EASTERN EUROPE S AGRICULTURAL TRADE WITH THE WEST: MORTGAGING

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• Sequence Number: 7
• Publication Date: May 1, 1984
• Content Type: REPORT

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Directorate of r---.~:a??+;.,~
Intelligence
Trade With the West:
Mortgaging Consumption
r=,xe
~l :rte
Eastern Europe's Agricultural
An Intelligence Assessment
EUR 84-10096
May 1984
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Directorate of Confidential
Intelligence
Trade With the West:
Mortgaging Consumption
Eastern Europe's Agricultural
An Intelligence Assessment
This paper was prepared by
Office of
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European Analysis
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Comments and queries are welcome and may be
directed to the Chief, East-West Regional Issues
Branch, EU
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Confidential
EUR 84-!0096
May 1984
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Summary
/rdormation available
as q/' 1 May 1984
was used in this report.
Eastern Europe's Agricultural
Trade With the West:
Mortgaging Consumptioq~
trade balance with the West.
External financial problems have forced a major adjustment in Eastern
Europe's agricultural trade with the West since 1981. The regimes have
scaled back longstanding commitments to consumers as debt repayment
has taken priority over domestic consumption. This development represents
a turnaround from the 1970s when proconsumer policies resulted in greater
reliance on Western imports and a growing hard currency agricultural
trade deficit:
? Hard currency agricultural imports, which rose from $1.8 billion in 1970
to $8.8 billion in 1980, have fallen by more than $3 billion during the
past three years.
? This curb on imports has slashed the region's hard currency agricultural
trade deficit from a record $4.8 billion in 1981 to $1.8 billion in 1983 and
accounted for almost 40 percent of the improvement in the region's total
nia-as price hikes, rationing, and long queues became common
The gains in the region's trade position have entailed economic and
political costs because they stemmed not from reductions in waste or
increased productivity but rather from limits on raw material inputs and a
squeeze on consumer supplies:
? Reduced imports caused losses in the livestock sector, depressed crop
yields, raised production costs in processing industries, and diminished
returns to past investment.
? Consumer grumblings increased-most notably in Poland and Roma-
We believe the adjustment phase of Eastern Europe's agricultural trade
with the West is coming to an end. We expect increases in imports for most
countries, and a widening in the region's agricultural trade deficit in 1984
and beyond. While poor agricultural performance in the next few years
would increase import requirements, good harvests probably would not
allow for a further reduction in imports. In our view, attempts to reduce
import needs through increased domestic output probably will not be
successful. As a result:
? A widening? of the agricultural trade deficit will make it difficult for
Eastern Europe to maintain, much less increase, the level of hard
currency trade and current account surpluses achieved in 1982-83.
goods.
? Efforts to offset a larger agricultural trade deficit by placing a larger
burden on the nonagricultural sectors could impede industrial modern-
ization and growth, complicate export commitments within the Council
for Mutual Economic Assistance, and limit supplies of nonfood consumer
iii Confidential
EUR 84-/0096
May 1984
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Even with some increase in imports, East European consumers can expect
only a small improvement in food supplies over the next couple of years.
Basically, food availability will be tied very closely to the success of the do-
mestic harvest:
? Shortfalls will remain most severe in Poland and Romania, where many
foods are already in tight supply and pressures to restrict imports and
boost exports are the greatest.
? Although spot shortages of basic .foodstuffs will occur in the other
countries, the major food problems will be reduced supplies of luxury
items and higher prices. (c)
The reluctance of US banks to lend to Eastern Europe and the limited
availability of US Government financing will restrict US exports to the
region. Despite East European threats to boycott US agricultural products
over alleged discriminatory financing practices,
~US exporters could recoup much of the market share lost in 1981-82
should credit become available again on favorable terms.
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Contents
Agricultural Trade in the 1970s
2
Regaining Control ~
6
Improved Trade Balances
6
Other Trade Adjustments
7
Reducing Domestic Requirements
8
The Burden of Adjustment
8
Impact on Supply
8
Increased Consumer Discontent
9
Outlook for Agricultural Trade
9
Prospects for Supply and Competing Demands
9
Availability of Western Credits
10
Consumer Pressures
10
Export Prospects
11
Implications for Balance of Payments, Food Supplies, and US Exports
11
Appendixes
A.
Factors Affecting Agricultural Trade in the 1970s
15
B.
The Regional Pattern of Eastern Europe's Agricultural Trade
21
C.
