RUSAG-L: Current Events #76

Please keep in mind that the following current events information represents information about events in Russian agriculture we received during the past week, while the actual events may have occurred earlier.

The sources for the information below include, but are not limited to, the following: the Open Media Research Center (OMRI), Interfax News, Food and Agriculture Report, the Foreign Broadcast Information Service at the Central Intelligence Agency's Central Eurasia Daily Report (FBIS), Nexis/Lexis through Mead Data Central, Inc., and The Washington Post.

The Russian Agricultural ListServ is sponsored by the University of Maryland College of Agriculture at College Park, the Research and Scientific Exchanges Division, Foreign Agriculture Service/International Cooperation and Development, U.S. Department of Agriculture, and the National Committee on International Science and Education of the Joint Council on Food and Agricultural Sciences.

16 April 1996:
-The current exchange rate is listed at R 4916 per dollar. (The Washington Post, April 16, 1996).

12 April 1996:
-A Duma bill, drafted by the Agrarian Party and adopted in the first reading on April 10, opposes the introduction of a land market on the grounds that it will promote the emergence of big landed properties and speculative dealing. The legislation was designed to thwart Yeltsin's March 7 decree which confirmed the right of peasant farmers to leave state and collective farms and to sell, mortgage, or lease their plots of land to the highest bidder. Since the Russian constitution does not address the buying and selling of land, only sanctions private ownership, both factions have attempted to plug the loophole by their respective actions. Russia still has 29,000 state and collective farms, which control 90 percent of the farm land. State and collective farm managers, who want to maintain their power, also control the food processing industry. (Monitor, Jamestown Foundation, Vol II, No. 73, April 12, 1996).

11 April 1996:
-Deputy Prime Minister and Foreign Economic Relations Minister Oleg Davydov expressed concern over the actions of the Russian Agriculture and Food Ministry during the recent poultry import controversy. According to Davydov, if Russia had stopped importing U.S. chicken legs, the U.S. would have reacted by imposing trade barriers. He said a trade war would have hurt Russia considerably, amounting to a loss of hundreds of millions of dollars. Davydov went on to say that government foreign economic policy should be the concern of the Ministry of Foreign Economic Relations, not the Agriculture Ministry. Exports currently account for 18 percent of Russia's GDP. (Nexis/Lexis through Mead Data Central, Inc., The British Broadcasting Corporation, April 11, 1996).

-Hundreds of agricultural workers protested outside the federal government building in Moscow on April 10. The demonstrators, who were addressed by Agrarian Party leader Mikhail Lapshin, demanded state support for the agro-industrial complex, measures to protect domestic goods from cheaper foreign imports, and the abrogation of Yeltsin's March 7 decree on the sale of land. Lapshin spoke in support of preserving the system of collective and state farms and the prevention of the unrestricted sale of farmland. (OMRI, Part I, No. 72, April 11, 1996).

10 April 1996:
-Communist Party leader Gennady Zyuganov announced details of the shadow "Government of Popular Confidence" which will take power if Zyuganov is elected to the presidency in June. The government will include: Communist Duma deputies Svetlana Goryacheva and Viktor Ilyukhin, Russian nationalist deputy Sergei Baburin, and the Communists' candidate for the post of human rights commissioner, Vladimir Isakov. Isakov belongs to the Agrarian Party. While planning to abolish the post of president, Zyuganov said he might revive the office of vice-president, abolished by Yeltsin. The leading candidates for a vice-presidency position are Kemerovo legislature leader Aman Tuleev and 1991 coup plotter Anatoly Lukyanov. (Monitor, Jamestown Foundation, Vol II, No. 71, April 10, 1996)

-Russia's Central Bank Chairman Sergei Dubinin said that, within the next few months, Russia will ease currency exchange restrictions and make the ruble fully convertible for foreign trade transactions. The move is seen as a show of confidence in Russia's reforming economy and a boost to Russian exporters. In addition, Russian shares have rallied strongly as a result of increased interest by Western investors, reacting to the latest opinion polls, which show Yeltsin closing the gap on his Communist rival, Gennady Zyuganov. (Monitor, Jamestown Foundation, Vol II, No. 71, April 10, 1996).

-According to an article that appeared in ITAR-TASS, the Russian army has begun to use emergency food reserves to feed its soldiers. Defense Ministry official L. Gen. Vyacheslav blamed the sparse conditions on cutbacks designated for food. Vyacheslav said the military food budget was cut from 3.5 trillion rubles to 1.7 trillion rubles last year and that even those funds were distributed sporadically. Despite the depletion of food supplies, the army does have enough food to keep its soldiers from starving. (OMRI, Part I, No. 71, April 10, 1996).

5-12 April:
-President Boris Yeltsin plans to reappoint reformist Viktor Khlystun as Russia's farm minister, a post now held by acting-minister Alexander Zaveryukha. Khlystun led farm reforms from 1991 until he was replaced by conservative Alexander Nazarchuk. Officials at the Ministry expect Khlystun to receive a mixed welcome at a ministry still dominated by Soviet-style planners. (Interfax Food and Agriculture Report, Vol V, Issue 15, p. 4, April 5-12, 1996).

