Created: 8/1/1968

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Intelligence Memorandum

Prospects for Agriculture in Communist Countries as of8




CENTRAL INTELLIGENCE AGENCY Directorate of Intelligence8


Prospects for Agriculture in Communist Countries asd-Aug


Agricultural prospects as of mid-August were relatively favorable in the USSR and the northern countries of Eastern Europe, but were below average in Communist China and in the southern countries of Eastern Europe. Total production of grain for the Soviet Union and Eastern Europe taken together will be close to the level achievedut the output of other important food crops will probably be somewhat below last year. Preliminaryare that Communist China's grain harvest will be appreciably below lost year's excellent results (see the table) .

Communist China's grain imports in9 trade year0re likely to be larger thanillion metric tonsin the previous year. The USSR probably will not import grain during9 trade year, other thanillion tons specified in the three-year agreement with Canada, which runs throughndeed, if the harvest turns out as now expected, the USSR probably will continue toet exporter pf grain. Eastern Europe's demand for imported grain is expected to exceed that of last year byillion tons.

Note: This memorandum waa produced solely by CIA. It was prepared by the Office of Economic Research.


There were wide differences this year compared7 in the size of the already-harvested bread-grain crops (wheat and rye) among the Eastern European countries, ranging from little or no change in Poland and Czechoslovakiaecline by one-fourth in Bulgaria and Hungary. The outlook for fall-harvested row crops such as corn, potatoes, sugar beets, and oilseeds is less favorableear ago in both the USSR and Eastern Europe.

The early grain harvest in Communist China was substantially below the favorable oneoreover, preliminary evidence concerning the size of the more important fall harvest indicates that this crop will also be appreciably below last year's excellent results. Crop prospects and thedomestic grain procurement effort are further endangered by the unfavorable effects of the Cultural Revolution on agriculture.

Production of Grain in Selected Communist Countries Calendar

Million Metric Tons


Eastern Europe

Communist China




a. Preliminary


With tha possible exception of livestock production, agricultural prospects are generally favorable in the USSR. It is tentatively estimated that total grain production8 will be slightly above both last year's relatively favorable2 million tons) and the average for the0 million tons). More importantly,unfavorable harvesting conditions in September, wheat production (preliminarily estimated atillion toillion tons) should be the second largest of the present decade.

Timely rains this year in late June and early July bolstered crop prospects in the new lands spring wheat areas of Kazakhstan and West Siberia.

An average level of production in these areas and an outstanding grain harvest in the Volga, Urals, and the central black-soil zones of European Russia are expected to compensateeduction in grainin the Ukraine and North Caucasus caused by drought. However, inclement weather during the harvesta rather frequent occurrence couldpresent grain prospects in the new lands areas where harvesting has just begun. In addition, frequent press reports concerning the shortage of trucks and railroad cars for transporting grain suggest that harvesting losses may be higher than usual in areas yet to be harvested.

esult of dry weather during the spring,8 production of sugar beets and potatoes is not expected to be quite as high as the record levels Precipitation in July, however,prospects for these crops to average or above-average levels* The upward trend in production of sunflower seed is likely to be interrupted8esult of some reduction in both acreage and yield. Cotton production is expected to be near the record harvest of the last two years.

Prospects for continued long-terra expansion in the output of livestock products during the balance8 and9 are not favorable. In some areas the supplies of livestock feed have


been adversely affected by drought and,esult, some distress slaughtering of animals probably will occur. Feed availabilities in other areas may be at or slightly above normal levels.

Soviets are expected in the nearpurchase atortion ofilliongrain remaininghree-year agreementthat ends in The USSR took 3in the first yearillion tons inyear of the agreement. Recently, grainCanada have been usedore economicalsupplying the needs of the USSR's Far East areasfulfill the Soviet commitment to Cuba, whichtotalillion tons per year. size of the8 wheat harvest promises

to be adequate for domestic needs and for export commitments to Eastern Europe, the area'sfor feed grains will not be met.

Eastern Europe*

mid-August outlook forcontinues mixed, with prospectsvery good in the northern countries tobelow in the southern countries. Totalof grain for the region is forecast atmillion tons, orercent below The decline largely reflects theof an extended spring drought on yields(wheat and rye) in the southernharvests of breadgrains in theseout better than expected earlier,in output from the level of lastercent in Yugoslavia to as muchulgaria and Hungary. By contrast,in Poland and Czechoslovakia were7 and in East Germany were less

Including the northern countries of Saet Germany, Poland and Czechoslovakia and the southern countries of Bulgaria, Hungary, Rumania, and Yugoslavia,

Europe's output of othersuch as corn, potatoes, forage, sugarand oilseeds, will notorecast is based on reduced acreages ofin most countries and on lower yields incountries. Although the drought inwas largely broken by mid-July,to crops planted in late spring alreadydone. The outlook is still not bright,moisture reserves were considerably belowthe end of July in the southern countriesCzechoslovakia (see chart). Therefore,during August and September will be needed

tourther reduction in the yields of fall-harvested crops.