Statistical Survey of Eastern Europe's Agricultural Trade
27
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Eastern Europe's Agricultural
Trade With the West:
Mortgaging Consumption
Beginning in the early 1970s, most East European ,
governments sought to boost labor productivity and
ease social tensions through new policies aimed at
rapidly improving living standards (see inset). A better
diet for the people, with greater consumption of meat
and dairy products, became the cornerstone of such
policies. Key features of the effort to increase food
consumption included:
? Expansion of agricultural output, mainly through
increased investment, in order to improve domestic
supplies and to increase export earnings needed to
pay for larger amounts of imports.
? Greater willingness to import items produced in
insufficient quantities (grain, oilseeds) and products
not grown domestically (coffee, tea, spices, citrus
fruits).
? Large retail food price subsidies to protect consum-
ers from the higher costs of agricultural production
and imports.
Implementation of the program produced immediate
gains in both production and consumption. As the
decade progressed, however, the growth of subsidized
consumption outstripped production increases by an
ever widening margin. To bridge the gap between
consumer demand and domestic output, Eastern Eu-
rope turned increasingly to the West for needed
imports. At the same time, the growth of the region's
agricultural exports slumped sharply as export prices
stabilized, supplies available for export declined, re-
strictionist measures in the West increased, and pres-
sures to boost deliveries to the USSR intensified. By
1981 Eastern Europe was consuming well beyond its
means, heavily dependent on the West for many of its
basic foodstuffs and agricultural raw materials, and
was saddled with a burdensome hard currency agri-
cultural trade deficit.
This paper examines the costs and benefits of Eastern
Europe"s agricultural trade with the West. After
briefly assessing the factors underlying the rapid
Eastern Europe'slood problem centers on the quality
and variety of the diet, not onlailure to meet
physiological or nutritional requirements. Indeed, the
average daily caloric intake of most East Europeans
is comparable to that in many Western industrialized
countries. The conventional yardstick for measuring
quality of the diet is per capita consumption of
animal protein-meat, dairy products, and eggs. In-
creased demandlor certain other commodities-
tropical and subtropicallrr~its, coffee, spices, and
cocoa-does not spring from indispensable nutrition-
al needs but rather reflects the desires of a more
c~fluent society. When,ludged against these criteria,
East European regimes made substantial progress in
improving their peoples' standard of living and per-
ception of'well-being during the 1970s.
Access to a wide assortment of qualityloods assumes
added weight in Eastern Europe because of shortages
of quality consumer durables. Consumers have had
few alternatives for spending their increased dispos-
able incomes. Consequently, food has averaged some
30 to 40 percent of total household expenditures in
most East European countries; expendituresJor meat
and dairy products alone often constitute 10 to IS
percent or more of consumer expenditures. The re- 25X1
spective percentageslor Organization for Economic
Cooperation and Development countries are roughly
one-haUto two-thirds the level olEastern Europe.
growth of the. region's deficit in hard currency agri-
cultural trade during the 1970s,' it examines the
' Agricultural trade in this paper is defined according to the
standard CEMA Trade Nomenclature (CTN) classification "Food
and Raw Materials for Food." It includes category 6-Live
Animals; category 7-Raw Materials for the Production of Food-
stuffs; and category 8-Foodstuffs. To these totals were added
trade in cotton, wool, hides and skins, and feedstuffs (oilmeal) to
give a more comprehensive picture of the region's agricultural
trade. Trade values are exclusive of trade in agro-industrial in-
puts-agricultural chemicals and machinery.
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Figure 1
Eastern Europe: Agricultural Trade
With the West, 1970-1;3
12
Phase 1
Phase 2
Phase 3
Expanding trade
Detcit financing
Regaining
control
9
Imports
6
Deficit
Exports
3
0 1970
impact of the East European financial crisis on agri-
cultural trade, production, and food supplies in 1981-
83. The paper also considers~the factors affecting the
outlook for agricultural trade with the West and the
implications for the region's balance of payments,
food consumption, and trade with the United States.
The appendixes review trends in the 1970s in depth,
show the regional pattern of East European agricul-
tural trade, and provide statistical detail.
Steadily growing deficits marked Eastern Europe's
agricultural trade with the West between 1970 and
1981. Although imports shot up at an average annual
rate of nearly 19 percent during 1971 to 1975 (figure
1), the East Europeans defrayed most of the addition-
al costs through an impressive 15-percent average
annual growth of hard currency agricultural exports.
