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and consvimer alike have been trapped in a vicious cycle. On the 

 upside (for the United States) , such conditions favor imports of 

 wheat. 



Production possibilitias 



Much has been said and written about the promise of Russian 

 agriculture (shorn of Soviet controls) , free to produce for a 

 future Russian marketplace. Some have predicted Russian self- 

 sufficiency in grain in the near term; others forecast a return of 

 Russia to the international export market place. 



It is possible, of course, that such developments may come to 

 pass: possible, but unlikely in the near future. 



In the short term, it is difficult to see how the current, 

 evolving Russian system can effectively match needs and production. 

 Too many constraints currently disrupt production to do so, among 

 them: the weather, input and transportation shortages, lack of 

 foreign currency to purchase imported inputs, limits on government 

 subsidies to farmers, the absence or near absence of markets, 

 barriers to inter-CIS cooperation and trade, lack of local and 

 national marketing know-how, and environmental constraints (such as 

 exist in Central Asia) , which place limits on future growth in 

 agricultural production. 



Rola of Imports 



I conclude that Russia will continue to rely on imports for a 

 significant portion of its total grain supply for the foreseeable 

 future. It will do so because of limits on its own production and 

 supply; and because imports allow a means to manage food supplies, 

 in the face of social discontent. 



These imports need not come at a cost to Russian producers in 

 the form of disincentives to production (such as has been argued) ; 

 there should be eunple domestic maricets for their future production. 

 On the other hand, such imports — if reliable — could play a 

 significant role in maintaining basic social welfare at a time of 

 tremendous economic and political turmoil and change. This is a 

 point that should not be lost on U.S. policy -makers. It is a 

 point, I believe, the President well understands. 



Policy 



What, then, of U.S. policy? What role should U.S. policy play 

 in advancing these objectives? 



It is, by now, well known to you that the Russians prefer to 

 maintain trade relations with the United States on a commercial 

 (GSM) basis. They favor trade, not aid. 



