By Renfrey Clarke
MOSCOW — Years ago, it would have been sensational news. The Russian state authorities, President Boris Yeltsin announced on March 9, would not import grain in 1994. The country, he explained, had sufficient reserves to last until the next harvest.
The USSR imported grain throughout the final three decades of its existence, a practice which Western commentators noted gleefully as evidence of the failure of Soviet "communism". The humiliation was felt keenly by Soviet leaders, and achieving self-sufficiency in grain was a cherished long-term objective.
Now Russian capitalism has attained the goal which eluded Communist Party chiefs from Khrushchev to Gorbachev. However, there were no fanfares accompanying Yeltsin's statement.
The imports have ended not because of an increase in local grain output — production declined by some 6% last year, and is expected to fall still more steeply in 1994. Importing has come to an end because the collapse of Russia's economy has caused much of the demand for grain on the country's internal market to vanish.
Among the population, meanwhile, malnutrition has become widespread.
The steep fall in demand for grain is one aspect of a crisis in agriculture far more profound than anything during the days of Soviet grain imports. According to the Statistical Committee of the Russian Federation, agricultural production declined between 1990 and 1993 by 17%. Other sources suggest a much steeper fall, of as much as 29%.
Traditionally, about three-quarters of the grain consumed in Russia has been used as stock feed. But stock numbers have fallen by around 40% in recent years, as collapsing real incomes have forced huge numbers of Russians to give up regular purchases of meat, eggs and dairy products.
Meanwhile, the government's "strong rouble" policy has provided huge subsidies to importers. Foodstuffs brought from Western Europe are often sold in Russian shops at prices competitive with local produce. In 1993, imports accounted for 18% of all food purchases in Russia, and for products of animal husbandry, 25%.
Russian farm enterprises are forced to compete not just with one another, but also with the subsidised agriculture of Western Europe. Even more crucially, they are squeezed by people who in many cases do not have to compete with anyone at all — the producers of industrial inputs used by the agricultural sector. Since almost all prices in Russia were freed at the beginning of 1992, the cost of industrial goods has risen much faster than the prices received by farms for their produce.
The concept of a "price scissors" enriching industry at the expense of the countryside is familiar to anyone who has studied Soviet history of the 1920s. In 1922 and 1923 the shift in relative prices amounted to 340%. Unable to buy industrial goods, peasants stopped selling their produce, creating acute shortages of food in Soviet cities.
According to the prominent economist V. Shprygin, writing in February this year for the newspaper Ekonomika i Zhizn, today's "price scissors" amounted to 400% during 1992 and 1993, and will quite probably reach 500% during 1994. To buy a tractor or a grain harvesting combine, a farm must now sell 12 times as much grain as in 1991.
Russian farms have also suffered from long delays by the government and other customers in paying for deliveries of agricultural produce. By the time this produce is paid for, inflation has often jacked the prices of industrial goods out of reach.
Many farms are now unable to afford fuel, machinery, spare parts or fertiliser. According to Moscow News early in March, only 40% of the needs of the countryside for oil products and lubricants are being met. "The villages have no money to buy the rest", the paper reported.
The area expected to be sown for the 1994 grain crop is well below last year's levels. The use of mineral fertilisers in 1993 was barely a quarter of the modest levels of 1987, and will drop still further this year. Even if weather conditions are ideal, the 1994 grain crop is expected to fall by about 10%, to levels far below those of the late 1980s.
The picture in stock raising is no brighter. The prices of industrially produced feed concentrates have risen steeply. Even pedigree breeding stock often have to be slaughtered. Despite the enforced killing, meat production in Russia in 1993 was down by more than 20% on the average for 1986-1990.
With farms unable to pay past debts or contract new ones, the agricultural machinery industry is in deep trouble despite the monopoly position of many of its producers. The yards surrounding tractor and harvester plants are full of unsold machines, production of which last year was only a fraction of 1980s levels.
Many factories closed down for long periods during the winter. The output of tractors in Russia in January was only 20% of the level in the same month last year. In December not a single potato harvesting combine was produced in the whole country.
Quantities of serviceable machinery in the Russian countryside have fallen sharply. Most of the equipment on Russian farms is now close to the end of its useful life. Worked to the limit, it is breaking down more and more often, in circumstances where replacement parts are often impossibly expensive.
With prices artificially skewed against agricultural producers, Russian farms have little chance of attracting outside investment. State support is therefore essential — in the first place, emergency credits to allow farms to continue operating.
In February the Russian government approved a 13.1 trillion rouble (US$7.8 billion) support package for agriculture in 1994. According to deputy prime minister in charge of agriculture Alexander Zaveryukha, this sum will be enough to maintain 1993 output levels.
Zaveryukha's assurance is questionable, to say the least. In the first place, there seems little prospect that the credits earmarked for fuel and machinery will reach farms in time to allow spring sowing to be completed.
The problems of the Russian countryside are not in every case the result of inept policies during the last few years. These problems rest on decades of neglect during the Soviet era, when for quite different reasons, agriculture was also denied investment at the expense of industry.
Russian agriculture today is heavily undercapitalised, lacking not only machinery but also crop storage and processing facilities, and perhaps most critically, adequate rural roads.
The key obstacles facing Russian agriculture, whatever their origins, are technical and financial in nature. Liberal government advisers, however, have focused on supposed structural problems that allegedly rob peasants of the desire to work.
Accustomed to viewing all of Russia's difficulties as the result of unnatural socialist practices, liberal ideologues propose to cure agriculture with large doses of private property and the free market.
During 1993 virtually all of the state and collective farms were re-registered as joint stock companies of various types. The main result was to allow the state to disclaim responsibility for supporting them.
The thinking of city-bred liberals on rural matters has also been tinged with Arcadian romanticism — with a belief that if only the collectives were to dissolve into a stout yeomanry of independent farmers, the problems of the countryside would solve themselves.
The peasants themselves have mostly been hostile to these schemes, and their suspicions have been borne out. Ill-researched and inadequately supported, the government's program of encouraging private farming has been a fiasco. By the end of last year, the number of private farms had ceased to grow, though the area involved — about 6% of total arable land — was still expanding.
Surveys of private farmers indicate that the main problem they face is lack of finance. According to Izvestia, independent farmers in 1993 received only one-third of the state credits promised to them. Only half of these farms now have tractors.
At the beginning of March, the English-language Moscow Times reported that as many as 40% of individual farms were likely to fail to sow spring crops because state credits had not been distributed.
Without adequate finance, and caught in the general price trap of Russian agriculture, large numbers of individual farmers have retreated into a primitive, Third World-style subsistence agriculture. While feeding their families, and perhaps supplying relatives in the towns, they do not participate in the market to any significant degree. Here, at least, the similarities with the 1920s are striking.
The basic measures needed to reverse the collapse of Russian agriculture are not impossibly complex, nor are they unorthodox in terms of Western economic practice. But in vital respects, they clash with the free-market mantras chanted by liberal ideologues.
To close the "price scissors", price controls must be imposed on monopoly industrial producers. The "strong rouble", which is subsidising imports and ruining light industry and agriculture, must be allowed to fall to more realistic levels. An appropriate combination of subsidies and tariff protection must be worked out, so that agriculture becomes attractive as a field of investment.
Finally, peasants must be allowed to decide for themselves what forms of organisation, collective or individual, they work within.