-Some 25 Nizhny Novgorod companies and organizations decided at an assembly to found an interregional agri-exchange to help the region's farmers and to try to establish balanced prices for farm produce and food. The exchange will trade daily in grain, meat products, fish, dairy products, and bee products. Eventually, the exchange will add fuels and lubricants, farm machinery, fertilizers, and other commodities. Members include: Regionkontrakt, which procures grain for the regional reserve on behalf of the government; the region's chamber of commerce; large farms, and food and food processing factories. (Interfax Food and Agriculture Report, Vol V, Issue 15, p. 6, April 5-12, 1996).

4 April 1996:
-Deputy Prime Minister Alexander Zaveryukha announced that Russia is anticipating a grain harvest of around 80 million tons this year. Zaveryukha said the forecasts were based on expectations that the government would provide farmers with adequate financial and material means for spring planning. He noted that farmers were set to receive Rb 18.9 trillion in tied credits for fuel and lubricant purchases. In addition, Zaveryukha said the agriculture ministry had received guarantees of a 30 percent compensation for the costs of mineral fertilizer and Rb 1 trillion to repay the farmers' debts for last year's supplies. Farmers, however, do not share Zaveryukha's optimism. Reports show the promised assistance for spring sowing has not yet reached the farms. Moreover, meteorologists have predicted more summer drought conditions in the Northern Caucasus, the Volga area, the Central and Central-Black Earth belt. Drought conditions are expected to cross the Urals by mid-summer. (Nexis/Lexis through Mead Data Central, Inc., RusData DiaLine-BizEkon News, April 4, 1996).

29 March-April 5, 1996:
-Valentin Mironov, the official in charge of agrichemicals at the Ministry of Agriculture and Food, expects shortages of crop protection chemicals, such as insecticides and pesticides, to cost Russia approximately 20 million tons of grain this year. He said this year's farmers will have to handle 2 million ha of corn bug infested grain, which is twice as much as in 1991. In addition, infestations of ground beetles and crop diseases are growing. Mironov noted that one dangerous pest, the meadow moth, was thriving and could cause extensive damage to sugar beets, maize, and vegetables. Domestic and imported crop protection chemicals are not expected to exceed 24,000 tons and 5,000 tons, respectively, this year. Mironov said that the amount is just 30 percent as much as needed. (Interfax Food and Agriculture Report, Vol V, Issue 14, p. 7, March 29-April 5, 1996).

29 March 1996:
-The Russian Academy of Agricultural Sciences and the Ministry of Agriculture are expected to submit an anti-crisis agricultural program, Green Revolution, to the Russian government. The new program will focus on introducing new species of agricultural crops as a way to offer an effective and cheap way of extricating Russian agriculture from crisis. Unlike the American green revolution, which relied heavily on chemistry and technology, the Russian program will emphasize seed growing. (Nexis/Lexis through Mead Data Central, Inc., Reuter Textline, Novecon, March 29, 1996).

25 March 1996:
-According to Arkady Zlochevsky who heads Ogo, Russia's largest private grain supplier, Russia's 1995 grain harvest of 65 million tons was understated. He argued the harvest was closer to 76 million tons. Zlochevsky noted that there has not been a deficit of grain on the Russian market and that the government has, so far, refrained from massive grain purchases. He explained that agriculture producers may have understated the amount of grain in order to evade taxes and, also, to claim budget financing. Nevertheless, grain imports have increased since early this year. In January, Russia imported 1,195 thousand tons of food wheat compared to 243 thousand tons last November and 267 thousand tons imported last December. Rye imports have also increased. The Russians have used U.S. and Canadian wheat to supply the Far East, finding it less expensive than the shipping of domestic grain all the way from European Russia. Grain imports are expected to continue to rise as prices increase due to the anticipated depletion of domestic stockpiles. (Nexis/Lexis through Mead Data Central, Inc., RusData DiaLine-BizEkon News, March 25, 1996).

AREAS OF INTEREST

KAZAKHSTAN

5-12 April 1996:
-Kazakh Deputy Prime Minister Zhanybek Karibzhanov told his country's parliament that Kazakhstan was not in danger of becoming dependent on foreign food. He did say, however, that Kazakhstan had to yield at least 1 ton per hectare to harvest 17 million tons of grain. Last year, yields averaged just 0.5 tons per hectare, and Kazakh farmers harvested only 9.5 million tons of grain, their worst harvest in a decade. Kazakhstan exported $750 million worth of farm commodities, outstripping imports of $400 million. The Asian Development Bank lent Kazakhstan $100 million to finance small-scale farm processing and irrigation system expansion. The World Bank added another $140 million. (Interfax Food and Agriculture Report, Vol V, Issue 15, p. 6, April 5-12, 1996).

UKRAINE

29 March-April 5, 1996:
-Ukraine's Minister of Agriculture, Pavel Gaidutsky, stated that the allegations over the content of toxic substances in American soymeal sent to Ukraine were groundless. He said that detailed analysis showed no evidence of the presence of mycotoxin patulin. However, Ukraine's chief state inspector of veterinary medicine, Vasily Matuzenko, claimed that investigations had found the beans did exceed acceptable levels of natural ferment. Matuzenko advised chicken farmers to use American soy only for preparing granulated formula feeds and for the feed's content of the suspect meal not to exceed 7 percent. (Interfax Food and Agriculture Report, Vol V, Issue 14, p. 6, March 29-April 5, 1996).