COMMONWEALTH OF INDEPENDENT STATES
Spring crop planting has been completed under mostly favourable conditions. Heavy snowfalls in late winter enhanced moisture reserves for crop development but may also have damaged winter grains. The area sown to winter grains (mainly wheat and barley) for harvest in the summer of 1997 increased by 16 percent to 105 000 hectares in response to better prices following liberalization of cereal trade. Indications are that the spring crop area could also rise. Provided weather conditions remain favourable until harvest, 1997 output could exceed the output of 340 000 tons in 1996.
Against the 1996/97 cereal import requirement of 310 000 tons, some 110 000 tons are being provided on concessional terms and the balance will be imported commercially. The counterpart funds from the market sale of wheat through concessional imports will be put into a fund to finance future commercial imports of wheat.
With the onset of spring, the availability of basic foods will increase and dependence on bread decline. Overall the food supply situation is satisfactory but prices are high compared to average earnings. Unemployment remains widespread and considerable numbers of economically vulnerable people continue to need targeted relief assistance. WFP is targeting 220 000 vulnerable persons, including refugees and IDPs, with supplementary rations of basic food commodities as part of the on-going relief aid and Food-For-Work programme. Requirements to the end of the year are 12 000 tons and the uncovered balance stands at 6 000 tons, valued at approximately U.S.$ 3.8 million. As the pipeline for relief food is only secure until mid-September, donors are urgently requested for additional support.
The early outlook for the 1997 grain harvest is satisfactory. Bread prices have been liberalized as planned and the area sown to wheat for harvest in 1997 is officially reported to have increased by 60 000 hectares to 495 000 hectares. Growing conditions to date have been mixed, but with more resources being put into wheat production, output could improve, in spite of shortages of agricultural credit, spare parts and inputs.
Dismantling of the State Bread Corporation has not caused disruption in wheat supplies and the need for a sizeable State Wheat Reserve in kind is being reassessed. Following increased production and reflecting higher bread prices as well as foreign exchange constraints, the 1996/97 cereal import requirement is estimated to fall to about 500 000 tons, mostly wheat. The bulk of this will be mobilized commercially but the country has received 6 000 tons of wheat flour to augment state reserves as well as humanitarian supplies for targeted distribution. At present, WFP assists 155 000 persons, mainly people displaced from Nagorno Karabakh, with supplementary food rations. The relief food pipeline is covered until the end of 1997, but WFP also intends to distribute food in 1998.
The early outlook for the 1997 grain (cereal and pulse) harvest is satisfactory. Official reports indicate that both the area sown to winter and spring grains has increased marginally and that the grain area target of 2.6 million hectares has been achieved. Growing conditions to date have been satisfactory and winter grains are reported to be in good condition. The availability of fertilizer and other agro- chemicals, although better than last year, continues to constrain yields. In addition, current indications are that production subsidies will be cut back this year. Reflecting the larger areas sown and the favourable outlook for winter grains, the 1997 grain harvest is provisionally forecast at about 6.3 million tons, compared to 6 million tons last year. The 1996/97 net imports of cereals are now estimated to decline to about 500 000 tons from about 700 000 tons in 1995/96. However, trade flows with the Russian Federation are not recorded so there is considerable uncertainty regarding actual imports.
The early outlook for the 1997 grain harvest remains satisfactory despite recent rain damage in some areas. Provided growing conditions remain favourable, grain production in 1997 could exceed last year�s good level. Privatization of the grain production/bread distribution system is progressing satisfactorily and farmers have good incentives to maximize production. The area ploughed in the winter for sowing to grain increased by at least 50 000 hectares and heavy rain and snowfalls this winter helped replenish moisture reserves after dry conditions last year.
A larger area was sown to winter wheat. Spring grain (maize) area is also expected to increase. Improved availability of micro- agricultural credit for inputs could also have a beneficial effect on yields.
