In socialistic agriculture system, land is owned by the state. Socialistic agriculture system were generally followed in countries like Cuba and some parts in China.
Approach: Socialistic agriculture system
Socialistic agriculture system does not support the idea of private ownership of lands, as this may lead to exploitation. Socialistic approach of agrarian system is primarily induced by political ideology. A rigid and well balanced state planning is the key to improve the productivity of the socialistic agriculture system.
Farm organization: Socialistic agriculture system
In socialistic agricultural system, two forms of firm organization are normally maintained. One is State Firms and another is Collective Firms. Both of the two forms of firm organization maintain their own set of policies.
- State Firms: In this form of firm organization, firms are controlled and shaped according to the laws, policies and regulations adopted by state. In state firms, state is responsible in bearing all the economic risks associated with the farming system. The state influence and maneuver the wage levels, capital formation and capital transfer by means of fixed prices and delivery quotas.
- Collective firms: In this type of firm organization, hierarchy and market play a vital role and the farm laborers are not normally compensated by way of wages, instead they get a share of the firm's net productivity. In this case, state does not need to bear all the economic risks associated with the farming system. All the members of the socialistic agriculture system share the economic risks, if any. In collective firm organization, the production from individual household plot plays a vital role. The Soviet Union first introduced this idea of mass collectivization during the period 1929-1933. In the late 1920, Stalin first introduced the term collectivization to promote agricultural production in Soviet Union through proper arrangement of land and labor. The collective firms were called 'kolkhozes' whereas state firms were called 'sovkhozes'.