of cattle in
1971 was lower by 28 percent, and the number of cows had declined by 16
percent. The poor performance of the livestock sector, particularly with
regard to cattle, has been a source of great concern for the leadership
because of the leadership's promise of a better standard of living for
the population and the obligation to meet export commitments to COMECON
partners, particularly the Soviet Union. Exports of livestock are also
important as a source of convertible foreign exchange.
_Table 17. Bulgaria, Livestock Numbers, Selected Years, 1948-72_* (in
thousands)
----------+---------+---------+---------+---------+---------
Livestock | 1948 | 1961 | 1970 | 1971 | 1972
----------+---------+---------+---------+---------+---------
Cattle | 1,783 | 1,452 | 1,255 | 1,279 | 1,379
(Cows) | (703) | (547) | (574) | (589) | (607)
Hogs | 1,078 | 2,553 | 1,967 | 2,369 | 2,806
Sheep | 9,266 | 9,333 | 9,223 | 9,678 | 10,127
Goats | 720 | 246 | 350 | 335 | 318
Rabbits | 128 | 470 | 164 | 277 | 350
Poultry | 11,380 | 23,366 | 29,590 | 33,706 | 34,102
----------+---------+---------+---------+---------+---------
* Figure for 1948 as of December 25; for all other years, January 1.
Source: Adapted from _Statistical Yearbook, 1971_, Sofia, 1971, p. 124;
and _Statistical Yearbook, 1972_, Sofia, 1972, p. 236.
Although agriculture is almost entirely socialized, substantial numbers
of livestock are nevertheless privately owned by farm and urban workers,
artisans, and the few remaining individual farmers. In 1971 these groups
possessed virtually all the goats and rabbits, more than half the
poultry, and about two-fifths of the sheep. They also owned 27 percent
of the hogs and 22 percent of the cattle, including 30 percent of the
cows. On socialized farms all types of livestock were reduced in numbers
during the 1961-70 period except for cows and poultry. Among private
owners the decline in the numbers of cattle and hogs was more
pronounced, but substantial gains were made in the stock of sheep,
goats, and poultry. Government policies concerning prices, incentives,
and feed allocation were mainly responsible for the differences in
development within the socialized and private sectors.
Expansion of livestock herds and production has been hampered by an
inadequate feed supply. The feed shortage in the 1966-70 period was
estimated by the Bulgarian Academy of Sciences to have approximated 30
percent. Domestically produced feed concentrates have been of poor
quality and nutritionally unbalanced. In 1972 more than 45 percent of
the mixed feeds and concentrates were substandard, and requirements for
these feeds were met by less than 55 percent.
The production of feed crops increased in absolute terms during the
1960-70 period, but its rate of growth lagged by comparison with other
crops and with official plans. In 1971 and 1972 the alfalfa acreage was
supposed to be 990,000 acres, but only 840,000 acres were actually
cropped. In 1972 only 57 percent of the requirements for alfalfa and
meadow hay were met on farms of the agroindustrial complexes, and the
quality of the hay was extremely low. The inadequacy of the feed supply
in relation to the government's livestock program has been designated by
the leadership as one of the most crucial problems of agriculture.
In the 1971-75 period improvement in the feed supply is to be achieved
mainly through an increase in feed crop yields, but a certain increase
in acreage has also been planned. Results in the first two years of the
five-year period have jeopardized the attainment of the goal for 1975.
Substantial investment funds are to be provided for the modernization of
dairy barns and for the construction of feed mills with assistance from
the Soviet Union. With a view to raising productivity and output,
livestock production is to be increasingly concentrated on large
specialized farms. This policy ignored the demonstrated superiority of
livestock production on small farm plots.
Major problems in the expansion of cattle herds and livestock production
are also posed by poor management and inadequate veterinary services.
The reproduction rate of cattle is abnormally low because of the high
percentage of old, sterile cows in the herds. The incidence of diseases
of the reproductive system and of mastitis among cows is rapidly
increasing, and mortality among cattle is high. Young breeding stock is
reared in unsuitable surroundings, is ill fed, and consequently remains
underdeveloped. A large proportion of newly born calves succumb to
various diseases. There is a shortage of trained veterinarians, but
veterinarians stationed on farms and in district veterinary hospitals
are reported to feel no responsibility for the deplorable conditions.
The care of livestock also suffers from a lack of adequately trained
workers and a high labor turnover in the livestock sections of the
agroindustrial complexes. Managers and specialists at the higher levels
of the agroindustrial complexes fail to provide systematic supervision
and guidance and often exhibit a lack of interest in the livestock
enterprise. These conditions were reported to the General Assembly by a
deputy minister of agriculture.
Despite the shortage of feed, increased yields per animal were attained
in the 1960-71 period. For agriculture as a whole the output of milk per
cow rose from 1,482 to 2,281 quarts, the number of eggs per hen
increased from ninety-one to 115, and the amount of wool per sheep rose
from 5.3 to 7.4 pounds. In 1972, however, yields per cow and per hen
declined. In the socialized sector the decline in milk yield had begun
in 1968 and reached serious proportions in 1972; the egg yield remained
stable through 1970 (data for later years were not available in 1973).
