RUSAG-L: Current Events #46

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.

6 December 1994:
-The current exchange rate is listed at R3261 per dollar.  (The Washington
Post, December 6, 1994)

-All twelve signers of the CIS have agreed to coordinate policies on agrarian
reform, including sharing crop information and various forms of technical
information.  Members established a Permanent Council and Secretariat to be
headquartered in Moscow. Russia's Deputy Prime Minister in charge of
agriculture, Aleksandr Zaveryukha envisions these steps as the first toward a
common CIS agriculture market.  Some CIS states noted their interest in
removing tariff barriers, which reflect the protectionist interests of
Russia's agricultural lobby. (RFE/RL, December 6, 1994)

29 November 1994:
-Russian First Deputy Prime Minister Oleg Soskovets and Japanese Foreign Prime
Minister Yohei Kono signed agreements on  rescheduling Russia's debt and the
creation of a joint trade committee.  Soskovets also agreed to negotiate
fishing rights in the area surrounding the Kurile Islands.  Kono had voiced
concern that Japanese fishing boats had been detained and fired upon by
Russian border patrol vessels. (RFE/RL, November 29, 1994)

-Russia's President Boris Yeltsin and Prime Minister Viktor Chernomyrdin
staged a joint appearance before a group of regional governors, moderate Duma
deputies, industrialists, and bankers to rally support for the 1995 budget.
Yeltsin stressed the importance of cutting inflation, stabilizing production,
and reducing the social costs of economic transformation.  Both Yeltsin and
Chernomyrdin ruled out uncontrolled borrowing from the Central Bank to cover
expenditures.  Their appearance came the day after the Duma rejected the
administration's 1995 budget proposal as "unrealistic" and voted to set up a
commission to work with the government to present a new budget.  The meeting
also coincided with the arrival of IMF officials in Moscow, who must decide
whether or not to agree to some $13 billion in loans to the Russian
Federation. (RFE/RL, November 29, 1994)

-The Russian Duma voted to raise the minimum wage from 20,500 rubles to 54,100
rubles, effective January 1, 1995.  The bill was attacked by Prime Minister
Viktor Chernomyrdin who told an economic conference that it would aggravate
inflation and unemployment.  Labor Minister Gennadii Melikyan also criticized
the bill, marking it as a "purely populist decision," inaugurating the
upcoming 1995 election campaigns. (RFE/RL, November 29, 1994)

18-25 November 1994:
-Agrarian deputies in the Russian Duma have vowed to oppose the
administration's 1995 budget.  The budget calls for spending 2.4 percent of
overall expenditures in agriculture, compared with 6.8 percent in 1993 and 6.4
percent in 1994.  Farmers, however, only received 11 trillion rubles of the
government's planned expenditure of 18 trillion rubles.  Agrarians are
demanding that the government keep agriculture spending at this year's level.
(Interfax, Food and Agriculture Report, November 18-25, 1994, p. 2)

-Agrarian Party leader, Mikhail Lapshin, accused the government of unfair
practices toward farmers.  Lapshin noted that the government had only procured
2 million of the planned 11 million tons of grain by November 2.  The
government decided to let regions buy the bulk of this year's grain.  In
addition, Lapshin complained that federal and local governments are currently
buying grain at 160,000 rubles per ton, despite regional agreements with the
government to purchase grain at 200,000-240,000 rubles per ton.  Lapshin said
farmers had to agree to what amounted to robbery in order to pay wage debts
for harvesting. (Interfax, Food and Agriculture Report, November 18- 25, 1994,
p. 3)

-Russia and Cuba have reached an agreement on their oil-for-sugar deal.  The
Russians agreed to resume the deal because the Cubans fulfilled their shipment
obligations under the first stage and guaranteed remaining supplies.
Initially, Cuba and Russia agreed to barter 2.5 million tons of oil for 1
million ton of raw sugar.  When the Cubans fell behind in sugar shipments, the
Russians quit shipping oil.  Now, the deal will go ahead as scheduled in
December and January. (Interfax, Food and Agriculture Report, November 18-25,
1994, p. 9)

Raw sugar traders are forecasting that Russia will produce just 1.5-1.6
million tons of home-grown beets, which is about 1 million tons less than last
year.  Yuri Chumakov, deputy general director of Sucden Kerry, one of the
world's largest raw sugar traders, told Interfax that the government needed to
scrap value-added taxes for raw sugar, keep up import duties for white sugar,
and impose license for exports in order to support its sugar industry.
Chumakov accused the government of letting the sugar industry slide, bringing
refineries to the brink of bankruptcy. (Interfax, Food and Agriculture Report,
November 18-25, 1994, p. 10)

