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