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GLOBAL AGRICULTURE : Dialogue : Farmers Fight to Get to Market in Ex-U.S.S.R. : Government still dominates supply and sales, former U.S. agriculture secretaries say.

August 30, 1994|STANLEY MEISLER | TIMES STAFF WRITER

O rville L. Freeman and John R. Block served as secretaries of agriculture in markedly different American administrations but now jointly chair an organization that encourages agricultural ventures in the former Soviet Union and elsewhere.

Freeman, 76, a Democrat and a former governor of Minnesota, was President John F. Kennedy's agriculture secretary , while Block, 59, a Republican, was President Ronald Reagan's. They co-chair the Citizens Network Agribusiness Alliance, which describes itself as a coalition of more than 200 agribusinesses, food companies, farm groups, trade associations and universities.

Freeman and Block, who toured the farming areas of Russia, Ukraine and Kazakhstan in early August, discussed their impressions with Times staff writer Stanley Meisler in Washington.

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Q: Looking at Russia, Ukraine and Kazakhstan, what were the main problems that you found in agriculture?

Block: First of all, I think they have a problem on the two ends of farming. On the supply side, in the spring they have a hard time getting on a timely basis, still, the chemicals and the seeds at a fair price that they need to do their farming. Even to this day a lot of their system is still government-dominated. . . .

On the other end, they have a problem with marketing their product. The government offers a price for the wheat or whatever, and they have a hard time getting paid by the government. So some of them have tried to sell it privately or barter it, where they could at least get money or get something of value for it.

That doesn't mean there isn't a problem in the middle too, in the farming side, but I think the supply side and the marketing side are bigger problems than on the farming side.

Freeman: I think I'd agree with that. They do not typically exercise much initiative on their own. They've been under a system where they did just about what they had to do to get by, and the stimulus of getting return related to the effort output . . . is very dim. So their productivity, per se, is not very strong. That . . . seems to be changing when they are responsible for the results themselves and can measure it and see it and benefit from it.

Block: When farms become privatized in one way or another, it transforms the motivation. The motivation is a profit motive. They look a lot harder for a place to market products, to make money, and we saw that last year on a farm that we visited.

We spent three or four days on the farm. They had a wonderful crop down near Krasnodar, in Russia, not far from the Black Sea. A beautiful crop, 40,000 acres, and I asked them if they owned the land. Of course they don't. The farmers don't own the land over there yet. . . . But he said that we have to pay the rent to Moscow--15% of the crops. I asked him if that wasn't a considerable burden to give up that much of the crop. He said it's no problem, we tell them we had a crop failure.

Then he goes on to say what we really want to do, almost pounding the table, is export this crop out through the Black Sea and get hard currency. We want dollars so that we can buy John Deere equipment. We want to buy Western seeds and Western chemicals. That's what they want to do.

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Q: What about Kazakhstan? You always hear that's really a Third World country. I wonder if the problems are very different in Kazakhstan from Russia, from Ukraine.

Freeman: I was there for a relatively limited time, but I would say . . . they are quite comparable there. I did meet with a group of farmers . . . and in the course of the questions I recalled I'd been asked many of those questions many, many years ago when I was secretary of agriculture. They weren't too different in some respects.

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Q: They ask the same questions as American farmers?

Freeman: Yes. . . . What's happening to the small farm, and how can we make a profit, and the government doesn't give us adequate direction, etc. But fundamentally, the pervasive hand of Moscow itself, of the Kremlin, was just as weighty there in Kazakhstan as I observed it in other places.

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Q: Do you feel enough attention is being paid to these problems by the new governments?

Freeman: I think they're trying. I think they understand what needs to be done, but it's very difficult to carry it forward. When (Russian President Boris N.) Yeltsin put out a decree that you could have private ownership, there was no bank willing to issue a mortgage. . . . This is one of the real problems--the underlying confidence that we're now going in this direction firmly and clearly. It's not there. That confidence has yet to come. . . . But I think they want to do that, and I think they're moving in that direction. I didn't detect anybody who wanted to go back to the old system.

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