9 period amounted to 6.4 billion lei, or an average of 800 million
lei per year. During the same period the farms received about 30 billion
lei in short-term production credits, or about 3.75 billion lei per
year. The annual volume of investment credits increased sharply after
1967; it was reported to have reached 1.8 billion lei in 1970 and to
have been planned at more than 2 billion lei for 1971. A rise was also
reported in the yearly volume of production credit.

Investment credits generally carry an annual 3-percent interest charge,
but the interest rate may be reduced to 2 percent for economically
weaker farms. Comparable information on production credit is not
available, except for an official statement that a large part of it has
been granted free of interest.

Postponement of scheduled long-term credit repayments may be authorized
by the bank with the approval of the Ministry of Finance for periods of
up to one year in the case of collective farms that are unable to meet
the due date for reasons beyond their control, such as a crop failure.
At the same time the bank may discontinue credits or demand repayment
before the due date in the event that borrowed funds are improperly or
inefficiently used. Penalties are also provided for short-term borrowers
who fail to respect contractual obligations. As a measure of assistance
to poor cooperatives, the repayment of loans in the amount of 1.15
billion lei, contracted before 1968 and due in 1972, was remitted by
decision of the Central Committee of the Romanian Communist Party in
December 1971.

The distribution of long-term credits to collective farms among
different types of investment projects changed significantly during the
1960s. In 1962 and 1963 more than half the credits were granted for the
expansion of livestock production, and one-fourth of the credits were
devoted to the construction of farm buildings. In the last two years of
the decade, however, only 5 percent and 3 percent of the credits,
respectively, were earmarked for these purposes. Emphasis shifted in the
mid-1960s to land improvement, the extension of orchards and vineyards,
and vegetable production. In the 1967-69 period 83 percent of the
investment credits were used for these projects. A lack of significant
progress in the livestock production of collective farms, despite the
heavy investment, was the main reason for the drastic reduction in
credits to this farm sector.

In mid-1971 the bank w