Following a good harvest of 635 000 tons in 1996, the cereal import requirement is estimated at about 500 000 tons, over two thirds of which is expected to be mobilized commercially. As this quantity of cereals had already been imported by the beginning of 1997, actual imports could be up to 50 percent higher. At the same time, unemployment remains high and there continues to be a need for food aid for targeted distribution to the most vulnerable populations, including refugees and internally displaced. WFP's target group for relief assistance has been reduced from 300 000 to 200 000 beneficiaries. WFP's food pipeline is secured until mid- October, but an additional 3 000 tons (approximately U.S.$ 1.4 million) will be needed to permit a continuation of food distributions to the end of 1997.
Current indications are that spring crops have been planted on 14.5 million hectares, including about 12 million hectares of wheat. Given about 1 million hectares of winter grains, the aggregate area sown to grains and pulses for harvest in 1997 has fallen by about 1.5 million hectares and is well short of the targeted 17 million hectares. Yield expectations for the minor winter wheat crops are satisfactory. The outcome of spring plantings will depend crucially on weather in the months to come. In western growing areas, normal precipitation since the autumn has helped replenish soil moisture reserves but in the more important central and eastern parts moisture levels were below normal. As a result crops in these areas will be dependent on timely rains during the growing season. To date, adequate rains have maintained favourable topsoil moisture for spring crop emergence and development in most areas except in the east. Even with better weather and yields than last year, it is unlikely that the grain production target of 14 million tons will be met in view of the reduced areas sown and the financial problems on many farms. Current indications point to a cereal harvest close to last year�s 12.5 million tons estimated by FAO.
The 1996 grain harvest is officially reported to be 11.6 million tons but is unofficially estimated to be up to 3 million tons higher, as farmers seek to maximize earnings in cash or kind. In 1996/97 the country could export about 3 million tons of cereals, mainly to the Russian Federation, neighbouring central Asian states as well as to the Ukraine and Moldova.
The early outlook for the 1997 grain harvest remains satisfactory. The area sown to winter grain increased by 14 percent to 370 000 hectares and good snowfall replenished irrigation reserves and provided favourable overwintering conditions. Spring grains have been planted and current indications point to another good harvest in 1997 given normal weather conditions.
Farm restructuring and privatization is forging ahead and the country has become self sufficient in cereals. However, unemployment is high and purchasing power low and vulnerable groups continue to be in need of targeted assistance.
Growing conditions for grains have been satisfactory and the 1997 grain harvest is expected to recover sharply from the drought reduced 1.8 million tons in 1996. Shortages of liquidity and fuel hampered planting and the area sown to winter grains is estimated to have declined somewhat. However, yields are expected to be markedly better than last year. The spring maize crop has been planted and soil moisture reserves are good. However, farm indebtedness limits the resources which can be allocated to inputs and the production target of 2.9 million tons from 850 000 hectares may not be achieved. FAO provisionally estimates the 1997 grain harvest at about 2.5 million tons
Remunerative prices for grains, a tight fodder grain situation, good growing conditions to date and rapid progress with spring planting despite severe liquidity problems and very limited availability of agricultural credit give support to official forecasts that the 1997 grain harvest could remain stable, given normal weather. Grain output in 1996 was officially estimated at 69.3 million tons, but is generally thought to have been at least 10 percent higher. Growing conditions for winter grains have been unusually good so far and winterkill is less than last year. A cool, wet spring has slowed crop development but also reduced pest infestations. There are indications that fertilizer and pesticide use could increase somewhat this year. The current outlook is for better yields, notably in the key North Caucasus and Blacksoil regions affected by drought last year. Provided the crop, the development of which is 2-3 weeks behind schedule, can be harvested in a timely manner, better yields could help offset the reduction of over 1 million hectares in the area sown and winter grain output may not be sharply less than last year.
Spring grain planting is nearing completion. By 9 June, farmers on large farms had sown 52 million hectares of spring crops including 35 million hectares of grain (excluding maize), and were only 1 million hectares below target. The aggregate area sown to spring crops is lower than last year but that sown to grains has remained stable. In addition the proportion of spring wheat has increased. Given that private farms and holders of subsidiary plots could sow another 3 million hectares of grain, the aggregate (winter and spring) sown grain area could reach 51 million hectares, about 5 percent less than last year. West of the Urals, soil moisture reserves for spring grain development are good as a result of heavy snowfalls this winter and good rains so far. East of the Urals moisture conditions are currently favourable for newly planted crops but below normal moisture accumulation over the winter mean that crops in West Siberia could become dependent on regular rains during the growing season.
