Created: 12/1/1980

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0 Crop Shortfall

National Foreign Assess meni Center


0 Crop Shortfall

An Intelligence Assessment

Research for this report wai completed

This assessment was prepared by

ffice of Geographic

Wfoial Research, and

of Economic Research.

Comments and queries are welcome and mayto the A

This paper was coordinated with the National Intelligence Officer for thc USSR and Easicrn




0 Crop Shortfall i j

Key Judgments For (he second consecutive year, tbe USSR hasubstantialA statement in late October by economic planning chiefa total grjin harvest ofillion tons, far below theFlanaddi-

tional official data on production in the three major grain-producingtogether with indirect evidence for other areas,otal production ofillion tons.

Prior to Ihe Baybakov report there was no clear indication that0 grain harvest wouldisaster. Until mid-October, several top Soviet officials claimed that this year's harvest would be up considerably from ihe9 crop. In early October, thc CIA and the US Department of Agriculture both estimated total USSR grain outputillionless if autumn weather conditions deteriorated further. Since lhat assess-

Baybakov's announcement

the exception ofhas surpassed last year's recordof all major crops is down. The harvests of potatoes and sunflower seeds are expected to be the worst since thef sugar beets and vegetables will drop back to the level of theupplies of forage crops are only slightly better than last year and8 levels.

Moscow will be unable torain deficitillion tons from imports and slocks. Wc estimateombination of the US embargo, transportation constraints, and tight world supplies will restrict total Soviet imports of grain to aboulillion tons (excluding rice) in the marketing year0 throughhc USSR also willillion tons of soybeans, soybean meal, and manioc.

Even if more grain became available, it would be difficult for Soviet ports to handle it. Because of greater use of small ships and rail transportreal port capacityill fall below the cslimatcd annual norm ofillion tons, f ' J

In addition to grain imports, ihc Sovieis will have to adopt other measures to cope wiih0 grain shortfall. Meal purchases are expected io lop previous records. Livestock inventories arc likelye reduced, although available data suggest thai distress slaughtering has noi ycl begun, al least to any appreciable degree


0 Crop Shortfall

Grain Produciion

The USSR hasubstantial grain shortfall for the second consecutive year. On the basis of r

]and announcements

by Sovici officials, we now expect0 grain output toillion tons (The US Department of Agriculiure also estimates grain productionillionrop of this size would belight improvement over lastoor cropillion ions and far belowillion-ton Plan


Acknowledging Use Shortfall

Onctober. Party Secretary Brezhnev told tbe Central Committee that ihe average annual grain production during the Tenth Foe-Yearould be "moreillionBecause produciion in the first four yearsillionrezhnevs statement would arithmetically allowrop as krwillionnctober, economic planning chief Baybakov put average grain produciionerceni higher" lhan the averagerop ofillion tons (

Both statements were based on preliminary data;heillion hectares of grain probably remained to be harvested Moreover, rounding errors in the figures cited by Baybakov could change the calculii-tions0 by as muchillion tons.released produciion data for the three major grain-producing republics- the RSfSR. Ukraine, anda yield ofillion tons for these regions Should grain production in the remainingepublics come inal roughlyillion ions (somewhal below average) total output wouldillion tons. Even introduction in tbove republics is somewhal higher, final Soviel grain output probably will notillion tons.[

Change in Outlook

Prior lo ihe Bre/hncv and Baybakov reports ihcre BOM no clear indication from Soviet sources thai0 gram harvest would be unusually poor Indeed, pub-

lished Sovici data on crop yields and slate grainsuggested average or above-average produciion. Until mid-October, several knowledgeable Scmciwere callingeasonably good crop. Senior Eksporikhleb officials reportedly"

|hal the harvest would be around 2ou minion Ions, and Minister of Agriculture Mcsyait referredrelatively good harvest" under very difficult weaiher conditions. Mesyals added firmly lhat the crop "would notisappointment" and would be up considerably from the harvestear ago.[

Based largely on favorable soil moisture levels. CIA's early summer estimate of Soviet grainarvest as greatillion ions, substantially larger lhan the average annual output ofsa rule, precipitation is ihe principal factor limiting grain production in the USSRainfall was greater lhan normal almost everywhere. Exceptrief period at ihc close of July, Ihc usual transition to drier summer weather never occurred over much of the European USSR. In severalgrain production areas of northern Europeanrainfall was iwo to ihrcc times normal ihroughoui ihe growing season, wilh several weeks of virtually no sunshine. As ihe crop season progressed, thewet conditions began lo threaten an adverse effect on (he grain harvest The CIA estimate was reduced accordingly,illion tons in August