In the private sector the milk yield continued to rise at least until
1970; the egg yield remained stable through 1969 and rose in 1970. In
the spring of 1973 several agricultural officials, including a deputy
minister of agriculture, were reprimanded by the Council of Ministers
Bureau for permitting the decline in yields of milk and eggs.
A study of milk production during the 1965-67 period found that farms
having milk yields of 2,110 to 2,640 quarts per cow sustained an annual
loss of 56 leva for each animal, whereas farms with yields of 3,170 to
4,287 quarts earned a net income of 111 leva per cow. The reported
national average milk yield per cow therefore indicates that most farms
produced milk at a loss.
The officially reported meat output increased by 74 percent in the
1960-68 period but declined by 11 percent in the next two years. By far
the largest increase in production to 1968--2.9 times--was reported for
beef and veal, while production of poultry meat and of sheep, and goat
meat almost doubled (see table 18). The decline in output after 1968
affected all types of meat except for poultry and rabbits. For the
entire period of 1960 through 1970, meat output rose by 55 percent,
including production increases of 150 percent for beef and veal, 160
percent for poultry, and 82 percent for sheep and goat meat. Pork
production, however, had risen by only 10 percent, and the output of
rabbit meat declined by about one-third. The reported increase in meat
production cannot be correlated with available data on changes in the
size of livestock herds. An improvement in the supply of all types of
meat other than beef and veal took place in 1971.
Production of milk and eggs also increased substantially during the
1960-71 period (see table 19). Nevertheless, domestic market supplies of
livestock products remained chronically and seriously short of demand,
in part because of the magnitude of exports. Exports of agricultural raw
materials and processed foods exceeded 1 billion leva in 1970; they had
increased 2.7 times during the decade and were equivalent to 44 percent
of agriculture's contribution to the national income. Exports of food
products alone had increased more than 3.5 times during the decade to a
total of 732 million leva.
_Table 18. Bulgaria, Production of Meat, Selected Years, 1948-71_ (in
thousands of tons)
--------------------+------+------+------+------+------+------
Meat | 1948 | 1960 | 1968 | 1969 | 1970 | 1971
--------------------+------+------+------+------+------+------
Beef and veal | 41 | 37 | 105 | 94 | 90 | 85
Pork | 74 | 134 | 194 | 167 | 148 | 169
Sheep and goat meat | 45 | 45 | 88 | 87 | 82 | 88
Poultry | 17 | 36 | 70 | 78 | 93 | 111
Other | 1 | 4 | 2 | 2 | 3 | 4
| --- | --- | --- | --- | --- | ---
TOTAL[*+] | 178 | 257 | 460 | 428 | 416 | 457
Edible offals | 29 | 50 | 73 | 65 | 60 | 64
| === | === | === | === | === | ===
GRAND TOTAL[+] | 208 | 307 | 534 | 493 | 476 | 521
--------------------+------+------+------+------+------+------
* Less offals.
+ Columns may not add because of rounding.
Source: Adapted from _Statistical Yearbook, 1971_, Sofia, 1971, p. 127;
and _Statistical Yearbook, 1972_, Sofia, 1972, p. 232.
_Table 19. Bulgaria, Production of Milk, Eggs, and Wool, Selected Years,
1960-71_
-----+---------------+----------------+---------------+---------------
Year | Milk | Cow's Milk | Raw Wool | Eggs
|(thousand tons)|(thousand tons) |(thousand tons)|(million dozen)
-----+---------------+----------------+---------------+---------------
1960 | 1,120 | 744 | 21 | 102
1967 | 1,609 | 1,210 | 27 | 140
1969 | 1,580 | 1,205 | 28 | 127
1970 | 1,631 | 1,250 | 29 | 135
1971 | 1,620 | 1,290 | 30 | 146
-----+---------------+----------------+---------------+---------------
Source: Adapted from _Statistical Yearbook, 1971_, Sofia, 1971, p. 128;
and _Statistical Yearbook, 1972_, Sofia, 1972, p. 233.
CHAPTER 14
INDUSTRY
In mid-1973 industry continued to expand, though at a significantly
lower rate than in the mid-1960s. Industrial expansion was being
increasingly restrained by the inadequacy of domestic raw material and
skilled labor resources. Limits on an increase in imports of materials
and essential machinery were placed by the insufficiency of foreign
exchange reserve and by the need to reduce traditional exports of
consumer goods in short supply on the domestic market. The Soviet Union
continued to be the predominant supplier of raw materials, machinery,
and technical and technological assistance.
To overcome the limitations on industrial expansion, the leadership of
the Bulgarian Communist Party (BKP--see Glossary) and government sought
to raise industrial productivity through concentration and
specialization of production and through improvements in the management
of material and labor resources. Strong emphasis was placed on the
introduction of automation in both production and management processes.
Heavy stress was also laid on the need to raise the quality of
industrial products in order to increase their salability abroad and
their acceptance in the domestic market.
The consolidation of industrial enterprises into a limited number of
trusts, introduced in 1971 as a measure for increased centralized
control in the search for greater efficiency, was being carried forward
by means of further regulatory and clarifying edicts. The leadership's
ultimate goal of an efficiently managed, technologically advanced,
low-cost industry remained the driving force behind all industrial
policy decisions.