outlook for livestock production forfavorable in the northern and poor in the Most southern countries haveover the large numbers of cattle andbeing marketed for slaughter bya situation related to the shortage ofand roughage supplies and resultantprices. Hungary and Bulgaria have takenimport feed grain and to restrict statelivestock in order torop in numbers

of hogs and cattle, particularly on private holdings, but the effort is unlikely to be successful. Gains made by the cattle industry during the past three years could be wiped out. While excessivemay raise meat output inroduction of eggs and dairy products will be down from last year's level. The full impact of the abnormal slaughtering will show up in reduced meat supplies by9 .

the northern countries, gains inprocurement of most livestock products arein Favorable pasture conditionshay crops will contribute to highermilk and beef. The emphasis on beefthe effort to hold down the expenditure offor imports of feed grain, however,gains in pork and egg production duringyear. In Poland and East Germany the numbers

of cattle, cows, and sheep as of mid-year were higherear ago. The production of livestock products in Czechoslovakia for the first half8 showed gains, but these gains may not bebecause of deteriorating prospects for output of forage crops and pastures in Slovakia and the possible adverse impact of the recent political crisis.

Europe's demand for imported grain

in9 trade year* is expected to exceed that of last year byillion tons, reflecting the increased needs of Bulgaria, Hungary, and Yugoslavia. In spite of Bulgarian and Hungarian official state- ments claiming that this year's wheat production was sufficient to cover domestic requirements, both countries may have to import small quantitiesthe9 harvest. Their import needs as well as Yugoslavia's have been tempered, however, by larger-than-normal carryovers of wheat from the7 crop. Hungarian and Bulgarianfor imports of feed grain and feed supplements will be larger than those for wheat. Hungary has recently announced plans to import atons of feed grain,ons more than originally planned Rumania,elatively largo exporter of wheat and cornill have to cut back grain exports sharply this year. Little change is expected in the total grain import requirements of the majorcountries of East Germany, Poland, and Czechoslovakia, which amounted toillion tons

shortfall in agricultural productionsouthern countries this year will reducecurrency earnings from agriculturaladdition, Yugoslavia will need to purchaseplanned amounts of wheat in hard currencyBulgaria and Hungary will have to makeof feed grains. These developmentsto create balance-of-payments problemsinvolve cutbacks in imports of industrial goods.

1 July8 through SO

Communist China

In Communist China, crop prospects8 were dimmedelatively poor early grain harvest, substantially below the fairly favorable one7 Although it is too early to predict the outcome of the more important fall harvest, preliminarysuggest that this harvest may also be appreciably below last year's excellent results.

Several factors contributed to the shortfall in the early grain harvest. Wet weather in the fall7 delayed the sowing of crops in most of the important winter wheat and barley growing regions

of northern China. In these areas, precipitation was well below normal during the late winter and early spring, further stunting the growth of winter crops. Although precipitation in April was above normal, it arrived too late to prevent below-average yields of wheat and barley. Winter grains and early rice did not fare any better in southern China. Unseasonably cold weather in the spring destroyed the sweet potato crop and killed the seedlings for the early rice crop in some areas of Kwangtung, Fukien, and Chekiang Provinces. Torrential rainfall in late May and unusually heavy and prolonged rainfall in late June and early July caused further damage to the early rice crop. The latter disturbance, which affected South, Central, and East China, flooded low-lying fields and disrupted harvesting operations.

outlook for the late harvest isbut growing conditions to date are notas last year. In general,been much greater than normal in areas toand much below normal in areas to thethe Huai River. Because the early rice cropChina was harvested late, the transplantingrice has been delayed, extending theinto the period of the year whenrelatively low and uncertain. Growingbeen generally favorable for mid-seasonunusually large amounts of rain fell over

The early grain harvest consists, in roughly equal proportions, of winter grains (winter wheat, barley, peas, beans, and sweet potatoes) and early rice.


the important Szechwan Basin during July. The outlook for fall-harvested grains, sweet potatoes, and cotton in North China is only fair. Moisture conditions in the spring were favorable for sowing, but the weather then turned dry and remained dry through mid-June. In the southern portion of the North China Plain, the drought was broken by torrential rainfall in late June and in mid-July, causing waterlogging and flooding over relatively large areas of northern Anhwei and northern Kiangsu Provinces. Precipitation has been far below normal throughout the growing season in Northeast andChina. The major cropspring wheat,grains, and soybeansre likely to be poor in these regions.

prospects are further endangered byeffects of the Cultural Revolution Disruption in farming operations and

in the supply of chemical fertilizer, pesticides, and other agricultural inputs have been noted throughout the year. Political unrest and administrativeare also affecting the government's domestic grain procurement effort. Editorials and reports confirm that these disruptions are more serious now than

these mediocre harvest prospects,grain imports in9 trade yearto be larger thanillion metricin8 tradeittle moretons of grain under old contracts remainsdelivereddditional imports intrade year will come from Australia and Canada.

In August, China's negotiations with Australiaew contract for delivery beginning in8 were suspended. Negotiations with Canada are also expected to begin at the end of August. Persistent rumors of negotiations with Prance for the purchaseillion tons of grain have yet to be confirmed.

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