By early fall, it became appareni thai Ihc potential harvest losses due to continued wet wealbcr ouiweighed ihc favorable aspects normally associated with high snd-moisture levels during ihc early growing season. In late September, based largely on harvest problems observed in ihe northern European USSR, we further reduced out estimate of tout grain output byillion ions,ilhon tons and pointed loan even lower harvest if persistent rains continued lo interfere wtlh ihc already delayed harvest (In early


USSR: Agrkultural Production

0 Eiiimiir hiiimxr














of reindict, rompuncau mayiddruiilini ludicc millet, buck'heal, rite, pubet. anil mitccllineout Brains.

Ihc USDA also reduced its estimaieillion

fconllrmcd the worst i* c Tijr.f isdSlcr; even with

e narvrsiaior massive attempts to hand harvest the grain, large areas remained unharvested and were undoubtedlywith ihconwi of winter. In those area* where the eram crcca arcrcignificant portion was not harvested despite special pick-up devices filled to lhe combines.

Much of lhe discrepancy between Western grainmade during0 crop sea son and ihc poor harvest totals recently announced is due to these abnormally large harvest losses, particularly in ihc northern European USSR, fcarly animates (or major

grain-producing areas less affected by late season raim -Kazakhstan and pans of the Ukraine, the North Caucasus, the southern Urals, and Westsupported by announced production dala.


Othtt Major Oops

Wiih the exception of cotton, production of the other major crops is down. Sowing was delayed by two to three weeks in ihe spring, and cooler- and wciier-than-norrnat weather during thc growing season generally retarded ripening. Yields of vegetables, sunflowers, and sugar beets will be below average, with thc outlook for potatoes probably the worst since the. By contrast, unusually favorable weaiher has fostered

Sal ret

0 Grain Yields*

ave'age yield i

avaiaoQ yields

a.efage yieNJi

olna ihe Karveal ha*

owaycd ana io aicaaHvely


USSR: Water Damaged Crop

record coiton harvest in Central Asia. Our estimate* Ior individual crops are as (olio*:

The potato harvest will be abotjtillion tons, downillion tons from our previous forecast and roughlyercent below the output averaged duringeavy rains during September and early October probably damaged potatoes more than any of the other row crops. This year's harvest has also been reducedigh incidence of plant diseases Reports indicate thai potato blight and otherthat could cause highcr-than-nor-mal losses during storage aswidespread in major production areas Serious shortages already have pushed collective (aim market prices for po-

talocs up ioimes the state-sel retail price level in some areas. To ensure potato supplies for major urban areas, Moscow recently purchased moreons from East Germany.

We estimate sugar btti output atillioneduction ofillion torts from the low end of our previous range and aboulercent below ihc jvcr-age harvest. (USIM currently estimates sugar beel productionillion ions.)was affected both by thc delay in spring sowing and poor weather late in ihe growing season, which prolonged the harvest into lstccceni Prorda editorial called the sugar beet crop "one of




worst inn addition to the lower yield of been, conditionsrop with below-avcragc sugar content. Id the event lhat large quantities of faie-harvcsied beets are still lying in ihe fields when heavy frosts sci in, the sugar content of the beets will be further reduced.

Production ofcarrots,cucumbers, and ihcesiimalcd ai aboulillionillion tons belowverage. Poor wcaiher delayed the harvest, caused heavy losses in localized areas, and lowered ihe qua!-ity of vegetables in most areas, |" as re ported1 below-normal quality for basic vegetables in Moscow and in other major provincial cities in European

We estimate the sunflower crop atillion tons belowDisease problems, words,ulysome of (he most productive areas ofCaucasus The drought wii followed byrain and many cloudy days, which delayedand harvesting of ihc crop anddamage as well. Early October observationsled

large areas of unharvested sunllowers. Althoughis normally completed by early Ociober.Soviet reports indicated lhatercent of the sunflower acreage was still unharvested as ofciober. the last reported date. If the weed and disease damage is more extensive lhanlotal output could be substantially lessas lowillion ions, " ' esfnTlaTB Soviet sunllower cropillion tons, making it the worst harvest since IheK.J

lo terms of total (eed unils.fodderhay. haylagc. silage, straw, andercent above lasa year's drought-reduced level Nit still below8 level As with otherhere are indications of serious problems withid-October report in Pratda staled thai in Belorussia. Latvia, the Urals region,umber of Russian Republic oblatls. only aboulercent of Ihe hay anderceni of ihe haylagc

were rated as top quality. Aa RSFSR paper reportedctober lhat in many areas of ihc Northwest.entral Chernozem, and othero m. more than one-half of the hay and haylagc procured has been substandard and that the quality of silage and grass meal has been no better