ORGANIZATION AND STRUCTURE
Virtually all industry is state owned. In 1970 state enterprises
possessed 98.6 percent of all industrial assets; they employed 88.8
percent of the industrial work force and produced 89.7 percent of the
industrial output. Collective industrial enterprises owned the balance
of 1.4 percent of the assets, employed 11.2 percent of the workers, and
contributed 9.9 percent of the industrial output. Small private
enterprises, mostly artisan shops, accounted for only 0.4 percent of the
industrial output.
Organization
Size and Location
In 1970 the industrial establishment (excluding the private sector,
information on which is not available) consisted of 1,827 state
enterprises and 644 collective enterprises, employing about 1.02 million
and 129,000 people, respectively. More than one-half of the enterprises
in the state industry employed over 200 people, and almost one-fourth
employed more than 1,000 people. Enterprises with large numbers of
workers predominated in metallurgy; in the glass and china industry; in
clothing manufacture; and in the leather, shoe, and fur industry.
Beginning in 1971 previously independent enterprises were transformed
into branches of countrywide trusts organized along functional lines
(see ch. 12).
The territorial distribution of industry during the 1950-70 period was
determined in large part by the priority development of heavy industry,
the location of which was dictated mainly by the sites of raw material
sources and the location of major consuming centers. In this process
several cities and districts, including Sofia, Plovdiv, Varna, Burgas,
and Ruse, experienced a large population influx from rural areas and
attendant shortages of housing and public services. At the same time
many villages were deprived of their inhabitants, and homes and public
facilities were abandoned.
In 1970 the Central Committee of the BKP laid down guidelines for a
program of regional economic development, with a view to attaining an
optimal distribution of productive resources (capital and labor). The
aim of the program was to arrest excessive urban growth and the
associated demands on the country's resources for new housing and other
amenities and, at the same time, to help develop backward rural areas.
Within these guidelines, decentralization of industry has been
undertaken, and plans are being worked out for the socioeconomic
development of individual districts under the Seventh Five-Year Plan
(1976-80) and until 1990.
In this context the construction of new industrial plants in heavily
populated areas has been restricted. Further production increases in
these areas are to be attained through modernization of existing
facilities and the introduction of more advanced technology. Special
measures have also been adopted to promote economic growth in the
relatively underdeveloped districts. In part, this program is
implemented through the transfer of industrial activities, equipment,
and labor from the congested cities and districts to rural areas.
Transfers of this kind decreed by the Council of Ministers Bureau in
December 1971 and July 1972 involved 195 production units and 25,000
workers and an annual output of 225 million leva (for value of the
lev--see Glossary). Under existing plans lasting until 1975, however,
industry and employment will continue to expand in some of the most
heavily congested cities.
Supply System
The organization of a smoothly functioning materials and equipment
supply system for industry has been an elusive goal of the leadership
ever since the inception of the controlled economy. Various approaches
to the problem over a period of years have not succeeded in
accomplishing the basic task of ensuring a dependable supply of material
resources to industrial producers. As a result, the economy has been
officially reported to suffer enormous losses through production
shutdowns, substitutions of materials that lower quality and increase
costs, and hoarding of scarce materials. Heavy losses have also been
incurred through improper storage of materials, careless use that
entails excessive waste, and pilferage.
Adequate information on the organization and functioning of the
industrial supply system has not been available. The latest
reorganization of the supply system was undertaken at the end of 1971
with a view to providing a normal flow of supplies for the economic
trusts beginning in 1972. Until 1971 the supply organizations had dealt
almost entirely with individual enterprises. The reorganization was
accompanied by extensive consultations with producers of raw materials,
importing organizations, and industrial consumers. The consultations
were held in order to clarify the needs of consumers, ensure the
availability of the needed supplies, and agree upon specific measures
for timely deliveries of materials and supplies.
Particular attention in the reorganization was paid to the problem of
reducing the inventories of materials in enterprises and concentrating
them in the supply organizations. Decisive measures were taken to halt
the former practice of making deliveries of materials large enough to
cover requirements for three months or longer. Under the new system,
supply organizations are required to make periodic deliveries to
consumers on guaranteed time schedules, at short intervals, and in
quantities that do not exceed one month's requirements. Adherence to the
regulation is to be used as a standard in evaluating the performance of
supply organizations.
One of the basic elements in industrial consumer-supplier relations has
been the annual contract for estimated material and equipment
requirements needed to complete the annual production quota. For a
variety of reasons both suppliers and users have often failed to honor
these contracts, and the penalties provided for breach of contract have
not been sufficient to deter this practice. Breaches of supply contracts
have been an important cause of economic difficulties. Supply
difficulties have been particularly disruptive because of the
traditionally stringent nature of the production plans and the limited
availability of resources.
In 1972 the Ministry of Supply and State Reserves planned to take
energetic measures to strengthen contract discipline and to use
contracts as legal and economic instruments for exerting pressure on
both parties to fulfill their obligations. The minister considered it
particularly important to put an end to the practice of contract
cancellation, either under provisions of official regulations or by
mutual agreement of the parties concerned--a practice that, according to
the minister, caused huge losses to the national economy.
