RUSAG-L: Current Events #53

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.

21 March 1995:
-The Washington Post lists the current exchange rate at R4744 per
dollar.  (The Washington Post, March 21, 1995)

20 March 1995:
-Russia's Ministry for Emergency Situations announced that an oil
pipeline had burst in Irkutsk Oblast in Siberia.  The pipeline
has already leaked around 3,500 cubic meters of oil over an area
of 19,500 square meters.  Cleanup work has begun, but officials
warned that the oil could seep into a nearby river during the
spring thaw.  (OMRI, March 20, 1995)

14 March 1995:
-The head of the crop-growing section of Russia's Ministry of
Agriculture, Ivan Gridasov, is predicting a bleak year for
Russia's agriculture.  Gridasov says farmers cannot afford the
equipment, fuel, fertilizer, and lubricants needed for sowing.
Gridasov called the situation "critical and lamentable" and
called on the government to furnish at least 6.5 trillion rubles
($1.5 billion) for farming supplies for the spring sowing.
(OMRI, March 14, 1995)

-In related developments, Deputy Prime Minister Alexander
Zaveryukha announced that the government has signed an economic
ordinance for 1995, creating new mechanisms for using budget
appropriations.  The ordinance will provide credits for fuels and
lubricants, enabling peasants to carry out spring sowing.
According to Zaveryukha, the government also plans to allocate 1
trillion rubles to expand the leasing of farm machinery and to
subsidize the prices of mineral fertilizer by 50%.  In addition,
the government decided to transform 3 trillion rubles in farm
debts for credits granted in 1992-1994 into internal public debt.
The farm sector will repay the debt over a period of 10 years at
an annual interest rate of 10%.  314 billion rubles will also be
appropriated from the federal budget to finance 15% of capital
investments in private farms, and local executive bodies have
been instructed to use local budgets to help with the 15%
finance.  (OMRI, March 14, 1995)

13 March 1995:
-Deputy Prime Minister Alexander Zaveryukha told a press
conference in Moscow that the government will subsidize Russian
agriculture until it adapts to market conditions.  Zaveryukha
noted a recent governmental resolution that stipulates subsidies
for stock and seed breeding, greenhouse vegetable production, and
purchases of mineral fertilizers.  He also mentioned interest-
free credit in goods.  Settlement is expected on the credit issue
by December 1, after the harvesting is over.  Interestingly, the
article in Tass stresses the fact that the resolution "commits"
the Ministry of Agriculture and regional executive authorities to
securing 82 million tons of grain in 1995; 20 million tons of
sugar beets; 3.5 million tons of oil seed; 60,000 tons of flax
fiber; 35 million tons of potato; 10 million tons of vegetables;
9.5 million tons of meat; 37 million tons of milk; 35 billion
eggs, and 110,000 tons of wool.  (Nexis/Lexis, through Mead
Central Data, Inc., Tass, March 13, 1995)

3-10 March 1995:
-An article in this week's Interfax noted that the Russian
government had once again left the financing of spring sowing to
the last minute.  This week, Deputy Prime Minister Alexander
Zaveryukha, a lobbyist turned deputy, personally attacked Russian
Prime Minister Viktor Chernomyrdin and his government for "a lack
of attention to rural problems which could lead to catastrophe."
Reformist First Deputy Anatoly Chubais also commented this week
that the government would have to keep subsidizing farmers for
years to come but added that the government expected greater
efficiency in the sector.  The article concluded that the
government would eventually make money available to farmers, but
that the money would arrive too late to be used efficiently.
(Interfax, Food and Agriculture Report, March 3-10, 1995, p. 2)

-Agrokhim plans to ship subsidized products to farmers if the
company can get gas and power companies to share the costs.  An
Agrokhim manager explained that natural gas accounts for 70% of
the cost of making fertilizers.  Natural gas, electricity, and
freight would have to be cut by 30-40% if farmers are to receive
the 800,000 tons of fertilizer they need.  However, Agrokhim is
unlikely to sell the farmers the overall 4.2 million tons planned
for 1995.  Experts at Agrokhim believe Russian farmers need to
apply 10 million-11 million tons of fertilizer each year to
maintain soil quality.  (Interfax, Food and Agriculture Report,
March 3-10, 1995, p. 4)

-Russia's winter crop area totaled 14.3 million ha in 1994,
including 13.2 million ha of winter grain.  The winter grain
figures compare poorly with 14.3 million ha in 1993 and close to
19 million ha in previous years.  In addition, 1.8 million-2.3
million ha of this year's winter crop area is in poor condition,
or 12-15% of the total area, compared with an average of about
9.5% in 1990-94.  (Interfax, Food and Agriculture Report, March
3-10, 1995, p. 6)

-Officials expect imports to make up for Russia's falling
domestic production of meat and milk and to adequately feed
Russians, particularly in the large cities.  However, experts at
the Russian State Statistics Committee fear more imports will
cause even further cuts in animal numbers.  Cash-strapped Russian
farmers do not even have enough feed to keep their current herds.
(Interfax, Food and Agriculture Report, March 3-10, 1995, p. 9)

28 February 1995:
-The Elekon-affiliated mechanical engineering plant (MEP) has
manufactured a high-precision seeder for this year's sowing
campaign.  The seeder consists of 12 independent parallel units
attached to a single frame.  The frame is then hooked to a
tractor.  With the ploughshare and sowing vacuum unit replaced,
the seeder can also be used for sowing beetroots, peas, soybean,
buckwheat and other crops.  The seeder has a capacity of 90,000
seeds\h.  Several Russian regions have already inquired about
purchasing the seeder, but contracts have, so far, been hampered
by a lack of funds with potential customers.  (Nexis/Lexis
through Mead Data Central Data, Inc., Reuter Textline Novecon,
February 28, 1995)



-Growth rates for industrial production and exports have slowed
somewhat, even though growth rates remain positive.  Prices rose
2.1% in February while the inflation rate amounted to 4.1%.  The
Agriculture Ministry predicted that food prices would rise by 25-
29% this year.  If import barriers remain, however, the increase
could be has high as 39%.  Food prices are one of the chief
factors driving Polish inflation.  (OMRI, March 17, 1995)


-Legislators argue that Ukraine's 1995 budget unjustifiably calls
for increased spending for the military, while aiming to cut the
budget deficit by 7.3% of GDP.  Members of several parliamentary
commissions have complained about the austerity measures and cuts
in both social spending and subsidies to ailing industries and
farms.  (OMRI, March 17, 1995)

-Two senior economic aides to President Leonid Kuchma have
attacked a decision by the Ukrainian Parliament to hand out money
to farmers to finance spring sowing.  On February 14, the
Parliament approved a proposal to spend $150 million of a World
Bank rehabilitation loan on farming.  In addition, the Parliament
ordered the government to buy 10 million tons of grain in 1995
from budget allocations and instructed the National Bank of
Ukraine to issue 25 trillion karbovanets in new credit in
February and 5 million karbovanets of it as advance payments for
grain to be bought under government contracts.  The economists
were not objecting to the government's support of farming as much
as to policies they considered harmful to Ukraine.  (Interfax,
Food and Agriculture Report, March 3-10, 1995, p. 5)