RUSAG-L: Current Events #17


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 Radio Free Europe/Radio Liberty Daily Report (RFE/RL), the Foreign Broadcast Information Service at the Central Intelligence Agency's Central Eurasia Daily Report (FBIS), U.S. Department of Agriculture's AG a.m., Nexis/Lexis through Mead Data Central, Inc., and The Washington Post.


7 March 1994:
-The Washington Post lists the current exchange rate at R1691 per dollar. 
The exchange is fixed by the Moscow Interbank Currency Exchange. (-The 
Washington Post-, March 7, 1994) 

4 March 1994:
-The Russian government's proposed budget for 1994 does not reflect the 
dire predictions of ousted reformers who saw the new government caving in 
to the interests of entrenched lobbies, such as those in the agricultural 
sector. Instead, the budget proposals seem designed to stem inflation by 
placing tight caps on spending. Prime Minister Viktor Chernomyrdin, who 
many feared would promote spending as the solution to the country's 
economic problems, said that the new government would not permit 
hyperinflation to destroy the country. He added that " We'll be making 
far-from-popular decisions, because popular decisions are simply 
impossible now." The government expects stiff opposition to the budget in 
the Duma, especially from special interests groups like the agricultural 
lobby which has already accused the government of reneging on promises 
that would have given that sector trillions of rubles. (- The Washington 
Post-, March 4, 1994)

- Ivan Rybkin, speaker of Russia's new parliament, will visit Washington 
this week-end as the guest of House Speaker Tom Foley. Rybkin will try to 
soothe the turbulent relationship between Moscow and Washington caused by 
the recent spy scandal. Rybkin, a former agrarian engineer, is considered 
an astute and patient politician who knows how to negotiate and build 
consensus. Rybkin led the Agrarian Party in the recent elections. He has 
opposed the radical reforms of Yegor Gaidar, seeing them as destructive in 
much the same way as the policies of the Bolshevik Party. According to 
Rybkin, both groups tried to impose radical ideas instead of the gradual 
dismantling of the system. Rybkin hopes to steer Russia toward peace and 
away from the bitter conflict between parliament and president that 
erupted last fall. (-The Washington Post-, March 4, 1994)





3 March 1994:
-According to reports from the Russian Agriculture Ministry, private 
landowners are beginning to show some gains against major collective 
farms. The share of individual smallholdings in total agricultural 
production increased from 24 percent in 1990 to 36 percent in 1993. 
Individual procurers provided more than 80 percent of all potatoes and 60 
percent of vegetables grown in Russia in 1993. (Nexis\Lexis through Mead 
Data Central Inc., BBC, March 4, 1994)


2 March 1994:
-The agricultural lobby is working to restore the farm subsidy allocation 
from the 8.5 trillion rubles in the proposed 1994 budget to the initial 
bid of close to 16 trillion rubles. Since no one knows what the 1994 
inflation rate will be, various groups lobbying for support use different 
price-bases in their pronouncements. The government appears to be using a 
projected annual rate of around 600 percent. (RFE/RL, March 4, 1994)


22 February 1994:
-The leaders of the Economy Ministry have been discussing their main ideas 
for the current year in the economic community in hopes of enlisting broad 
support. The ministry envisions targeting the least privileged strata of 
the population for support. Total spending on social needs is projected at 
16 percent of GNP, depending of course, on total revenue. The leaders of 
the Ministry also see many enterprises that were sustained by the federal 
budget as going bankrupt. Targeted assistance is promised to major 
facilities in the coal and metallurgical industries as well as those 
industries involved in the production of fertilizers. (FBIS, February 22, 
1994)


18 February 1994:
-The last two years of economic reform have resulted, not only in a sharp 
decrease in the living standards of Russians, but also a decrease in 
birthrates and an increase in death rates. Russian society has also been 
stratified into the very rich and the very poor, resulting in an almost 
non-existent middle-class. Almost 40 million Russians or 26.7 percent of 
the population have living standards below the poverty line. For the last 
two years, the unemployment rate has grown 13.5 times. Because of all 
these changes, the government anticipates the erosion of the social base 
needed to secure reforms. Hence, sources close to Prime Minister 
Chernomyrdin hint at future policies aimed toward prioritizing social 
policies.

-'Selskaya Zhizn' reported that economists and representatives of agrarian 
movements and organizations met at the Russian Academy of Agricultural 
Sciences to discuss the results of a socioeconomic survey conducted by the 
Agrarian Institute. The director of the Institute, A.A. Nikonov, reported 
a need for agrarian reform and recognized the growing number of private 
farms in Russia. Nikonov noted that the survey indicated peasants engaged 
in private farming even less than previous surveys had shown. He 
attributed this to a lack of materials, such as fertilizers, credit, and 
machinery. The data collected by the Institute divided private farmers 
into four groups: "professionals", who specialized in agriculture; "elite 
farmers", whose families did well in agriculture because of their previous 
connections with the nomenklatura, and "farms of the intelligentsia", 
whose families' job skills were divided between low paid jobs and 
agriculture, and the "marginal group," whose family members had few skills 
in agriculture but who comprised one-fifth of farmers. The former groups 
were quite successful but the latter group, the "marginals," produced very 
few goods on their farms The report suggested reorganizing collective and 
state farms so the peasants could own the land, instead of just work it. 
(Nexis/Lexis through Mead Data Central Inc., BBC, February 18, 1994)



Area of Interest: Slovakia


4 March 1994:
-The government of Slovakia has placed a 10 percent import surcharge on 
consumer goods. The duties will be decreased by 50 percent after six 
months in accordance with Slovakia's agreement with the International 
Monetary Fund. This move follows steps taken in February to improve the 
country's trade balance by implementing new rules which require approval 
from Slovak authorities for food shipments entering the country. The Czech 
republic, which holds a customs union with Slovakia, retaliated by 
devaluating the Czech koruna by 3 percent in the clearing system used in 
bilateral trade. (RFE/RL, March 4, 1994)