OECD report highlights Russian food crisis By Sebastian Alison
MOSCOW, Oct 19 (Reuters) - Russian agricultural output fell to 64 percent of its 1990 level last year, while agriculture's share of GDP fell to 6.5 percent from 15.4 percent in 1990, the Organisation for Economic Co-operation and Development said in a report publicly discussed for the first time on Monday.
Andrzej Kwiecinski, main author of the OECD's Review of Agricultural Policies - Russian Federation, told a round table that while the sector's share of GDP had fallen dramatically, its share in employment had actually risen, to 13.9 percent last year from 12.9 percent in 1990.
The report outlined a number of dismal statistics showing how agriculture has declined during Russia's transition from a centrally planned economy in the Soviet era.
Total capital investment in the agro-industrial complex, for example, expressed in 1991 prices, shrank some 16 times, from 70.4 billion roubles in 1990 to 4.3 billion in 1997.
Large scale farms appear to have been unable to cope with the transition. Kwiecinski said that while the whole farming sector produced 64 percent of 1990 levels last year, on large scale farms the figure was just 44 percent.
By contrast, output on household plots was up 19 percent last year in comparison with 1990.
The report said that about 5.7 million hectares of land, representing around three percent of all farmland and divided into 16 million household plots of 0.4 hectares each, produced a staggering 50 percent of gross agricultural output last year.
But Gerard Viatte, the head of the OECD's directorate for food, agriculture and fishing, told the meeting at the agriculture ministry that the OECD had no strong views on the optimum farm structure.
"I would not adopt a dogmatic approach to farm structures," he said. "In all countries there is a range of possibilities. One can't say household plots are better than large farms."
"The main issue is to make sure they're run efficiently. Economic training and advisory services are needed," he added.
He said that a recent meeting of all OECD agriculture ministers had reaffirmed the body's commitment to putting agriculture in an increasingly market- orientated framework, and no deviation from this policy was expected.
But he added that in Russia and other countries the role agriculture played in social policy issues, especially regional development, was widely recognised.
"The main duty of agricultural policy makers is to reconcile these objectives, market orientation and fulfilment of social goals which society expects from agriculture," he said, adding "It's a great challenge to policy makers for 10 years or more."
Russian Agriculture Minister Viktor Semyonov, opening the round table, welcomed the report and pointed to many areas where the OECD and the ministry appeared to be in basic agreement.
As Russia has plunged into economic chaos, food consumption patterns have changed. Kwiecinski noted that meat consumption was down to 51 kg per person last year, from 75 kg in 1990.
Dairy product consumption was also down, from 386 kg per head in 1990 to 235 kg last year. Conversely, potato consumption rose to 126 kilos last year from 106 kg in 1990.
"There's a substantial decline in consumption of products which depends on a certain level of income," Kwiecinski said.