Current Events--#27

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.


13 July 1994:
-The exchange rate as listed in _The Washington Post_ is R2,020 to the dollar.
 (_The Washington Post_ 13 July 1994)


4 July 1994:
-Finance Minister Sergei Dubinin reported that monthly inflation was down to
6% in June, from a rate of 22% in January.  The State Statistics Committee
reported that the June figure was as law as 4.8%.  If accurate, these figures
are a promising sign, given that Russia agreed with the IMF to reduce monthly
inflation to a rate of 7% by December 1994.  (RFE/RL 5 July 1994)


1 July 1994:
-The second stage of the Russian government's privatization program, set for
introduction on July 1, is expected to use direct cash auctions to privatize
20% of state industry.  It has been designed to overcome two shortcomings of
voucher privatization:  shortage of new capital infusions and dispersion of
ownership.  Under the direct cash auction scheme, enterprises will be allowed
to own the land on which they are located and sell any surplus property.  The
amount of shares employees may buy on preferential terms will decrease from
51% under voucher privatization to 10%.  (RFE/RL 1 July 1994)

24 June - 1 July 1994:
-Minister of Agriculture Khlystun reported that Russian farmers have received
only 10.2% of promised government aid so far this year.  At the same time,
government and traders owe R3 trillion to food processing enterprises for
supplies of agricultural produce.  Khlystun said that harvesting will be
possible only if farmers receive R500 billion to finance machinery lease/sales
and R4.6 trillion to finance at least half of planned procurement.  (Interfax
Food & Agriculture Report, June 24-July 1, p. 2)

-Vladimir Bashmachnikov, President of AKKOR, announced that Russian private
farmers will be responsible this year for 6% of total agricultural production,
while they own only 5% of Russian farm land.  The Ministry of Agriculture and
Food reported that the number of private farms dropped from the approximately
270,000 registered in early 1994 to about 255,000.  Bashmachikov acknowledged
that laws hindered private farm development by making it difficult for farmers
to leave collective farms with an appropriate share of stock and land.  Also,
he said that annual interest rates of 210% were a significant obstacle.  The
rates seem unfair, particularly given the fact that private farmers have had
one of the highest rates of return on money borrowed in the country, returning
82% of the money they borrowed.  (Interfax Food & Agriculture Report, June
24-July 1, p. 3)

-According to a 1993 report of the Russian Committee for Land Resources and
Use, the Ministry for the Conservation of the Environment and Natural
Resources and the Ministry for Agriculture and Food, agricultural land in
Russia has shrunk by 26.4 ha over the last 50 years due to reductions in soil
fertility.  Irreversible soil damage could result if efforts are not taken in
the next 2-3 years to change present farming practices.  The problem is due in
part to the fact that only 30-40% of the government's 1993 soil enrichment
program was carried out, mainly due to financial difficulties.  (Interfax Food
& Agriculture Report, June 24-July 1, p. 5)


21 June 1994:
-According to the State Committee for Statistics, the rise in prices for
consumer goods and services during the June 8-14 period was the smallest so
far this year at 0.8%.  Food prices rose by 0.7% and non-food prices by 0.9%.
The average cost for a basket of 19 basic foodstuffs was R56,000 for one
month, with the highest cost for such a basket occurring in Magadan (R150,400)
and the lowest in Ulyanovsk (R35,800).  (FBIS-SOV- 94-119, 21 June 1994 p.
28).


20 June 1994:
-First Vice-Premier Oleg Soskovets urged the agro-industrial complex to guard
against a repetition of last year's grain losses, which amounted to 20 million
tons or 20% of gross harvest.  His concern for the grain harvest stems in part
from the fact that the grain combine harvester fleet has 29 thousand vehicles
less than it did in 1993 and, of those remaining, only 50% are operational.
Consequently, each machine must harvest 260 ha. compared to the standard 131,
and the harvesting season will last one month instead of the optimal 15-17
days.  Soskovets asked manufacturers to supply 1,575 grain harvesters on
credit supported by government guarantees.  He criticized very strongly the
Rosagrosnab and Roskhleboprodukt joint-stock companies and the associations of
Rosagrokhim, all of which had assumed new names but have failed to transform
into genuine market structures.  He complained that the agro-industrial
complex in Russia consists of fragmented structures which carry no
responsibility for the farmers' end product.  (FBIS-SOV-94-119-A, 21 June 1994
pp. 27-28)


19 June 1994:
-Aleksandr Nazarchuk, State Duma Agricultural Committee chairman told Interfax
news agency that the Russian farming sector needs nearly nine trillion rubles
in credits or else much of the next harvest will be lost.
(FBIS-SOV-94-119-A, 21 June 1994 p. 27)



Areas of Interest:


the Baltic Republics

24 June - 1 July 1994:
-In an effort to combat smuggling, the Lithuanian government plans on July 10
to tighten import restrictions on alcohol and tobacco.  Businesses hoping to
import alcohol must get permission from the Lithuanian Ministry of Industry
and Trade.  Businesses hoping to import tobacco products must first register
at the Customs Department and pay necessary duties.  The cost to import
alcohol is 300,000 litai annually ($1 buys four litai).  Moreover, alcohol
requires transport under Lithanian police convoy.  The cost for a tobacco
importer certificate amounts to 5,000 litai.  (Interfax Food & Agriculture
Report, June 24-July 1, p. 4)


30 June 1994:
-OECD issued a report which, while cautious in its predictions on the Russian
economy, praised Estonia and Latvia for their economic growth and Estonia in
particular for reduction of its annual inflation rate to 30%.  (RFE/RL 1 July
1994)


Moldova

4 July 1994:
-US Ambassador to Moldova, Mary Pendleton, said in an address in Chisinau that
Moldova's currrency is the most stable of the currencies of the CIS states.
Valentin Tolkachev, chairman of the Russian electronics firm TVT which is
investing in Moldova earlier reported that the Moldovan government supports
foreign investment and that customs duties and VAT are lower in Moldova than
in Russia.  (RFE/RL 6 July 1994)