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Analysis From Washington - Fallout from Bad Harvest

  • Paul Goble

Washington, June 27 (RFE/RL) -- If the grain harvest in Ukraine this year turns out to be as bad as experts now suggest, that development could have significant political as well as economic and social consequences.

At an agricultural seminar in Kyiv this week, Western and Ukrainian experts predicted that the grain harvest in Ukraine this year would be approximately 28 million tons, down from earlier official forecasts of 36 million tons and down from 50 million tons in 1990. If these forecasts hold, the 1996 harvest will the the worst there in 17 years.

The social and economic consequences of such a shortfall are obvious: Food shortages are possible, even likely, food prices would certainly rise depressing the standard of living still further, and the government would have less hard currency to spend on energy imports.

Indeed, under the worst projections, Ukraine might even be forced to purchase grain abroad, something that could put a variety of reforms on hold.

And all these problems are likely to be compounded by substandard harvests in Russia and Belarus as well.

The political consequences of a bad harvest in Ukraine are likely to be even more serious and to spill over the entire region.

Not only would any food shortage cause domestic political problems for the Ukrainian government, but the decline of hard currency earnings from the export of grain could put Ukraine in an even more serious bind with regard to paying for energy imports from Russia.

In the past, Moscow has used Ukraine's dependence on Russian energy supplies and its inability to pay for them as a lever to extract concessions on a variety of political fronts -- from the division of the Black Sea fleet, to the question of the construction of an oil terminal in Odessa, to transit fees for Russian oil and gas headed toward Europe.

The Russian government almost certainly could be expected to employ the same tactic now, possibly to even greater effect.

On Tuesday, Russian President Boris Yeltsin clearly signalled what he wants. In his annual report on Russian national security, Yeltsin said that "the political foundation of CIS relations could be a union with Belarus, Kazakhstan and Ukraine -- with the goodwill of the latter."

Such "goodwill" is unlikely to be present this fall. Ukraine has opposed the formation of any kind of union with Russia, but a bad harvest might leave it with fewer options in its dealings with Moscow -- unless Western governments were prepared to help.

That would put Kyiv in a difficult position because Yeltsin would certainly view any help to Ukraine on this score as undercutting Russian interests and thus as an unfriendly act, something few Western leaders seem willing to contemplate at present.

If the harvest fails in Russia as well, all these problems would be compounded. On the one hand, Russia would find itself forced to compete with Ukraine to purchase grain on the world market. On the other, food shortages in Russia could quickly be translated into political demands that Moscow take steps to guarantee its continued access to Ukrainian grain, even if there is a shortfall this year.

In that event, what began as a agricultural failure could easily become a political calamity.