RUSAG-L: Current Events #18

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.

The Russian Agricultural List Service 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.

5 April 1994:
-The current exchange rate is R1773 per dollar. (-The Washington Post-, April
5, 1994)

-The draft program on agricultural reform approved by the Cabinet has been
rejected by the agricultural committees of both houses of Parliament.
Meanwhile, the government has issued a decree on the redistribution of land,
which does not have to be approved by Parliament.  The land redistribution
decree provides for a system based on the one initiated in Nizhny Novgorod
whereby the farmers and pensioners receive a voucher entitling them to part of
the parent kolkhoz' or sovkhoz' land and machinery.  The system encourages the
farmers and pensioners to then join other workers to form effective production
units. (RFE/RL, April 5, 1994)

-First quarter results show a decline in industrial output, reported variously
at 24 and 25 percent when compared with last year's figures.  The monthly
inflation rate dropped from 22 percent in January, to 9.9 percent in February,
to 8.7 percent in March.  Economics Minister Aleksandr Shokhin is predicting
a monthly inflation rate of 3-5 percent by the end of the year, well within
the guideline stipulated by the IMF. (RFE/RL, April 5, 1994)

4 April 1994:
-One  of the trade agreements signed recently between the US and Russia during
US Secretary of Commerce Ron Brown's trip to Russia provides for the
establishment of nine business centers in Russia to assist US companies
seeking to invest there.  The agreement also stipulates the reduction of trade
barriers in the pharmaceutical industry. (RFE/RL, April 4, 1994)

-Bernard McPheely, CEO of Hartness International and a recent companion of US
Secretary of Commerce Ron Brown on his trip to Russia, commented that he found
individual companies in Russia committed to becoming successful business
enterprises.  McPheely signaled out the managers and food and beverage
producers he met as "top rate."  He said they were aware of the difficulty
facing them but were "absolutely committed to succeeding." (-USA Today-,
Monday April 4, 1994, Section 5B)

-Admiral Nikolai Kudinov, commander of Russia's naval border forces, says
Russia has launched a campaign against what he describes as illegal fishing by
foreign boats in Russian waters.  Specifically, Admiral Kudinov is targeting
Japanese fishing boats which have been spotted fishing off the coast of the
disputed Kuril Islands. (RFE/RL, April 4, 1994)

30 March 1994:
-Government officials continue to disagree on the introduction of import
tariffs on foodstuffs.  Prime Minister Chernomyrdin told visiting US Commerce
Secretary Ron Brown that some of the suggested import duties will be revised
and others introduced.  Duties on goods already ordered will not change.
Economics Minister Aleksandr Shokhin supports the higher tariffs which he
contends will invigorate the domestic economy while Minister of Foreign
Economic Relations Oleg Davydov rejects the custom duties.  Davydov contends
that Russia needs to remove all trade barriers if the country intends to move
toward an open society. (RFE/RL, March 30, 1994)

29 March 1994:
-Officials close to President Boris Yeltsin expect pro-Communist candidates to
win a majority of the votes cast in the local elections held on March 27.
Ostankino TV reported a low turnout for the elections with approximately 30-40
percent of eligible voters participating.  Turnout was highest among the
conservative rural areas. (RFE/RL, March 29, 1994)

23 March 1994:
-Boris Yeltsin's introduction of import duties on foodstuffs met opposition
with officials from Russia's three largest cities.  City officials have asked
Yeltsin to rescind the 20 percent import duty on food, claiming it destroys
the established food-supply system, which could lead to starvation. (US
Department of Agriculture's Ag a.m., March 23, 1994)

24 March 1994:
-US chicken exports to Russia plummeted with the introduction of Russian
tariffs on imported meats.  Semi-processed and consumer-oriented agricultural
goods were hardest hit by the new tariff increases. (US Department of
Agriculture's AG a.m., March 24, 1994)

-USDA General Sales Manager Christopher Goldthwait told a House Appropriations
subcommittee that USDA would consider extending Russia more export credit
guarantees to help buy US grain.  However, prospects for near term sales to
Russia  remain unlikely. (US Department of Agriculture's Ag a.m., March 24,

17 March 1994:
-In an address to the upper house of Parliament, Russian Prime Minister Viktor
Chernomyrdin rejected the idea of imposing emergency measures into the
economy.  Chernomyrdin admitted the economic situation was complicated but
stated the government had control.  He said imposing emergency measures would
be the "shortest way of ending the reforms." (Interfax News Agency, Bulletin
#3, March 17, 1994)

4-11 March 1994:
-According to Interfax, Russian farmers face critical shortages of machinery
and materials needed to sow spring crops.  Overall, Russian farmers have
63,400 less  tractors, 26,200 less plows, 41,000 less sowers, and 40,300 less
cultivators than at this time last year.  A shortage of spare parts is
preventing the usage of much of the  available machinery.  Farmers also face
critical shortages in gasoline, diesel fuel, fertilizers, and pesticides.
Officials predict that farmers will have to resow about 2-2.5 Mn ha of their
winter crops and sow even more grain than usual this spring to make up for the
total crop areas cut last fall. (Interfax News Agency, Food and Agriculture
Report, March 4-11)

-The administration of the Moscow region is trying to secure funds to purchase
food and fodder grain to stock a regional reserve of 2Mn tons.  (The federal
food reserve no  longer supplies the region.)  Although the region has
requested a loan from the federal government, it does not expect the funds to
be approved because of the government's policy of not issuing soft credits.
The region may be forced to borrow the money from the Central Bank of Russia
at the full discount rate of 213 percent.  This would increase the price of
groats, flour, and formula feed as much as 45-50 percent.  According to
experts, retail prices would be expected to increase as follows; "for bread,
from Rbs 260 to 350 for a half-kilo loaf; factory-gate prices will go up for a
kilo of pork from Rbs 1,300-1,800 to Rbs 4,400; for 10 eggs from Rbs 900 to
Rbs 1,460, and for a liter of milk from Rbs 165-290 to Rbs 370." (Interfax
News Agency, Food and Agriculture Report, March 4-11)

-Area of Interest:  Latvia

The Latvian Farmers' Union held its congress on March 26 and elected a new
chairman, Andris Rozentals.  The congress then passed a resolution urging the
government to ban the import of farm goods produced in Latvia.  The Latvian
Farmers' Union and Latvia's Way are partners in the current ruling coalition.
Some speakers at the Latvian Farmers' Union's congress suggest the coalition
may fail if the situation does not improve in the countryside.