China, and as people tend to get more disposable income, in terms of food they will tend to consume more meat. This means a lot more wheat and grain is demanded in order to feed these animals, this causes the demand curve to shift to the right causing prices to rise. As indicated in the diagram on the right where P1 moves up to P2 as a result of a shift in demand. Another reason for an increase in the prices of grain and wheat is a rising demand for bio-fuels of which grain and corn are vital components. This combined with the current fuel climate and oil prices result in a lot of demand for bio-fuels which is why 20% of American grown corn goes on bio-fuels.
There were economic factors that led to collectivisation. The autumn of 1926 saw a record grain harvests for the USSR, however, the harvests of 1927, 1928 and 1929 were all poorer due to the peasants keeping hold of the grain. This decrease in production forced the price of agricultural products up. Consequently, the standard of living amongst urban worked declined. The decrease in agricultural production also affected the soviet government.
Prior to the “five year plans”, Russia had mostly a peasant farming economy. The 1750 to 1914 period in Russia was met by a large increase in the available labor force. Coupled with an increase in population, Russia's emancipation of the serfs freed many of Russia's serfdom from perpetual slavery. However, the emancipation process was planned so as to put the freed serfs deeply in debt to the original owners of the land. In fact, many of the serfs were so deeply indebted that they relocated to Russia's cities in search of better work opportunities.
With a retained earnings from the wheat of 122 bushels Ivan – the Farmer Ivan received from Baron Von-Shrek the following: 20 (5 bushels per acre) acres to farm, 20 bushels of wheat and 2 bushels of fertilizer – Ivan also received oxen, worth 40 bushels over 10 years – with a depreciation of 4 bushels per year. In addition, Ivan purchased a plow from Smith, the plow-maker. However, Ivan still owes 3 bushels of wheat for the plow and will need to
Industrialization was creating even more towns, increasing this problem. So in order to feed his industrial workforce Stalin needed to revolutionize agriculture. He achieved this through forced grain seizure and the prosecution of kulaks and forcing peasants to work together in ‘collectives’. By doing so he was able to secure extra grain to feed the growing urban population of workers and sell the surplus to gain foreign currencies for purchasing foreign machineries. Though collectivisation may have had short term boosts to the economy but the effects of collectivisation were disastrous.
The key to economic power in Russia was agriculture. When Russia’s agriculture was turning out to look like a disaster, Alexander III as the Tsar made a difference by introducing new laws. He created Peasant Land Banks where peasants were given loans to increase their land size and grow more grain. Therefore Russia was able to sell more grain and gain more money. This suggests that Russia’s economy was improving very early on and this method of increasing their economic power panned out to be successful in the long term, however this would only be successful if the peasants buying the land were productive.
However, back then numerous people didn’t comprehend just how much of an impact farmers had on their everyday lives. If you took farms away from the United States during this period of time, everything would have entirely crashed. Farmer’s had complications with making a living because the rates of being a farmer were so high, as it is stated in document B. The farmers were also being abused by the railroad companies and banks. Like it says in document F “Nothing has done more to injure the (western) region than these freight rates.” Out west the railroad companies took advantage of the people and often they would charge more than four times the Eastern rates.
The increase in state procurement also meant that exports of grain increased. Grain exports peaked in 1931 with five million tonnes sold abroad. Although five million tonnes was the peak, 1931 was at the beginning of the Wall Street crash meaning that the grain would have been sold for minimum value. With machine tractor stations put in place to hand out fertiliser and other resources to the collectivised farms it was much easier for the government to keep control and watch over the peasants. The kolkhozy and sovkhozy collective farms were much easier to watch and control than traditional peasant villages.
Despite the positive changes that occurred, the quality and maintenance of the new infrastructures were very poor, furthermore most weren’t even completed. Plus the growth of the Russian economy was also highly dependant on foreign investments and loans. Living and labouring conditions in the outskirt areas became places where ambitious and hardworking farmers could persevere, become independent, successful landowners and buy land from their neighbours. Loans could be given to the farmers and paid back with the small profits made during harvest seasons. With this new form of farming (called Kulaks) that was introduced to the farmers the food production increased, successfully reaching a record harvest in 1913.
The rapid growth of old and new industries led to a population migration from rural to urban areas. The agricultural industry was another of the industries that faced a lot of changes, mechanisation meant better yields which therefore meant that, less agricultural workers were needed. There is evidence to support and contradict whether or not those economic developments did in fact threaten the power of the elites. There is evidence to support the idea that the economic developments in Germany in the period 1900-1914 didn’t pose a threat to the power of the elites because economic growth and the opening up of new industries bring many benefits with them. While it has been argued that an exceptional economic growth caused some problems, the advantages that came with it, outweigh the negatives.