US embassy cable - 05MINSK923

UNCLAS SECTION 01 OF 03 MINSK 000923 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
MOSCOW FOR FAS 
 
E.O. 12958: N/A 
TAGS: EAGR, PGOV, ECON, BO 
SUBJECT: The "Best" Harvest Ever 
 
Ref: 04 MINSK 1280 
 
1. (SBU) Summary:  The 2005 harvest campaign is in full 
swing in Belarus and, like in years past, Lukashenko 
expects an unattainable yield.  During his annual 
conference on the "battle for the harvest", Lukashenko 
rattled off his demands and listened to exceptional 
progress reports from nervous and often frightened 
ministers and governors.  The GOB's banks have invested 
millions of dollars into the agriculture sector, 
resulting in large deficits that the government will 
most likely write off.  Special police units are raiding 
farms to catch thieves red-handed while state propaganda 
teams glorify the harvest campaign on a daily basis. 
Official production results are largely inaccurate, as 
water accounts for most of the weight and farmers are 
reporting poor crops due to poor weather and leadership 
decisions.  End Summary. 
 
The Expert On Agriculture 
------------------------- 
 
2. (U) At a July 28 conference on the 2005 harvest 
campaign, Lukashenko demanded no less than seven million 
tons of grain be harvested to ensure the country's food 
and political security ahead of next year's presidential 
election.  He demanded southern regions complete their 
harvest by August 20 and then help the central and 
northern regions finish by August 25.  Lukashenko 
pointed out how the harvest was moving seven to ten days 
slower than usual and demanded farmers pick up the pace 
by reducing combines' idle times and increasing their 
work capacity to 17 - 20 acres per day. 
 
3. (U) Government figures predict farms will produce 7.7 
million tons of grain, 3.3 million tons of sugar beet, 
66,000 tons of flax fiber, 9.5 million tons of potatoes, 
143,000 tons of rapeseed, and 2 million tons of 
vegetables.  Agriculture Minister Leonid Rusik 
anticipated that Belarus would need to import 165,000 
tons of wheat to prevent a possible shortage in 2005. 
Lukashenko, believing Belarus could produce enough of 
its own, sternly informed the ministers that no more 
than 110,000 tons would be imported.  [Note: The 2004 
harvest campaign also witnessed a record 7.7 million-ton 
grain harvest.  Ironically, the government ended up 
importing grain from Russia and Ukraine, accounting for 
52 percent of Belarus' total cereal grain needs in 
2004.] 
 
Unprecedented Government Support 
-------------------------------- 
 
4. (SBU) Early in 2005, the GOB ordered banks to provide 
USD 280 million in loans for the 2005 sowing and harvest 
campaign at a rate below three percent.  According to 
the Chairman of the National Bank, Petr Prokopovich, 
bank loans to agriculture have increased 150 percent 
over last year.  Sidorsky informed Lukashenko that as of 
July 18 the GOB had allocated USD 106 million to state- 
controlled farms to offset harvest costs.  The total 
amount of subsidies and loans given to the agriculture 
sector, however, has put the nation's banks into a USD 
73 million deficit.  [Comment: State-controlled farms 
have little incentive to pay loans back and the 
government, even though it says otherwise, does not seem 
to expect them to.]  The government has also allocated 
USD 1.7 million to purchase 1 million tons of milling 
and feed grain for national use.  Sidorsky suggested the 
government should allocate funds to commodity processing 
plants, such as bakeries and refineries, so that they 
too can purchase Belarus' crop. 
 
5. (U) Prokopovich informed Lukashenko that the nation's 
banks have "loaned" farms USD 188 million to purchase 
agricultural machinery on leasing terms.  Over 13,300 
combines, plus hundreds of grain dryers, processors, 
trucks, tractors, and loaders Q all Belarusian made Q 
are in use to gather the "record" harvest.  Even the 
Ministries of Transport and Defense have donated 
vehicles and manpower.  As in past years, the GOB 
ordered the military to help gather crops.  On August 2, 
11 platoons and 270 military cargo trucks were sent to 
farms throughout Belarus.  The Minsk regional 
government, in order to garner citizens' support and 
elevate their pride, formed propaganda teams - comprised 
 
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of government officials, local public organizations, and 
state reporters Q to visit farms and report on their 
progress. [Note: Since the harvest began, state papers 
have published photos and front-page articles of the 
campaign on a daily basis.] 
 