Structure
Manufacturing is the dominant sector of industry in terms of employment
and output. In 1971 manufacturing accounted for 93.9 percent of the
total industrial output and provided employment to 88.3 percent of the
industrial labor force. Mining and energy production contributed 3.6 and
2.5 percent, respectively, of the industrial output and employed 10.3
and 1.4 percent, respectively, of the labor force. More than half the
industrial establishment was devoted to the production of capital goods.
In 1971 the capital goods sector employed 52.5 percent of the industrial
labor force and produced 56 percent of the output. The relative
importance of the capital goods sector had been rising over a period of
years, from 36.7 percent of the output in 1948 and 47.2 percent in 1960.
During the same period the contribution of the consumer goods sector to
total output had declined from 63.3 percent in 1948 to 52.8 percent in
1960 and 44 percent in 1971. As a consequence of the priority
development of heavy industry, the supply of consumer goods on the
domestic market has been inadequate to meet consumer needs (see ch. 5).
In terms of their employment shares, the largest state industry branches
in 1971 were: machine building and metalworking, 25.5 percent; food
processing, 14.4 percent; and textiles, 11.3 percent. Next in
importance, but with much lower levels of employment, were: timber and
woodworking, 7.4 percent; chemicals and rubber, 6.1 percent; and fuels,
5.5 percent. Industrial branches that experienced the most rapid growth
in the 1960-71 period included ferrous metallurgy, chemicals and rubber,
machine building and metalworking, and fuels. Among the slowest growing
branches were timber and wood processing, textiles, nonferrous
metallurgy, and food processing.
FUELS AND POWER
Domestic resources of mineral fuels are inadequate for the needs of
industry. Through the limitation that it places on electric power
development, the fuel shortage--in the absence of a large hydroelectric
power potential--may become a major factor inhibiting industrial growth.
In 1968 the proportion of petroleum and natural gas in the fuel balance
was somewhat more than 42 percent; it is planned to rise to about 60
percent in 1975 and to at least 65 percent in 1980. Virtually all
petroleum and natural gas must be imported.
Coal and Lignite
Reserves of anthracite and bituminous coal are insignificant; their
production amounts to less than 2 percent of the annual coal output.
Brown coal deposits that can be mined economically are nearing
exhaustion, and brown coal production declined by about one-third in the
1960-70 period. Low-calorie lignite remains the major fuel base for
thermoelectric power stations. Reserves of this inferior fuel are large.
Coal deposits are scattered in about twenty small deposits. Because of
difficult geological conditions, however, only a few of the deposits are
exploited. Anthracite is mined in the Svoge basin, located in the Iskur
gorge area of the Stara Planina, north of Sofia. Bituminous coal is
mined in the same mountain range, in the area between Gabrovo and
Sliven. The deposit at Sliven was reported to contain a very small
quantity of coking-grade coal--a quantity far below the needs of the
iron and steel industry. In addition to large annual imports of coking
coal, Bulgaria has also imported from 250,000 to 465,000 tons of coke
per year.
The main source of brown coal for many years has been the Pernik basin
in the upper Struma valley, about nineteen miles southwest of Sofia. In
the 1971-75 period brown coal mining is to be substantially expanded at
the Bobov Dol deposit in the Rila mountain range, south of the Pernik
basin. The Babino mine in the Bobov Dol coalfield is scheduled to become
the largest underground coal mine in the Balkans. Reserves in this
deposit, however, are equivalent to only about five to six years'
production at the 1970 rate of brown coal output.
Lignite is mined mainly in the Maritsa basin, near Dimitrovgrad in the
Thracian Plain, and in the Sofia Basin. The Maritsa basin, particularly
the area known as Maritsa-Iztok (Maritsa-East), has become the basic
source of coal production, contributing about 50 percent of the
country's output. Aside from planned new mine construction, the
Maritsa-Iztok complex is to be rebuilt and modernized. Production
problems at this mine have not yet been solved satisfactorily.
Coal-bearing strata have not been fully identified; equipment is
utilized to only about 40 percent of capacity; and the organization of
labor is poor. Substantial improvement also remains to be attained in
processing the coal for market, in view of its high ash and moisture
content. Unsolved problems also remain in the manufacture of coal
briquettes.
In the 1971-75 period substantial investment is to be devoted to the
expansion and modernization of coal mines. New mines with an annual
capacity of about 4 million tons are to be built. Three-fourths of the
investment funds are to be concentrated on three major production
centers. The relative investment shares of these centers were planned to
be: Maritsa-Iztok complex, 41 percent; Bobov Dol complex, 25 percent;
and the Georgi Dimitrov mine at Pernik, 10 percent.
Production of marketable coal increased by 83 percent in the 1960-70
period to a level of about 29 million tons. The rise in output, however,
was confined to lignite production, which grew more than fourfold during
the decade. Production of bituminous and brown coal declined by 42 and
32 percent, respectively. Output of anthracite in 1970 equaled the
output in 1960 but was 9 percent below the production level in 1966.
Production of both anthracite and bituminous coal amounted to less than
400,000 tons in 1970. Strip mining has steadily grown in importance and
accounted for 73 percent of the output in 1970.
