RUSAG-L: Current Events #69


Note: There is a copy of an email message re: this issue of Current Events at the end of this document.
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.


 11 November 1995:
-The current exchange rate is listed at R4522 per dollar.  (The Washington
Post, November 11, 1995).


9 November 1995:
-The abrupt dismissal of Tatyana Paramonova as acting governor of the Russian
central bank has alarmed Russian specialists and reformists around the globe.
Under Paramonova's direction, the central bank had succeeded in following
fairly austere monetary policies that kept inflation in check.  Even in the
summer months, Paramonova managed to keep a tight reign on credits to
factories and farms.  The decision to dismiss Paramonova apparently came from
an ailing Boris Yeltsin, as none of the main officials connected with economic
policy have been allowed near Yeltsin since his hospitalization.  If monetary
targets are abandoned, the Russians may not be successful in securing the $15
billion extended loan from the IMF next year or the refinancing by the Paris
Club.  The entire reform program could be in jeopardy.  (The Financial Times,
Thursday, November 9, 1995, p. 15).

-The Russian government has given no clear indication that it will import
grain this year despite a dismal harvest.  The government indicated that it
has no money for state-supported imports and that any such imports will have
to come by way of the private sector.  The government is, however, trying to
figure out how to buy grain to keep bread prices from soaring, since steep
bread prices could affect the government's support in the upcoming elections.
To make matters worse, world grain prices are at a fifteen year high.  In
London, prices are at $173 per ton and could break $200 by the end of the
year.  (Russian Business News, November 9, 1995, p. 3).

-On October 2, a decree was issued placing all privatization policy under the
direction of President Boris Yeltsin.  All decisions regarding the disposal
and the management of state-owned shares will be done by presidential decree.
In addition, the government announced it will seek to raise duties on
agricultural imports from 16% to 18%.  The move was designed to aid Russia's
bid to enter the World Trading Organization.  (Russian Business News, November
9, 1995, pp. 7,8).

-Importers and producers are unable to satisfy the demand for baby food in
Russia.  Hence, several companies have begun opening local plants.  H.J. Heinz
opened a plant in Stavropol province, and Nestle plans to build a production
facility in St. Petersburg.  The US company, Oceantrawl, plans to build a
factory in the Far East.  (Russian Business News, November 9, 1995).


8 November 1995:
-Stocks of Caspian Sea sturgeon-the world's main source of caviar-have reached
precariously low levels during the last five years.  Stocks have dropped from
200 million five years ago to no more than 60 million today.  Experts
attribute the drop to pollution, low water levels, and increased poaching.
Before the collapse of the USSR, the area's caviar industry was controlled by
Iran and the Soviet Union.  Since then, controls have disappeared.  The
Russian Fisheries Committee would like to see Russia create a governmental
body to monitor the fish.  (OMRI, No. 218, Part I, November 8, 1995).



7 November 1995:
-The various political parties vying for seats in the December elections to
the Duma have all begun stressing social justice in their advertisements.  A
recent Public Opinion Foundation survey concluded that Russians rank "justice"
as the third most popular campaign slogans, behind "legality" and "human
rights."  The various parties, however, differ in their approach to justice.
For example, the Agrarians and Communists plan to revive old Soviet-style
social guarantees, resurrect the decaying state-run educational and health
systems, and also pay compensation to deceived investors.  On the other hand,
Our Home is Russia promises only to create a strong state that will "protect"
its people.  None of the parties, however, suggested how they will pay for the
purposed benefits.  (OMRI, No. 4, Russian Election Survey, November 7, 1995).


27 October-November 3, 1995:
-As the December parliamentary elections draw closer, more parties are
entering the debate on land reform.  At a meeting in Moscow on October 27, the
AKKOR's Vladimir Bashmachnikov, private farm lobbyist and supporter of Prime
Minister Viktor Chernomyrdin's party, reiterated his support for the free sale
of land.  At an alternative meeting, the Agrarian Party's Mikhail Lapshin
voiced his belief that the  selling of land, except gardens, should be banned.
 Russia's Choice candidate, Yegor Gaidar and Yuri Chernichenko, leader of the
Peasant's Party and close ally of Gaidar, backed the government's call for a
referendum on the land issue and attacked the current Land Code under debate
in the State Duma.  Gaidar said he did not think the present draft, which was
drawn up by the APR-dominated State Duma agrarian committee, would pass if
submitted to voters.  Russian politicians have every reason to be interested
in agrarian issues as the elections loom closer.  Russia's 38% rural
population has traditionally been active voters.  (Interfax Food and
Agriculture Report, Vol. IV, Issue 34, October 27-November 3, 1995, p. 2).

