Trade Disruptions, Russian Farmers Are Concerns

October 7, 1999

Agriculture Secretary Dan Glickman says U.S. aid packages to Russia must not disrupt international markets or reduce incentives for Russian farmers to produce food. In testimony before the House Agriculture Committee, he said USDA will move "as quickly as possible" to meet the latest Russian request for U.S. food aid.

John Hardin, Jr., past president of the National Pork Producers Council, told the committee the need for pork in an aid package for the Russians "has not dissipated" with the last aid package. Since 1990, he says, the total "apparent domestic supply of pork in the Russian Federation has declined sharply from almost 4 million tons to 1.7 million tons."

During the same time, he adds, per capita consumption of pork declined from 26.5 kilograms per person to 11.8 kilograms per person. U.S. pork exports to Russia have declined 96% in volume this year compared with 1998.

U.S. pork producers want at least another 50,000 tons of pork and pork products made available as humanitarian assistance to Russia for delivery late this year and early 2000, says Hardin.

Vincent Peterson, regional vice president for the Ruopean Region, U.S. Wheat Associates, says Russia has been left with a wheat deficit of more than 3 million tons.

Roger C. Viadero, USDA inspector general, told the committee, "We have no evidence nor do we have any direct knowledge of any money laundering involving USDA food aid program funds." However, he emphasized, "due to the breakdowns of internal control procedures (and in some cases, the absence of adequate control procedures) under the 1992-93 food aid assistance program that we had previously reported on, we cannot say with absolute assurance that such money laundering involving proceeds from earlier monetized USDA-donated commodities did not occur or is not occurring."

Also, because of problems in the Russian banking system and because the Foreign Agricultural Service current level monitoring effort "cannot provide absolute assurance that such money laundering schemes are not occurring, we also cannot provide this assurance," said Viadero.