RUSAG-L: Current Events #83

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.

19 September 1996:
-The current exchange rate is listed at R5380 per dollar. (The Washington Post, September 19, 1996).

13 September 1996:
-In a draft letter to President Yeltsin, Security Council Secretary Lebed criticized the 1997 draft budget, saying that the proposed policies neglected Russia's economic security. Lebed called for the government to provide more financing for the military, industrial, construction and agricultural sectors.
The Security Council's Economic Security Department Chief, Sergei Glazev, who has long been critical of the government's economic policies, helped draft the letter. (OMRI, No. 178, Part I, September 13, 1996).

6-13 September 1996:
- Mikhail Lapshin, leader of the Agrarian Party, stressed to a group of Party activists the need to build potential candidates from power bases in the federal government or regional authorities. He said key players in the APR would then have real experience of government at a federal or regional level. Other APR leaders, such as Nikolai Kharitonov, who heads the APR's Duma faction, were more concerned about preparations for the winter. Kharitonov said he feared that several Siberian regions could face a severe energy crisis. He noted that several schools and colleges already had heating problems. Students and teachers at a farm college in Kuibyshevsky district near Novosibirsk were planning strikes, and the Novosibirsk Agrarian University had already declared a pre-strike condition. (Interfax Food and Agriculture Report, Vol V, Issue 37, September 6-13, 1996, p. 3).

-According to Alexander Zaveryukha, Deputy Prime Minister of Agriculture, Russia has "every chance" of meeting its procurement demands for the grain it needs to feed its army, police, big cities, and remote Arctic and Siberian communities. However, Ivan Gridasov, the official at the Ministry of Agriculture responsible for crop farming, said the federal government had, so far, bought just 320,000 tons or 7 percent of its procurement target. Gridasov also acknowledged that farmers had sold 5 million tons of grain to regional reserves, down from the 5.5 million tons last year. (Interfax Food and Agriculture Report, Vol V, Issue 37, September 6-13, 1996, p. 3).

-Gregory Nerubenko, General Director of Russia's Rostiseprom chicken concern, told Interfax that the amount of chicken imports from the US had not increased significantly this year, totaling nearly 600,000 tons from January to July. He said that domestic consumers in Russia now prefer Russian chicken legs, despite the fact that domestic chicken products are 10-15 percent higher. Nerubenko noted, however, that egg production between January and August dropped 20 percent to total 16 billion units. Chicken meat production dropped from 6.6 million tons in 1990 to 2.2 million tons this year. Nerubenko added that broiler chicken production had been hit particularly hard, increasing domestic demand. He said he expects demand to continue to rise because of the continuing cuts in cattle herds. (Interfax Food and Agriculture Report, Vol V, Issue 37, September 6-13, 1996, p. 4).

-Economics Minister Yevgeny Yasin announced to at a press conference that Russia will harvest between 75-77 million tons of grain this year, which should cover practically all domestic demand. Last year, Russian farmers harvested only 64 million tons of grain, the lowest in 30 years. Yasin did say, however, that he expected overall agricultural production to fall because of the continued depression in the livestock sector. (Interfax Food and Agriculture Report, Vol V, Issue 37, September 6-13, 1996, p. 6).

-Privatization officials in the Russian republic of Karelia plan to auction 24 percent of the Lakhkolamba Timber Mill, one of the largest of its kind. Officials said they will sell 4,730 of 1,000-ruble shares at a starting price of 50,000 rubles each. The Mill has a charter capital of 19.7 million rubles, and its total assets and investments amounted to 40.4 billion rubles at the beginning of 1996. The Mill's fixed assets have a book value of 36.8 million rubles. (Interfax Food and Agriculture Report, Vol V, Issue 37, September 6-13, 1996, p. 5).

5 September 1996:
-According to Goskomstat, consumer prices fell by 0.2 percent in August, compared to July, which is the first drop since economic reforms began. Food prices fell by 1.7 percent and consumer goods prices increased by 1.1 percent.
Some experts believe the drop is due to the problem of increased wage arrears, which they argue is decreasing demand. Consumer prices have risen by 16.1 percent, since the beginning of the year; food prices have increased 13.1 percent; non-food prices have risen 13.2 percent, and the price of consumer services has gone up 35.7 percent. July inflation was at 0.7 percent. (OMRI, No. 172, Part I, September 5, 1996).

30 August-September 6, 1996:
-Prices for land in the Moscow area used for market gardening and dacha building remained fairly stable over the summer, but the number of deals struck for land increased 15 percent or about 20-30 plots per month. Land costs in the Moscow area varies, depending on how far plots are from the Moscow ring-road. A 100 square meter plot in the most popular area within 30 kilometers of Moscow costs between $1,200-$9,000. Up to 50 kilometers from Moscow, the cost drops to between $170-$270 per 100 square meters. The majority of plots further than 50 kilometers from the capital will bring around $100. Land plots available for sell are usually small and do not include agricultural land. (Interfax Food and Agriculture Report, Vol V, Issue 36, August 30-September 6, 1996, p. 5).

