Created: 9/1/1967

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Intelligence Memorandum

Prospects for Agriculture in Communist Countries as of7



RReptember 7

CENTRAL INTELLIGENCE AGENCY Directorate of Intelligence


Prospects for Agriculture in Communist Countries as of Auqust FT6 7


Agricultural prospects as of August are relatively good in all the Communist countries except North Vietnam. Crop production for the Communist countriesroup will probably be above average, but less than last year, when record grain harvests were gathered in both the USSR and Eastern Europe (including Albania and Yugoslavia). Contracts to import grain ara bo-hind those of the last few years, although the demand for imports may rise if drought continues to affect the fall-harvested crops in China and Eastern Europe.

A record wheat crop has already been harvested in Eastern Europe. The Soviet wheat harvest is likely to be above average, but less than the6 crop. The outlook for fall-harvested row crops such as corn, potatoes, sugar beets, and sunflowers is less favorableear ago in both the USSR and Eastern Europe. The production and procurement of livestock products, however, probably will exceed the levels of recent yuars.

Mote; This memorandum was produced by CIA. It was prepared by the Office of Economic Research; the estimates and conclusions represent the best judgment of the Directorate of Intelligence as

The early grain harvest in Communist China is estimated to have been better thanut it is too early to predict tha outcome of the moretall harvest. The Cultural Revolution thus far appears to have been confined primarily to urban areas, but agriculture may become increasingly in-olvod in the coming months if unrest persists.

In North Vietnam the spring rice harvestnormally about one-third of the annual rice cropis estimated to have been below average, primarily because of reduced acreage. The more important fall rice crop is also offoor start because of drought, but the final outcome will depend heavily on the effectiveness of irrigation in the Red River delta, where most of the rice is grown.


good winter grain crop has beenthe USSR, Less is known about the springthe harvest of which is still under way innew lands areas of Western Siberia,and northern Kazakhstan. One Easternhas indicated that Soviet officials expectgrain crop ofillion metricwithillion tons claimed ina Soviet source has estimated the wheatillion tons {compared 7 grain crop isillionillionillion toillion tons of wheatestimates6illion and

illion tons, respectively).

Soviet purchase in late July of onlytons of wheat from Canada (leaving 4yet to be purchased under the three-yearending inrobably means that theits wheat supply situation to be On the basis of the evidence presently

" Soviet statistics on grain production do not make allowances for trash, excess moisture, immature grain, and other factors, which normally amount to an 15 toercent of the total.

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available, it is not believed that large additional purchases of wheat this year will be necessary. But, if the weather is inclement during the remainder of the harvest in the new landsa rather frequent occurrencethe quality of the wheat could beuced, and Soviet officials might feel compelled to import some additional grain, particularly if the alternative were to draw on reserves.

production of row crops, such asbeets, sunflowers, and potatoes, hasaffected by the below-normal precipitationof European USSR during July. Althoughcrop experienced some difficultiesyear, production of this irrigated crop isto approximate the6 level. output of livestock products is expecteda result both of good feed supplies andnumbers in most categories of livestock,shortage of processing and storage facilitiesgreater than normal losses of meat and milk.

Eastern Europe

production of grain in Easternexpected to be above average but not asillion tons) becausemaller rowing season for smalloutstanding in most countries, andin wheat were set in all countriesGermany and Poland. Although smallin both fall and spring ripened harvesting losses were held tobecause the weather remained dry andharvesting machinery was available. Oneexception was East Germany, whereorganizational problems, and the highof the grain may have caused excessivelosses and reduced the milling quality of

the grain.

current outlook for fall-harvestedas corn, sunflowers, sugar beets, andnot as goodear ago. Earlier forecasts Hungary, Rumania, Bulgaria, and

Yugoslavia have proved to be too optimistic becausebelow-normal rainfall. Drought conditions through early September could sharply reduce yields of these row crops, which got offate start in most countries and are nowtage of growth that requires good soil moisture to result in high-yields. The northern countries could still realize yields equal to last year, but this seems unlikely in the southern region. The production andof livestock products during the first seven monthsave increased over the same period6 because of good feed supplies and favorable farm prices and will probably continue to6 levels during the balance of the year.

Europe's demand fors expected to be somewhat less7 million tons purchased in Majorwill continue to be Czechoslovakia,and Poland. Their demand for feedthe Free World will be stronger than forRumania, and Yugoslavia will again beexport grain and couldillion tons of wheat. umania and Bulgaria have agreedons of wheat to Egypt on credit.

Communist China

The winter wheat harvest in Communist China is estimated to have been slightly larger than eduction in sown area, caused by severe drought conditions at the time of fall planting, was more than offset by increased yiolds resulting from more favorable growing conditions. The early rice harvest was probably also better thanf more favorable growing conditions in most of the major producing areas.

Drought conditions which began to appear in portions of North and South China in late July and early August may adversely affect fall-harvested crops, although it is still too early to predict the outcome of this important harvest. In North China, soil moisture as of ugust was considerably below

Fiscal8 7 through.

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normal ln portions of tho provinces of Hopeh, Shantung, and Honan, which are major producers of miscellaneous grains such as millet, kaoliang, corn, and pulses. In South China, the coastal regions of Kwangtung Provinceparticularly the important late-rice areas of the Canton delta and he Swatow plainappeared to be the mostaffected by drought. In these regions, below-normal soil moisture conditions coincided with late-rice transplanting. The extent to which the late rice is damaged will depend upon theand length of the drought and theof irrigation facilities.

9. The Chinese have signed only one contract for the delivery of grain inith Australiaillion tons to be delivered by Chinese grain imports in7 totaledillionillion tons less than in The Sino-Canadian grainplanned for Canton in mid-August wereby the Chinese and have not yet been Under the throe-year agreement covering the1he Chinese have alreadyillion tons of Canadian wheat and canaximumillion tons more over tho next two years.

North Vietnam

10. The spring rice harvest in North Vietnam, which normally accounts for about one-third of the annual rice crop, is estimated atillion tons, orons short of the average of recent years. Yields were about average, but acreago was reduced because of an early cold spell this spring, the disruptive effects of bombinga shortage of rice seedlings, insect and disease infestations, and the substitution of other crops in some of the spring rice fields.

In an attempt to increase total food production, the North Vietnamese substitutedcropsuick-maturing late spring rice crop for some of the regular spring ricehe resulting increase in the production of these crops was not sufficient to make up for the short- -fall in the production of regular spring rice.

The important fall rice crop is offoor start. Drought conditionssomewhat unusual at this time of the yearhave interrupted the normal progress of this crop in areas which depend on reservoirs and storage ponds for irrigation water. Much of the rice, however, is grown in the Red River delta, which is irrigated from river systems and probably not as seriously affected by the drought. Moreover, favorable weather from now to harvest could improve the prospects for this crop.

* The subsidiary crops are sweet potatoes, corn, manioc, and green beans. The fast growing late spring rice, normally grown primarily in the mountain areas, was planted in some of the delta provinces this spring. While this crop frequently has high yields, it is very susceptible to insect damage and, as it is harvested later than the regular spring rice crop, is more likely to interfere with theof the fall rice crop.

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