The Sixth Five-Year Plan (1971-75) calls for a rise in coal output to 33
million tons--an increase of about 13 percent. In the view of the
minister of heavy industry, the planned increase is not large, but its
attainment is difficult considering the character and condition of the
mines. Experience has justified the minister's assessment. In the first
two years of the five-year period, coal output rose by less than 1
percent.
Crude Oil and Natural Gas
Deposits of crude oil are located at Tyulenovo in the Dobrudzha region
and at Dolni Dubnik, east of Pleven. Natural gas fields have been
discovered near Vratsa and in the area of Lovech, south of Pleven.
Reliable information on the magnitude of crude oil and natural gas
reserves is not available. Statistics on current imports and official
projections of import requirements, however, indicate that domestic
production of oil and natural gas will continue to cover only a small
fraction of needs.
Production of crude oil rose from 200,000 tons in 1960 to 500,000 tons
in 1967 but declined thereafter to 305,000 tons in 1971. Natural gas
output, which had increased to 18.5 billion cubic feet in 1969, declined
to 16.7 billion cubic feet in 1970 and 11.6 billion cubic feet in 1971.
Imports of crude oil, mostly from the Soviet Union, increased almost
3-1/2 times between 1965 and 1971 to a level of 7.5 million tons. In
1972 the Soviet Union alone provided 95 percent of the country's
requirements for crude oil and petroleum products. Imports of natural
gas from the Soviet Union, through a pipeline still under construction,
are scheduled to begin in 1974 at a level of 35 billion cubic feet and
to continue at an annual rate of 106 billion cubic feet beginning in
1975. The planned 1975 import volume represents about three-fourths of
the estimated requirements in that year.
Crude oil is processed in two refineries, located at Burgas and Pleven,
with daily throughput capacities of about 16,500 tons and 5,500 tons,
respectively. Except for the small domestic output, crude oil for the
Pleven refinery is moved by rail from Black Sea ports. A pipeline
network that will connect the refinery with the ports is under
construction and is scheduled to enter into full operation in 1975. By
that date the capacity of the Pleven refinery is planned to attain
16,500 tons per day. A pipeline under construction for the transport of
petroleum products from the Burgas refinery to consuming centers at
Stara Zagora and Plovdiv is to be completed sometime in 1973.
The refinery output has not been sufficient to cover all the country's
requirements for petroleum products. Net imports of petroleum products
in 1970, including gasoline, fuel oils, and lubricating oils, amounted
to 2.5 million tons. Ninety percent of the imports originated in the
Soviet Union.
Electrical Energy
Installed electric generating capacity and production of electrical
energy increased more than fourfold in the 1960-71 period but failed to
keep pace with the country's growing requirements. Installed capacity in
1971 was 4.48 million kilowatts, including 3.65 million kilowatts in
thermal and 0.83 million kilowatts in hydroelectric stations. During the
period the proportion of hydroelectric capacity declined from 50 to 18
percent, and the production of electricity per kilowatt of hydroelectric
capacity dropped by more than one-third. The utilization of thermal
capacity declined by 13.5 percent.
New power from generating plants scheduled to begin operation in the
1971-75 period totals about 3 million kilowatts. Major power stations to
be commissioned include: hydroelectric stations--with a capacity of 1
million kilowatts--on the Sestrimo cascade, in the upper reaches of the
Maritsa River and at the Vucha cascade, southwest of Plovdiv; a thermal
power plant with a capacity of about 620,000 kilowatts at Bobov Dol,
fueled by local coal; and an atomic power station with a capacity of
880,000 kilowatts at Kozloduy on the Danube River, in the northwestern
corner of the country. According to government plans, total generating
capacity is scheduled to reach 7 million kilowatts in 1975 and 12
million kilowatts in 1980. The more distant plans include the
construction, jointly with Romania, of a hydroelectric power complex on
the Danube, at Belene on the Bulgarian bank of the river and Ciora on
the Romanian side. The Soviet Union has provided large-scale technical
and material assistance in the development of the electric power system.
Production of electrical energy amounted to 21 billion kilowatt-hours in
1971, of which 90 percent was generated by thermal stations. Energy
output in 1972 reached 22.3 billion kilowatt-hours. The Sixth Five-Year
Plan calls for an energy output of 30.5 billion kilowatt-hours in 1975,
which is equivalent to an average annual increase in output of 9.4
percent during the five-year period. In the years 1971 and 1972 energy
output rose by an average of 6.9 percent per year, so that an average
annual rise of 11 percent will be needed in the remaining years to
attain the planned goal in 1975. Consumption of electrical energy in
1975 is planned to reach 33.5 billion kilowatt-hours. The planned
deficit of 3 billion kilowatt-hours is to be covered by imports from
Romania, Yugoslavia, and the Soviet Union.
The electrical transmission network is well developed, and further major
improvements have been planned. The network is connected with the power
grids of Romania and Yugoslavia. A 400-kilovolt power line from the
Moldavian Soviet Socialist Republic in the Soviet Union was reported to
have been completed in mid-1972. There was no evidence nine months later
that power had actually been transmitted over that line.
