228 



kind of contractual relationships that I referred to briefly in my 

 oral testimony that now begin to play a dominant role in American 

 agriculture. 



We have accepted the bailee or custodial contract in this country 

 almost through the backdoor, without anybody having talked much 

 about it. But as you know so well in your own district, major frac- 

 tions of agricultural activity are governed by contracts that in ef- 

 fect make the farmer a sharecropper on his own land. I expect that 

 type of institutional innovation will, in a Russian version, charac- 

 terize much of the agricultural organizational structure in the 

 states of the former Soviet Union. 



We could help, I think, by bringing people over here for longer 

 periods of time and permitting them to work with the practitioners 

 in the field. You're not going to learn this in the State capitols, 

 you're not going to learn this in Washington. It has to be done at 

 the operational level and in a local commimity situation, which is 

 where they will have to implement it. 



So I think bringing people over for longer periods of time and en- 

 suring that they are focused on the understanding of the operation 

 of the institutional structure and not just on a technology or a par- 

 ticular kind of practice would be the greatest service we could 

 render. 



Mr. Penny. Thank you. 



Mr. Lewis. 



Mr. Lewis. Thank you, Mr. Chairman. 



Ms. Brookins, you recommend a longer credit guarantee to be 

 provided to the former Soviet Union. What's the basis for this rec- 

 ommendation? 



Ms. Brookins. The basis for this recommendation, sir, is the fact 

 that if Russia — this is only preconditioned by the fact that Russia 

 does complete the Paris Club rescheduling and is engaged in a 

 long-term restructuring under an IMFAVorld Bank/G--7-type of 

 mandate. My recommendation is based on the fact that Russia al- 

 ready is earning considerable amounts of hard currency. The prob- 

 lem this year is the fact that it's not repatriating that money be- 

 cause it's considered flight capital and the fact that the economy 

 is so unstable internally that the ruble is virtually valueless today 

 or is moving in that direction. 



So there's probably at least 12 biUion dollars' worth of hard cur- 

 rency even today out of their $24 billion to $28 billion in annual 

 hard currency earnings recently that is located outside of the coun- 

 try in Western banks, sitting there because people don't want to 

 bring it back to be used to service debt. If Russia goes on a Paris 

 Club rescheduling, it will be probably a 7- to 10-year rescheduling. 

 I think that we could do a 7- to 10-year GSM-103 program, and 

 it would complement the type of debt management that Russia is 

 operating. 



If we move to a longer-term concessional food aid program, sir, 

 we run into the problem of cargo preference, we run into the prob- 

 lem of much higher costs when I don't believe Russia has to have 

 that tjrpe of concessional assistance. Many other states in the 

 former Soviet Union do, but I don't think that Russia does need to 

 do that, and if we move Russia into a concessional category, it will 

 be very hard to bring them back up into being a commercial cat- 



