PROSPECTS FOR AGRICULTURE IN COMMUNIST COUNTRIES AS OF LATE MAY 1968 (ER IM 68-

Created: 6/1/1968

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DIRECTORATE OF INTELLIGENCE

Intelligence Memorandum

Prospects for Agriculture in Communist Countries as of Late8

-Confidential

ER8

Copy NS

gon'ki dentta77

CENTRAL INTELL1GLNCE AGENCY Directorate of Intelligence8

INTELLIGENCE MEMORANDUM

Prospects for Agriculture in Comir.unist Countries is of Mayc

Summary

Crop prospects as of late May were relatively good in the USSR, the northern countries of Easternnd Communist China, but were below averaqe in the southern countries of Eastern Europe. Production of wheat and of total grain in the USSR currently is expected to approximate7epeat performance of the6 crop does not appear lixely at this time because of shortages of soil moisture in some important regions.

In the southern countries of Eastern Europe, an extended drought has sharply reduced yields of winter grains and threatens spring-planted crops. The production of breadgrains (wheat and rye)ia estimated atoercent less than the7 harvest .ind also below the annual average output, and if timely June rains are not received, production could be oven lower. This situation contrasts sharply with the condition of winter grain and other crops in the northern countries, where final output could approach the high leveliven normal precipitation during Lhu June-July period.

Tho expected small whom harvest in Rumania and Bulgaria will remove ihum as competitors of

* term Eastern Europe includes the northern countries of East Germany, Poland, andand the southern countries of Albania, Bulgaria, Hungary, Rumania, and Yugoslavia,

Hote_: This memorandum uaa produced solely by CIA It was prepared by thc Office of Economic Research.

tho United States in the international grain market this year. Theso two countriesotal of about one million metric tons of wheat to Free World countries last year. It also is likely that Yugoslavia and Rumania will have to curtail exports of corn sharply during the year Both countries arc competitors of the United States in Western markets and usually sell small quantities to other East European countries. Bulgaria and Hungary may need to increase imports of corn or other feed concentrates in tho coming year.

Weather conditions in moat areas of Communist China havo been favorable for the growth of crops in the first half However, favorable growing conditions are being largely offset by the adverse effects of the Cultural Revolution onof fertilizer, pesticides, and farm equipment. The early grain harvest this year probably will be no better than last year's average crop.

grain crops in much of thethe principal winter wheat regionunder low moisture conditions forow. Timely precipitationatepermitted good development ofmost, but not all, of the winter grainis estimated to be about the same size as Some winterkill of fall-sown grainsapparently overall losses did not greatlylevels.

precipitation in all majorareas between7 andverage. Precipitation in the Ukraineduring this period, however, was lessthe same period in the two precedingregions, which constitute aboutercent

of the total winter wheat area, typically have yields that are among the highest in the USSR. Winter wheat areas in the RSFSRNorth Caucasus, Central, Central Black Soil, and Volga regionsreceived more precipitation in tho October-April periodear ago. Weather during April and the beginning of May was dry over most of the winter wheat area. Precipitation during the remainder of May apparently was more general in the Ukrainehe North Caucasus.

much of April, warm temperaturessouthern European USSRimelyspring sowing of small grains, sugar beets, Sowing was under way in northernUSSR by the end of April. Moistureprobably generally adequate forearly growth of spring seedlings in allweather during April in Central Asiadelay in cotton sowing. Spring wheat seeded

by the end of May approximated last year's harvested acreage, and the seeding of other spring crops was proceeding at7 pace.

moisture reserves also vary ingrain region east of the Volgain Western Kazakhstan, the Volgathe Urals appear betterear ago,in Eastern Kazakhstan and Westnot as favorable as in recent years. The size

of spring wheat and other spring seeded crops will be determined largely by weather conditions in the summer months.

rain crop, particularlybenefit from increased application ofand other chemicals, larger seedingson fallowed and stubble-mulch tilleduse of improvedreaterfarm machinery, and improved incentives toand workers.

