213 



There are two issues I would like to address in response. First, in answer to the 

 question |X)sed, peasant farmers in 1992 were obliged to sell a part of their produce to the 

 state just like state and collective farms. The percentage to be sold to the state was not to 

 exceed 25 percent of a peasant farmer's output. The terms were to be contracted at 

 prevailing market prices. The reality was quite different, as prices continued to be dictated 

 by procurement agencies, and that is exactly why peasant farms joined state and collective 

 farms in not fulfilling their contracts. 



Second, we should note that there is both a system for credits and one for loans that 

 peasant farmers may obtain. Dr. Van Atta described the process by which AKKOR 

 guarantees repayment of state credits, in which case a bank is a clearinghouse. The peasant 

 can easily obtain state credits with this guarantee. The market interest rate was 80 percent, 

 but a farmer with a guarantee would pay only 8 percent. This system was largely 

 theoretical, and in fact few such credits found their way to peasant farmers. 



The other system was for loans and was the one I was talking about. Here, the farmer 

 does not have a guarantee from AKKOR, and he simply must apply for a loan at the market 

 rate from either a commercial or agro-bank. Even in this process the repayment criteria are 

 rather lax. Precisely because state subsidizied credits did not reach peasant farmers, they 

 had to turn to non-subsidized loans to obtain livestock, equipment, or other inputs. It was 

 this problem that forced so many peasant farmers to quit their operations, or to operate 

 without needed supplies. Regardless of whether a farmer obtained a loan or state credits, it 

 was to be repaid and was considered debt. 



