RUSAG-L: Current Events #81

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.

17 August 1996:
-The Washington Post lists the current exchange rate at R5293 per dollar. (The Washington Post, August 17, 1996).

15 August 1996:
-Alexander Zaveryukha (agriculture) was appointed as one of the new cabinet's seven deputy prime ministers. (OMRI, No. 158. Part I, August 15, 1996).

8 August 1996:
-In an August 13 speech, Prime Minister Viktor Chernomyrdin alluded to the possibility of a new tax on foreign currency imports. Chernomyrdin's remarks spurred considerable controversy in the Russian financial community. Bankers argued that the tax would shift cash imports to the shadow economy and lead to an increase in currency speculation. The tax could also violate IMF provisions on current account convertibility which the Russian government accepted in June. Russian banks import approximately $30 billion a year in cash. (OMRI, No. 158, Part I, August 8, 1996).

7 August 1996:
-Leaders of the Agrarian Party agreed to join Gennady Zyuganov's new Popular-Patriotic Union of Russia party. The Agrarians also passed a resolution saying the Agrarian Party's Mikhail Lapshin should be made co-chairman of the union because rural dwellers are such active voters. However, the Agrarians remain more dependent on the Communist Party than vie versa since their poor showing in the December elections. (OMRI, No. 152, Part I, August 7, 1996).

6 August 1996:
-Economic output continued to decline in this half of the year. According to official statistics, industrial output fell 4 percent, agricultural production fell 7 percent, and the volume of investment dropped by 14 percent. Wage arrears reached 29.8 trillion rubles, $5.7 billion at the current exchange rate. (OMRI, No. 151, Part I, August 6, 1996).

9-16 August 1996:
-The Federal Prosecutor's Office has begun an investigation into alleged irregular activities at the Federal Food Corporation. The FFC is under the Ministry of Agriculture and is responsible for the procurement and distribution of foods which supply the armed forces, border guards, and the Ministry of Internal Affairs. Allegedly, the FFC accepted 1.9 trillion rubles in loans from commercial banks at the end of 1995 under Ministry of Finance guarantees. When the FFC could not meet the loans, it used 2.8 trillion rubles meant to finance farm production in 1996 to pay off the loans. (Interfax Food and Agriculture Report, Vol V, Issue 33, August 9-16, 1996, p. 3).

-According to Ivan Gridasov, the official in charge of crops at the Russian Ministry of Agriculture and Food, Russian farmers had harvested 29.1 million tons of grain from 16.3 million hectares by August 10. This is approximately 34 percent of their total crop area. This time last year output was 28.9 million tons. Since August, yields have increased 0.31 tons per ha to 1.78 tons per ha. Farmers in the southern regions, namely, the regions of Rostov, Stavropol, Krasnodar, and the republics of Adygeya, Dagestan, and Kabardino-Balkaria, have practically finished their harvesting, while farmers are farthest behind in Central Russia, the Urals, Western Siberia, and the northern Volga. Russian farmers are considerably behind in hay-making. By August 10, farmers had mowed only 17.6 million ha of grass or 19 percent less than at the same time last year. They had laid in 13.4 million tons of hay and 17.4 million tons of haylage, which is also down from last year's figures of 17.5 million tons and 20 million tons respectively. (Interfax Food and Agriculture Report, Vol V, Issue 33, August 9-16, 1996, p. 4).

-A research project at the Russian Ministry of Agriculture indicated that for every 74 people fed by US farmers in 1995, Russian farmers fed only 9 people. The report blamed poor quality machinery for the resultant productivity gap between Russian and American farms. Official figures showed that, since 1990, Russian tractor production dropped 90 percent, grain harvester production by 90.5 percent, and sower production by 98 percent. In 1995, Russians produced only 6 mineral fertilizer spreaders compared with 8,600 in 1990. Minimum demand for grain combines is 394,000 machines, while Russian farmers have access to only 273,000 machines of which just 119,000 work. The report predicted that the productivity gap would continue to widen by as much as 30 percent in the first six months of this year alone. (Interfax Food and Agriculture Report, Vol V, Issue 33, August 9-16, 1996, p. 8).

-Russian government forecasters are predicting another drop this year in livestock numbers and a subsequent decline in meat and dairy products. Cattle numbers are expected to drop 10 percent, including 7 percent for cows, hog numbers 12 percent, and sheep and goats 21 percent. As of January 1, cattle numbers were at 39.7 million, including 17.4 million cows. There were 22.6 million hogs and 28 million sheep and goats. Forecasters said meat production will fall 10 percent, milk 11 percent, and eggs 8 percent. In 1995, meat production was at 5.8 million tons, milk at 39.2 million tons, and there were 33.8 billion eggs. (Interfax Food and Agriculture Report, Vol V, Issue 33, August 9-16, 1996, p. 5).

-A report, released by Assoya, an association of soya processors, suggested that Russian farmers could increase the annual production of soybeans to 3.5-4.2 million tons by 2005. The report centered around potential production in the main agricultural region of Krasnodar Territory, Kuban, which has had some experience processing soybeans. The region produced only 39,700 tons in 1995 but could increase production to 600,000 tons annually under the new program envisioned by the report. The program also allowed for increased production of protein and vitamin additives for some 300,000 tons annually of formula feeds. Russia produced only 5,900 tons of such additives in 1995 compared to 195,000 tons in 1992. The report, commissioned by the federal government, said the program's developers would need 922.7 billion rubles to finance the project through 1998. (Interfax Food and Agriculture Report, Vol V, Issue 33, August 9-16, 1996, p. 4).

