RUSAG-L: Current Events #40

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, 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.

12 October 1994:
-According to the Washington Post, the current exchange rate is
R3926 per dollar. (The Washington Post, October 12, 1994)

-In September, the Central Bank of Russia stopped intervening to
support the value of the ruble.  Panic selling ensued.  As a
result, on October 11, the ruble fell drastically against the
dollar, losing 845 points to end at R3926.  The Central Bank  then
injected $80 million at the close of trading to keep the ruble from
sliding over R4000 to the dollar.  Acting Finance Director Sergei
Dubinin denied rumors that the government intended to halt market
trading of the ruble, freeze hard-currency deposits, or seize hard-
currency savings accounts.  However, opponents of Yeltsin's
administration are expected to use this occasion to propose a no
confidence vote in the government. (RFE/RL, October 12, 1994)


6 October 1994:
-A RFE/RL correspondent identified Egor Stroev as the most likely
"communist" to be included in the possible coalition government
mentioned by the Yeltsin administration.  Stroev is currently the
elected governor of Orel Oblast.  He served as the Communist Party
agriculture chief during the last part of Gorbachev's era. (RFE/RL,
October 6, 1994)

30 September 1994:
-As of September 20, the average cost of a basket of 19 of the most
important foodstuffs was 62,700 rubles.  The Far East Economic
Region was the most "expensive" area for the basket of goods,
R109,200.  The least expensive region was the Central Chernozem at
R47,300.  Costs were calculated over the month. (FBIS, September
30, 1994, p. 36)

-30 September-October 7, 1994:
Russian Prime Minister Viktor Chernomyrdin signed a government
resolution creating the Federal Food Corporation and a network of
wholesale food markets.  The main tasks of the Corporation will
center around developing and regulating the food market, forming
food reserves, meeting public and industrial demand for
agricultural products, intervening in the food market, and placing
competitive orders for the procurement and supply of farm produce.
The corporation will also be responsible for organizing and
conducting import and export operations on the food market.
(Interfax Food and Agriculture Report, September 30-October 7,
1994, p. 2)

-Russian Deputy Prime Minister, Alexander Zaveryukha, held a
conference on the city of Moscow's problems procuring sugar and
vegetable oil.  Moscow needs about 600,000 tons of sugar a year,
but city traders have only been able to buy 50,000 tons of sugar
from this year's sugar beet harvest.  According to Magomedtagir
Abulbasirov, Russia's deputy prime minister of agriculture,
Krasnodar refineries are willing to supply Moscow with all the
sugar it needs.  However, Moscow traders remain unwilling to pay
the asking price of 1,000 rubles per kilo.  In addition, Moscow is
in desperate need of vegetable oil.  Again, buyers and sellers
cannot agree on prices.  Zaveryukha supports the farmers higher
prices and efforts to sell their product abroad.  Russia would then
buy less expensive imported oilseeds to meant consumption demands.
(Interfax Food and Agriculture Report, September 30-October 7,
1994, p. 3)

-According to Alexander Zaveryukha, Deputy Prime Minister in charge
of Agriculture, Russian farmers have gathered 80 million tons of
grain.  However, 9 million-10 million hectares have yet to be
harvested.  Bad weather in Siberia and the Urals where the
unharvested area is located could mean that 3 million-4 million
tons of grain could be left to rot in the snow.  Zaveryukha also
noted the slow rate farmers are selling their grain to the
government.  By October 3, procurement enterprises had only
purchased 13.3 million tons contrasted with October 3, 1993, when
the government had already acquired 22.8 million tons.  Zaveryukha
explained that government procurement agencies simply did not have
the money to buy the much needed grain. (Interfax Food and
Agriculture Report, September 30-October 7, 1994, p. 5)

-At a meeting of the parliamentary fraction of the Agrarian Party
of Russia, Alexander Zaveryukha noted that 330,000 ha of sugar
beets, or 30% of its area, had been harvested by October 3.  Yields
averaged 15 tons per hectare and production was running at 5
million tons.  At the same time last year, farmers had harvested
470,000 ha, or 35% of the crop area with yields of 20 tons per
hectare. (Interfax Food and Agriculture Report, September 30-
October 7, 1994, p. 5)


