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or consider fair. The majority of Russian families have been 

 forced to significantly tighten their belts, even on purchases of 

 staples, such as bread, milk, and meat. But there is no safety net 

 in Russia, as in the United States, for enhancing purchasing power 

 by lowest income families. 



The relative absence of foodstuffs — or of the ability of the 

 common consumer to purchase basic foodstuffs at reasonable prices 

 — has created a tinder box of social discontent. Access to 

 imports provides an important means to manage the current Russian 

 food supply problem. Such access is dependent on the willingness 

 of exporting countries to provide credit or assistance for the 

 purpose of purchasing agricultural commodities. That decision, of 

 course, rests entirely in the hands of exporting countries. 



Pipeline Disruptions 



Many of the food-related problems we see in Russia today 

 result from what I would term "pipeline disruptions". 



Even in the past — under a completely centralized system — 

 such disruptions were common. Today, however, more serious 

 challenges exist, resulting from a partial breakdown in previously 

 reliable relationships between producer and government procurement 

 authorities and entities; retailers and consvuners; and food-surplus 

 and deficit Republics (and even between food-surplus and deficit 

 regions within individual Republics) . 



The absence of a generally recognized, legally sanctioned 

 market mechanism has resulted in an inefficient allocation of 

 scarce resources. Surpluses exist side-by-side with deficit 

 conditions. 



Central procurement authorities currently attempt to bridge 

 the gulf. But they are limited in what they can do by constraints 

 on subsidies to producers, weather-related factors, and 

 availability of credit overseas to purchase bulk commodities not 

 otherwise available from domestic stocks. 



Problems in the Livestock Sector 



Problems of grain availability are generally severe, but they 

 are most severe in the livestock sector. In that sector, back-to- 

 back poor harvests — and farmer reticence to sell grain at low 

 prices in the face on inflationary pressures — has resulted in a 

 serious downturn in livestock numbers. 



There is a critical need for feed grains and protein feeds for 

 animal production; however (with U.S. credits suspended), there is 

 little outlet for this demand. As a result, wheat normally 

 destined for human consumption is being fed to animals. This, in 

 turn, has lessened wheat supplies for food. Producer, government 