22 July 1996:
-The Russian government approved an amendment to the federal law on the rent of land in its July 18 session. The five-year privileged period offered to farmers to pay rent and taxes will be extended to 10 years. Russian Agriculture Minister Viktor Khlystun said past practices have shown that the five year period was just not enough time for farmers to improve their financial positions. (Nexis\Lexis through Mead Data Central Inc., The BBC, July 22, 1996).

2-9 August 1996:
-Russian veterinarian officials said no US chicken products imported into Russia had been rejected since the two countries agreed on new standards in April. US officials confirmed the report, saying American supplies had become an import source of high quality food in the Russian market. Russia imported 848,000 tons of chicken in 1995, 70 percent from the US. Only 1.5 million tons of chicken were produced domestically by Russian farmers. (Interfax Food and Agriculture Report, Vol V, Issue 32, August 2-9, 1996, p. 5).

-Russian Agriculture Minister Viktor Khlystun told a press conference that Russia would import 3.5-4 million tons of grain this year. Khlystun said Russia expects to harvest around 77 million tons of grain, compared to the 63.5 million tons last year. He argued Russians could expect grain independence in the near future because of lowered Russian grain demand which is linked with lowered herd numbers. However, Khlystun did not rule out the possibility of maize, soy sprout and food grain imports for certain regions. Khlystun said Russia now imports 35 percent of its foodstuffs but should be able to level out at around 10 percent in the next few years. (Interfax Food and Agriculture Report, Vol V, Issue 32, August 2-9, 1996, p. 6).

-Chechen Minister of Agriculture Alash Saikhanov announced that the republic's grain yield from winter crops averaged 1.9 tons per ha. Saikhanov said that some areas averaged a yield of 3 to 4 tons per ha. He noted that the spring harvest is also showing good results, but some areas have not been harvested because of security problems and mines. According to Saikhanov, Russian soldiers helped with the harvest in some areas. (Interfax Food and Agriculture Report, Vol V, Issue 32, August 2-9, 1996, p. 7).

AREAS OF INTEREST

THE BALTICS

16 August 1996:
-Estonia became the second Baltic country, after Lithuania, to ratify the free trade agreement on agricultural products that was signed by the prime ministers of the three countries in June of this year. The Latvian parliament is expected to ratify the agreement later this month. (OMRI, No. 159, Part II, August 16, 1996).

UKRAINE

9-16 August 1996:
-As of August 5, Ukrainian farmers had harvested 17.1 million tons of grain with yields of approximately 2.13 tons per threshed ha, down by 0.5 tons on last year. Collective, integrated, and state farms had harvested grain on 8.4 million ha or 78.3 percent of total crop area. Dry weather meant farms in Crimea, Zaporozhye, Lugansk, Nikolaev and Kherson regions had milled 0.4-0.5 tons less than the average for other areas. (Interfax Food and Agriculture Report, Vol V, Issue 33, August 9-16, 1996, p. 6).

-Ukrainian Prime Minister Pavlo Lazarenko told workers at the Kherson Combine Factory that he wants Ukrainians to produce their own combine harvesters. Lazarenko said that he will reward foreign companies that set up joint combine production in Ukraine by allowing only those companies to sell their combines freely on the Ukrainian market. He conceded that the state could no longer wait for totally Ukrainian built and funded machines. (Interfax Food and Agriculture Report, Vol V, Issue 33, August 9-16, 1996, p. 8).

BELARUS

9-16 August 1996:
-Wet weather in Belarus has slowed its grain harvest. As of August 7, farmers had harvested 700,000 ha of grain or 27 percent of the total grain area. Yields averaged 2.45 tons per ha. (Interfax Food and Agriculture Report, Vol V, Issue 33, August 9-16, 1996, p. 6).

BULGARIA

8 August 1996:
-Bulgaria's president, Zhelyu Zhelev vetoed the latest amendment to the land law. Zhelev said the new amendment favored collective farms at the expense of private owners and posed problems to land restitution. (OMRI, No. 153, Part II, August 8, 1996).

KYRGYZSTAN

2-9 August 1996:
-Kyrgyzstan officials claim this year's grain harvest will meet all of the country's demand and then some. Officials expect a grain harvest of 1.30 million tons, while Kyrgyzstan has a demand for 800,000 tons. Minister of Agriculture Karimzhon Abdimomunov said the republic will not sell its spare grain. Yields this year are averaging 2.45 tons per ha compared to 1.95 tons per ha in 1995. (Interfax Food and Agriculture Report, Vol V, Issue 32, August 2-9, 1996, p. 7)

UZBEKISTAN

2-9 August 1996:
-Uzbek officials termed this year's grain performance unsatisfactory. Uzbek farmers have harvested, thus far, just 2.7 million tons of grain of a planned 4.7 million tons. The grain area totals 1.193 million ha of irrigated and 490,000 ha of non-irrigated land. Yields are running at 2.61 tons per ha on irrigated lands and 2.2 tons per ha on non-irrigated land. Drought killed half the crops on non-irrigated land and 70,000 ha of crops on irrigated land.
(Interfax Food and Agriculture Report, Vol V, Issue 32, August 2-9, 1996, p. 7).