Publication: Monitor Volume: 1 Issue: 105

. Deputy Prime Minister Alexander Zaveryukha, Russia’s top agricultural official, yesterday denied media reports that Prime Minister Viktor Chernomyrdin would discuss buying grain or ask for another grain loan during his October 4-6 visit to Canada. "The matter has not yet been raised by either the Russian or the Canadian side," Zaveryukha said before leaving for Ottawa. Itar-Tass news agency and Interfax reported earlier that the issue of possible grain purchases would be on the agenda for Zaveryukha’s five-day visit to Canada. Zaveryukha has repeatedly ruled out state grain purchases this year despite the fact that Agriculture Ministry officials forecast this year’s grain harvest at 67 million tons. This would be the lowest output in 30 years, down from 81.3 million tons last year. (7)

Government officials are between a rock and a hard place. A poor harvest and low state grain reserves would push domestic prices up, putting into question the economic "stabilization" on which the Prime Minister has pinned his hopes for electoral success come December. On the other hand, buying grain abroad also will result in inflation, though its effects will not be evident immediately. As the 17 December election draws near, Chernomyrdin’s government is likely to try to avoid public wrath by reversing itself and buying grain. The state grain monopoly Roskhleboprodukt estimates 3 to 4 million additional tons of wheat are needed.

Government Seeks Political Alliance With Banks.