
There is one remarkable island of stability in the current stormy waters of international politics - the three decades of cooperation between the Russian and U.S. agricultural lobbies.
Without fully knowing the details of the mechanism supporting this cooperation in the U.S., the essential aims of the Americans are clear - supporting an export industry. On the Russian, side the motivations are not so clear because the practice effectively amounts to supporting imported goods - and as a result cannot coincide with the national interest.
In the 1970s and 1980s the financial problems of the Soviet Union's planned economy (particularly the agricultural sector) were largely neutralized by the inflow of hard currency brought by high oil prices.
But to the agricultural lobby in Russia today, struggling with shrinking subsidies and desperately resisting market forces, food aid remains attractive.
The price liberalization of 1992 put an end to the country's previously extravagant grain consumption, allowing grain imports to be reduced to more reasonable levels (during the Brezhnev era the U.S.S.R.'s grain imports reached 45 million tons a year).
The ensuing years were difficult for Russia's state and collective farm managers.
Almost pushed out of the picture by the good harvest of 1997, Russia's farm lobbyists only regained the initiative with the drought of 1998, allowing them to again argue the necessity of food aid. The leader of the Agrarian Party and the farm lobby, Gennady Kulik, also a first deputy prime minister in the government of Yevgeny Primakov at the time, pushed hard for food imports.
Ignoring expert advice, which maintained the country had sufficient grain reserves from the bumper 1997 harvest for 1998, the Primakov government concluded a new food aid contract. In reality, it is not correct to describe it as "food aid," because Russia must eventually pay for the food, further burdening the country's already over-stretched budget.
The following year it became clear the experts were right - that it was not the country that needed "food aid," but Kulik's department, which benefited from its distribution. As it turned out, the grain reserves kept on private farms, which are difficult to assess, would have been sufficient to pull the country through.
But it was the ensuing drought of 1999 that crushed the resistance of those politicians who had tried to stand up to the agrarian lobby. In September 1999, Russia sent an official request for food aid to the United States, and the issue was promptly resolved during talks held in October.
Meanwhile, Russian agricultural experts continue to insist the country's grain reserves are much greater than official data suggest. Yevgeniya Serova of the Institute of Transition Economies claims that up to 20 percent of grain available to the country is hidden from official accounting. In Russia's cash-strapped economy, where barter has become an important method of transaction, grain is a valuable commodity for both farmers and local governments. By reporting a reduced harvest figure, both of these groups can siphon off reserves to use as barter.
Backing this analysis, aerial photography of the Rostov region, one of Russia's major grain-supplying areas, has revealed the land under grain crops to be 25 percent greater than the officially reported figure.
It is interesting to compare the official food industry reports for the first nine months of this year - operating on the bad harvest of 1998 - with those for the corresponding period last year, when the food industry processed the record harvest of 1997. The comparison reveals that the 'poor harvest' still produced an increase in grain products of 9.7 percent in bread, 9.4 percent in pastries, 40.1 percent in pasta, 32.8 percent in beer and 33.3 percent in ethyl alcohol.
Even with increased grain imports, the total amount of grain in Russia in 1999 is still 20 percent below the 1998 figure, if official statistics are to be believed. It is also indicative that animal breeding, which depends heavily on fodder grain, also did not suffer - egg production was stable and pig stock even increased.
Without doubt, the groups exploiting the food aid system with the U.S. are opposed to the free market - and are bent on trying to preserve the vestiges of a "socialist planned economy" in Russia. Another important conclusion that follows is that Russia could be self-sufficient in grain if its leadership stuck to a consistent free-market policy approach.