Firm Control On Fuel 
-------------------- 
 
6. (U) Sidorsky estimated the harvest campaign would 
require 220,000 tons of diesel fuel and 84,000 tons of 
gasoline.  Lukashenko replied that he had just issued a 
directive to allocate an additional USD 30 million to 
provide farms with fuel.  However, he warned that those 
who misuse or steal the fuel would be severely punished. 
Head of the State Control Committee Anatoly Tozik 
reported that out of 24 recent farm audits, 23 revealed 
abuse or fraud in which managers deliberately 
misreported the condition of combines and grain dryers 
in order to receive more fuel.  On July 19, the Interior 
Ministry announced it had formed special police teams to 
conduct night raids on collective farms to prevent the 
theft of fuel, grain, fertilizers, and agricultural 
equipment and to ensure the proper transportation of 
grain, pesticides, and spare parts. 
 
Bogus Results? 
-------------- 
 
7. (U) By August 1, the GOB reported that state farms 
had harvested over one million tons of grain from 16 
percent of the country's total cultivated area, 
resulting in 1.4 tons per acre, up from 1.3 per acre in 
2004.  On the same date in 2004, Belarus had harvested 
only 440,000 tons from six percent of sown ground.  Malt 
barley production increased 350 percent to 50,000 tons, 
and 172,000 tons of rapeseed had been harvested from 62 
percent of the total area, resulting in 0.8 tons per 
hectare. 
 
8. (SBU) Official government results, however, are 
skewed.  An agriculture contact told Poloff on July 22 
that many farmers expect lower yields than in 2004, 
partly due to unusually warm weather in April followed 
by a series of frosts lasting until early May.  Several 
hard rains either damaged or killed entire fields of 
crops and/or washed away applied fertilizers, pesticides 
and herbicides.  Lukashenko's orders to plant early 
within a small time frame, regardless of weather 
conditions, also played a damaging role.  [Note: During 
the warm spell in April, Lukashenko impatiently ordered 
farms to plant crops and vegetables.  The frosts 
occurred not long after many fields had germinated.] 
 
9. (SBU) Post expects farms to meet Lukashenko's quota 
by August 25, but it is doubtful that the quality will 
be substantive.  Poloff, who has an agricultural 
background, drove through farming country 40 km north of 
Minsk and noticed that many of the wheat and rye fields 
being cut were still relatively green and needed at 
least one more week of warm weather to ripen.  In one 
field, the kernels were chewy and too wet, making it 
difficult to separate them from the chaff.  Poloff's 
contact explained that moisture accounts for at least 
half, if not two-thirds, of the government's reported 
weight yields.  Once gathered, the loads are weighed and 
then put through dryers.  Once dried, the weight is 
drastically reduced, but not officially reported. 
According to the contact, elevators do not dock farms 
for unacceptable levels of moisture, foreign objects, or 
quality.  This is how Belarus can report record 
surpluses surpassing other CIS states, while at the same 
time it continues to import grain and produce from 
Russia and Ukraine. 
 
Voodoo Ag 
--------- 
 
10. (SBU) Farming methods in Belarus, at times, cast 
doubt on the country's ability to yield quality produce. 
For example, poloffs have seen farmers applying 
fertilizer, pesticide, and/or herbicide on wheat, rye, 
and corn fields in their later stages of maturity, 
leaving tire tracks of flattened wheat and/or broken 
corn stocks behind.  Corn Q which is mainly used for 
silage since the growing season is too short to mature Q 
 
MINSK 00000923  003 OF 003 
 
 
is sometimes not even planted in rows, preventing 
machinery from working the fields without major damage. 
It is not uncommon to see new Belarusian-made tractors 
pulling antiquated implements while a field hand walks 
behind, controlling and/or monitoring the process. 
These and many other examples would make an American 
farmer gasp. 
 
Comment 
------- 
 
11. (SBU) Lukashenko, the former collective farm manager 
from Shklov, firmly controls the agriculture sector 
while ignoring advice from his specialists.  Similar to 
his 2004 conference on the harvest campaign (reftel), 
Lukashenko shot down suggestions from regional governors 
and ministers on what needs to be improved and 
personally blamed them for failing to meet his high 
expectations.  Earlier in the year, Minister of 
Agriculture Leonid Rusik pleaded to Lukashenko to 
purchase foreign combines, noting the inferiority of 
Belarusian makes, but the president refused (septel). 
However, one of Lukashenko's high-ranking cronies, 
obviously with no agriculture background, suggested 
farmers add several tons of fertilizer per acre to get 
rid of Belarus' surplus of potash. 
 
12. (SBU) On the president's orders, the GOB has 
invested millions into the agriculture sector, but even 
with "record" production levels, the industry remains 
insolvent.  If the government is financing the sowing, 
the harvest, and buying the produce, then farms really 
do not need to worry about making a profit.  Many other 
factors account for poor results, such as inefficient 
labor and infrastructure, but Lukashenko's heavy-handed 
micro-management and blatant stubbornness are not doing 
the sector any favors. 
 
KROL