Belarus Suffers Large Crop Loss, Still Expects

UNCLAS MINSK 000538

SIPDIS

SENSITIVE

SIPDIS

MOSCOW FOR FAS

E.O. 12958: N/A
TAGS: EAGR PGOV PHUM ECON BO
SUBJECT: Belarus Suffers Large Crop Loss, Still Expects
Record Harvest

Ref: 05 Minsk 923

Sensitive But Unclassified: Protect Accordingly.


1. (SBU) Summary: Spring has finally come to Belarus
and, along with it, President Aleksandr Lukashenko's mad
fervor to attain an unrealistic harvest yield.
Lukashenko raised the national quota of grain to 8.4
million tons, a 700,000-ton increase to Lukashenko's
2005 quota that was never achieved. To meet this end,
the GOB allocated enormous subsidies, totaling USD 1.3
billion, in seed, fuel, chemicals, and equipment.
However, unfavorable weather and GOB interference has
not been sympathetic to farmers. Belarus' cold winter
temperatures killed over 741,000 acres of sown winter
crops, including 50 percent of the country's winter
wheat. To make up for the loss, Lukashenko ordered
farmers to replant the fields to spring crops in as
short a time as possible with no regard to current
weather conditions. Belarus' agriculture sector will,
officially, come close to meeting Lukashenko's
expectations, but unofficially, it will likely fall
short just as it did in 2005. End Summary.

The Cold Snap
--------------


2. (SBU) In January-February 2006, Belarus witnessed the
coldest winter in 20 years with temperatures in the
Vitebsk district dipping to minus 29 degrees Fahrenheit
and minus 11 degrees in Minsk. These cold conditions
and lack of snow resulted in a major crop loss.
According to GOB statistics, the cold snap killed
approximately 741,000 acres (20 percent) of the nation's
winter crops, including 50 percent of sown winter wheat,
30 percent of rye, and 50 percent of rapeseed. The
total loss, however, could be much greater than what
authorities report. A group of private farmers on May
11 told Emboffs that their farms in the Minsk oblast
lost 25-35 percent of their winter crops and in the
Vitebsk oblast they lost over 50 percent.

The Spring Sowing Campaign
--------------


3. (U) Despite the losses, the GOB still expects to
yield 8.4 million tons (metric) of grain in 2006, a
record harvest. To accomplish this, fields affected by
the cold snap would be replanted to spring crops or
pasture. On March 29, Lukashenko ordered State Control
Committee chairman Anatoly Tozik (now Ambassador to
China) to complete the 2006 spring sowing campaign in a
shorter time frame and directed his ministries to supply
agricultural enterprises with enough seed, fuel,
fertilizers, herbicides, pesticides, and machinery to
complete the task. In the following weeks, the
government exhausted itself meeting Lukashenko's
demands.


4. (U) Deputy Agriculture Minister Vasily Pavlovsky on
April 12 told reporters that sowing would begin on April
15, ten days later than usual. Approximately 5.7
million acres were to be sown, including 2.7 million
acres of grain and leguminous crops. All grains would
be planted by May 1, sugar beets by May 5, and potatoes
and other crops by May 10. Upon Lukashenko's orders,
Pavlovsky directed farmers to work day and night to
finish planting on time. In addition, farmers who
finished early were to send their machinery to other
farms so that no tractor or planter "sat idle."

Free Fertilizer.
--------------


5. (U) The GOB allocated USD 1.3 billion for the 2006
spring sowing campaign, an 89 percent year-on-year
increase (and nearly five percent of GDP). Out of this,
USD 80 million reportedly went to Russia for 82,000 tons
of phosphate fertilizers and 245,000 tons of nitrogen
fertilizers that Belarusian manufacturers failed to
produce. According to Pavlovsky, farmers applied 60
percent more chemical fertilizers to their fields in
2006, averaging 178 pounds per acre (up from 165 pounds
per acre in 2005) to "prepare" the topsoil that, by the
time the sowing campaign started, had thawed only eight

inches deep.

