Government Intervention in Soviet Agriculture: Estimates of Consumer and Producer Subsidy Equivalents

Government intervention in agriculture in the USSR is substantial. Data on agricultural policy programs for 1986 indicate large subsidies accruing simultaneously to producers and consumers. The most significant subsidy channel in the USSR is the system of prices. Domestic consumer prices are administratively held well below world market levels, while domestic producer prices are generally above world market levels. Since 1986, the overall amount of support to agriculture in the USSR has increased. Subsidies to producers though, have declined, while subsidies to consumers have increased significantly.