-Russian sugar imports rose 50 percent in the first 7 months of 1996 to reach a total of 2.49 million tons worth $1.015 billion, compared with 1.65 million tons in 1995. Principal suppliers were Ukraine at 106,140 tons (mainly refined) and Cuba at 73,590 tons. Other suppliers included: Brazil-12,800 tons, of which 10,000 tons were refined, and Moldova at 9,260 tons of which 8.270 tons were refined. Because it has a customs union with Russia, Belarus is not included in the figures. Experts expect Russian sugar imports to remain high. Minimum annual Russian demand is 5 million-5.5 million tons, but the country only has the capacity to produce 4 million tons annually. Currently, Russia is producing only 2.5 million tons. (Interfax Food and Agriculture Report, Vol V, Issue 36, August 30-September 6, 1996, p. 11).

AREAS OF INTEREST

BULGARIA

12 September 1996:
-Agriculture Minister Krastyo Trendafilov and Trade Minister Atanas Paparizov reported that the Bulgarian government is currently importing 130,000 tons of grain and purchasing another 680,000 tons domestically. Trendafilov said that he would assume the responsibility for ensuring the bread supply of Sofia and some mountainous regions but that other regions would be responsible for their own supplies. He claimed there are large amounts of grain in private bakeries and households for regions to purchase. Trendafilov said the government wanted to import more grain but needed credits, because the government did not want to further strain the balance of payments. Since the beginning of 1996, the grain shortage in Bulgaria has caused the resignation of two agriculture ministers. (OMRI, No. 177, Part II, September 12, 1996).

UKRAINE

9 September 1996:
-Ukraine's President Leonid Kuchma said Russia's planned tax on Ukrainian imports could lead to a trade war. Last month, Moscow announced its intentions to place a 20 percent value-added-tax on imports from Ukraine and to limit sugar imports to a one million ton quota. The Russian government explained that the actions were necessary to counter Ukraine's mass dumping on the Russian market. Kuchma, however, took a different view. He said that, since Russia's measures applied to only Kiev and, not the rest of the CIS, they were motivated by political concerns, not economic considerations. The Russian government has since postponed imposing the tax and quota until October. (OMRI, No. 174, Part II, September 9, 1996).

6-13 September 1996:
-Ukrainian farmers had harvested 21.1 million tons of grain from 98.8 percent of their 10 million ha crop area, 7.8 million tons less than at the same time last year. Average yields fell from 2.6 tons per ha in 1995 to 2.1 tons per ha this year. Ukraine had planned to bring in 28 million tons of grain. Ministry officials also said that harvesting for grain maize and green and silage maize were behind schedule. (Interfax Food and Agriculture Report, Vol V, Issue 37, September 6-13, 1996, p. 9).

30 August-September 6, 1996:
-The Ukrainian Cabinet of Ministers has approved a plan for the Kherson Combine factory to set up a joint venture to produce and sell grain harvesters in 1997. The joint venture will use 50 percent Ukrainian parts the first two years and then 80 percent after that. The end products will be sold in Ukraine. The plan also calls for the creation of service centers and efforts will be made to ensure the combines are closely compatible with other domestic combines, such as the Slavutich. (Interfax Food and Agriculture Report, Vol V, Issue 36, August 30-September 6, 1996, p. 6).

BELARUS

6-13 September 1996:
-Belarus farmers are expected to harvest between 11 and 11.5 million tons of potatoes, up from 9.5 million tons in 1995. Yields were at 14-15 tons per ha.
The country has a total potato area of 743,000 hectares, including 122,000 ha at state and collective farms. State and collective farms should produce approximately 1.9 million tons of the crop. Belarus ministry officials said Belarus plans to process 600,000 tons of the potatoes and export another 1.5-1.8 million tons. Belarus farmers have also harvested 5.8 million tons of grain, less than the target of 6 million tons. However, farmers produced 800,000 tons of wheat, twice as much as in 1995. (Interfax Food and Agriculture Report, Vol V, Issue 37, September 6-13, 1996, p. 5).

LITHUANIA

6-13 September 1996:
-Lithuania will harvest around 2.5 million tons of grain this year at yields of 2.3 tons per ha, up from the 1.5 million tons per ha in 1995. This year's expected harvest will be about half a million tons more than the 1995 harvest. Lithuania has a crop area this year of 1.1226 million ha, an increase over 1995 of 7 percent. (Interfax Food and Agriculture Report, Vol V, Issue 37, September 6-13, 1996, p. 9).