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cantly and, in fact, it was at the previous level due to the highly 

 distorted prices. 



Thus, in addition to adjusting to a new economic system and a 

 new set of institutions, farmers there are adapting to an entirely 

 different pricing system, one that is more consistent with that in 

 the world markets. 



The second point in terms of background is that the GDP per 

 capita in Russia dropped about 7 percent in 1990, about 17 percent 

 in 1991, and is estimated to have dropped about 20 percent in 

 1992. That means that their per capita income is down over 40 per- 

 cent in the past 3 years. And to give a little perspective, during the 

 Great Depression our per capita income was off about a third. 



Thus, the Russians are dealing in a very difficult economic situa- 

 tion where not only the agricultural sector is under stress to adapt, 

 but the whole population is under economic stress. 



The last point is to understand that as we deal with the eco- 

 nomic reform and our participation in reform of Russian agri- 

 culture, it is important to understand that the Russians have their 

 own set of institutions. In particular these farms, collective £md 

 state farms, have been both social and economic institutions. This 

 situation represents a difficulty associated with the reform that 

 will require very innovative developments if they are to succeed in 

 the short term. 



Let me tell you about our agribusiness centers briefly. We ran 

 the agribusiness centers in Russia and Ukraine. Our discussions 

 about these centers are a long history, starting about 5 years ago 

 actually, and when we — most of the discussion was in terms of 

 model farms. It became clear, as we discussed this, that there real- 

 ly wasn't much of an interest in model farms, that is replicating 

 a farm from Iowa and Russia, but instead technology, management 

 methods, and other things. 



We organized these centers as joint ventures, legal joint ven- 

 tures, which in itself was interesting, within the laws of Ukraine 

 in Russia, and they provided training on management methods and 

 market systems and institutions to about 1,000 participants in 

 1992. They also provided opportunities for demonstrating U.S. 

 technologies. 



Small- and medium-sized firms in the Midwest were particularly 

 interested in participating because the centers provided a low-cost 

 way for them to assess the potential for commercial developments 

 in the former Soviet Union and a way to capitalize on what I be- 

 lieve is a very general feeling of wanting to support the reforms in 

 these countries by our Midwestern population. 



The short courses were organized in a number of areas, crop pro- 

 duction, grain handling, meat processing, dairy processing, food 

 processing, and packaging, and we brought people to talk about 

 how those technologies and how the industry is organized in the 

 United States, not with the idea that they would copy it, but with 

 the idea that they could ask questions and adapt in their system 

 whatever parts of our methods and technologies seemed most ap- 

 propriate. 



Based on this experience, a number of recommendations come, 

 not only about how these centers would be operated, but that relate 



