IMPLICATIONS OF POOR SOVIET GRAIN HARVEST (S-09067)

Created: 8/15/1975

OCR scan of the original document, errors are possible

KCMORAKOUM Ambassador Deane Hinton

I believe the attached memo is responsive to Secretary Kissinger's request.

When the new crop estimate is ready you will be one of the first to gat it.

Acting Director Economic Research'-

Dale ugust 'IS

I'M ioi

CIA HISTORICAL REVIEW PROGRAM RELEASE AS

CENTRAL INTELLIGENCE AGENCY

ugust5 Implications of Poor Soviet Grain Harvest

Conclusions: The Soviets already have arranged for large grain imports and have additional options to deal with shortfalls caused by the current poor harvest. They nay welluch more serious problem, however, if the forage.crop is extensively damaged,ariety of indicators now suggest. In this case, they would likely have to reduce meat output byback to2 level. They would do this by cutting the feed ration and slaughtering animals bofore they reached their normal weight. The harvest results pose serious problems for Brezhnev, whose prestige is involved in success in the agricultural sector and steady improvement in the meat supply.

The Problem

The Soviets planned toillion tons of grain this crop year. rop of this size would have satisfied domesticillion tonsand permitted exportsillion tons to Eastern Europe. The extraillion tons would have been added to stocks and/or exports Because of the severe drought, we now estimate the harvest, will likt'ly be in the neighborhood ofillionillion tons below expectations andillion tons below actual requirements.* The problem is made worse because considerable damage has also been done to forage crops used to feed livestock.

Somo Opt 1ons

Thus far, Hoscow has purchased aboutillion tons of foreign grain, including nearly illion from the United States. We think it likely the USSR will be able to buy anillion tons of grain from non-US suppliers. If so. thenf the grain shortfall remains to be made up.

w*ust.we "iuevised grain crop estimate

andtcchntr^rhuman

ann Lecnnical sources.

Impossible? to Determine

educe the quality of bread {asmillion

Tho Soviets can also draw from their own grain reserve* We do not know how large these reserves are, but we think that an additionalillionfrom thisefinite possibility. The Soviets then wouldariety of options left to cope with the remaining shortfalle order of lo million tons. These include:

Import more grain from tho United States.

feed grain rations por head of livestock to2 level, while maintaining the current livestock* inventory. This would save

illion tons.

Increase moatillion tons4 imports). This quantity, aboutf total meat supplies, is available outside the United States and would reduce grain demandillion tons.

soybeans to stretch feed grain supplies.

We think the leadership will he reluctant to lower the quality of bread or reduce livestock inventories beyond the culling of herds, choosing instead to import more US grain and some additional meat, to reduce animal feed rations and thus market lighter weight animals, and to buy soybeans.

The Forage Crop Shortfall

* While the Soviets can cope with the grainevere shortfall in forage cropsprimarily hay, ensilage, and fodder rootswould be quite another matter, we <cnowariety of sources that there has been considerable damage to forage crops. We cannot, howover, quantify the extent of the loss. Just how serious the fodder shortfall actually is will have to be inferred from Soviet actions. Already, there are suggestions that the damage is extensive.

been given

school chiMrinei;nqknd reeds fornd chool children are being sent to collect vegetation for

livestock teed We suspect this'situation is indicative of

the forage problem in other livestock areas, and this raises

a real possibility that the Soviets would have to reduce

ratLnfPUr(by Sll9Vby CUttin*

shake ?Arthe leadershiP's de*ire toetterespecially during the year of a

Party Congress, this coulderious setback to the regime's consumer program.

Political implications t

analysis suggests that the problem, .while

serious, may be largely manageable, but the politicalarg neyerCheless likely to be sizable. aior crop failure generally overshadows other domestic and foreign

andSiwntS ^ leers' prestige 9

. nln,.tne firsfc instance, Agricultural Minister PolyanskyY fiecEetajywill find their careers blighted. -iS f- BrezhneV Protege, and setbacks to him will tend to weaken the General Secretary's own position. More important, the magnitude of the failure is such that he probably cannSthare of personal responsibility.

vercome his difficulties, Brezhnev would probably like, among other things, to show that he

f"or UCa^inThuS' nebc PokingelP arrangingtated minimum

rl^tlZ 5neXt SGVRral yearS- rawdown in Soviet reserves would be more palatable if replenishment were assured in this fashion.

Original document.

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