227 



pated it would be basically done — through the purchase of commod- 

 ities. But you could use farm equipment through GSM-103, I be- 

 lieve. 



Mr. Penny. In terms of the Russian perspective, is that an area 

 where we would find an anxious buyer? 



Ms. Brookins. Russia is one of the largest producers of farm 

 equipment in the world, particularly of tractors and combines. Un- 

 fortunately, they have no spare parts network or system, so they 

 retire as many or more pieces of equipment a year as they produce, 

 and this has really been greatly constrained. I think it could be an 

 opportunity for some of our farm equipment manufacturers, but I 

 do believe that it would be in our longer term interest also to help 

 the Russians build up their own plant capacity within the country. 

 Certainly, it is a peaceful use of technology, and I think it would 

 benefit them in terms of even defense conversion. 



Mr. Penny. We had two Russian farmers testify that they were 

 interested in processing equipment, small-scale processing equip- 

 ment, and I know that we have had Russian delegations travel to 

 Minnesota and sign contracts for processing equipment. You indi- 

 cated that Russia builds a lot of basic production equipment, but 

 evidently they, at both the state level and the individual farm 

 level, aren't doing such a good job of providing for these processing 

 facilities. Is that another possibility for GSM-103? 



Ms. Brookins. I think it's another possibility for GSM-103 or for 

 any other of our programs, and certainly possibly even for an enter- 

 prise fund or an Ex-Im-type of program as well. We do provide sup- 

 port to exports of U.S. industrial products through the Export/Im- 

 port Bank program, and I think that we should look to see where 

 the appropriate fit is in terms of whether we should be seeking to 

 get more Ex-Im guarantees for that type of transfer of U.S. busi- 

 ness products and whether we want to use GSM-103 for those 

 tj^es of products or whether we want to keep it as primarily a 

 commodity type of program, used also possibly at the other end to 

 help them build infrastructure. 



Mr. Penny. Dr. Raup, what would you recommend as the most 

 effective approaches by the United States if we want to support ag- 

 ricultural reform, market development within Russia? 



Mr. Raup. As I indicated, the basic problem is not that they don't 

 have skilled people, not that they don't have a good bit of the mod- 

 em technology available within agriculture. They do, and some of 

 it is world-class. They don't have the institutions. Particularly, they 

 don't have the legal basis, and they don't have the organizational 

 basis, and they don't have the structural models. 



One of the greatest handicaps in the Soviet Union system is 

 there is no model for organization except the army, and everything 

 else can be interpreted as organized on these lines. As we've seen 

 in the last week, they have no tradition of conflict resolution in 

 their debating agencies, in their parliamentary agencies. They have 

 only a system of handing down orders from the top, and no feed- 

 back loop is completed to permit information to flow from below. 



So the greatest service we could provide them is to give training 

 and access to information about alternative institutional struc- 

 tures, specifically, but not limited to, alternative forms for coopera- 

 tive work, alternative forms for corporate organization, and the 