Although the areas sown and growing conditions are the main determinants of outcome, the economic situation of the farms will affect their ability to plant and harvest in a timely fashion. Over 70 percent of farms are indebted and agricultural credit is extremely limited this year. At the federal level budget allocations for commodity credits (whereby farms obtain inputs against future deliveries of grains) are being discontinued in favour of the allocation of concessional credit via commercial banks and the regions. The actual availability of soft credit fund is small but efforts are being made to target it to viable farms/entities. As in past years, the bulk of production costs have had to be financed from sales/barter of farm produce. High grain prices in 1996/97 (food wheat has been quoted at about US $215 per ton this marketing year - although the average farm price is reported to have been only about two thirds of this - and feed barley at US $ 140 rising to $ 170 per ton) and good demand for feedgrains after last year�s low crop could assist farmers to mobilize necessary inputs for planting. Although soil exhaustion after successive years of inadequate fertilization and shortages of liquidity are expected to keep yields low, current indications do not preclude a grain harvest similar in size to that harvested last year, which is estimated by FAO at around 75 million tons. However, the final outcome will depend crucially on weather until the completion of the harvest in September/October.
Demand for cereals has fallen sharply in recent years due to a sharp reduction in animal numbers, increased use of grass fodder and substitution of feedgrain imports by imports of livestock products. In 1996/97, net cereal imports are estimated to have declined to about 2.3 million tons, mainly wheat and barley and mainly sourced from Kazakhstan and the Ukraine.
WFP continues to provide supplementary food assistance to some 90 000 displaced persons in areas surrounding Chechnya and is reviewing its impending phase-out. Carryover pledges are sufficient to continue the operation until October.
Shortages encouraged farmers to divert land from cotton to winter cereals. The area sown to winter wheat is reported to be even larger than last year. Current expectations point to further increase in wheat production in 1997, given favourable weather conditions. However, insufficient land rotation coupled with the absence of significant progress in land privatization and additional investment in or availability of inputs, the country is likely to remain dependent on imports and food aid to meet minimum consumption requirements. Despite the favourable harvest of 400 000 tons in 1996, the cereal import requirement in 1996/97, estimated at about 370 000 tons, remains high. Commercial imports and food aid allocations are estimated to have amounted to only two thirds of this amount so that actual imports will remain well short of estimated needs.
Shortages of basic foodstuffs, notably wheat and potatoes, coupled with widespread unemployment and poverty following five years of intermittent hostilities and persistent economic decline, have contributed to the marked deterioration in the nutritional situation.
Some 705 000 particularly vulnerable people continue to need targeted humanitarian assistance. These include populations displaced as a result of civil strife, elderly pensioners, war-widows with children, large single-parent families, orphans and the disabled/invalids. WFP provides emergency assistance to 485 000 vulnerable persons while other agencies assist 220 000. Some 15 000 persons also received WFP assistance under food-for-work programmes. For 1997, WFP estimates the relief food requirement for its operations at over 46 580 tons, valued at some U.S.$ 22 million. The contributions for 1997, including carryover stocks, will permit WFP to cover the entire 1997 requirement.
The outlook is for another poor grain harvest in 1997. The reduction in the target area for cereals, from 600 000 hectares to 400 000 hectares, is likely to benefit average yields as scarce resources are applied to smaller areas and marginally irrigated areas are not pressed into grain production. However, even in 1996 less than 500 000 hectares were actually sown. Moreover, the availability of inputs, in particular fertilizers and pesticides, has not improved. In addition, recent reforms in the agricultural sector and higher purchase prices for wheat were announced only in December 1996, too late to significantly influence viable winter wheat plantings. In view of severe financial problems on farm, stimulation of private agricultural production will depend crucially on additional working capital or inputs being made available to farmers.
Direct human consumption of wheat is expected to decline following the doubling of bread prices in December 1996, and again in May 1997. For 1996/97 the domestic cereal requirement is estimated at 1.0 million tons and includes 600 000 tons for human consumption, and 400 000 tons for feed and other uses. Feed use of grains has contracted sharply and animal numbers are reported to be falling rapidly. The cereal import requirement is now estimated at 515 000 tons and includes 500 000 tons of wheat.
