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they fail to provide adequate funds to cover the cost of current repairs. Failure to make the necessary repairs has resulted in substantial losses of dwelling space.

In addition to a shortage of housing, Gierek is faced with the problem of inadequate facilities, especially in rural areas. Although Poland has made great strides in this area, there is still much room for improvement, as shown in the following tabulation of dwellings supplied with various facilities (in percentages of respective totals):

Because labor is generally plentiful, mechanization of the construction industry has not advanced as far as in most other East European Communist countries. Recent attempts to raise labor productivity are reflected in six production sharing ventures between Poland and Western firms in the construction equipment field. These agreements provide for cooperation in the production of heavy-duty cranes, concrete mixers, trucks for construction sites, hydraulic building machinery, heavy tractors and crawlers, and axles for construction equipment and vehicles. Two of the agreements are with Koehring International and International Harvester of the United States.

5. Domestic trade (U/OU)

The bulk of Poland's domestic trade is carried out by socialized wholesale and retail trade organizations, at prices fixed or regulated by the state. In 1971, private trade accounted for only 1.1% of total retail sales and 2.2% of the total spent at eating places.

Trade in producer goods among state industrial enterprises is carried out by the enterprises themselves or by marketing organizations attached to industrial associations. Goods are sold at prices that are fixed by the producing enterprise, association, or ministry, and are intended to reflect to some degree both production costs and level of demand. Consumer goods produced in the socialized economy are distributed through state cooperative wholesale and retail organizations. Retail prices are set to achieve the social goal of maintaining low prices for basic commodities and to balance projected supply and demand.

The Ministry of Internal Trade directly controls a large share of wholesale trade and some retail trade. Organizations attached to the ministry conduct wholesale trade in most ordinary consumer items such as textiles, clothing, food, and housewares; they conduct both wholesale and retail trade in certain specialized items such as jewelry, pharmaceuticals, and cultural materials. Socialized retail trade is organized in separate urban and rural networks. The urban retail network includes state retail stores, most of which are subordinate to local people's councils, and cooperative stores under the state-controlled Union of Consumer Cooperatives. The former account for about two-thirds of urban retail sales and the latter for about one-third. Rural retail trade is dominated by the Peasant Self-Aid Cooperative. Rural cooperative stores supply peasants not only with consumer goods but also with seed, fertilizer, and building materials. Restaurants are part of the state trade network in both urban and rural areas.

Because of the retention of private ownership in agriculture, state purchases from the private sector have a much larger role in Poland than in other Communist countries. These state purchases are made by procurement organizations attached to the Ministry of Food Industry and Purchases and the Ministry of Internal Trade. Compulsory deliveries, which once made up a sizable share of the purchases, were abolished on 1 January 1972. Most procurement is done under contract. Under this system, a farmer agrees in advance to sell a certain quantity of his produce at the price offered by the state.

Private or free-market trade in Poland includes direct sales by farmers to private traders and individual consumers and sales by private artisans and retailers. Although it comprises only a small share of total trade, private trade is an important supplement to the socialized trade system, especially in providing fresh produce, good-quality clothing, and repair services to the population. The role of private retail outlets has varied considerably since 1950, when they accounted for 17.9% of all retail sales. Efforts to extend state control over the domestic trade network reduced the share of private outlets to 2.3% in 1956. Following the 1956 uprising, however, the Gomulka regime adopted a more liberal policy toward private retail trade in an effort to improve the supply of goods and services to the population, and the share of retail sales made in private outlets rose to 4.7% in 1957. Since then, however, private retail trade has declined, while socialized trade has increased rapidly. By 1971, the share of private outlets in aggregate retail sales dropped to 1.1%.

At the end of 1971, there were 198,593 retail outlets and 14,619 eating places, compared to 159,682 and 10,235 respectively, in 1960. Most retail stores are

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200070030-5