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.

21 November 1996:
-The current exchange rate is listed at R5489 per dollar. (The Washington Post, November 21, 1996).

19 November 1996:
-Russian Deputy Prime Minister Alexander Zaveryukha claimed on November 17 that production of cereals and output of such foods as sugar, children's food, margarine, and tobacco had increased, strengthening the position of Russia's food and agricultural producers. He said that domestic producers were becoming more accustomed to market forces. (The Monitor, Jamestown Foundation, November 19, 1996).

-According to Minister of Agriculture Viktor Khlystun, a federal stabilization program will funnel some 10 trillion rubles into a fund for the concession of privileged credits for the agro-industrial complex between 1996 and 2000. The money will be granted at a refinancing rate only 25 percent that of Russia's Central Bank. Khlystun also said he would lobby for a better system of protections for domestic producers and a change in taxation for the agricultural sector. (The Monitor, Jamestown Foundation, November 19, 1996, from Interfax, November 17, 1996).

-Russia's Foreign Trade Minister Oleg Davydov said Russian sugar imports will be cut to 1.5 million tons this year and that the bulk of the imported sugar will come from Ukraine. Davydov explained that the move was designed to allow domestic producers time to increase their competitiveness. He added that the quotas would be removed "after a while." (The Monitor, Jamestown Foundation, November 19, 1996).

18 November 1996:
-Only nine of the 20 governors have managed to retain their seats following voting on November 17. Communist Duma member Aleksandr Chernogorov defeated the incumbent Petr Marchenko in Stavropol Krai, and State Farm Director Valerii Maleev defeated the incumbent Aleksei Batagaev in Ust-Orda Buryat Autonomous Okrug. In addition, Altai voters rejected the free buying and selling of agricultural land by a margin of 81 percent to 19 percent in a non-binding referendum. (OMRI, No. 223, Part I, November 18, 1996).

-The Federation Council approved a 10 percent increase in the minimum pension as of November 1. (The minimum pension currently stands at 69,500 rubles or $12.70 a month). The Council also urged the government to undertake measures to pay pension and social benefits arrears. The Central Bank and the Finance Ministry both criticized the idea of printing more money, saying it would not solve the problems. (OMRI, No. 223, Part I, November 18, 1996).

15 November 1996:
-Some Russian regions have begun issuing surrogate money, especially plants that cannot afford to pay their workers wages. A truck plant in Bashkortostan began paying its workers with special vouchers that can be used to buy goods in the plant's shops or to pay rent for company housing. In Sverdlovsk, authorities approved the use of special checks in the region as a substitute for cash. Such actions have led experts to speculate that it is a way of regions asserting independence from Moscow. However, surrogate money tends to be confined to vouchers and credit notes that can be used only in specific ways. The use of surrogate money and bartering appears to be a way for companies to deal with payment difficulties. (The Monitor, Jamestown Foundation, November 15, 1996).

-Russia's GDP shrank in the first 10 months of this year by six percent over the first 10 months in 1995. From January through October, the volume of investment totaled 247 trillion rubles, down 18 percent from the same period in 1995. The number of unemployed also increased by 11 percent and is now at 6.6 million, of which officials say 2.6 million are registered as unemployed. This suggests that the economic output for 1996 may be worse than experts have predicted. (OMRI, No. 222, Part I, November 15, 1996).

8-15 November 1996:
-Officials at the Ministry of Agriculture and Food are predicting that Russia will produce 68-70 million tons of grain (cleanweight) this year. The figure is higher than last year's 63.4 million tons, but it is still one of the lowest in 30 years. Around 19.3 million tons is expected to come from the Northern Caucasus, 9.6 million tons from Western Siberia, and 3.1 million tons from Eastern Siberia. The Russian State Statistics Committee has already cited bunkerweight output at 74.6 million tons. Bunkerweight figures are usually 8-10 percent higher than cleanweight. (Interfax Food and Agriculture Report, Vol V, Issue 46, November 8-15, 1996, p. 8).

-President Boris Yeltsin vetoed the Forestry Code passed by the State Duma and rejected by the Federation Council. Yeltsin had instructed the Federation Council's Yegor Stroyev and the Duma's Gennady Seleznyov to form a conciliatory commission and hash out differences. The Duma failed to respond to the offer and passed the Code a second time. Yeltsin said that the Federation Council's proposal for a better system of state regulation for ownership of forestry resources must be taken into consideration. (Interfax Food and Agriculture Report, Vol V, Issue 46, November 8-15, 1996, p. 4).

-The Forestry Service plans to reforest around 200,000 hectares of boggy, shrubby, and waste land in the Moscow region by the end of this year. Deputy head of the service, Mikhail Giryayev, told Interfax that reforestration work is underway across the country as part of a strategy to manage the woodland that covers 69 percent of Russia. Giryayev said the government had to do more to protect Russia's forests. Forest fires enveloped 3 million ha of forests this year, and gypsy moths destroyed 400,000 ha of valuable softwood in Krasnoyarsk territory this fall alone. (Interfax Food and Agriculture Report, Vol V, Issue 46, November 8-15, 1996, p. 11).

-Russian First Deputy Prime Minister Vladimir Potanin chaired a meeting of the Governmental Commission on Financial and Monetary-Credit Policy which approved the composition of a tender committee and guidelines on a contest for the takeover of Agroprombank. The bank that wins the contest will transfer 25 percent of shares in Agroprombank to the state, and the government's share will be administered by the State Property Commission and the Agriculture and Food Ministry. The winning bank will also be required to maintain the ratio between the crediting of farm goods producers and other borrowers, preserve the liquidity of Agroprombank, and incur liability for its commitments. In addition, the bank will have to invest 1 to 1.5 trillion rubles in Agroprombank. (Interfax Food and Agriculture Report, Vol V, Issue 46, November 8-15, 1996, p. 4).

