RUSAG-L: Current Events #26



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), 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.


1 July 1994:
-The current exchange rate is listed at 1985R per dollar. (The
Washington Post, July 1, 1994)


30 June 1994:
-As of June 30, Russians can no longer exchange privatization
vouchers for shares in state firms.  136 million of the total 148
million vouchers have already been traded.  The Cabinet is
expected to begin debating the second phase of privatization June
30.  In another note, Moscow Mayor Yurii Luzhkov continues to
assert Moscow's independence from the privatization process.
President Yeltsin, with the support of Prime Minister
Chernomyrdin, has instructed Privatization Minister Anatolii
Chubais to "leave Moscow alone." (RFE/RL, June 30, 1994)


29 June 1994:
-Prime Minister Viktor Chernomyrdin has agreed to create a
commission with a group of top foreign executives to help Russia
attract foreign investment.  The commission or Foreign Investment
Council will address tax problems and regulatory burdens for
countries operating in Russia.  Chernomyrdin expects foreign
investment to total as much as $1-$1.5 billion in 1994. (The Wall
Street Journal, June 29, 1994)


28 June 1994:
-In light of the recent decline in Western business interest in
Russia, Prime Minister Chernomyrdin has outlined plans to offer
new incentives to encourage Western investment.  Some of the
incentives include:  permitting firms to keep all hard-currency
profits from exports; removing more restrictions on capital
flows; and allowing fully foreign-owned companies to buy the land
on which they are located. (RFE/RL, June 28, 1994)


27 June 1994:
-Both houses of Parliament voted and passed the 1994 budget.  The
budget calls for expenditures of 194.4 trillion rubles ($102
billion) and revenues of 124.4 trillion rubles ($65 trillion).
The budget now requires only President Yeltsin's signature to
become law.  Pro-reform deputy Grigorii Yavlinsky's Yabloko
faction voted against the budget because of the unlikelihood of
achieving revenue and spending targets.  On the other hand, Egor
Gaidar's Russia's Choice voted for the budget on the grounds that
the current Parliament was unlikely to come up with anything
better. (RFE/RL, June 27, 1994)


17-24 June 1994:
-Alexander Nazarchuk, chairman of the State Duma's farming
committee, says farmers need an additional 9 trillion rubles to
keep their crops from rotting in the fields.  Russia's grain
harvester fleet has decreased by 29,000 this year and less than
half of the remaining harvesters are in working condition.  Farm
machinery plants have been instructed to deliver 1,575 combine
harvesters to farms on guaranteed government credit.  The Russian
government has also drafted a "special harvesting resolution
worth several trillion rubles which is in addition to the more
than 10.8 trillion rubles allocated by this year's budget.
(Interfax, Food and Agriculture Report, June 17-24, 1994, p. 2)

-Responding to reports that bread prices would double in June,
Deputy Prime Minister Alexander Zaveryukha explained that bread
prices would rise but not more quickly than prices for other
foods.  Reports began to circulate that bread prices would
increase dramatically when Russian bakeries began to switch to
more expensive grain from state reserves.  Zaveryukha stressed
that Russia needs around 2.8 million tons of grain a month.  In
March, Russian grain use fell to 600,000 tons.  According to
Roskhlebprodukt, until recently, Russia used 4 million tons of
grain per month. (Interfax, Food and Agriculture Report, June 17-
24, 1994, p. 3)

-A loan being extended under agreement between the World Bank's
Board of Directors and the Russian government will provide Russia
with $80 million for land reform.  The money will be used to set
up a computerized land registration system and to modernize
cadasters and land mapping.  A U.S firm, Dell Computer
Corporation, has won a tender to supply the equipment for the
project. (Interfax, Food and Agriculture Report, June 17-24,
1994, p. 4)

-Tsentrsojuz, an association of rural consumer co-cooperatives,
will buy approximately 2.3 trillion rubles of farm products this
year.  Valentin Yermakov, association chairman, told Interfax
that co-ops will produce food and non-food goods worth 3.5
trillion rubles.  Rural outlets will continue to offer goods and
services to farm communities.  However, some of the co-operative
land has fallen into state hands, but the government is working
with Tsentrsojuz to either return the land to co-operatives or
compensate them.  The government has also shown interest in
helping develop the co-operatives, possibly through a special
fund. (Interfax, Food and Agriculture Report, June 17-24, 1994,
p. 5)


10-17 June 1994:
-Russia is expected to harvest between 2.9 and 3.4 million tons
of sunflower seed this year.  Forecasters are predicting good
weather for most of the parts of Russia where the seed is
cultivated.  The last five-year average for sunflower seed is 3.2
million tons. (Interfax, Food and Agriculture Report, June 10-17,
1994, p. 3)

-Russian farmers have almost completed spring sowing.  However,
the total grain area is down from 61.4 million hectares to 56.6
million ha.  Officials have also expressed concern over the grain
seed industry.  Russian farmers used about 3 million uncertified
seeds or 28 percent of the total sown, despite the fact that
state reserves still contain about 500,000 high-grade seeds.
(Interfax, Food and Agriculture Report, June 10-17, 1994, p. 6)


-Despite efforts to liberalize Russia's grain market, state
procurement agencies remain the largest purchaser of grain in
Russia.  Approximately two-thirds of marketable grain was sold to
the state in 1993.  Only 12.4 percent of marketable grain was
sold on the free market.  The rest of the grain was sold directly
to the public as direct sales transactions or traded for wages.
(Interfax, Food and Agriculture Report, June 10-17, 1994, p. 12)


Area of Interest:  Croatia

29 June 1994:
-The World Bank has approved a $120 million loan to Croatia.  The
money will be used mainly for emergency infrastructure repairs
and to improve Croatia's agriculture sector which has been
devastated by the war. (RFE/RL, June 29, 1994)


Ukraine:

13 June 1994:
-Political opposition to privatization in Ukraine has kept that
process from moving forward.  Some officials blame this year's
upcoming presidential elections for the lack of governmental and
private interest.  However, many Ukrainians doubt the need for
privatization and question whether Ukrainians will benefit
personally and financially or if Western corporations that can
buy choice industries cheaply will have the most to gain. (Russia
and Commonwealth Business Law Report, June 13, 1994, p. 5)

27 June 1994:
-Preliminary outcomes of the Ukrainian presidential election
suggest President Leonid Kravchuk and Prime Minister Leonid
Kuchma will compete for office in the second round of the
elections scheduled for July 10. (RFE/RL, June 27, 1994)