Response to collectivisation in the 1950s:
Many farmers abandoned their farms. It is estimated that 13% of agricultural land was deserted.
This led to a drop in the supply of food to cities.
Many farmers emigrated to West Germany.
Food production declined; Rationing was reintroduced in 1961.
In 1958, one-third of East German farms were collectivised.
In 1960 and 1961 there was a renewed effort to collectivise land in East Germany.
The consequence of not collectivising became more extreme.
E.g. farmers were not allowed to use state machinery.
Eventually, the state started arresting farmers and confiscating lands.
By 1962, 85% of farms were collectivised.
The First Five Year Plan, 1951 to develop heavy industry- set production targets, controlled all aspects of workers lives, and nationalised industries
Officially, the state declared that between 1950 and 1955, industrial productivity levels had risen by 100%.
However, this statistic does not take profitability or quality into account.
Arguably, the quantitative aim meant goods were of a poor quality and not profitable.
Consumer goods were not a priority meaning low standard of living
The Second Five Year Plan was introduced in 1956.
The policy placed emphasis on producing consumer goods and technological progress.
Between 1956 and 1958, the economy grew by 12%.
Living standards improved (however rationing continued until 1958).
Workers benefitted from low food prices. The number of workers leaving for the West stabilised. However, this was due to state subsidies which meant the state could not invest in other industries.
Although the economy was growing, it was not matching the scale of growth in the West. Thus, East Germany was falling behind.
Profits incentivised workers to be more productive.
Quality also became a priority, instead of quantity.
By the early 1960s, the GDR's levels of growth were better than other countries in the Eastern Bloc.
The Seven Year Plan was introduced in 1959- Industrial growth fell under the plan. This led to rising numbers emigrating to West Germany until the erection of the Berlin Wall. The Berlin Wall led to harsher conditions for workers, as the state did not fear emigration.
East Germany's economy was being influenced by the Soviet Union's economic needs. This means it was not a balanced, diverse economy which had sustainable growth.