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Russia: Grain Harvest Slowed By Combine Woes

Moscow, 2 September 1997 (RFE/RL) - To hear government officials tell it, the late-summer fields are brimming with grain, and Russia is about to reap a record harvest.

Russian Ministry of Agriculture officials were estimating a month ago that a harvest of 80 million tons of grain were standing in the fields, a record volume waiting to be gathered. Agriculture Minister Victor Khlystun has been pushing his forecasts upward recently. He claimed last week that this year, Russia's farmers would reap 10 million tons more than they did last year, when the official ministry total for the harvest was 69.3 million tons.

President Boris Yeltsin, at a chicken farm in Saratov region last week, declared: "The economic and agricultural indicators are good, and they want to collect a record harvest this year."

The operative word there is "want." For government officials and farmers admit there can be no record, unless the grain is reaped. According to the Ministry of Agriculture's mechanization division, there is a shortage of 136,000 working combine harvesters across the country. Fuel to power those machines that work, and money to pay for spare parts and repairs, are also in desperate shortage.

This was acknowledged by the less ebullient Prime Minister, Viktor Chernomyrdin, who made a tour of the southern Russian farm belt in July. Blaming the commercial banks for charging 40 percent on farm credits, he said the government is considering a proposal to provide loans at 12 percent. Even if they are approved -- and such subsidized credits are opposed by the deficit-cutters at the Ministry of Finance -- they will not arrive in time for this year's harvest.

"I will make certain," Chernomyrdin said, "that everything will be done to put bank credit in motion." High-quality farm machinery must also be provided, he added.

Tight-money advocates like First Deputy Prime Minister Anatoly Chubais, who is also Russia's Finance Minister, blame the old Soviet system of state and collective farming for inefficiency and mismanagement of the credits they have received in the past. He advocates reform of the state land-holding system and radical privatization of farm ownership. Legislation to achieve this has been defeated by Russia's parliament. A land code that restricts large-scale rural land sales was enacted by the two chambers of parliament, but it was vetoed by Yeltsin as the harvest season began.

According to Robert McIntrye, an economics professor from Bowdoin College, Maine, who is on a Fulbright teaching fellowship in Russia, privatization of Russia's farms, since Yeltsin came to power, has been "a fiasco." Combing through the property registers and analyzing production figures since 1992, McIntyre says most of the collective and state farms merely changed their names and re-registered themselves as companies.

Of the tiny 4 percent of Russian farmers, who opted to leave the larger units and create individual farms of their own, McIntyre says fewer than one-in-25 is "reported to have a marketable surplus. Most of the rest are literally subsistence farms undertaken with the intention of feeding only themselves and city relatives."

According to data gathered by McIntyre, the productivity figures of the private-plots that have operated in conjunction with collective farms for years do not reveal how much of the inputs and costs were paid out of the collective budget. On their own, private farmers, says McIntyre, have "extraordinarily low productivity."

McIntyre shares Prime Minister Chernomyrdin's assessment that lack of cash and credit, and shortages of fuel and equipment explain part of the reason Russia's farmers keep falling behind field projections. He also blames European Union (EU) governments for heavily subsidizing food exports to Russia that are sold at prices below even low Russian costs of production.

"The effects of the EU's 'butter mountains' and 'milk lakes' are so strong in Russia, not because of inherent weaknesses of collective agriculture, but because the Russian government has failed to take fundamental measures to protect its own producers until conditions stabilize sufficiently," says McIntyre.

First Deputy Trade Minister, Georgy Gabounia, agrees. His calculations show that in the final Soviet years, 1989-91, state support of agriculture in Russia was as high as $90 billion.

"Now it's a negative figure," says Gabounia, "That means the pricing of farm products is supporting the rest of the economy."

John Helmer is a Moscow-based journalist, who routinely contributes to RFE/RL.