Growing conditions to date have favoured the 1997 grain harvest but financial difficulties and marketing constraints are likely to restrict farmer�s access to inputs and keep yields below average. Grain production remains profitable whereas marketing of sugarbeet is problematic. Planting of the 1997 spring grains has been completed and indications are that both the aggregate area sown to spring crops and that sown to spring grains has increased, the latter to about 5.1 million hectares (excluding maize). As the winter grain area also increased and winterkill remained close to last year�s level, the aggregate area sown could rise by about 1 million hectares. Winter grains have benefitted from good growing conditions throughout the season and soil moisture reserves for spring growth are better than in the past two years. Provided growing conditions remain normal, better yields can be expected. However, farmer�s access to fertilizers, pesticides, fuel and spare parts will be limited by the availability of credit, whether in cash or kind. Despite government restrictions on the movement of grain after the 1996 harvest, which limited farmers ability to repay input loans in kind, the volume of inputs provided by the private sector for repayment in grain after the harvest have increased and about half of the farmers are thought to be obtaining their inputs via this channel. By late April the quantity of grain contracted for sale to the government - against which farmers can also obtain inputs in kind - was less than half the target 5.9 million tons. Provided weather conditions remain good until the completion of the harvest, the 1997 cereal harvest could recover sharply, perhaps to about 34 million tons, from around 26 million tons in 1996.
Despite the disappointing harvest in 1996, officially estimated at 26 million tons, the official export target is 3 million tons of cereals in 1997. In view of infrastructure bottle-necks and export tariffs imposed on Ukrainian flour by the Russian Federation, this target may not be achieved.
Even if growing conditions remain favourable until the harvest in July, current indications point to a 1997 grain harvest no larger than the 3.4 million tons harvested in 1996. The area sown to winter grains, mainly wheat and some barley is reported to be 1.5 million hectares. Of this amount 500 000 hectares are not irrigated and dry conditions in the fall and early winter adversely affected non-irrigated winter grains. Good snowcover in February/March helped to recharge irrigation reserves but arrived too late to assist non- irrigated areas. However even with irrigated areas, the final outcome will depend on better availability of inputs, and better incentives for farmers to maximize production. Procurement prices have almost doubled for the 1997 harvest but the fact that one half of the grain harvest has to be sold to the Government, at fixed prices, compared to 30 percent of the more profitable cotton production, remains a disadvantage.
FAO tentatively forecasts the EC's total cereal crop in 1997 at some 202 million tons, down from the record crop of 208 million tons last year but still well above the average of the past 5 years. Although overall cereal plantings are estimated to rise some 2-3 percent following a reduction in the set-aside restrictions, yields are expected to decline somewhat from last year's bumper levels. Good rains throughout the majority of the EC since late April have alleviated earlier fears of drought after very dry conditions during most of March and April. However, Spain, Portugal and the southern tip of France are still reported to be at risk from particularly low yields because of the exceptionally dry conditions. Output of soft wheat, which accounts for nearly half of the total EC cereal crop, is expected to fall only marginally in 1997 while the small durum wheat crop which is grown in the drier southern parts of the Community could fall by about 5 percent. FAO forecasts the EC's 1997 total wheat output at some 97 million tons, compared to 99.8 million tons last year. Barley output is also seen to fall considerably despite a significant increase in area. However, the summer maize crop is anticipated to remain close to last year's level. In aggregate, coarse grain output is now forecast at 103 million tons, versus 105.3 million tons in 1996.
Prospects for the agricultural sector remain very uncertain. Cereal crop production was well below potential in 1996 and is likely to remain low in 1997. However, latest information indicates that output of wheat, the major arable crop, may increase somewhat from last year following a slight expansion in the area sown last autumn, and better soil moisture reserves this spring after drought in the previous year. Thus, although even this year weather conditions have not been ideal, the bulk of the seeds sown were of very poor quality, and the level of input use has remained limited, government agriculture officials forecast that output could rise to about 350 000 tons from the 316 000 tons estimated for 1996. Early indications for the winter wheat crop to be sown this autumn point to a further recovery in planted area if farmers can realize their intentions. However, improving output will depend more on ensuring increased availability of high quality seeds at planting time.
