Just as the farm subsidy debate between Europe and America rages at the controversial GATT talks, the U. S. government has been busy promoting its own subsidized food program which it hopes will provide vast new markets for American agricultural surpluses in the former Soviet Union.
The European Community, for its part, has itself recently negotiated the final obstacle to approving a 1. 25 billion ECU ($970 million) package of aid credits to Russia over the next three years.
But many Russians feel that their market is on the verge of being flooded with subsidized food from the United States and Europe, and worry about its effect on domestic food production and an already astronomical foreign debt.
One Russian agricultural specialist, who did not wish to be named, said he regarded the issue of subsidized food as an attempt by the West to foster Russian dependence.
"The only reason you do it is to keep us on our knees", he said, arguing that the price of accepting aid indiscriminately would be permanent national enfeeblement.
In their competition for the Russian market, Europe and the United States seem to have gone out of their way to make products available.
Despite long-standing American complaints that Europe's heavily subsidized agricultural sector has been a major obstacle to global free trade, the U. S. government's Export Enhancement Program, now allows third-party barter arrangements as a way of tunneling American grain, meat, dairy products and rice into the vast new Eastern European market.
American officials describe their program as a "drop in the bucket" of Russian domestic agricultural production, unlikely ever to undermine the country's ability to feed itself; yet new categories of American food are steadily being added to the list.
The latest, a subsidy on 30, 000 tons of pork worth $30 million, joins wheat, cereal, vegetable oil, barley, rice, milk powder and butter as categories of farm production the American Agriculture Department considers worth supporting in their competition with European surpluses.
It's the first time the American government has ever subsidized pork exports.
Having recently dropped its demand that Russia issue a "sovereign immunity guarantee" as collateral on future loans, the European Commission has opened the way for a first installment of food credits, worth 349 million ECUs, beginning immediately. Katherine Magnant, a Moscow representative of the EEC, said that 50 percent of the credits would have to be spent on European agricultural production, while the rest would be divided on imports from former East bloc countries and Soviet republics.
But Magnant said that emergency food aid, requested by the Russian government on Oct. 1, was a different issue currently being negotiated by a specially convened European conference on assistance to the CIS, and would probably not be decided until an upcoming meeting in Tokyo this week.
"There is no more food aid to Russia as such. Instead, we are now issuing credits", she said, adding that part of the recent aid package involved an agreement that Russia repay debts incurred by the former Soviet Union.
The Americans and Europeans both argue that the main beneficiaries of food subsidy programs will be the Russian people, who will reap a bonanza of high-quality food at artificially low prices.
But given the current state of the Russian distribution system, it is likely that some of the beneficiaries will be those in the transport, wholesaling and retailing networks who take charge of the subsidized cargoes and sell them off at a profit through traditional channels.
The official U. S. position is to insist that "no direct subsidies go to the Russians", and that even the $900 million credit program designed to give Russians the hard-currency they need to pay American fanners is a purely commercial venture by U. S. banks -- albeit, one secured by the government.
Addressing a conference of Russian meat producers last week, David Schoonover, chief agricultural specialist at the American embassy, said that food aid was "a temporary measure to help friends in time of need".
He also acknowledged the American government's interest in protecting domestic producers and giving them a level playing field on which to compete with Europe.
But a level playing field for European and American agricultural producers may mean something altogether different for the Russian economy, which risks becoming caught in the rivalry of competing trading blocs.
The European Community, for its part, has itself recently negotiated the final obstacle to approving a 1. 25 billion ECU ($970 million) package of aid credits to Russia over the next three years.
But many Russians feel that their market is on the verge of being flooded with subsidized food from the United States and Europe, and worry about its effect on domestic food production and an already astronomical foreign debt.
One Russian agricultural specialist, who did not wish to be named, said he regarded the issue of subsidized food as an attempt by the West to foster Russian dependence.
"The only reason you do it is to keep us on our knees", he said, arguing that the price of accepting aid indiscriminately would be permanent national enfeeblement.
In their competition for the Russian market, Europe and the United States seem to have gone out of their way to make products available.
Despite long-standing American complaints that Europe's heavily subsidized agricultural sector has been a major obstacle to global free trade, the U. S. government's Export Enhancement Program, now allows third-party barter arrangements as a way of tunneling American grain, meat, dairy products and rice into the vast new Eastern European market.
American officials describe their program as a "drop in the bucket" of Russian domestic agricultural production, unlikely ever to undermine the country's ability to feed itself; yet new categories of American food are steadily being added to the list.
The latest, a subsidy on 30, 000 tons of pork worth $30 million, joins wheat, cereal, vegetable oil, barley, rice, milk powder and butter as categories of farm production the American Agriculture Department considers worth supporting in their competition with European surpluses.
It's the first time the American government has ever subsidized pork exports.
Having recently dropped its demand that Russia issue a "sovereign immunity guarantee" as collateral on future loans, the European Commission has opened the way for a first installment of food credits, worth 349 million ECUs, beginning immediately. Katherine Magnant, a Moscow representative of the EEC, said that 50 percent of the credits would have to be spent on European agricultural production, while the rest would be divided on imports from former East bloc countries and Soviet republics.
But Magnant said that emergency food aid, requested by the Russian government on Oct. 1, was a different issue currently being negotiated by a specially convened European conference on assistance to the CIS, and would probably not be decided until an upcoming meeting in Tokyo this week.
"There is no more food aid to Russia as such. Instead, we are now issuing credits", she said, adding that part of the recent aid package involved an agreement that Russia repay debts incurred by the former Soviet Union.
The Americans and Europeans both argue that the main beneficiaries of food subsidy programs will be the Russian people, who will reap a bonanza of high-quality food at artificially low prices.
But given the current state of the Russian distribution system, it is likely that some of the beneficiaries will be those in the transport, wholesaling and retailing networks who take charge of the subsidized cargoes and sell them off at a profit through traditional channels.
The official U. S. position is to insist that "no direct subsidies go to the Russians", and that even the $900 million credit program designed to give Russians the hard-currency they need to pay American fanners is a purely commercial venture by U. S. banks -- albeit, one secured by the government.
Addressing a conference of Russian meat producers last week, David Schoonover, chief agricultural specialist at the American embassy, said that food aid was "a temporary measure to help friends in time of need".
He also acknowledged the American government's interest in protecting domestic producers and giving them a level playing field on which to compete with Europe.
But a level playing field for European and American agricultural producers may mean something altogether different for the Russian economy, which risks becoming caught in the rivalry of competing trading blocs.
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