23 November 1994:
-Timber wholesale groups have found themselves in a fierce price war due to the
availability of Russian timber.  Russia's low timber prices have made it
virtually impossible to sell timber for a profit.  And while Russian timber
sells cheap, Finnish timber has increased by around 30% to 40%.  Three large
timber wholesalers have a corner on the regional market which is worth about
5bn Finnish marks a year. (4.8635 per dollar)  Small wholesalers can expect to
hold a large market share only in very restricted geographic areas.
(Lexis/Nexis through Mead Data Control, Inc., Kauppalehti, November 23, 1994)

16 November 1994:
-According to the Russian State Committee for State Statistics, between
October 12-18, prices grew 104.9 percent.  These prices included foodstuffs
which increased 105.1 percent; nonfood goods 105.6 percent, and paid public
services 102.4 percent.  The cost of an assortment of 19 staples grew in the
same period by 5.1 percent to 69,600 rubles.  In Moscow, the basket costs
82,300 rubles. (FBIS, November 16, 1994, p. 1)


11-18 November 1994:
-According to the Ukrainian Agriculture Ministry, Ukraine will not have to
import grain this year despite harvesting just 37.4 million tons of grain or
6.7 million tons less than last year.  Public-sector farms produced 34.6
million tons of grain with yields of 2.86 tons per hectare, compared with 44.6
million tons and 3.37 tons per hectare in 1993.  The Ministry cited wheat
production at 13.8 million tons with average yields of 3.26 tons per hectare.
Last year, wheat production was reported at 21.2 million tons and a yield per
hectare at 3.35.   In addition, officials at the Ministry reported that
Ukraine harvested only 29 million tons of sugar beets with average yields of
20.4 tons per hectare, its lowest in 30 years.  Despite those figures,
however, Ukraine will be able to meet its domestic requirement for the
commodity. (Interfax, Food and Agriculture Report, November 11-18, 1994, p. 3)

Alexander Nazarchuk, Russia's new Agriculture Minister, 
on Agrarian Reform 

When Alexander Nazarchuk was appointed minister to replace Viktor
Khlystun, officials in Russia and abroad expected radical changes to occur.
Although that has not happened, Nazarchuk has managed to channel some reform
within the Ministry without colliding with Yeltsin's government.  For example,
Nazarchuk issued an order revamping the Ministry, giving deputy ministers and
department heads new functions.  Mostly though, Nazarchuk has done what he
does best, lobby.

A lobbyist for agrarian reform before his appointment as agricultural
minister, Nazarchuk has continued to explain problems and promote solutions to
Russia's troubled agro-industrial complex.  He maintains that Russian farmers
have done what they can do to make the transition to a market economy.  Debt,
however, is crippling Russia's farms.  Russian farmers owe 13 trillion roubles
for power, chemicals, machinery, and other inputs, plus another 1 trillion
roubles in wages.  Nazarchuk says that 3,000 of what were Russia's state and
collective farms face bankruptcy this year.  He expects approximately 30% of
them to close this year in the red.

Accordingly, Nazarchuk posits that the government must intervene and
provide farms with capital if the farms are to provide enough food for the
people.  As evidence of the dismal conditions, Nazarchuk cites this year's
production record.  Russian farmers produced only 84 million tons of grain,
its lowest production in 13 years and 15 million tons less than last year.
Officials predict that the sales of meat (slaughterweight) and milk will fall
by 17% and 16% for 1994.  Because of low sugar beet production, Russia will
also struggle to provide sugar for her people this year.  Consequently,
Nazarchuk plans to lobby the government to sign a draft resolution, drawn up
by Ministry of Agriculture and Food officials, which would defer farm debt to
1999 and then allow farmers to pay off the debt in equal installments over
five years, without interest.  He argues that farmers must receive this kind
of financial backing as long as the disparity between input and commodity
prices persist.

Nazarchuk also reiterates his support for private farming and a
mixed-economy farmed sector.  Nonetheless, he stresses the danger in the
mechanical growth of the sector, noting the collapse of 38,000 private farms.

Alexander Nazarchuk is an ethnic Ukrainian.  He graduated from the Altai
Agricultural Institute as an agronomist.  Nazarchuk served as director of two
state farms, Gusaletovsky and 53rd October.  He was deputy chairman of the
Altai Territory Council of Workers' Deputies and, since 1989, head of the
local farm lobby in the Altai Territory.  In 1990, Nazarchuk was elected as a
People's Deputy to the Russian Supreme Soviet, where he secured a prominent
place in the agrarian committee and Agrarian Union parliamentary faction.

(Information taken from Interfax, Food and Agriculture Report, November 18-25,
pp. 15-16.)