New Economic Policy

Economic policy of the USSR 1921–29 devised by the Soviet leader Vladimir Ilyich Lenin. Rather than requisitioning all agricultural produce above a stated subsistence allowance, the state requisitioned only a fixed proportion of the surplus; the rest could be traded freely by the peasant. The NEP thus reinstated a limited form of free-market trading, although the state retained complete control of major industries.

The NEP was introduced in March 1921 after a series of peasant revolts and the Kronstadt uprising. Aimed at re-establishing an alliance with the peasantry, it began as an agricultural measure to act as an incentive for peasants to produce more food. The policy was ended in 1928 by Stalin's first five-year plan, which began the collectivization of agriculture.