Eighteen percent of the total electrical energy supply in 1971 was used
by the power stations or lost in transmission. Of the remaining net
supply, almost 70 percent was consumed in industry and construction;
agriculture received only 4 percent; and transport and communications
accounted for little more than 3 percent. Households were allotted about
16 percent of the net electrical supply, and the balance of 7 percent
was consumed in trade, public institutions, and street lighting. The
major industrial users of energy were metallurgical enterprises and the
producers of chemicals and rubber; each of these industrial branches
consumed one-fifth of the energy supply to industry.
Expansion of electric-generating capacity and energy output at rates
planned by the government has been hampered by a chronic lag in new
construction and by inadequate maintenance of existing facilities. The
lack of preventive maintenance and disregard of technical requirements
in the operation of equipment result in frequent breakdowns requiring
major repairs. Such repairs, particularly those involving boilers,
turbines, and transformers, pose difficult problems because of the
shortage of technically qualified repair personnel and ineffective
organization of repair work. Efficiency of operation is also adversely
affected by a high labor turnover and the difficulty of finding
qualified replacements.
The lag in the completion of new power stations, equipment breakdowns,
and insufficient water reserves for hydroelectric stations have caused
frequent power shortages, particularly at peak load hours. Elaborate
official measures have been introduced to regulate the consumption of
electricity and to eliminate waste, including a bonus system for saving
electricity. These measures have not proved sufficiently effective, and
some enterprises have been reported to earn bonuses by the simple
expedient of overstating their requirements in the formulation of the
annual economic plans. The State Inspectorate for Industrial Power and
Power Control, it was stated by officials, was not in a position to
solve the problem of economizing electric power without the active
cooperation of every enterprise, plant, and trade union. Additional
unspecified measures affecting industry were reported to have been taken
in 1973 to reduce peak power loads, and the population was advised to
use electricity more sparingly between 6:00 P.M. and 9:00 P.M.
RAW MATERIALS
In 1970 about 54 percent of the manufacturing industry's output was
based on industrial materials, and 46 percent was derived from
agricultural raw materials; the proportion of industrial materials in
manufacturing continued on its post-World War II upward trend in the
1960-70 period from a level of 24 percent in 1948 and 49 percent in
1960. This trend was sustained by the relatively rapid rise in the
production and imports of industrial materials compared to the slower
increase in agricultural output and imports. Because of the limitation
of domestic resources, further industrial expansion will necessitate
ever larger material imports.
Iron and Steel
The main deposits of iron ore are located at Kremikovtsi, northeast of
Sofia, and at Krumovo in the lower Tundzha valley. Other small deposits
of little or no commercial value are scattered in the Strandzha
mountains, in the western Stara Planina, and at several locations in the
Rodopi (or Rhodope Mountains). The ore in the Kremikovtsi deposit is of
low grade; it has a mineral content of about 33 percent and requires
beneficiation. Reserves at Krumovo were reported to be of better grade
but much smaller. Available evidence suggests that mining at this
deposit was discontinued after the mid-1960s. Its site is far removed
from the country's two iron and steel mills.
Reserves at Kremikovtsi were estimated a number of years ago to contain
from 200 million to 250 million tons of ore. An official
Russian-language survey of Bulgaria, published in 1969, cited a figure
of 317 million tons for total iron ore reserves but mentioned only the
Kremikovtsi deposit as one being mined. In a review of the country's
natural resources, published in a Bulgarian technical journal in
mid-1970, it was stated that known reserves of iron ore would last
another fifty years. At the average annual rate of iron ore output in
the years 1968 and 1969 the reported life span of the deposits indicates
a reserve of only 133 million tons as of 1970. Whatever the actual
reserves may be, domestic iron ore has had to be supplemented by imports
of about 1 million tons per year from the Soviet Union and Algeria to
meet the requirements of the metallurgical industry.
Reserves of steel-alloying minerals are reported to be available,
particularly manganese, chromium, and molybdenum. The quality of the
manganese ores, however, is low, and reserves of chromium are
insufficient for the needs of the economy. Output data are available
only for manganese ore. Production of this mineral declined by about 60
percent in the 1957-70 period, which suggests the depletion of known
reserves. The metal content of the manganese ore mined in 1970 amounted
to 10,300 tons. In that year the discovery of new manganese deposits in
the Obrocha area was reported, the eventual exploitation of which, it
was said, would not only provide for all domestic requirements but would
also make it possible to export manganese for an entire century.
Although small amounts of ferroalloys are also obtained as by-products
of copper, lead, and zinc smelting, imports must be relied upon to cover
substantial deficits. Imports of manganese ores and concentrates in 1969
and in 1970 were more than double the volume of domestic production, and
imports of chromium and chromite amounted to 3,400 tons in 1969. Nickel
and titanium were also imported.
Steel is produced at the integrated Kremikovtsi metallurgical combine
and at the smaller integrated Lenin Steel Works in Pernik. With Soviet
assistance the Kremikovtsi combine is being expanded to a planned annual
capacity of 2 million tons of steel and 2.2 million tons of rolled
products by the end of 1975. A third coking plant was put into operation
in the spring of 1971, and the production of coke is scheduled to reach
1.4 million tons in 1975, compared to an output of 837,000 tons in 1970.
The steel mill at Pernik is to be modernized, also with Soviet
assistance.