Production of cotton is expected toillionons more than last year's record output. Growing conditions were unusually favorable throughout Central Asia, and the area harvested was probably the largest ever. | |

Import Needs and Availabilities

rop ofillion ions, the USSRrain deficitillion tons if: (a) no more lhan marginal cuts in livestock herds are made: (b) grain stock rebuilding is postponed: (c) livestock product output is maintained at current levels; and (d) needs for direct human consumption and for seed also continue ai current levels. Since Moscow will beio make up ihe entire deficit with foreign grain, ii will have to adopt other measures to balance grain supply and demand; ihe most likely measuresubstantial reduction in livestock inventories and abnormally large meat

We expect total Soviet imports of grain from0 through1 to be restricted to aboulillion tons (excludingillion ions of soybeans, soybean meal, and manioc. The US embargo limits Soviet purchases of US grainillion tons, and we believe purchases from all oihcr sources will not exceedillion ions. So far, we estimate ihe Soviets have arranged to purchase aboutillion ions of grain, includingillion tons from the Untied Slates and

tons of soybeans and meal '

Other exporters may be tempted to follow Canada's lead in modifying their support of the LS embargo, but such moves would not greatly add lo Soviet grain imports. The EC. with its record grain harvest and large carryoxr stocks, could make at much as

ions of additional wheal and barley available, but Moscow probably could not handle thai quantity because of transportation constraints. Because of nop shortfalls. Australia cannot supply more lhan already estimated. Q

Meirie Tees


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Sale* and Aareeawnt1




n Earooe




illion tons of rice. As ofncluolaa oteii flour.

Transport problems will be at least as imponant as attain availability in limiting Soviet imports. Wethat under optimum conditions Soviet ports and internal transport facilities can handle an average ofillion tons ofonth, orillion tons per year. Conditions arc not optimum, however,thc US embargo has forced the usearge number of smaller ships which are tying up Soviet port facilities. Moreover, the grain import rate over the past nine months has been well below normal Soviet por; capacity. Under these conditions, we estimate that the Soviet* would be hard pressed to import lhe estimatedillion tons of grain available from Western sources during the year ending

Iniernal rail congestion also it hampering theof grain from ports to consumption centers At Ike largest Soviet grain port. Odessa, mkears not suited for grain shipments arc being pressed intoPoor weather during thc upcoming months wilt further hamper deliveries.

In addition to grain imports, the Soviets will have to adopt other measures lo cope with0 grain shortfall. Since nonstratcgic grain stocks weredrawn down to minimal levels following the9 harvest, Moscow can protect its strategic reserves only by reducing the demand forne way is to bolster domes lie meat supplies with imports. Soviet meatare expected toons in calendar yeargo as highillion tonsn addition, livestock inventories arc likely to be reduced appreciably. Such reductions add temporarily to meat supplies butrebuilding programs lhat can last years.dataat such distress slaughtering has not yet begun, si least in any discernible degree andolicy decision to reduceot likely to be made untilQ

In any event, the hard currency bill for agricultural products in01 will increaseAside from grain and meat, the USSR also will import large quantities of sugar and other agricultural products. In anticipation of problems with thcsugar beet cropoor Cuban sugarcanetbe Soviets have been forced into the work) sugar market Tbey have already boughtillion tons of sugar and are calling for delivery of as much of it as possible byhis would allowto make additional sugar purchases for delivery later |

We estimate that0 hard currency imports oF major farm products will total aboulillioa' or about two-thirds of total Soviet agriculturalup sharply0 billion9 (secascd on our estimate for the first six months of next year, thc Soviets may have to pay almostillion in hard currency for imports of these productsecause the large increase in agriculturalthis year has not been fully offset by an increase

The USSR holds an unknown Quantity of'WPly 'heir militarys civilianrme of *ar. Tha is in addition to operalocks anil bufferin jcats of large harvests and reduced in year* of poor j



Million USS

Lsiimated Hard Currency lmporls of Major Agricultural Products'



hard currency purchases from Eastern Europe which are believed to be relatively small

in sales io the West, we estimate that the Soviet hard currency deficit on toial merchandise trade could rise1 billion9 was much asillionith miliiary sales projected io level offal9 level ofillion and gold sales expected lo be low. ihc surplus on current account is expected io drop from M9 billion95 billion



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