Sonny ---I thought you might like the math in this article ---
April 12, 1999
Are We Feeding the Serbs?
Russian aid puts White House in a tough spot
By Cheryl Strauss Einhorn
Why is the U.S. sending food to Russia when the Russians are turning
around and sending foodstuffs and other aid to Serbian President Slobodan
Milosevic?
Though Russia's sympathy for Milosevic is widely known, what is less well
known is that the Russians are sending truckloads of supplies to Serbia.
Mikhail Shurgalin, a counselor at the Russian embassy in Washington, told
Barron's that "a column of trucks has left Russia and Belarus to bring aid to
Serbia."
Shurgalin said that the supplies are not being used to help Milosevic's troops,
per se. "The aid is for all needy, regardless of ethnic origin," he said.
This Russian truck convoy to Serbia coincides with the first shipments of a
$625 million U.S. aid package to Russia. These U.S. food shipments have
buoyed the market for agricultural commodities, particularly in recent weeks.
Any derailment of the aid shipments to Russia would likely send those
markets lower. And rumblings in Washington suggest that Congress is not
happy.
As yet, Russia's aid to Serbia has not stopped U.S. plans to send food to
Russia. Officials at the USDA acknowledge that they recently learned about
Russia's shipments to Serbia, but add that they haven't yet moved to stop the
U.S. program.
It is possible that the Balkan hostilities could prevent further U.S. aid to
Russia, though. When a second wave of food shipments to Russia was
suggested, beyond the $625 million package, it initially won favorable
comments from U.S. Secretary of Agriculture Dan Glickman. But his
enthusiasm is likely to be dampened by word of Russian aid to the Serbs.
Russia's aid to the Serbs is tiny right now, estimated at $1 million of goods in
80 trucks that left Moscow for Serbia with plans to cross Belarus, Ukraine,
Hungary and Romania. The convoy was expected to arrive in Serbia on
Sunday, April 11. Besides food, the 900-ton cargo includes medical supplies,
clothing and tents. A second aid shipment is expected to follow, Shurgalin
said.
The U.S. food assistance package for Russia was first announced in
November, after Russia suffered one of its worst harvests in 50 years. It
includes 1.7 million metric tons of wheat, plus 500,000 tons of corn, 300,000
tons of soybean meal, 200,000 tons of soybeans, 120,000 tons of beef and
50,000 tons of pork.
Not only is the size of the package unusually large, but the structure is highly
irregular, according to Bob Riemenschneider, director of the feed and grain
division of the foreign agriculture service at the U.S. Department of
Agriculture. As for size, the 1.7 million metric tons of wheat is huge. "We're
doing quantities of perhaps 50,000-100,000 elsewhere," Riemenschneider
says. What's unusual about the structure is that the food isn't being given away
to feed the Russian people; it is being given directly to the Russian
government, which will then resell the stuff to its people.
So what becomes of the money from these sales? That, too, is highly unusual.
In virtually all other such USDA programs, the money from food sales goes
back into improving food production in the country that receives the food aid.
But in the Russian deal, the money will instead go to fund Russia's pension
fund.
Giving money to a country is something that Congress usually must vote on.
Rarely are aid grants decided unilaterally by the executive branch. In this case,
members of the House appropriations agriculture subcommittee say they had
no chance to veto the Russian program. Another member of the same
committee says that the USDA used an outdated rule to bypass Congress,
adding that "we are concerned that this program is counterproductive to our
policy in Serbia."
Beyond the issue of Russia aiding Serbia, the USDA also knows that Russia
has been giving aid to other U.S. enemies. Riemenschneider told Barron's
that the Russians have sold 60,000 metric tons of wheat to Iraq, and the sale
of 500,000 tons is being brokered by the Russians now.
The White House is said to be preparing to nominate financier and
friend-of-the-President William Rainer to be chairman of the Commodity
Futures Trading Commission. A fundraiser for Clinton and a co-founder of
Connecticut-based trading firm Greenwich Capital Markets, Rainer was
chosen in 1993 to run the U.S. Enrichment Corp., which Congress created to
sell the U.S. uranium stockpile.
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