Can aid satisfy hungry Russia?

The US is finalizing a $625 million food-aid deal. But experts warn it may do more harm than good.

Christmas always comes late to Russia, where the holiday falls on Jan. 7. But now there seems little to celebrate. A combination of disasters has pushed many vulnerable Russians - the poor, aged, displaced, and disabled - over the line that separates subsistence from possible starvation.

American officials say a $625 million food-aid package should be finalized this week. Russia's government has welcomed the assistance. But many analysts warn that without effective monitoring, it may only end up boosting corruption and hastening the decline of Russian agriculture.

This fall the country brought in its worst grain harvest in 45 years, while the financial crisis that began in August has caused a plunge in food imports, sending prices skyward. According to the State Statistics Committee, 44.3 million Russians, nearly a third of the population, live below subsistence level.

"There are masses of people who could be in trouble this winter, due to poverty or because they live in remote regions," says Viktor Levashov, with the Institute for Social and Political Studies in Moscow.

The United States has put together a package that involves a gift of 100,000 tons of foodstuffs and 1.5 million tons of grain. There are also easy credit terms to help Russia buy a further 1.5-million tons of US commodities, including corn, soybeans, rice, beef, and pork.

"Good news for the Russian people, who might otherwise face the possibility of food shortages this winter," Christopher Goldthwait, general sales manager of the US Department of Agriculture's foreign service, said last week. "And it is good news for America's farmers and ranchers, who are facing economic hardships related to large supplies and low prices," he added.

But Russian experts, pointing to the fiasco of Western food aid to Russia in the early 1990s, say pitfalls remain.

"There are no guarantees that the aid directed to institutions like schools and orphanages will not be stolen, just as it was in 1991-92," says Mr. Levashov.

This time, the largest portion of the aid will be sold by the Russian government to commercial firms, who will be expected to distribute it at affordable prices in the markets of hard-hit regions. Critics point out, however, that the Russian official overseeing the sale, Deputy Prime Minister Gennady Kulik, is the same person who supervised the disastrous 1991-92 effort.

Goldthwait said the Russian government has provided a plan for aid distribution and the US will have its own staff of traveling observers. "Certainly we have heard that there is a danger that some individuals may profit unduly," he said. "We are very much concerned about that, which is why we take distribution and monitoring very seriously."

In the longer term, some experts argue assistance only serves to undermine Russia's faltering efforts to feed itself.

"Russia can produce food, we have a lot of capacity," says Vilen Perlamotrov, an economist with the independent Institute of Market Problems in Moscow. "This crisis is a warning to us to solve the underlying problems with our agriculture, and not to repeat the mistakes of the past."

Russian farming has languished since the 1991 demise of the USSR, a victim of declining state subsidies, competition from cheap foreign imports, and a skewed price structure that keeps manufactured goods far more expensive than agricultural products.

"The kind of aid we really need from the West is support and investment in Russian agriculture," says Levashov.

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