Production of pig iron and steel increased about sevenfold in the
1960-70 period, reaching levels of 1.25 million tons and 1.8 million
tons, respectively. The same was true of rolled steel products, the
volume of which rose to 1.42 million tons. Nevertheless, Bulgaria
remained a net importer of iron and steel throughout the entire period.
In 1970 the import surplus amounted to 272,000 tons of pig iron and
96,000 tons of steel.
Nonferrous Metals
Reserves of nonferrous metals are reported to be more plentiful than
reserves of iron ore. Unofficial claims have been made that copper
reserves will meet requirements during the next fifty years despite the
planned rapid growth in output. Similarly, known reserves of lead and
zinc ores were said to be sufficient to supply the needs of available
smelters until 1990. A foreign observer, however, noted that plans for
large-scale expansion of nonferrous mining and smelting may be
frustrated by the deteriorating quality of the ores being mined and that
metal output may not rise much beyond the level attained in the late
1960s. In fact, mine output of lead and zinc in 1970 was not higher than
it had been in 1960, although the mine output of copper increased at an
annual rate of 7.1 percent from 1967 to 1971. In this context it is
noteworthy that data on nonferrous metals were omitted from the official
statistical yearbook published in 1972.
In 1972 the minister of heavy industry pointed out that the relatively
small planned increase in the output of the nonferrous metals industry
in the 1971-75 period--22.8 percent--was dictated by inadequate
supplies of raw materials. He stated that prospecting for new deposits
would be intensified and stressed the urgent need to increase the degree
of metal recovery from ores and the need to utilize fully all ore
components. Nevertheless, the minister assured his audience that the
requirements of the economy for copper, lead, and zinc in the 1971-75
period would be met from domestic production, except for 3 to 10 percent
of certain types of rolled metal. He called for the construction of
plants to extract the metal from the industry's tailings as a means for
partially eliminating the troublesome shortage.
Copper is mined south of Burgas; in the Sredna Gora mountains near the
town of Panagyurishte; and in the western Stara Planina mountains, south
of Vratsa. A deposit is also being developed at Chelopets, near Sofia.
The ore is concentrated locally and is smelted and refined in plants at
Eliseyna, Pirdop, and the Medet complex near Panagyurishte. Production
of refined copper from ores and reused scrap increased from 14,000 tons
in 1960 to 24,000 tons in 1965 and 41,000 tons in 1971. More than half
the copper output is processed into copper profiles, sheet, and wire at
the Dimiter Ganev plant in Sofia--the only plant for manufacturing
rolled products. Bulgaria has both imported and exported copper and
copper products.
Lead and zinc are obtained from mines near the towns of Madan and
Rudozem, in the eastern Rodopi, and in the western part of the Stara
Planina, at Eliseyna and Chiprovtsi. A new lead mine is under
development at Erma Reka, in the vicinity of Madan. The Rodopi mines
account for the major portion of the ore output. The ore is processed in
flotation plants near the sites of the mines and is refined at
Kurdzhali, Plovdiv, and Kurilo.
Production of refined lead and zinc rose rapidly in the first half of
the 1960s but leveled off in the second. Substantial amounts of these
metals have been exported, mostly to Western Europe. Exports, however,
have been declining both in volume and as a proportion of output. The
decline has been more pronounced in the case of lead, and lead exports
dropped from 65 percent of output in 1960 to 22 percent in 1970. The
volume of lead exports fell from 53,500 tons to 22,100 tons in the
1965-70 period. Zinc exports declined from highs of 78 percent of output
in 1965 and 58,100 tons in 1966 to 64 percent of output and 48,100 tons
in volume in 1970.
Bulgaria also possesses small reserves of gold, silver, and uranium.
Gold has been found near the town of Trun, not far from the border of
Yugoslavia. Silver and uranium deposits are located in the western Stara
Planina. The uranium ore is processed by the Rare Metals Combine near
Sofia. Gold and silver are also obtained as by-products in the smelting
of copper, lead, and zinc. Information on reserves and production of
these metals is not available. Aluminum and tin must be imported.
Other Raw Materials
There are reported to be adequate resources of nonmetallic minerals for
the production of cement and other building materials, glass, and
ceramics. Asbestos, salt, sulfur, and cement are produced in quantities
large enough to allow some exports. The quality of asbestos, however, is
low, and better grades must be imported for some uses. Exports of cement
declined from 715,000 tons in 1965 to 153,000 tons in 1970. Timber and
wood pulp from domestic sources are in short supply. Under an agreement
with the Soviet Union, Bulgaria has supplied 8,000 workers to the timber
industry of the Komi Autonomous Soviet Socialist Republic for the
development of Siberian timber resources, in return for which the Soviet
Union has undertaken to export to Bulgaria about 900,000 cubic yards of
timber in 1973 and up to 2 million cubic yards per year after 1975.
Similar arrangements exist with regard to paper pulp, iron and steel,
natural gas, and other raw materials.
Domestic agriculture provides ample raw materials for the food
processing industry, but only a fraction of light industry's needs for
fibers and hides. In the 1968-70 period average annual imports of these
materials included cotton, 60,000 tons; wool, 2,900 tons; synthetic
fibers, 26,000 tons; and cattle hides, 7,700 tons. In addition to the
raw cotton, cotton textiles in the amount of 63,000 tons were imported
annually.
