Do the Russians Need Food Aid?
IN the West, there is genuine concern over the Soviet food situation. The West feels obligated to help the new democracies survive their steps toward market economies. But we must understand clearly what kind of help the Russians, Ukrainians, and others need.Moscow has requested $2.5 billion in food credits and $1 billion in food donations from the United States. The US has granted food credits worth $1.5 billion; about $5 billion has been promised by the European Community, Japan, Saudi Arabia, and others. Ready-to-eat food will certainly be needed for city dwellers. Massive gifts of grain, however, might actually have an adverse effect. First, Soviets don't need wheat. Wheat to Russia helps US farmers handle overproduction. What the former Soviets want are feed grains - mainly corn and soybeans for their livestock which will otherwise be slaughtered. But even if the Soviets get the 14 million metric tons of corn they want, that will only help the huge state and collective farms. The country's disintegrating central distribution system will not be able to help those who need it most: small private farms. About 40 percent of Soviet farms don't even have storage facilities, and are poorly connected with state elevators and silos. Grain isn't what small, private Soviet farms need. They need the equipment to store, process, and distribute the grain they are already capable of producing. The democratic leaders who came to power in August understand well that, of all the sectors of the Soviet economy, agriculture is the easiest to fix. Indeed, Russian and Ukrainian agricultural products are inherently competitive if processed and packaged well. Their production potential is immense. Soviet agriculture has more people, more machinery, and more arable land than US agriculture. The cultivated area in the USSR is 40 percent larger than that of the US. The Soviet labor force involved in agricu lture is nine times that of the US. Soviet agriculture uses 50 percent more fertilizer than its American counterpart. Still, US agriculture produces 25 percent more grain than the old USSR. However the USSR, now the world's largest food importer, has the potential to outproduce the US. Its dependence won't last long. The need for food imports can end much sooner than many think, because Moscow's grip on the farmer's throat - what naive Western economists call state "subsidies has lost its power. Agriculture is undergoing revolutionary changes in the former USSR, ramifications of which will be felt in the West. A more diverse and flexible structure is being born. Eventually, all forms of farming - small family farms to huge joint-stock agro-companies - will coexist together. In Russia, the number of private farms grew from 4,433 in January to 36,000 by November. The average private farm is 120 acres, and won't take the tractors and combines used on collective farms. In 1991, Russia provided private farmers 7,000 tractors and 6,000 trucks. Boris Yeltsin promised that in 1992, 24,000 tractors and 22,000 trucks will be made available. Even so, the demand for machinery exceeds the supply. One reason is that while family farms increased rapidly, huge collective farms split into smaller units. Collective farms increased from 46,000 in 1986 to 52,500 in 1991. Collectivization is not spreading; the collective farms are shrinking to more manageable size. The average collective farm has 90,000 acres of arable land (of which 30,000 is cultivated), and 50 tractors, 14 grain combines, and 32 trucks (as of 1981). At any moment, however, 60 percent of this machinery doesn't work for various reasons. If the dividing goes on, the number of collective farms might grow to 60,000 by next year. These farms need smaller, more versatile, reliable, and economical equipment. Soviet industry doesn't produce such machines. The diversification of Soviet agriculture will continue no matter how much food we send. Only a major political disaster - civil war or unrest - can stymie it. Otherwise, Russia, Ukraine, and most of the other states of the former USSR will stop being food importers in three years. It is extremely myopic of the US to encourage wheat surpluses, through ephemeral aid, when American farmers will ultimately have to switch to crops with a greater domestic and world demand. This delays needed adjustments. At the same time, agricultural producers in the former Soviet Union must increasingly import specialized farm machinery and high technology, because the quality of Soviet farm equipment can't be improved quickly enough to keep pace with demand. This is an opportunity for American manufacturers. The Russian government allocated $100 million in hard currency to buy such equipment abroad. That isn't nearly enough. Even half the $6.5 billion the West pledged in food credits could help buy small, versatile tractors, rototillers, trucks, grain bins and dryers, generators, and small food-processing and packaging devices. Polish agriculture evolved from food shortages to overproduction in two years. There is no reason to suppose Russians or Ukrainians can't do the same. We should help them take advantage of their opportunities rather than dump our unwanted food on them.