120 



The monetization program that we have proposed to USDA is es- 

 sentially a program to front load the Russian market with qual- 

 ity — actually Russian-branded product. We — in working with the 

 Venev cooperative, which is a region in the Venev Oblast, about 2 

 hours south of Moscow, there is a processing plant there that we 

 hope over the next year will be able to produce butter on their own. 

 In fact, we are shipping some butter equipment which Land 

 O'Lakes is donating to this particular cooperative, private coopera- 

 tive. 



The object of the USDA program is to take surplus CCC stocks, 

 ship them to Russia, monetize them and sell them to both local 

 currency Russian stores and also hard currency stores — for exam- 

 ple, we have had discussions with Super Value regarding their 

 store just outside of Moscow — and to establish a Russian brand on 

 the Russian market. 



Now, in addition to it being branded with a Russian label, it will 

 also have "as a gift of the United States Government" and also 

 packaged or produced in cooperation with Land O'Lakes, but the 

 object is to establish a high-quality branded product on the Russian 

 market. The local currency and the dollars that would be generated 

 from the sale of this commodity will go back into providing some 

 of the capital expenditures required, for example, on farm grain 

 storage within this small local cooperative. 



Mr. Penny. Cooperative members in that region would then have 

 the benefit of the proceeds? 



Ms. Cashman. Yes, they would, but it would not stop there. In 

 other words, this is not simply a gift to that particular cooperative. 

 What it is is an investment in the cooperative, and it is expected 

 that they will repay this back into the fund. And as other regions 

 and other Oblasts indicate interest in this particular type of cooper- 

 ative model, that the resources then, as they are repaid, would be 

 reinvested in other regions. And, again, it is a self-regenerating 

 fund. 



Mr. Penny. Revolving loan fund. 



Ms. Cashman. That is correct. 



Mr. Penny. For member borrowers. 



Ms. Cashman. That is correct. 



Mr. Penny. What have you found in your involvement with Rus- 

 sian agriculture — what have you found to be the most troubling 

 barrier to your company's projects? What are the biggest stumbling 

 blocks and how do you propose that we get around those? Or isn't 

 there any light at the end of the tunnel? 



Ms. Cashman. There is always — well, if you use the term "light 

 at the end of the tunnel" with a Russian — for Americans that 

 means hope. For Russians, they say, well, that just means a train 

 is coming. However — and that says a lot right there about doing 

 business in Russia. There are vast cultural differences. 



However, the one thing I would say is that there is hope. The ob- 

 stacles that we have had, quite frankly, are actively engaging the 

 American — the U.S. Government, quite frankly, in what it can do 

 specifically to address some of the constraints that American busi- 

 ness feels in moving forward out there which is not just the only 

 reason to be out there but also in looking at what is happening to 



