RUSAG-L: Current Events #30a

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 Serviceat 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.

5 August 1994:
-The current exchange rate is listed at 2060R per dollar. (The Washington Post,
August 5, 1994)

4 August 1994:
-The Russian government will focus economic policy on lowering annual
lending rates to 110-120% by the end of 1994. The prime lending rate was 200%
at the beginning of June.  The current annual lending rate is set at 150%.
(RFE/RL, August 4,1994)

1 August 1994:
-According to a state statistical committee, prices in Russia rose 5.1% in
July.  However, food prices rose more slowly than anticipated.  In the first
seven months of 1994, overall prices rose 90%.  Economists expect inflation
rates to surge and remain at around 10% per month for the rest of 1994.
(RFE/RL, August 1, 1994)

-Vodka distillers expect the price of a bottle of vodka to more than triple by
the end of the year.  Officials blame the situation on the substantial increase
in the price of grain.  Higher grain prices alone could push the cost of vodka
from 4,000 rubles ($2) to 14,000 rubles ($7) a bottle.  In an effort to
counteract the smuggling of cheaper alcohol across borders, the government
announced that new excise stamps will be required on all imported liquor as of
January 1, 1995. (RFE/RL, August 1, 1994)

28 July 1994:
-Trade between Russia and China plummeted 39% in the first half of this year as
compared with the same period last year.  While Chinese officials admit that
the poorer quality of Chinese goods led Russians to purchase higher priced
Western goods, they also cite the primitive state of the Russian banking system
as another obstacle to effective trade.  Trade between the two countries
developed quickly without the necessary laws and regulations in place to cope
with trade agreements. (RFE/RL, July 28, 1994)

22-29 July 1994:
-Officials from the Ministry of Agriculture and Food, Roskhleboprodukt (the
state grain procurement agency), and the Agrarian Union (a farm lobby) met with
representatives from Russia's eight main grain-producing regions and
discussed recommended prices for this year's grain harvest, as well assuggested
prices for oilseeds and sugar beets.  The prices were effectively doubled or
tripled to place grain prices at world levels.  At these rates, Russians should
expect to buy bread at around 1,500 rubles per kilogram.  Also, Russian farmers
are holding grain for prices of 250,000-300,000 rubles per ton.  So far, buyers
have been willing to pay only 110,000-120,000 rubles per ton. (Interfax News
Agency, Food and Agriculture Report, July 22-29, 1994, p. 2)

-A mass demonstration has been planned for August 25 in Moscow by the
Coordinating Committee for the Collective Action of Agro-Industrial Workers.
Anatoly Vorontsov, the State Duma deputy who chairs the Russian Council of
Collective and Other Farms, says the demonstration will coincide with protests
in other district and regional centers throughout Russia.  The purpose of
the demonstrations is to voice demands for more government support. Farmers
want to close the gap between prices for agricultural goods and industrial
products, or more simply put, farmers want prices to reflect their costs.
(Interfax News Agency, Food and Agriculture Report, July 22-29, 1994, p. 3)

-Aleksandr Zaveryukha, deputy prime minister in charge of agriculture, noted
recently that, while the government shares concerns about decreasing crop
areas, it does not consider the trend a tragedy.  Zaveryukha said lower crop
areas simply reflect the painful transition to market-based farming.  For
example, this year Russian farmers set aside 200,000 more hectares for highly
profitable sunflowers than last year.  At the same time, areas of
labor-intensive and low-return flax were dramatically reduced.  Russia's total
grain area has fallen by 4.27 million ha.  However, Zaveryukha predicts Russia
will be able to meet consumption of staple foods by harvesting
between 90 and 95 million tons of grain and 35 million tons of
potatoes. (Interfax News Agency, Food and Agriculture Report, July 22-29, 1994,
p. 4)

-The government has lent Dalselmash, the farm machinery plant in the Far
Eastern city of Birobidzhan which produces Yenisei-1200P track combine grain
harvesters, 30 billion rubles to pay for a shipment of 500 track combines to
local farms.  The plant has been out of production for some time.  Managers at
the plant said the government order would be filled by September 15 at which
time managers expect to encounter the same problems that caused the plant to
close initially, mainly, selling their combines. (Interfax News Agency, Food
and Agriculture Report, July 22-29, p.5)

-Although Russia's nearly 300,000 private farms have consistently increased
output, the levels of private farming start-ups have dropped considerably since
early 1992.  Officials blame late government payments for food shipped to state
reserves, price disparities between agriculture and industrial goods, and
high interest rates and tax burdens.  Because of tougher lending rules, many
private farmers have yet to receive loans promised to help with spring sowing.
Government aid has done much to help establish private farming in Russia, but
officials say much more aid is needed if private farmers are to survive
Russia's harsh free market. (Interfax News Agency, Food and Agriculture
Report, July 22-29, 1994, p. 6)

-Ivan Gridasov, the official in charge of crop growing at the Ministry of
Agriculture and Food, blames low potato yields (10-11 tons per hectare) on the
collapse of the country's seed potato sector.  Gridasov claims that Russia's
seed potato quality control and certification is in a poor state.  Some
potato breeding labs have already shut down.  In addition, seed potato farmers
have no workable mechanism to channel their products to small producers who now
account for most production.  Meanwhile, agriculturalists at the Ministry of
Agriculture and Food say a new program, currently being considered by the
cabinet, will upgrade technology and help maintain supplies of high-grade
seed potatoes. (Interfax News Agency, Food and Agriculture Report,July 22-29,
1994, p. 10)

15-22 July 1994:
-Aleksandr Zaveryukha told a seed potato farming conference in Bryansk that
Russians will harvest 35 million tons of potatoes this year compared to 38.1
million tons in 1993.  Zaveryukha argued, however, that the 35 million tons
matched consumption and that there will be enough of the crop for food and
processing. (Interfax News Agency, Food and Agriculture Report, July
15-22,1994, p. 3)

Area of Interest:  Romania

26, June 1994:
-According to senior Agriculture Ministry official Iosif Pop, Romania is
producing food surpluses once again.  Pop and ministry officials put the 1994
grain crop at 19 million tons compared to 15.5 million tons in 1993.  Thus,
Romania is not expected to import any grain in 1994, and the country has
surpluses of meat, dairy products and eggs.  Officials say state farms now have
a surplus of over 100,000 "fat pigs," 35 million eggs, and 45,000 tons of
cheese.  Pop attributes Romania's agricultural boom to the redistribution of
land to private farmers.  93 percent of the country's 15 million hectares of
farmland are now in private hands.  (The Moscow Times, June 26, 1994, p. 45)