As a result of the poor cereal crop in 1996, the country has continued to rely heavily on wheat imports in the current 1996/97 marketing year to meet its needs for its staple bread production, especially in urban areas. Government and private sector imports have been effected throughout the year but the exact quantity shipped into the country is unknown. It is likely that consumption has decreased again from the previous year. The situation became critical for vulnerable populations in early March following an outbreak of civil unrest which disrupted infrastructure in the country. Amongst other international assistance, WFP is currently providing U.S. $ 6.5 million in humanitarian assistance to some 400 000 of the most needy of the population.
A recent FAO field assessment has confirmed that agricultural production continues to recover as a result of gradual normalization of the economic and marketing activities coupled with better availability and lower cost of inputs. The outlook for the 1997 wheat crop is favourable and aggregate output could rise by 4 percent to 328 000 tons. This is entirely due to better yields in the SRPSKA republic while in BiH Federation production is expected to fall reflecting lower planting and yields. The area sown to maize is expected to increase sharply in both republics in response to the gradual recovery of the livestock industry and disruption of industrial activities. Provided normal weather conditions prevail, output of maize is forecast to rise sharply. Production of potatoes is also likely to continue its upwards trend.
The food security situation has improved but the country will continue to have a large structural deficit in wheat, the main staple. In 1997/98 the wheat import requirement is tentatively forecast at some 265 000 tons, mainly for the BiH Federation. This is 24 percent higher than in the previous year. The increase reflects larger consumption needs following a 10 percent rise in the population inside the country, coupled with a reduction in production in the BiH Federation, which have more than compensated the reduction in consumption requirements per capita.
Prospects for the 1997 cereal crop are uncertain. Latest reports confirm earlier estimates of an increased winter cereal area, and indicate that although the spring crop planting season was delayed by cold weather, the final area sown also increased from the previous year. However, forecasts of the likely yields that may be achieved vary greatly. Soil moisture conditions are generally favourable but the quality of the seeds planted was generally poor, and crop yields are not expected to benefit much from inputs. Although many farmers have been able to access funds for fertilizer, applications were at low rates and mostly after the optimum time to be of much benefit to crops. FAO's latest forecast of wheat output in 1997 is 2.45 million tons. After allowing for exports to repay special import deals in the current year, total wheat supplies available in 1997/98 are not expected to be sufficient to meet the country's total utilization requirements and some imports would be necessary to meet food and/or feed needs in 1997/98. However, it is too early to forecast the amount of imports required, as the final outcome of the 1997 cereal crops will still depend greatly on weather conditions in the coming weeks, and on the availability of operational machinery at harvest time.
The government has provided funding for the spring sowing campaign, to assist state and private farmers to purchase fuel, fertilizer and agro-chemicals. The area sown to grains has increased sharply due to the reintegration of territories not previously accessible. The crop outlook is somewhat mixed as winter grains experienced dry conditions but rainfall has improved since April. Provided that favourable weather continues for the remainder of the season aggregate output could be larger than last year and the country may have a exportable surplus.
Prospects remain generally favourable for the 1997 cereal crops. Adequate precipitation in April replenished soil moisture reserves and lower than normal temperatures favourably reduced the plant growth rate, normalizing the previously very advanced crop development stage. The winter crops area is estimated to be similar to last year and yields are expected to be close to or slightly above last year's average levels. Total cereal output is forecast at about 6.5 to 7 million tons.
The early outlook for the 1997 grain harvest remains satisfactory. The area sown to winter grains declined slightly to 48 000 hectares; that sown to wheat declined while the rye area remained stable. The bulk of the harvest is spring grains which are being planted. The aggregate area sown to grains could continue to decline marginally. Growing conditions to date have been mostly satisfactory but the land privatization process, limited access to credit, structural shortcomings in the domestic food processing industry and keen competition with imported foodstuffs, all combine to limit farm income and to keep yields below potential.
FORMER YUGOSLAV REPUBLIC OF MACEDONIA (9 June)
Prospects for the 1997 cereal harvest are satisfactory and output is expected to recover from the drought-reduced level last year to around 550 000 to 600 000 tons.
