RUSAG-L: Current Events #51

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.


22 February 1995:
-The current exchange rate is listed at R4314 per dollar.  (The
Washington Post, February 21, 1995)


20 February 1995:
-According to First Deputy Prime Minister, Anatolii Chubais, the
Russian government plans to "stop or radically reduce the
allocation of centralized credits to the agro-industrial sector."
Chubais said the government recognizes the need to assist the
countryside but that the process of allocating credits had proven
ineffective.  He noted that everyone understood that neither the
credit nor the interest could be repaid.  Chubais suggested the
government use budget financing with a special tax, like a value
added tax, to generate revenues.  (OMRI, February 20, 1995)

-Chubais called January's financial results "catastrophic."
Budget revenues stood at 6 trillion rubles, instead of the
projected 13 trillion rubles.  Chubais blamed the revenue problem
on the slow pace of cash privatization and the failed talks with
the IMF.  The $6 billion dollar loan from the IMF was included in
the first quarter budget revenues.  The budget also envisioned
another 9.1 trillion rubles in revenues from the sale of state
property.  Chubais complained that, by the end of 1994,
privatization measures had stalled, and called on the State
Property Committee to move the process along.  (OMRI, February
20, 1995)

-In another interesting move by the Russian government, President
Boris Yeltsin announced that he would set up a "public council"
to put together a draft on local government for the parliament to
consider.  Yeltsin said he envisioned an updated system of
municipal self-rule as a working model for local governments.
Yeltsin emphasized separating federal and local powers, although
he concluded that it would take many years to overcome the legacy
of central control.  (OMRI, February 20, 1995)


17 February 1995:
-Goskomstat announced on February 15 that the decline in Russia's
industrial production had leveled off last month.  January output
was down 0.7% from one year ago and GDP had decreased only 4%
from 1994 figures.  During 1994, industrial production fell 21%
from 1993 and GDP was down 15%, the sharpest decline since
reforms began.  State figures, however, do not account for
private sector activity.  (OMRI, February 17, 1995)


16 February 1995:
-In his annual state of the nation address to a joint session of
parliament, President Boris Yeltsin stressed the need to curb
inflation and control federal spending.  Yeltsin noted that the
main conditions for strengthening Russia's economy lay in
enhancing the value of the ruble and modernizing the economy.  He
argued that Russia needed to reduce reliance on the raw material
sector of the economy.  Yeltsin also said that the government
would have to support agriculture.  (OMRI, February 16, 1995)


15 February 1995:
-The All-Russian Center for the Study of Public Opinion released
a poll which showed that 83% of the respondents considered
inflation Russia's biggest problem.  Crime came in second at 58%,
while 50% listed the economic crisis and the fall in output as
their greatest concern.  Interestingly, few Russians, 12%,
registered doubts about their country's leadership.  Moreover,
only 5% expressed concern about the possibility of a military
dictatorship.  (OMRI, February 15, 1995)


13 February 1995:
-Yevgeni Yasin, Russian Economy Minister, called on the
government to change its food policy in lieu of the alarming
shortages in grain, meat, butter, and vegetable oil.  Yasin said
he supported an increase in customs duties on cheaper imported
products, and he called for a ban on exports of certain farm
goods in order to create a "more favorable environment for
Russian producers."  In particular, Yasin argued that wheat
exports should be banned.  He noted that Russia had a good
overall supply of food but that it was unequally distributed over
regions.  Only 101,000 tons of meat were available as of January
1, compared to 316,000 tons last year. Yasin also said that, if
oil producers sold 2.5 million tons of oil-yielding seeds as
planned in 1995, the shortages would become even more severe.
(OMRI, February 13, 1995)


10 February 1995:
-In a letter to Prime Minister Viktor Chernomyrdin, State Duma
Speaker Ivan Rybkin described the majority of Russian farms as
insolvent and spoke of "dire consequences" that may follow if the
government does not intervene to finance the agro-industrial
sector.  Rybkin wrote that most farms are short of fuel,
fertilizers, and pesticides and that 70-80% of machinery and
equipment needs repairing.  Rybkin proposed that the government
offer 12 trillion rubles in centralized credits to the agro-
industrial sector and urged the Federation Council to lend
another 4 trillion rubles to farms for purchasing farm machinery,
vehicles, and pedigree cattle in the first six months of 1995.
(OMRI, February 10, 1995)


3-10 February 1995:
-The Russian Ministry of Agriculture and Food's crop farming
department announced that farmers overall had enough seed for
spring sowing.  However, 33% of the seed does not meet sowing
standards.  According to Ministry officials, the government plans
to swap non-certified seeds for certified ones from the federal
reserve.  Although short of maize seeds, Russian farmers appear
to have adequate supplies of sugar beet seeds and seed potatoes.
Nevertheless, the Ministry is concerned about farmers meeting
spring sowing because of the dismal state of plows and sowing
machinery.  Only 75% of the tractors and 60-70% of the plows and
sowing machines needed for spring sowing were in working
condition by early February.  In addition, farms have only 43% as
many tractors as they need for spring sowing.  (Interfax Food and
Agriculture Report, February 3-10, 1995. p. 3)

-Oleg Davydov, a Russian deputy prime minister of trade, told
Interfax that the government has still not finalized a deal with
Cuba, bartering oil-for-sugar.  Davydov said that it is not even
clear Cuba can come up with the sugar to exchange for Russian
oil.  He suggested selling the oil on the open market and
importing white sugar.  Virtually all of Russia's sugar
refineries have stalled because of Russia's record-low sugar-beet
harvest.  Russia, whose sugar market is estimated at about 5
million tons per year, is expected to face shortages of 1 million
tons this year.  Traders are waiting for some signal from the
government about its intentions in the Cuban oil-for-sugar deal.
Meanwhile, Russian sugar prices have already topped world
averages, paving the way for commercial imports.  (Interfax Food
and Agriculture Report, February 3-10, 1995, p. 4)


AREA OF INTEREST:  HUNGARY

3-10 February 1995:
-Hungary's Agriculture Minister, Lazzio Lakos, announced that,
for the first time in years, Hungary will export a half million
tons of grain to Russia in 1995.  Hungary has offered the
Russians 200,000-300,000 tons of maize and about 100,000 tons of
food wheat.  By the end of the year, the Hungarians hope to sell
the Russians another 1 million tons of grain.  Hungary also plans
to export meat, including pig meat, dairy products, and
pesticides to Russia in 1995.  Lakos said Hungary may accept
Rostov-made Don combine harvesters for payment against the $900
million dollars Russia is thought to already owe Hungary.
Hungary's overall food exports are worth $2.3 billion per year.
(Interfax Food and Agriculture Report, February 3-10, 1995, p. 6)