eastern europe

the southern countries have been hit by one of the worst droughts in many years. as shown in the chart, soil moisture reserves in bulgaria as ofpril were as much asercent below the long-run average. the hot, dry weather in april and early hay was especially damaging to crops. it caught the winter grain in the critical heading stage, retarded growth of spring-sown grains, and delayed the planting of corn and industrial crops. in yugoslavia, where corn planting normally is finished bypril, onlyercent of the area had been planted byay, as farmers waited for rain. rains in mid-may provided temporary rolief to most spring crops in parts of yugoslavia, and western rumania but came too late to overcome previous drought damage to the winter grain crop. yugoslavia and bulgaria had announced by mid-may that wheat output might beelow last year; yields in neighboring countries arc probably down an equal amount.

although it is too early to assess fully the final impact of the drought on most spring-planted crops, there is no basis for optimism. even with normal precipitation between now and harvesttime, the output of corn, sugar beets, potatoes, oilseeds, and forage crops will be below the level of the past two years. albania, bulgaria, hungary, and rumania

{ In stubble-mulch tillage the soil is cultivated inanneronsiderable part of the plarit residue is left on the surface of the soil, which protects the soil against erosion and assists retention of moisture in the soil.

as recently asay were exhorting farmers to maximize use of irrigation systems in order to minimize the effects of low soil moisture. Of these countries, however, only Bulgariaignificant share of itsercent) under irrigation, andmall share of that land is used for grain.

No serious food shortages are likely to occur in the region, except possibly in Albania. Domestic consumers in all countries, however, can expect higher food prices. Shortages already are predicted for fruit and early vegetables, the prices of which are largely determined in the market place. Free market prices of dairy products may be expected to increase as poor pastures reduce milk yields. Moreover, because agricultural exports are ansource of foreign exchange in these countries, the governments are likely to give priority to the export market over the domestic market.

On the basis of current prospectsmaller breadgrain harvest in Eastern Europe, import requirements will rise, but will be tempered by the fact that Bulgaria, Yugoslavia, Rumania, andesser extent Hungary, have larger-than-normalof wheat following two excellent harvests. Nevertheless, all will need to import wheat, except possibly Rumania. Bulgaria already hasetric tons from France andtanding agreement with Canada foretric tons. Yugoslavia may be in the market for as much

etric tons of wheat. Hungary's reserves of both food and feed grains are estimated to be insufficient, and imports may have to be increased over last year's level. Little or no change is expected in the grain import requirements of the major importing countries of East Germany, Poland, and Czechoslovakia. The current forecastelatively favorable wheat harvest in tho Soviet Union suggests that its exports to Eastern Europe can be maintained at current levels in the year

Communist China

10. Precipitation and soil moisture levels have been favorable in most of the important winter

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grain* areas in Communist: China, except for those portions of Bast and South China hit by severe drought in the autumn and winternd those areas of North China affected by heavyin the autumn esult, some reduction in the acreage and yield of winter wheat, rape, and barley may have resulted from planting delays in these areas of North China and East and South China. In the latter areas, an unseasonably cold winter and spring have also severely damaged the early sweet potato crop.

early rice crop, whichercent of the early grainto have been planted underconditions in most of the majorareas, with the exception of portions ofSouth China. In these areas, droughtan unseasonably cold spring resulted intransplanting and seed rot. The late arrival

of. spring monsoon rains may haveeduction in the acreage planted to early rice.

Early autumn grains and industrial crops probably were planted under favorable climatic conditions in Southwest, Central, and North China. Northeast China, however, is suffering from drought, and present prospects for autumn grain andcrops are mediocre.

The adverse effects of the Culturalon agricultural inputsontinuing concern for the regime. Reductions in the availability of new machinery, chemical fertiliaer, and pesticides will largely offset the beneficial effects that favorable weather could have on crops grown during the first half of the year.

* /net tiding" crops such as winter wheat, grains, and tubers, which are sown in the autumn and early winter and harvested during the Boring of the following year.

" The early grain harvest includes 'winter grains and early rice that is planted in the spring.

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