Yeltsin's program threatens food supplies


By Renfrey Clarke

MOSCOW — In the first half of June, peasants in numerous regions of the Russian Federation were threatening strike action against the consequences of the Yeltsin government's "reforms". Meetings of agricultural workers in Kurgan province, in the Chuvash republic and in Bashkortostan promised collective action unless the government met a range of demands that included the disbursement of unpaid wages, compensation for price rises, credits on favourable terms and increased spending on social provisions.

In Khabarovsk province in the far east, a June 16 report indicated that sporadic work stoppages were already occurring. Farmland was not being ploughed, and milk was being fed to calves instead of being processed for sale. In some districts, including the North Caucasus, local authorities have unilaterally raised the price of grain shipped to Moscow.

Agriculture is among the economic sectors hit hardest by the doctrinaire neo-liberalism of Yeltsin and his ministers. At least 80% of state and collective farms are now operating at a loss. Economists from the Agrarian Union predict that, after declining by 5% in 1991, gross agricultural product will fall in 1992 by a further 9 or 10%.

In some categories, output has already collapsed. According to the journal Economics and Life, whole milk production in the Russian republic in April was down by 52% from the levels of 1990. Output of meat had fallen by 42%.

Using existing machinery and carefully hoarded fuel, farm workers were able to ensure that this year's grain crop was planted, though sowings of vegetables were down. Also, large areas of crop land were sown without fertiliser. Fodder production is about 30% below last year's levels. This is having a catastrophic impact on the numbers of stock, especially poultry and pigs.

Ironically, one of the key problems of Russian agriculture lies in the fact that, unlike almost all other sectors, it consists of a multitude of producers who now compete against one another on the basis of price. The enterprises which supply the industrial inputs for agriculture — machinery, fertilisers, pesticides and so on — frequently enjoy monopolies, and can raise their prices at will.

When the government at the beginning of this year ended most price controls, the results for agriculture were predictably catastrophic. By March, food prices in the shops had risen by an average of 11 or 12 times. But the cost of agricultural inputs rose much more steeply. "A tractor which not so long ago cost 21,000 roubles, now sells for 520,000, not counting turnover tax", Izvestia reported in April.

"Ammonium nitrate fertiliser now costs 2500 roubles a ton, instead of , a state farm director told the newspaper Trud. "All our profits have vanished in the space of two months."

For many state and collective farms, Yeltsin's "economic rationalism" has made producing food for the market absurd. "The cost of producing a litre of milk is about 15 roubles", the same state farm director explained, "and we're selling it for five". The farm sector cannot simply pass its increased costs on to commercial consumers. Its customers are the mass of half-starved Russians who by April, Trud reported, had already cut their physical purchases of foodstuffs by 40% compared with April last year.

State and collective farmers who complain to the government are likely to be met with platitudes such as "Learn how to operate in the new conditions!".

Yeltsin and his vice-premiers make no secret of their hostility to the dominant property forms in the countryside. The Russian president's December decree "On Urgent Measures for the Implementation of Land Reform" virtually removed state and collective farms from the list of legitimate economic structures. Now, the government talks of ending subsidies to loss-making state farms.

Yeltsin and other neo-liberals see the solution to Russia's perennial food problem in the private farmer; the countryside of the future needs to be an idyll of prosperous, independent smallholders. This is a picture which in North America is vanishing fast before bankruptcies and the inroads of agribusiness, and which in western Europe is sustained — to a degree — only by massive state support.

Private farmers in Russia remain a marginal phenomenon, likely to account for no more than 4 or 5% of this year's agricultural product. Often former migrants to the cities with a yearning to go back to the land, the private farmers tend to be in even worse economic shape than the peasants in the established farm sector. Inflation of more than 20% a month has meant that their state loans, averaging some 60,000 roubles (now less than US$500) per household, are far too small. Many are unable to buy sufficient seed, fuel and fertiliser. A survey quoted recently in Trud showed that for every 100 private farm households, there are only 48 tractors, 17 trucks and 14 seed drills.

Workers on the state and collective farms have shown little enthusiasm for setting up as independent proprietors. The Russian peasantry has strong collectivist traditions stretching back to pre-Christian times. More to the point, they are wary of any proposal which would leave them as atomised individuals in a society where the advantages of being part of a large organisation are now more apparent than ever. Lacking the apparatus contacts of the state and collective farms, private farmers are often at the mercy of shady intermediaries.

The extent of peasant resistance to the government's schemes is suggested by figures reported in April by the trade union journal Solidarnost. Of the first group of nearly 3300 state and collective farms re-registered under Yeltsin's "land reform" decree, eir existing status, while 1573 became partnerships and cooperatives. Two hundred and eighty became joint stock enterprises, and in only 126 cases — fewer than 4% — the labour collectives decided that the land should be divided up and worked as private farms.

Among the new private farmers, Yeltsin's stocks are falling fast. In mid-May, Izvestia reported, farmers in the Moscow region were threatening to block highways in protest against the high cost of machinery and building materials, and against high taxes and interest rates.

Is Russia to repeat the grain strikes and urban famines of 1916-1917 and the late 1920s? With inflation accelerating, it will be very difficult to persuade the rural sector to part with its crops later this year for the normal lump-sum rouble payments.

The best variant would be a system of progressive payments indexed to rises in the cost of agricultural inputs. However, this would differ little from the subsidies to state and collective farms which Yeltsin has anathematised, and would represent a major departure from free-market doctrines. More importantly, it would end the government's hopes of stabilising the economy by suppressing growth in the money supply.

Agriculture, Russians are often reminded, was a critical weak point of the old system of command-administer socialism. To judge from the blundering of the past six months, the most basic element in any political and economic stabilisation — keeping the people fed — is beyond the new neo-liberal order as well.