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Statement, S. R. Johnson P*ee 2 



Houte Subcominee on Poreien Agricnhure and Hunger March 31. 1993 



Agribusiness Centers support from the U.S. I!)epartmeax of State was provided in the form of a 

 C5B military aircraft to transport equipment, seeds, and other materials along with Iowa ^rmers 

 who were to assist in crop production in Russia and Ukraine. 



Joint VkiUitres: The Agribusiness Centers in Russia and Ukraine were organized as joint ventures 

 or cODunercial enterprises. The board members were from the United States and from local farms 

 and the agricultural establishment in each of the Agribusiness Center regions. Approximately 2,000 

 acres of com and soybeans were grown using seeds, chemicals, and specialized equipment from U.S. 

 companies. The Russian or Ukrainian partners provided labor, machinery, and land. The plan was 

 that the Agribusiness Centers would generate sufficient resources through the U.S. or Ukrainian or 

 Russian contributions to sustain their operation in future years. In actuality, this was not possible 

 because commitments of the Russian and Ukrainian local officials to the trading and other costs of 

 the Agribusiness Centers could not be met due to the deteriorating economic conditions in their 

 countriea. Nonetheless, the Agribusiness Centers were operated as though they were profit-nuking 

 toujt ventures, with the proceeds to be reinvested to support further demonstratioa and training 

 activities consistent with the objectives of the Agribusiness Centers. 



The objectives of the Centers were to achieve positive results for both the Russian or 

 Ukrainian partners and the U.S. agribusinesses (or more generally for the U.S. agricultural and 

 agribusiness sector). The specific objectives were to provide trade and commercial opponunities for 

 U.S. agricultural producu and agribusiness and to support the transition to a market economy in 

 the FSU. Our intention was to achieve these objectives by introducing U.S. agricultural technology, 

 equipment, and business and market experience to people in the FSU, and by conducting 

 specialized training. 



Sbon Counts: The Agribusiness Centers leveraged the information on technology, management 

 methods, market economic concepts, and the joint venture concept itself through a series of one- 

 week trainii^ sessions or short couraet. The participants in the training sessions were extension 

 economists from ISU, the University of Wisconsin, and other land grant institutions; market 

 economics specialistt from other economic organizations (eg., the Federal Reserve Bank of Kansas 

 City); and reprecentacives of agribusiness firms. These one-week training sessions were organized to 

 focus on a particular ^ricultural activity. InrliuiiH were: 



• Crop production and irrigation 



• Grain handling, processing, and storage 



• Meat processing and livestock production 



• Dairy processii^ 



