RUSAG-L: Current Events #49


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 Open Media Research Center
(OMRI), 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.


27 January 1995:
-The Washington Post lists the current exchange rate at R3947 per
dollar.  (The Washington Post, January 27, 1995)

-IMF delegates are in Moscow to access prospects for loaning
Russia $6.25 billion in a standby loan.  The political
instability and the Chechnya troubles have IMF officials
concerned.  The only hopeful sign in the current political chaos
appears to be Yeltsin's decision to remove Privatization Minister
Vladimir Polevanov, who had announced his support for
nationalizing several natural resource firms.  Officials remain
skeptical, however, since there is no guarantee that Polevanov's
replacement will have different ideas on nationalization.  The
ultimate decision on the IMF loan will be made by representatives
of the Group of Seven (G7) when they meet in Toronto February 3-
4.  (OMRI, January 27, 1995)

-Russian agencies reported that in MICEX trading on January 26
the ruble fell 16 points, closing at 4,004 rubles to the dollar.
Oleg Osemnuk, a MICEX representative, stressed that overshooting
the 4,000 ruble mark contained more psychological overtones than
economic and that buyers would just have to get used to the new
price.  In addition, the director of the central bank's foreign
transactions department, Aleksandr Potemkin, said the fall of the
ruble in January at a weekly rate of 4.5% reflected inflationary
processes.  He argued that the currency market was predictable
and showed the central bank's efforts to prevent panicky dollar-
buying and selling of rubles.  The central bank has increased the
annual refinancing rate from 170% to 200% since the beginning of
the year.  (OMRI, January 27, 1995)


26 January 1995:
-On January 25, the Russian State Duma passed the 1995 budget in
a second reading.  The budget was adopted after concessions by
First Deputy Prime Minister Anatolii Chubais who agreed to
increase a value-added tax from 20% to 21.5%.  The added revenue
will be used to support the agricultural sector and to improve
the financing of social programs.  The tax is expected to bring
in an extra 5.7 trillion rubles ($1.4 billion).  The budget
provides for revenues of 169.8 trillion rubles ($42.45 billion)
and expenditures of 243 trillion rubles ($60.75 billion), leaving
a deficit of 73 trillion rubles ($18.25 billion).  The budget
must pass a third reading in the Duma, then it goes to the
Federation Council.  (OMRI, January 26, 1995)

-After approving the 1995 budget, Duma deputies voted to increase
the minimum monthly wage from 20,500 rubles to 54,100 rubles ($5
to $13), an increase of 163%.  Finance Minister Vladimir Panskov
warned that the increase could swell the budget deficit and fuel
inflation.  The wage increase must now be approved by the
Federation Council.  (OMRI, January 26, 1995)

-Russian Economics Minister Yevgenii Yasin announced that
Russia's economic crisis in 1994 was worse than experts expected.
Gross domestic product (GDP) fell by 15% in 1994; industrial
production fell by 20.9%; and agricultural production fell by 9%,
compared to 4% in 1993.  (OMRI, January 26, 1995)


25 January 1995:
-According to a Goskomstat report, Russia's final figures for the
1994 grain harvest show Russian farmers collected 81.3 million
tons of grain, the lowest harvest in 13 years.  In 1993, Russia
harvested 99.1 million tons of grain compared with a high of
116.7 million tons in 1990.  Experts at the Ministry of
Agriculture are predicting that Russia will harvest 82 million
tons of grain in 1995, if state support for agriculture stays at
last year's level of 13.9 trillion rubles.  The 1995 budget,
however, only allocates 8 trillion rubles for agriculture.
Ministry of Economics officials estimate Russia will need 108-110
million tons of grain to fulfill the population's needs this
year.  (OMRI, January 25, 1995)


20 January 1995:
-Foreign trade in Russia rose 7.2% in 1994 with a total of $76.2
billion.  Russia's largest trade partners were Germany (13% of
total turnover) and the United States (7.3%).  Food products and
consumer goods accounted for 50% of the import market.  (OMRI,
January 20, 1995)

13-20 January 1995:
-According to Aleksander Zaveryukha, Deputy Prime Minister in
charge of agriculture, food aid for Chechnya will not come from
the farm budget.  The Russian government will provide most of the
aid as credits to pay for machinery and seed needed to carry out
spring sowing.  Zaveryukha said the government had already
ordered the Ministry of Agriculture and Food to send Chechnya
50,000 tons of grain, 9,200 tons of groats and pasta, 6,400 tons
of meat, 7,800 tons of sugar, 4,600 tons of fish, and other foods
by April 1, 1995.  Chechnya will also receive maize, sunflower
seeds, and more than 15,000 tons of fertilizer and crop
protection chemicals.  Prime Minister Viktor Chernomyrdin told
state Duma representatives that the government could afford to
spend 3.5 trillion rubles in Chechnya without upsetting the basic
shape of the 1995 budget.  He listed reconstruction program
expenditures as follows:  500 billion rubles for humanitarian
aid; 400 billion rubles for vital infrastructure reconstruction
and spring sowing; 650 billion rubles for transportation,
communication, and power utilities, and 700 billion rubles for
oil and gas facilities.  Chernomyrdin's figures do not include
the cost of on-going fighting.  (Interfax Food and Agriculture
Report, January 13-20, 1995, p. 2)


6-13 January 1995:
-Deputy Prime Minister in charge of agriculture, Alexander
Zaveryukha, called on the government to finance fertilizer sales
to farmers to prevent further deterioration of soil fertility.
Zaveryukha explained that fertilizer costs were three times
higher than grain and that Russian farmers simply could not
afford to buy it.  In 1994, farmers applied just 12 kilos of
fertilizer per hectare of arable land, compared with 30 kilos in
1993 and more than 100 kilos in 1990.  Natural fertility in
Russian soil provides grain yields of about 1.2-1.4 tons per
hectare.  Soil fertility is currently equal to one quarter of the
levels in the second half of the 1980's and is now dropping to
levels recorded between 1965-1966.  (Interfax Food and
Agriculture Report, January 6-13, 1995, p. 3)


AREAS OF INTEREST


KAZAKHSTAN

25 January 1995:
-Kazakhstan has signed an agreement of cooperation with the
European Union (EU) to promote trade, commercial, and political
contacts.  This is an important agreement for Kazakhstan, since
it signals an important new phase in Kazakhstan's entry into the
world marketplace. (OMRI, January 25, 1995)


BELARUS

20 January 1995:
 -Belarus has signed a multimillion dollar tractor deal with
Pakistan.  The deal provides for the export of 12,000 Belarusian
tractors to Pakistan over a six month period for less than $5,000
per tractor.  Belarus is attempting to negotiate a similar deal
with Iran.  Before the break-up of the former Soviet Union,
Belarus was the world's third largest tractor manufacturer after
the U.S. and Japan.  (OMRI, January 20, 1995)