New enterprises that meet certain criteria can receive pioneer status, exempting profits from income tax for up to 5 years, depending on the amount of capital invested.
State farms, compared with negdels, had more capital invested, were more highly mechanized, and generally were located in the most productive regions, or close to major mining and industrial complexes.
From the point of view of capital, increased productivity means both increase in the scale of production and a reduction of labour-costs as a fraction of the total capital invested.