RUSAG-L: Current Events #82

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.

30 August 1996:
-The Washington Post lists the current exchange rate at R5367 per dollar. (The Washington Post, August 30, 1996).

-According to Russia's Epidemiological Service, 9 percent or 1,840 metric tons of foodstuffs imported by Russia in the first half of 1996 were either of low quality or had passed the expiration date for freshness. (OMRI, No. 169, Part I, August 30, 1996).

-Now that Russia's governors are no longer appointed by the Kremlin, regional elites are becoming increasingly independent of the Moscow-center. Businessmen figure prominently among deputies to local legislatures, and those legislatures are increasingly dominated by business and economic interests. Regional elites have even begun to forge agreements with other regions and cities. For example, Saratov oblast recently signed an agreement with Moscow's Mayor Yuri Luzhkov to provide Moscow with vegetables, chemicals, buses, and trolley-buses, in exchange for financial support. (Monitor, Vol. II, No. 161, August 30, 1996).

28 August 1996:
-Vladimir Zhirinovsky's Liberal Democratic Party faction engineered a drive to collect the necessary signatures to force deputies to call an emergency session of the Duma, in order to discuss the food supply situation in Russia's northern territories. Apparently, only 50 percent of supplies have been shipped to the North and 5 million people may be without food this winter. Deputies have collected 70 of the necessary 90 signatures and expect the emergency session to be held by September 10. (OMRI, No. 167, Part I, August 28, 1996).

23-30 August 1996:
-Leaders of Russia's Agrarian Party, Deputy Prime Minister Alexander Zaveryukha, and Minister of Agriculture Viktor Khlystun all agree that the grain harvest in the fields this year will not be less than 77 million tons. However, Agrarian Party leader Mikhail Lapshin and Agrarian Union leader Vasily Starodubstev, question the ability of farmers to bring in the harvest. They noted that 8 percent-12 percent of the gross harvest is traditionally lost during the harvest process, and they said that they expect problems with tractors and combines. Zaveryukha responded that the problem of transferring equipment to Siberia's massive grain fields had almost been sorted out. He said Agrosnab, the ex-state machine supplier, would supply new combines from the Don factory, even though the machines still have no engines. Zaveryukha said the engines would be installed directly at the farms. (Interfax Food and Agriculture Report, Vol V, Issue 35, August 23-30, 1996, p. 3-4).

-By August 24, Russian farmers had harvested 42.5 million tons of grain from 25.1 million ha or 52 percent of the total. These figures lagged 1.6 million ha behind the total for the same period last year. Yield is running at 0.25 tons per ha, up 1.69 tons per ha from last year. According to Ivan Gridasov, crops chief at the Ministry of Agriculture, more than 80 percent of the grain had been harvested in Belgorod, Voronezh and Volgograd regions and the republic of Kalmykia. The regions of Tula, Tver, Smolensk, Kirov, and Ulyanovsk lagged behind last year's pace. Meanwhile, winter crops had been sown on 2.45 million ha as of July 19, compared with 3.77 million by the same time last year. Gridasov said many farmers had sown winter crops without the benefit of fertilizers, so several farms may produce low quality winter wheat.
(Interfax Food and Agriculture Report, Vol V, Issue 35, August 23-30, 1996, p. 4).

-Senior officials at the Ministry of Agriculture and Food are concerned that Russia's inability to improve its irrigated and drained land may result in harm to future harvests. They noted that 80 percent of Russia's farmland needed either better drainage or irrigation. The total areas of irrigated land dropped by 1.2 million ha and drained land by 0.3 million ha over recent years. Over half of Russia's irrigated land, 2.7 million ha, received no water supplies last year. According to officials at a special meeting on soil melioration, the absence of water to those lands costs Russia over 632 billion rubles in lost produce. (Interfax Food and Agriculture Report, Vol V, Issue 35, August 23-30, 1996, p. 5).

-Anatoly Altukhov and Nina Prolgina of the Russian Scientific Research Institute of Agricultural Economics want Russia to develop an information highway for Russian grain market needs. The two scientists argue that the system for collating grain market statistics has not kept pace with change, so it does not reflect market structures, infrastructures, and competition. They maintain that the government needs to set up a price information and statistics database and a parallel system for state price intervention in the grain market. Collection, processing, study and dissemination of information should take place through a network of state information services with the possibility of a commercial information organization functioning alongside it within different regions and subbranches of the market. Altukhov and Prolgina suggested the EC price regulation mechanism as a model. (Interfax Food and Agriculture Report, Vol V, Issue 35, August 23-30, 1996, pp. 6-7).

22 August 1996:
-The IMF will release the $330 million July tranche of the $10.1 billion granted to Russia in July. The IMF had suspended the July tranche because of concerns over the 40 percent shortfall in tax collection in the first half of this year. Apparently, the IMF is satisfied with Russia's attempts to correct the situation. (OMRI, No. 163, Part I, August 22, 1996).

21 August 1996:
-Experts predict Russia's poultry imports will rise 10 percent in 1996 from 1995. Meanwhile, the uncertainty over import quotas that would limit imports from the U.S. continues. The U.S. fills 75 percent of Russia's import poultry demand. (Wall Street Journal, Section A, August 21, 1996, p. 10).

16-23 August 1996:
-A Russian commission called for a white sugar import quota of 1.5 million tons in 1996 and 1997. The commission's recommendation came as a result of an investigation sanctioned by the Ministry of Agriculture and Food in response to complaints from domestic refineries. The commission cited sugar imports as the reason for a reduction in output at domestic refineries and for losses of approximately 1 trillion rubles in 1995. According to the Ministry of Economic Relations, white sugar imports over the last three years have grown to take 40 percent of the Russian market. Russians consume around 5.5 million tons annually. Officials anticipate output at 4 million tons a year in 1996 and 1997. They expect the quota to enable Russia to buy all the white sugar it needs without undermining domestic refineries. (Interfax Food and Agriculture Report, Vol V, Issue 34, August 16-23, 1996, p. 5).

AREAS OF INTEREST

UKRAINE

9 August 1996:
-Officials continued to predict a low grain harvest for Ukraine. A senior official in Ukraine's agricultural sector said this year's harvest will be little more than half the 1990 level of 50 million tons. The forecast has been revised from 39 million tons to 30 million. Some officials said the harvest could be as low as 26 million tons. A cold spring and a dry summer have contributed to the low harvest, but Western officials believe underlying structural problems and lagging farm reform are behind the steep decline. Ukraine has been slow to replace its subsidized collectives with private farms. Last month, the number of private farms rose by 488 to 35,300, leaving 2.5 million people on collective farms. Private land accounts for less than 3 percent of the total. In addition, the parliament has not acted on a land code, and President Leonid Kuchma remains leery of liberalization. Kuchma only removed licensing of grain exports this year. (Financial Times, August 9, 1996, p. 23).

BULGARIA

21 August 1996:
-Prime Minister Zhan Videnov placed the blame for Bulgaria's grain crisis largely on farmers. Videnov said farmers had not fulfilled their obligations under contracts signed with the state for which they were paid from the state agricultural fund. He charged farmers with holding grain in expectation of higher prices. Videnov conceded that importing grain would not solve Bulgaria's problems. Videnov said the government would attempt to keep domestic prices under world market prices and concurrently restrict exports of foodstuffs. (OMRI, No. 162, Part II, August 21, 1996).