RUSAG-L: Current Events #30

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), Interfax News Food and Agriculture Report, 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/International Cooperation and Development/
Foreign Agriculture Service/U.S. Department of Agriculture, and the National
Committee on International Science and Education of the Joint Council on
Food and Agricultural Sciences.

23 August 1994:
-The current exchange rate is listed at R2129 per dollar. (The
Washington Post, August 23, 1994)

29 July-August 5, 1994:
-Several of the former Soviet republics face lower grain harvests
this year.  Ukraine, whose grain area shrank 2%, is forecast to
harvest only 34 million tons of grain compared to 45.6 million tons
last year.  Ukrainian officials still insist, however, that Ukraine
will not need to import grain.  Ukraine needs an annual 40 million
tons of grain.  Kazakhstan, the only former Soviet republic to
export grain outside the Soviet Union, is expected to harvest only
18.6 million tons of grain in 1994.  In 1993, Kazakhstan produced
23 million tons and in 1992 harvested 30 million tons.  Kazakhstan
has also reduced land area by 1.5 million hectares and has been hit
by bad weather that has caused yields to fall to 0.95 tons per
hectare. (Interfax News Agency, Food and Agriculture Report, July
29-August 5, 1994)

-Forecasters are now predicting Russia will harvest 90-94 million
tons of grain this year from an area of 57 million hectares.  Last
year, Russian farmers harvested 99.1 million tons of grain from
60.9 million hectares.  These figures compare with five year
averages of 103.3 million tons from 62.5 million hectares.  Most of
Russia is experiencing a mild, warm summer which is ideal for grain
and grain-legumes.  However, dry weather in the country's main
grain-producing region, the Northern Caucasus, has produced low
yields and a 2 million ton drop in the forecast of overall
production. (Interfax News Agency, Food and Agriculture Report,
July 29-August 5, 1994)

- Although officials stressed the fact that real prices would be
determined by the market, an agreement was signed in
Omsk placing third-grade wheat prices at 200,000 rubles per ton.
The Russian Ministry of Agriculture and Food and representatives of
seven Western Siberian regions and territories hammered out the
agreement.  The final price was a compromise that gave Russian
farmers average gross margins of 122% for grain. (Interfax News
Agency, Food and Agriculture Report, July 29-August 5, 1994)

-Vladimir Yarmosh, the president of the company that includes
Russia's vodka distilleries, says the anticipated rise in the price
of a ton of domestic grain to 200,000 rubles may cause the price of
a bottle of vodka to increase from the current 2,000 rubles to
6000-7,000 rubles by the end of the year.  Yarmosh indicated the
government could help stabilize prices by cutting excise duties
from 85% to 75% for vodka and to 70% for liquors. (Interfax News
Agency, Food and Agriculture Report, July 29-August 5, 1994)

-Russian Minister of Agriculture, Viktor Khlystun, predicts that
Russian farms will go broke if the government does not allow delays
on repayment for loans extended last year.  Last  year, the Russian
government lent farmers 2 trillion rubles and another 8 trillion
rubles this year.  Farmers must now pay the government 30 trillion
rubles in principal and interest.  The Russian Ministry of
Agriculture and Food says farmers have already defaulted on about
6 trillion rubles worth of these loans.  Meanwhile, the Russian
government has given farmers until September to pay off 700 billion
rubles worth of loans.  Khlystun does not expect Russian farmers
to be able to repay the loans.  Farmers do not have
the working capital to maintain output levels, and the 1994
agricultural output is estimated to be worth only 37 trillion
rubles. (Interfax News Agency, Food and Agriculture Report, July
29-August 5, 1994)

Areas of Interest

23 August 1994:


Speculators, hoping to make huge profits off this year's expected
meager grain harvest, sent sugar prices skyrocketing in July,
doubling the price of sugar.  The Agricultural Market Agency helped
stabilize the situation by making interventionary sales.   A
subsequent draft amendment to regulate the sugar industry passed
the Polish Diet but was vetoed by President Lech Walesa.
(RFE/RL, August 23, 1994)

22 August 1994:


According to the Ministry of Trade, the recent increase in the
price of bread and milk has caused a decline in production levels
of the two commodities.  Last week, milk production declined by 20%
and bread production by 10-15%.  Officials believe the decline is
related to the fact that compensatory payments to cushion the
effects of the rises have not been implemented.  Also, Belarusian
banknote denominations were reduced to their face values last week,
about the same time that the commodity price reductions occurred.  Although
the Belarusian ruble did not drop in value against the Russian
ruble or the dollar, officials say the reduction may have caused
some confusion in the marketplace. (RFE/RL, August 22, 1994)

16 August 1994:

Ukraine, Belarus, and Moldova

The US will contribute $150 million to a fund over the next 3-4
years to help develop the private sector in Ukraine, Belarus, and
Moldovia.  The money will be used to provide credits and technical
assistance to new private companies, especially small enterprises.
(RFE/RL, August 16, 1994)

12 August 1994:

Baltic States

The grain harvest in the Baltic States is expected to drop from
5.77 million tons in 1993 to 3.2 million tons in 1994.  Officials
blame a reduction in land planted and a severe drought in the area.
Lithuania is expected to harvest 2 million tons this year, down
from 2.7 million in 1993.  Estonia harvested 700,000 tons in 1993
but is expected to bring in only 400,000 tons in 1994.  Latvia is
expected to harvest only a third of last year's 2.4 million tons, or
approximately 800,000 tons. (RFE/RL, August 12, 1994)