Because of the general shortage of domestic raw materials and the need
to conserve scarce foreign exchange, strong emphasis has been placed on
recycling waste materials. A decree on this subject was issued in 1960,
and a special Secondary Raw Materials State Economic Trust was created
in 1965. Another comprehensive decree was issued in November 1971
because, as stated in its preamble, the importance of collecting and
using waste materials had been underestimated, and the needs of the
economy were not being met. The new decree was intended to organize the
collection and processing of waste materials, including metals, paper,
rubber, textiles, and worn-out machinery and household equipment, on a
modern industrial basis under the direction of the waste materials
trust. Special provision was made in the decree concerning the handling
of unused machinery and surplus materials held by economic enterprises,
and sanctions were provided for failure to surrender or refusal to
purchase such surplus equipment and materials.
INVESTMENT
Industry's share of total annual investment rose steadily from 34.2
percent in 1960 to 47.3 percent in 1969 but declined in the next two
years to 43.9 percent. In absolute terms and in current prices, annual
investment in industry increased from 466.3 million leva in 1960 to 1.6
billion leva in 1970 and declined to 1.58 billion leva in 1971.
More than four-fifths of the industrial investment in the 1961-71 period
was devoted to the expansion of producer goods industries. The
proportion of investment funds allotted annually for this purpose was
slightly lower in the 1966-71 period than it had been in the preceding
five years; it ranged between 84.7 and 87.8 percent in the 1961-65
period and between 81.2 and 85.5 percent thereafter, except for 1970,
when it declined to an atypical low of 78.5 percent.
The bulk of industrial investment was channeled into heavy industry,
including fuel and energy production, ferrous and nonferrous metallurgy,
chemicals, and machine building and metalworking. In the 1960-65 period
fuel and energy production were the major recipients of investment
funds; in subsequent years machine building and chemicals became the
primary targets of investment activity. Ferrous metallurgy was among the
five largest investment recipients through 1967, but nonferrous
metallurgy dropped from this group after 1964. Beginning in 1967
substantial investment funds were also devoted to food processing--the
major export industry and earner of foreign exchange.
Investment allotments to consumer goods industries ranged between 12.2
and 18.8 percent of industrial investment, except for an unusually high
allocation of 21.5 percent in 1970. In 1971, however, the investment
share of consumer industries dropped sharply to only 14.5 percent. The
predominance of investment in heavy industry reflected the leadership's
basic economic policy tenet that, with minor temporary exceptions, the
production of capital goods must develop more rapidly than the output of
consumer goods.
Construction of industrial plants has frequently fallen behind schedule,
causing losses of planned production and disruption of the five-year
plans. The situation became critical in the fall of 1972 because of the
failure to commission on time new facilities that were counted upon to
produce in 1973, among other products, 0.5 million tons of rolled steel;
0.4 million tons of mineral fertilizers; 30,000 tons of synthetic
fibers; 20,000 tons of cellulose; 11,000 tons of polyethylene; 0.3
million kilowatts of electric generating capacity; and a large volume of
machinery and equipment.
The main reasons for the construction lag were delays in the supply of
materials and a shortage of construction workers. In an effort to
expedite the completion of the most essential projects that were under
the direct supervision of the Council of Ministers because of their
national importance, the council created a special operational bureau
for the coordination and control of the construction activities
associated with these projects. At the same time 6,000 workers were
transferred to the priority projects from less important construction
jobs. These measures did little to solve the basic problems and merely
shifted the incidence of construction delays from one category of
projects to another.
LABOR
The labor force in state and collective industry numbered 1.17 million
workers in 1971, of whom 542,000--or 46 percent--were women. The labor
force had increased by 54 percent compared with its size in 1960, and
the number of women workers more than doubled. About 88 percent of the
workers were employed in manufacturing; the remaining 12 percent were
engaged in mining and energy production. Production of capital goods
provided employment for 52.5 percent of the workers, and consumer goods
industries absorbed the remainder. One-fourth of the labor force was
concentrated in machine building and metalworking, and another
one-fourth was occupied in food processing and textile production (see
Organization and Structure, this ch.).
By far the largest proportion of women workers--26 percent of their
total number--were employed in the textiles and clothing branches of
industry, where they constituted 77 percent of total employment. Women
constituted the majority of workers in food processing--53 percent--and
accounted for 21 percent of the workers in machine building and
metalworking. Substantial numbers of women were also employed in
chemical and rubber plants, in logging and woodworking, and in the
production of leather shoes and furs. Four-fifths of all women working
in industry were in blue-collar jobs.
According to official statistics, 95 percent of the workers in 1971 were
directly engaged in production; the rest were employed in various
auxiliary occupations, such as maintenance and warehousing. Yet in
outlining means for raising industrial labor productivity in the fall of
1972, the minister of labor and social welfare included as an objective
a reduction in the proportion of auxiliary personnel to about 30 or 35
percent of the number of production workers in industry. About 17
percent of the production workers were in white-collar jobs; information
on the total number of white-collar workers has not been published.