Area of Interest:  Moldova

4 October 1994:
-Moldova's Agrarian parliamentary majority continues to insist that
the world must accept Moldova as an independent state, not as a
part of Romania.  Moldova's Chairman of the Parliament's Foreign
Relations Committee said the misconception that Moldova had to be
treated as part of Romania had delayed that country's international
recognition and its acceptance into European institutions. (RFE/RL,
October 4, 1994)

-Several international companies have signed contracts with
Moldovan wineries.  Southcorp, Australia's wine maker, has launched
a joint venture aimed at exporting 3 million bottles of Moldovan
wine annually, half of it to the United States beginning in 1995.
The European Bank for Reconstruction and Development has also just
approved a $30 million loan to develop Moldova's ability to bottle
high-quality wines.  The goal is to develop annual export capacity
to 20 million bottles or 5-7% of Western Europe's total market by
1998.  Moldova accounted for more than a third of the Soviet
Union's total wine output but lacked bottling capacity since the
wine was shipped to Russia for bottling. (RFE/RL, October 4, 1994)


Area of Interest:  Kiev

30 September-October 7, 1994:
-On October 1, city authorities raised bread prices in Kiev by 50%.
Prices went from 2700 karbovanets to 4000.  One US dollar currently
buys 68,000-70,000 karbovanets on the streets of Kiev.  In an
economic memorandum to the International Monetary Fund, the
Ukrainian government pledged to free bread prices by January 1995.
(Interfax Food and Agriculture Report, September 30-October 7,
1994, p. 3)


Area of Interest:  Armenia

30 September-October 7, 1994:
-In Armenia on October 1, the government increased bread prices
 by 150%.  This raised the price of a kilo of bread from 4 dram to
10 dram.  One US dollar is currently worth 365.65 dram.  Wages in
Armenia average approximately 800 dram per month. (Interfax Food
and Agriculture Report, September 30-October 7, 1994, p. 4)


Russian Beef Farming:

Beef production accounts for 43-45% of Russian meat output,
but, interestingly, specially-bred beef cattle only account for 2%
of beef production.  All other beef comes from superfluous dairy
bullocks, heifers, and unproductive cows.  According to the
Ministry of Agriculture and Food, it is the ratio of beef to dairy
herds in Russia that prevent the sustained growth of meat and milk
production.  Thus, as Russia's dairy herd, which generates much of
the country's beef production, shrinks, Russian officials have
begun planning ways to develop beef farming.

Russian farmers have created a program which seeks to increase
beef cattle numbers from 894,800 (including 289,900 cows) to 2.7
million (including 0.8 million cows) by the year 2000.  Under the
program, officials would develop beef farming in three zones:
areas where beef herds currently exist, new regions, and those that
have suffered from radioactive pollution.

The first zone includes:  Kalmyakia, Orenburg, and Rostov
regions, the Volga River, the southern Urals, the Northern
Caucasus, and Siberia in general.  Officials plan on converting
10,000 ha of arable land to pasture in those areas to keep 1
million head of cattle.

The new regions, or second zone, are the Non-Black Earth
Region and the Far East.  Officials speculate that these areas
could hold another 1 million beef cattle after improvements have
been made to 5 million-6 million ha of land.

Lastly, on about 19 million ha of land polluted by the
Chernobyl disaster, officials plan to switch from dairy farming to
beef farming.  Beef herds could reach as much as 700,000 on these
lands.

The problem with the proposed program, of course, harkens back
to money.  Officials put the initial cost of the program at
somewhere around 3.2 trillion rubles, including 2.3 trillion rubles
of credit and $5.5 million to buy embryos and breeding bulls.  The
program is not expected to get off the ground this year, and
officials even doubt a 1995 date.

(Taken from Interfax Food and Agriculture Report, September 30-
October 7, 1994, pp. 8-9)