-Ivan Starikov, deputy prime minister of economics, and Leonid Kholod, the
official in charge of price policy at the Ministry of Agriculture and Food,
attacked the government's role in the farm sector at a conference run by the
Organization for Economic Cooperation and Development and the Russian Ministry
of Agriculture and Food.  Starikov  criticized government handouts to farmers
and suggested, instead, that the government concentrate on helping poor
families meet growing food bills.  Starikov argued that handouts only served
to increase the national debt and create monopolies that "sucked farmers dry
of government money."  Likewise, Leonid Kholod stressed that subsidies are
only helping processors, not farmers.  He noted the growing disparity between
industrial and farm prices.  For example, a Niva combine grain harvester costs
49 tons of grain in 1991, 289 tons and 331 tons of grain in the first half of
1995.  Kholod offered a different range of solutions, which centered around
more effective government subsidies and guaranteed farm prices.  (Interfax
Food and Agriculture Report, Vol IV, Issue 44, October 27-November 3, 1995, p.
3).

-With only 50,000 ha of cereals, 160,000 ha of grain maize, and 20,000 ha of
rice left to harvest, Russian farmers have harvested only 61.9 million tons of
grain.  Farmers have also harvested approximately 1.7-1.8 million tons of
maize, 0.8-0.9 million tons more than last year, and 3.7 million tons of
sunflower seeds, 1.2 million tons more than last year.  The old state and
collective farms have harvested most of their sugar crop, over 19 million
tons, 5 million more than last year.  Potato production was also up to an
estimated 36 million tons or 2 million more tons than in 1994.  (Interfax Food
and Agriculture Report, Vol IV, Issue 44, October 27-November 3, 1995, pp.
4-5).

-Experts appear encouraged with Russia's spring sowing.  Russian farmers have
sown 14.9 million ha of spring crops and plowed another 39.8 million ha for
spring sowing, 0.9 million ha and 1.6 million ha respectively more than at the
same time last year.  However, much of Russia's farm machinery broke down
during this year's harvesting, and farmers cannot afford repair bills.  Plus,
officials are worried about the quality of seeds and soil fertility.  Overall,
217,000 tons, or 33%, of 648,000 tons of seeds were uncertifiable.
Applications for fertilizers have fallen overall 80%, 83.3% for lime and 10%
for phosphorous and other chemical fertilizers since 1986-1990.  Farmers have
been able to apply only 1-2% of the manure, lime, and phosphate stipulated in
the government's soil fertility program.  In addition, the ground beetle
larvae have infested some of the corn fields in the Northern Caucasus, which
could destroy much of the spring crops because of the lack of insecticides.
(Interfax Food and Agriculture Report, Vol IV, Issue 44, October 27-November
3, 1995, p. 5).

-Agriculture Prime Minister Alexander Nazarchuk said the Russian government is
committed to buying grain under contracts with domestic farmers, but has yet
to find the money.  Nazarchuk noted that, contrary to media reports,
commercial banks were interested in lending the Federal Food Corporation money
to help finance its procurement, but at ostensibly high interest rates.
Nazarchuk also said that Moscow's Mayor Yuri Luzhkov was free to import grain
if he could find a better market than Russia.  According to reports, the
Moscow government has set aside $12 million to buy food grain abroad, so that
Muscovites will not go without bread.  (Interfax Food and Agriculture Report,
Vol IV, Issue 44, October 27-November 3, 1995, pp. 5-6).

-Gregory Zelinsky, director of the All-Russian Grain Research Institute, says
grain prices will continue to grow and the price of a loaf of bread could
reach 5,000 rubles.  In contrast, Leonid Cheshinsky, president of
Roskhleboprodukt, the semi-private grain trading firm, told Moscow city
officials that the price of a loaf of bread could reach 10,000 rubles by the
end of the year.  Currently, a kilogram of bread costs 4886 rubles in Moscow;
4487 rubles in St. Petersburg; 5800R in Arkhangelsk; 2950R in Krasnodar; 4450R
in Yakaterinburg in the Urals, and 5523 rubles in Vladivostok in the Far East.
(Interfax Food and Agriculture Report, Vol IV, Issue 44, October 27-November
3, 1995, pp. 5, 14).