.And Fuel.
--------------


6. (U) On March 23, the GOB allocated 60,000 tons of
diesel fuel to farmers, but later announced that 277,000
tons of diesel and 70,000 tons of gasoline were needed
to complete the sowing campaign. On April 4, the
authorities ordered Belarus' two oil refineries in Mozyr
and Novopolotsk (Naftan) to supply the needed gasoline
and diesel free of charge. The "agreement" was that out
of every 1,000 kilograms of gasoline the refineries
produce, eight kilograms would go to farms free of
charge. Naftan was to supply 2,600 tons of gasoline and
Mozyr 2,700 tons. Both companies were to provide 3,500
tons of diesel, approximately 38 kilograms for each ton
produced. The joint venture Slavneft-Start was to
supply an additional 4,000 tons of diesel and the state-
owned petrochemical holding company Belneftekhim was to
supply 60,000 tons.

.And Machinery
--------------


7. (U) The GOB on April 18 issued a USD 59 million loan
to the state-run equipment company Belagroservice to
lease Belarusian tractors to farmers, provided that
farmers repay half the tractors' cost. The Fund for
Support of Agricultural Producers would pay for the
rest. Belagroservice leased 1,230 tractors, 1,000 MAZ
trucks, and 1,300 combines for the campaign.

The Results
--------------


8. (U) On May 4, Agriculture Minister Leonid Rusak
informed Lukashenko that the sowing campaign had
finished (except for corn and sugar beet),and 445,000
acres of winter grains were reseeded. Lukashenko, the
"expert" in agriculture, ordered Rusak to "toughen"
control over spring fieldwork in order to attain good
results.

Complications
--------------


9. (SBU) Weather during the sowing campaign was not
always favorable. At first, many of the fields were
still wet from the snow thaw and had not completely
drained. Afterwards, windy conditions blew away the
topsoil, which was powder after visible overworking of
the ground and a month without rain. Farmers told
Emboffs that erosion was a large problem, especially for
those farming in hilly areas. Once it did rain, the
hills--which are planted from top to bottom rather than
in a contour and lack terraces--form downhill rivers,
washing away much of what is planted and flooding the
lower areas. A visiting U.S. farm specialist added that
the soil quality of many Belarusian fields was very poor
and many fields lacked topsoil. He also mentioned that
farms were experiencing problems with lodging, meaning
crops were lying on the ground rather than standing
upright, due to lack of potassium in the soil. [Note:
Belarus is one of the world's largest exporters of
potash fertilizer, a primary source of potassium.]


10. (SBU) Although they face a number of obstacles,
several private farmers told Emboffs that they expect to
double their crop output this year because of better
farming practices and technology. However, whether a
private farm or state-owned collective, the farms'
success lay with the labor force which, as a consequence
of the Soviet collective farm system and its
preservation in Belarus, was largely inefficient. All
farmers and specialists whom Poloff has spoken to agree
it will take at least one more generation, and likely
privatization, before farm hands learn to work
efficiently.

Lukashenko's 2005 Quota Unrealistic
--------------


11. (SBU) According to initial results, the 2005 harvest
"yielded" approximately seven million tons, a record

harvest, but one that fell short of Lukashenko's 7.7
million-ton quota (reftel). Regardless, GOB authorities
celebrated the results and Lukashenko declared it was an
indicator of Belarus' national security. But after
processing plants and mills dried the crops (much of
which was water heavy and not yet ripe) and removed
foreign material (added to grain loads to meet weight
quotas),the final "official" yield was only 6.4 million
tons. Only in the end of 2005 were the final totals
briefly mentioned in the state press, as were reports of
manipulated yield statistics and complaints of low-
quality grains.

Comment
--------------


12. (SBU) Judging from Belarus' latest agriculture
history, it is highly improbable Belarus in 2006 would
increase its total grain yield by two million tons. The
cold snap was a rocky start and government interference
hinders the development of the agriculture sector.
Although Lukashenko's quota may be too high, authorities
and farmers will employ their same tactics to "produce"
a yield that may fall short of the quota, but be higher
than last year. Unfortunately, farmers and local
authorities have little choice. They can either report
the true yields and be blamed for undermining the
harvest, or manipulate the results with the slight
possibility of someone calling foul.

KROL