FRG and GDR economies

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FRG and GDR economies

Advantages

  • Agriculture in the FRG was greatly subsidied particularly by the government under Erhard whose Green Plan introduced higher subsidies and federal expenditure on agriculture. In 1966, federal expenditure in farm infrastructure and investment aids stood at 1611 million Deutschmarks compared to pensions and insurance which stood at 730 million deutschmarks. Such investment included aid for consolidation, subsidies for fertilisers and from 1963, payments for various social facilities in the countryside such as communal laundrettes. Subsidies also continued under Chancellor Kohl. All this made the agricultural industry an attractive career and although it wasn't as prominent as industry or trade, it provided a steady flow of foodstuffs unlike the GDR.

Disadvantages

  • The GDR took a contrastingly different approach to agriculture which in turn, arguably weakened it which in turn resulted in common food shortages and in 1948, thanks to the introduction of collectivisation by the Soviet occupation, food yields had fallen dramatically thus causing emigration of skilled farmers to the west which in turn boosted the FRG's agricultural output. In the period 1966-70, potato yields for example were only 66% of that of the FRG. This is because of the communist ideal of collectivisation which although promoted an egalitarian society, it took land away from experienced land workers and instead gave it to refugees and smallholders who had little or no experience in the field. However, its useful to know that in 1953, the SED became aware of these issues arising from collectivisation and thus introduced voluntary collectivisation and LPGs and 2/3 of agriculture was uncollectivised. Yet this was short lived and the 1960s saw a second wave of collectivisation which had the exact same effects as the 1st wave. Food shortages became so rife that in 1961 rationing had to be reintroduced.

Evaluation

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