Prospects for the 1997 cereal crops remain satisfactory. Winter cereal development is reported to be somewhat behind normal due to exceptionally cold conditions in April, but soil moisture reserves are adequate. Good rains in late May alleviated earlier concerns that soils were becoming too dry to sustain normal development. The winter wheat area is estimated to be slightly up from the previous year, and based on the current condition of crops, yields are expected to recover sharply from last year's drought-reduced levels. With regard to maize, the major spring crop, plantings are estimated to be down from last year due to poor price prospects relative to other crops. In aggregate, reflecting the better prospects for the winter grain crop, total cereal output is expected to increase to about 12.5 million tons in 1997.
Spring grain planting is well underway and newly planted crops have benefitted from favourable moisture conditions . Winter grains have overwintered well and good yields may be expected. High grain prices and good market demand in 1995/96 and 1996/97 have increased farmers ability to auto-finance production. Some increase in fertilizer use and agricultural credit for viable concerns could also benefit yields. Other than border protection, Latvian farmers receive very little price support and the coming into operation of the Baltics free trade area, for produce produced in the region, is expected to lead to keen import competition from the two neighbouring countries, where retail food prices tend to be lower. Overall the early outlook for the 1997 grain harvest is satisfactory so far but the aggregate area sown to cereals could decline as spring feedgrain plantings could well be depressed by the expected upsurge in imports of grain and livestock products from the neighbouring countries.
Planting of spring grains has been completed under good conditions. To date growing condition for the 1997 winter and spring grain crops have been satisfactory. The area sown to both winter and spring grains is thought to have increased further, despite the removal of the subsidy on food wheat purchased under quotas. In 1996 agricultural production increased sharply in response to good weather and higher, subsidized purchase prices for produce. However, as a result substantial stocks of processed foods, including flour and livestock products, have accumulated.
Latest information indicates 1997 cereal output will remain close to the previous year's level at about 25 million tons. Although winter cereals were affected by harsh weather conditions for the second year in succession, the damage to crops has been less than earlier feared. Official estimates indicate that about 8 percent of the winter wheat area was damaged beyond recovery. However, relatively attractive grain prices are expected to have encouraged farmers to increase the spring wheat area which could largely offset these losses. With a satisfactory crop now in prospect, and after a significant build up of grain stocks in 1996/97, due to large imports and reduced demand for feed grains, imports of cereals are expected to be reduced in 1997/98.
Prospects for the 1997 cereal crop are generally good reflecting increased plantings and favourable weather. Abundant precipitation during the winter and early spring in the major producing areas ensured adequate soil moisture supplies for developing crops. Aggregate cereal output is forecast to recover sharply from last year�s poor crop to over 19 million tons, and close to the bumper level in 1995. The outlook for the winter wheat crop is particularly good: output is forecast to expand to about 7.8 to 8 million tons, well above the average of the past 7 years. For maize however, because of a period of adverse weather this spring, plantings are estimated to have decreased, and slightly lower yields are expected.
Prospects for the 1997 cereal crop are satisfactory. Winter grain plantings, which account for the bulk of the crop, are estimated to be similar to the previous year's level. However, very dry conditions during the winter and early spring, coupled with above normal temperatures, which increase plant water requirements, is likely to have somewhat reduced winter crop yield potential. The dry spring conditions also hampered spring planting. The total 1997 cereal output is now forecast at some 3 to 3.5 million tons.
Some intermittent rainfall has been reported in the past few weeks which will have improved conditions for cereal crop development after generally dry winter and spring conditions. Plantings are estimated to be normal and the 1997 cereal output is expected to be similar to last year's level at about 500 000 tons.
YUGOSLAVIA, FED. REP. OF (SERBIA AND MONTENEGRO)* (9 June)
The outlook for the 1997 wheat crop has deteriorated somewhat as persistent dry conditions this winter has likely affected yield potential. Better precipitation as of April has improved soil moisture reserves but has also slowed spring grain planting. Shortages of working capital with which to mobilize inputs could also keep spring grain yields below potential. Nevertheless the 1997 harvest could still be larger than last year in response to the sharp increase in the area sown to wheat.