Agriculture Falls into Marasmus
Power takes preventive actions to intimidate society
The week before last, addressing a Cabinet of Ministers session, the President
fired Minister of the Agro-Industrial Complex (AIC) Borys Supykhanov for
the poor preparedness of the sector for the harvest. "For poor readiness
to bring in the harvest Minister of the Agro-Industrial Complex Supykhanov
is being dismissed," said Leonid Kuchma.
Over the past three years, at the beginning of or during the harvest,
the agro-industrial sector has been plagued with leadership changes as
regularly as it has with bad weather. The ministry takes on new and old
bosses, adopts new programs and concepts, while everything remains unchanged
in the collective and state farms. At first glance, Mr. Supykhanov's ouster
does not differ from all previous such actions. The inability to reap or
sow has dogged all his predecessors. Moreover, the resignation had even
been programmed by the stagnant organizational patterns of agricultural
production. It would have taken place in any case sooner or later. Yet,
this dismissal has two special features.
First, there is a direct connection with the approaching elections.
For there is a linear dependence between the state of the agro-industrial
complex and the results of presidential elections: the worse and more expensive
the wheat harvest, the less chance the current leadership has of reelection.
Secondly, there is the unexpected fuel price rise. It became clear as long
ago as spring that the "oil issue" would have to be dealt with by the AIC
minister personally. He must have understood this too late. Thus, on the
one hand, it appears that Minister Supykhanov was merely unlucky: everything
- prices, gasoline, and partners - was against him. But, on the other hand,
he really failed to cope with the demanding job of being Kuchma's man.
True, it is not only Mr. Supykhanov who faced a nasty surprise the week
before last. President Kuchma was apparently equally upset. Of course,
we do not possess as much information about the AIC situation as the President
does. But even by using isolated episodes and reactions, one can draw a
relatively detailed picture of what is in store for this country in the
fall.
Episode one is the fuel shortage. On July 14, after hearing the government's
information about fuel supplies to the AIC and the progress of harvesting,
Verkhovna Rada passed a resolution instructing the Cabinet of Ministers
to urgently deliver the necessary logistic resources, including those from
the Cabinet reserve, to the AIC. Chairman of Parliament's Agrarian Committee
Oleksandr Moroz said that government declarations on oil product supplies
were just empty words. "The Cabinet of Ministers, fully aware of the situation,
showed carelessness. The farms do not have a gram of fuel," said Mr. Moroz.
Let us see what "not a gram of fuel" means. Why was fuel available last
year but not now? The first cause might lie in the fuel price rather than
shortage. The 50-100% price rise for diesel fuel and gasoline automatically
raises the cost of bread, the end product. The current authorities are
totally unprepared for bread price hikes. Should this happen, they will
lose the ultimate ratio in the election race. Hence, the injunction to
freeze prices sweeps "politically cost-effective" fuels and lubricants
off the market. What is left in free trade is commensurate with the world
oil price dynamics. Unfortunately, world prices again broke its record
the week before last.
The spasmodic steps the President and the Cabinet take - handing out
privileges, remitting debts, forcing deals - are not yet being accepted
by the market (i.e., it is not going to slash prices). The uncertainty
reigning supreme among dealers assumes the shape of forecasts of a twofold
price rise for new harvest wheat. But even these forecasts do not eliminate
the fuel shortages. Hence episode two: the pattern of AIC funding and the
fuel shortage.
Addressing a Verkhovna Rada session, the not-yet-ex-AIC Minister Borys
Supykhanov said, "The state will not shirk its responsibility: it will
give diesel oil (to farms - Ed.) because the wheat is still in the field.
And we do provide money, being well aware that it will never return to
the budget." Mr. Supykhanov said oil products are being supplied under
five government-sponsored programs. It is planned to deliver in July a
total of 360,000 tons, which will meet the farms' fuel requirements.
The report of the Ukrainian Auditing Chamber for 1998 said this about
these programs and supplies: "As the analysis of the Cabinet's standard-setting
instruments showed..., none of them raised the problem of the effectiveness
of the proposed system of budget loans, the mechanism of settlements, etc.
Under Ukrainian laws on the state budget, UAH 2.7 billion in budget loans
were issued for each of the 1994-1997 years and for the 1998 harvest. Out
of this, UAH 1.4 billion was repaid." Enumerating concrete abuses and structures,
the Auditing Chamber concluded that the non-returned amount was "hanging"
on the accounts of intermediaries, leaving the budget and the agrarians
to incur multimillion dollar debts.
However, the funding pattern was not fundamentally changed during the
sowing and harvesting campaigns of 1999. This makes it logical to presume
that agribusiness people lost interest in cooperating with state officials
on various levels because the latter resorted to improvisation. For example,
some active operators were ousted from the agricultural market last year
by central and local authorities which blocked their making payments. The
authorities also did such unexpected things to business people before,
but the super-high rate of profit (reflecting the degree of their risk)
offsets the losses. This year, the rulers banked on centralized supplies
of everything, so amateurs had to quit the grain market. And in the spring,
a group of oil-product importing entrepreneurs also joined the ranks of
the pariahs. As a result, the old partners no longer existed by the summer,
while the government had had no time enough to form a network of new intermediaries.
Perhaps if fuel prices had not begun to rise, if the government had not
had to alter diesel fuel and gasoline prices by various resolutions and
instructions - urgently and in "hand to hand combat " (breaking Parliament's
resistance) - if the summer were not so hot, and if the wheat had ripened
a bit later, the President would not have been in so low spirits the week
before last. And Mr. Supykhanov would not have to repent: "Speaking frankly
and self-critically, yes, for various reasons we were late in addressing
the pressing problems..." And all the not-yet-dismissed ministers would
not have to worry about their portfolios in the current atmosphere of mild
psychosis. Hence episode three: the whipping up of apocalyptic expectations
in society in order to be able to give the public, if not bread, at least
a circus.
The leading television channels have already joined the propaganda campaign
that conjures up the picture of a cold and hungry winter. Urban dwellers
are being advised to courageously refrain from using municipal public transport.
The whole country could see how Kyivans gladly agree to make sacrifices.
Rural residents are also likely to be soon invited to participate in another
act of self-sacrifice: to go out to the field with sickles and scythes
in hand to stand in for idle combines. In a word, those who wish to keep
this President for another term will have more than adequate occasion to
show their selflessness.
By Iryna KLYMENKO, The Day