20 October-October 27, 1995:
-Russia's sugar refineries have rebounded to produce 1.054 million tons of
sugar as of October 23.  This figure compares with a production of just
914,000 tons at the same time last year.  According to Vasily Severin,
president of Sakhar, a company set up by the Russian Food Industry Committee
to represent refineries, all refineries are producing sugar at full capacity
of 230,000 tons of sugar beets per day.  Russian farmers are expected to boost
sugar beet and sugar production from 12.5 million tons and 1.6 million tons
respectively, to 17.5 million tons and about 2 million tons.  The Russian
sugar industry has also been aided by the sugar-for-oil deal concluded with
Cuba earlier this year.  (Interfax Food and Agriculture Report, Vol IV, Issue
43, October 20-October 27, 1995, p. 7).


AREA OF INTEREST

UKRAINE

20 October-October 27, 1995:
-Ukrainian farmers have harvested 29.2 million tons of cereals, including 16.4
million tons of wheat, but not including maize.  Overall, Ukraine plans to
produce 38 million tons of grain this year, compared with 35.5 million tons in
1994.  This should allow Ukraine to export approximately 2 million tons of
grain.  (Interfax Food and Agriculture Report, Vol IV, Issue 43, October
20-October 27, 1995, p. 6).



Date: Mon, 13 Nov 1995 12:43:00 EST
Reply-To: Russian Agriculture (RUSAG-L@UMDD.UMD.EDU)
Sender: Russian Agriculture (RUSAG-L@UMDD.UMD.EDU)
From: bb95 (Betty_P_BROWN@UMAIL.UMD.EDU)
Subject: Re: rusag-l: current events
To: Multiple recipients of list RUSAG-L (RUSAG-L@UMDD.UMD.EDU)

Many thanks to the Rusag-L managers for reposting the item from Interfax's Food and Agriculture Report reporting statements at the recent OECD-Russian Federation Ministry of Agriculture Conference in Current Events no. 69. I am in the process of editing a proceedings volume from the conference. I will post a further announcement when the compilation is ready for distribution.

However, the CE report contains an error. Ivan Starikov is Deputy Minister of Economics, not Deputy Prime Minister with responsibility for the economy. Starikov answers to Evgenii Iasin, Minister of Economics. (The Ministry of Economics inherited roughly the coordination functions of the old Gosplan.)

Aleksandr Nazarchuk, mentioned in another item in the same current events drawn from Interfax, is Minister of Agriculture and Food, not Deputy Prime Minister with responsibility for agriculture. The latter post is, of course, actually held by Nazarchuk's boss, Aleksandr Zaveriukha.

Neither "First Deputy Prime Ministers" nor "Deputy Prime Ministers" have their functional responsibilities specified in their titles, although each one of them (9 the last time I counted, but I'm sure I'm out of date) has a particular functional responsibility. So, for instance, Zaveriukha coordinates the entire agricultural sector, including input supply, production agriculture and processing and procurements. Nazarchuk, as head of the Ministry of Agriculture, is directly responsible only for production agriculture. So the Russian Ministry of Agriculture has a different, and in some ways more limited, function that the Ministry of Agriculture in an OECD country. This is why the agricultural subgroup of the Gore-Chernomyrdin Commission is chaired jointly by US Agriculture Secretary Glickman and Zaveriukha (rather than Nazarchuk).

Don Van Atta Administrator Directorate for Food, Agriculture and Fisheries Organisation for Economic Cooperation and Development

Don.VANATTA@OECD.org

voice (33-1) 45.24.95.19 fax (33-1) 45.24.96.72 Standard disclaimer: The above message is the author's personal opinion. It does not necessarily reflect the views of the OECD secretariat or member countries.

Don:

Thanks for pointing out the error on Starikov. I was not familiar with his name or position; I simply cited it from Interfax. However, the information on the structural functions of the Ministry is extremely helpful, and I look forward to seeing the compilation.

Thanks,

Betty Brown