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- On the brighter side, the Yeltsin government has 

 drafted a sound proposal for a Russian agricultural 

 credit system. Under this proposal the system would 

 be capitalized not by paper rubles, but by granting 

 it title to large amounts of farm land. The bank 

 would be authorized to buy and sell land and make 

 loans to farmers. A key feature of the proposal is 

 that all loans would be secured by a first mortgage 

 on land. Such a system could work and be non- 

 inflationary. Unfortunately this proposal has 

 little support among Russian legislators. 



These then are some of the realities that should temper our 

 expectations and influence our assistance program. A point of 

 great importance is that successful solutions must address the 

 social as well as the technical problems which exist. 



The good news is that in spite of the formidable obstacles roughly 

 one percent of the farmers in the NIS have made the transition to 

 private farming. In large measure these new farmers come from the 

 elite in Soviet agriculture. Many are university trained 

 professionals — agronomists, veterinarians, livestock specialists, 

 agricultural engineers and the like. Others are former chairmen 

 of state and collective farms. Still others are professionals from 

 non-agricultural walks of life, including the military, who have 

 no desire to live in the cities. 



