33 



Mr. GOLDTHWAIT. I've brought with me, in addition, two special- 

 ists from the Department — Mr. Allan Mustard, who is the Deputy 

 Director of our East European and Former Soviet Union Secretar- 

 iat, as well as Chris Foster, who's the Leader of ERS' Former So- 

 viet Union Section — and they may be helpful with very detailed 

 questions you may have. 



I'd like to begin by laying out the two assumptions that have 

 been behind the administration's agricultural activities with Russia 

 and the other countries of the former Soviet Union, and I believe 

 they both were adumbrated by a number of the comments that you 

 and the other members made at the beginning. These are that 

 progress in agricultural reform and restructuring is critical to the 

 success of the overall reform effort in Russia and the other coun- 

 tries, and second, that success in the FSUs restructuring in agri- 

 culture is good for American agriculture as well as that of those in- 

 dividual countries. 



From these two assumptions emerge, I think, two themes that 

 are very, very important and that have lain behind all of our activ- 

 ity: First, the need to ensure continued access to U.S. agricultural 

 exports during the economic restructuring because adequate food 

 supply is necessary for its success, as well as because we want to 

 maintain a market position in what will be an important farm mar- 

 ket for U.S. products longer term; and, second, in assisting with 

 the restructuring of Russian agriculture, we need to focus particu- 

 larly on the needs of the emerging private farm sector — the rep- 

 resentatives we heard from this morning — as well as the off-farm 

 market and distribution system that, under the old Soviet regime, 

 was the weakest link in the food chain. 



If I may, I'll comment briefly on the specific topics that were 

 raised in your letter of invitation before closing. First, with respect 

 to United States efforts to aid Russian agriculture, the United 

 States approach to assisting Russian agriculture has been devel- 

 oped by relying not only on the expertise that we have within Gov- 

 ernment in our Department, in AID, and in our other sister agen- 

 cies, but also by the involvement of a host of United States private 

 sector representatives, including farmers, agribusiness persons, 

 and academicians that have been with us on our various trips to 

 Russia and the other countries of the former Soviet Union. 



In working together, we have identified the post-harvest side as 

 the portion of the equation needing the most attention. I think re- 

 cently, as we've seen more private farms emerge, we've increased 

 our attention to production agriculture as well. But I think if you 

 look at all of the various technical assistance activities we've devel- 

 oped, they will fit around two points: First, improvements that 

 focus, importantly, on the management skills in handling, market- 

 ing, distributing, and processing farm products after they ve grown; 

 and second, the skills and inputs that are needed by the new 

 emerging private farmers. 



If I could comment briefly on the second point, agricultural cred- 

 it, as the farmers we heard from this morning mentioned, is a key 

 area, and there, in point of fact, USDA has already signed two 

 monetization agreements with private voluntary organizations that 

 are designed to provide rural lending to farmers and other rural 

 entrepreneurs with the proceeds from the commodities that we're 