-Government economists expect potato output to fall from 39.9 million tons in 1995 to 38.2 million tons this year. Likewise, sugarbeet output is expected to decline from 19.1 million tons in 1995 to 16 million tons this year. Yields for sugarbeets fell from 17.6 tons per hectare in 1995 to 16.5 tons per ha in 1996, and total output has fallen 5.7 million tons below the 1991-1995 level. Although potatoes yields have also decreased, overall output is still 1.4 million tons over the 1991-1995 average. (Interfax Food and Agriculture Report, Vol V, Issue 46, November 8-15, 1996, p. 4).

-According to trade inspectors at the Ministry of Foreign Economic Relations, they imposed fines totaling about 45 billion rubles on those who made or sold defective or low-quality foodstuffs between January and September of this year. Inspectors told Interfax that between 12 and 35 percent of the foodstuffs checked were found to be defective. The worst offenders were alcoholic beverages. 25.6 percent of 7.065 million liters of vodka and other spirits checked proved to be substandard. The figure for wine was 46.5 percent. In addition, inspectors said they rejected 35 percent of the 2.73 million liters of nonalcoholic beverages; 30.9 percent of the 7,200 tons of fish; 26.9 percent of the 2,400 million tons of vegetable oil, and 21.8 percent of the 1.3119 million tons of fish checked. The shares of flour unfit for human consumption rose from 14.9 percent in January-September 1995 to 26.5 percent for the same time period this year. The share of substandard bread and bakery products also rose from 9.8 percent to 12.2 percent in the same period. Inspectors called on the government to draft laws on independent consumer testing, food safety, and procedures for confiscating, processing, and destroying substandard products. (Interfax Food and Agriculture Report, Vol V, Issue 46, November 8-15, 1996, p. 6).

23 October 1996:
-Roskhleboprodukt will negotiate grain imports for the Far East with Canada. Deputy Prime Minister Alexander Zaveryukha said the interest in importing grain was not a response to a poor harvest but the fact that it is cheaper to import grain to that area than to transport the grain from central Russia. Zaveryukha also said that the volume of grain imports would be determined locally. (OMRI, Vol I No. 9, Part II, Regional Report, October 23, 1996).

AREAS OF INTEREST

KAZAKHSTAN

8-15 November 1996:
-Kazakhstan posted a grain output 11.6 million tons, lightweight. This year's harvest was up 2 million tons from last year. The yield rose 0.21 tons per ha to 0.84 tons per ha. Wheat accounted for 65 percent of the harvest. (Interfax Food and Agriculture Report, Vol V, Issue 46, November 8-15, 1996, p. 8).

LITHUANIA

8-15 November 1996:
-Government procurement of food-quality grain has progressed at a healthy pace this year. The government has already bought 333,700 tons from this year's harvest or 75.8 percent of its target. Procurement has been best for food wheat where purchases have amounted to 236,300 tons or 82.6 percent of the target for the commodity. Figures are worse for rye, which is an important commodity in Lithuania. Only 77,600 tons or 64.7 percent of the target has been purchased. The government has issued a license to import 80,000 tons of rye duty-free this year. In addition, purchases of fodder grain have increased by approximately 250 percent to 143,000 tons, up from just 41,000 tons last year. (Interfax Food and Agriculture Report, Vol V, Issue 46, November 8-15, 1996, p. 9).

UKRAINE

5 November 1996:
-Ukrainian officials announced that Ukraine will increase duties on food imports by as much as 50 percent over the next few months. Ukrainian Prime Minister Pavlo Lazarenko said the aim was to protect domestic producers. The Ukrainian government has already imposed duties on potato imports and will soon do likewise on meat and dairy products. Officials expect duties to appear on more than 600 goods. Monthly inflation, according to government sources, was at 1.5 percent in October. (OMRI, No. 214, Part II, November 5, 1996).

1-8 November 1996:
-Ukraine's Ministry of Statistics said Ukrainian farmers expect to harvest 26 million tons of grain this year, down from an official forecast of 28 million tons and last year's harvest of 33.9 million tons. By the end of October, Ukrainian farmers had also harvested 19.1 million tons of sugarbeets, 9.2 million tons less than last year. Yields for sugarbeet dropped from 20.4 tons per ha to 19.2 tons per ha. Only 13 percent of the crop is left to be harvested. Overall, the output of feedstuffs was down by 42 percent, compared to 1995. Farmers had laid in 1.12 tons of oat units per animal, down from 1.64 tons last year. (Interfax Food and Agriculture Report, Vol V, Issue 46, November 1-18, 1996, p. 5).

ARMENIA

1-8 November 1996:
-Armenian farmers harvested 340,200 tons of grain this year, 80,000 tons more than last year. The highest yield was 3.6 tons per ha at private farms in the Ararat Valley. Experts at the Armenian Agriculture Ministry also think Armenia will top its 1995 potato harvest of 427,700 tons. Farmers have harvested 31,800 ha of a total area of 35,600 ha and have produced 412,000 tons. Hail and rain storms destroyed 28,000 ha of crops. Overall, this year's bad weather costs Armenia 4.895 million dram or $12 million. (Interfax Food and Agriculture Report, Vol V, Issue 46, November 1-8, 1996, p. 6).