The region's position worsened dramatically during
the latter half of the 1970s. Import growth remained
strong-roughly 16~percent annually-while the rate
Table 1
Eastern Europe: Geopolitical Distribution
of Agricultural Trade
Imports from
100.0
100.0
100.0
100.0
Socialist countries
50.8
41.7
32.0
45.1
Eastern Europe e
14.6
14.8
14.1
17.9
USSR
28.0
18.2
8.6
11.8
Other CPEs b
8.2
8.7
9.3
15.4
Nonsocialist countries
49.2
58.3
67.9
54.9
Developed ~
33.0
37.6
47.4
37.1
LDCs d
16.2
20.7
20.5
17.8
Exports to
100.0
100.0
100.0
100.0
Socialist countries
47.1
50.4
54.6
64.2
Eastern Europe a
18.4
15.9
17.9
23.0
USSR
26.2
32.2
32.5
37.2
Other CPEs n
2.5
2.3
4.2
4.0
Nonsocialist countries
52.9
49.6
45.4
35.8
Developed ~
48.4
41.5
35.2
28.4
LDCs d
4.5
8.1
10.2
7.4
e The CEMA Six-Poland, East Germany, Czechoslovakia, Hun-
gary, Romania, and Bulgaria. Excludes Yugoslavia.
b Other centrally planned economies-Albania, China, Cuba, Mon-
golia, North Korea, Vietnam, and Yugoslavia.
Developed countries~ECD, South Africa, Japan, Australia,
and New Zealand.
a Less developed countries-all countries not included above.
Socialist trade was derived by converting the value of
trade expressed in the currency of each European country to rubles
and then to dollars at the prevailing foreign exchange rate.
of export growth fell to nearly half that achieved in
the early 1970s. As a result, the deficit in hard
currency agricultural trade, which stood at only $244
million in 1970, reached $4.8 billion by 1981.
The growth of agricultural imports improved the East
European diet, but these gains were only as good as
the region's credit rating. Ever increasing deficits
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(:onfidentlal
Trade Positions D#/yerAmong Countries
While Eastern Europe as a whole increased net
imports gJ'agricultural commodities from the West
during the 1970s, developments varied sign~cantly
between the northern and the southern countries. The
grain-d~cit, more industrialized northern coun-
tries-Poland, East Germany, and Czechoslovakia-
accountedfor 60 percent of the region's hard currency
imports and roughly 85 percent ctf the region's hard
currency d~cit in agricultural trade. By contrast, the
southern countries provided approximately 60 per-
cent cif East European agricultural exports to the
West. Bulgaria regularly recorded surpluses in agri-
cultural trade while Yugoslavia ran d~cits figure 2J.
After chalking up large surpluses in 1970-75, Hunga-
ry and Romania suffered deteriorating trade
performance in the last haUaf the decade.
In gross terms, Poland was by jar Eastern Europe's
leading importer from the West during the 1970s,
accountinglor roughly one-fourth of the region's
hard currency purchases. On a per capita basis,
however, imports Jrom the West were substantially
more important for East Germany, Czechoslovakia,
and Hungary figure 3). Agricultural imports received
between 20 and 25 percent of total hard currency
expenditures for the three northern countries, but
only 1 S percent of outlays by the southern tier. C
Despite the southern region's overall dominance in
exports, Poland was Eastern Europe's single largest
seller of agricultural products to the West. The Poles
held roughly 23 percent cif the region's market in the
West. Agricultural sales accounted for nearly 18
percent of Warsaw's hard currency earnings over the
decade. By comparison, food exports contributed
approximately 20 to 2S percent of total earningslor
Hungary and Bulgaria, the countries most supportive
oJ'agriculture, but only 10 percent of earnings for
Czechoslovakia and East Germany, the most Indus-
,
Except for Bulgaria, every East European country s
hard currency trade balance deteriorated sharply in
the last haU4f the 1970s. Poland, which struggled
with disastrous harvests and overheated consumer
demand, experienced the worst losses. A 33 percent
decline in export growth coupled with a 1 SO percent
increase in imports reversed generally good trade
performance in 1971-75 and produced a nearly eight-
,fold increase in Poland s hard currency trade d~cit.
As a result, Poland's accumulated d~cit for 1971-80
trailed by only a small margin those of East Germa-
ny and Czechoslovakia, countries with considerably
less comparative advantage in agriculture. Romania,
and to a much lesser extent, Hungary, ran d~cits in
agricultural trade with the West during 1976-80.
Romania cut the rate of import growth almost in haU
during the period, but exports showed virtually no
growth. Bulgaria, on the other hand, recorded a
widening agricultural trade surplus in 1976-80 as a
result of healthy gains in exports. Consequently,
Bulgaria's net exports for 1971-80 were roughly
double those of Romania and Hungary.
meant that agricultural trade assumed a growing role
in the buildup of Eastern Europe's hard currency debt
(see inset). Whereas the agricultural trade deficit
amounted to only 16 percent of the region's total hard
currency trade deficit in 1970, by 1981 it exceeded
the region's total trade deficit. Agricultural trade
trailed only net interest payments as the largest
element in the region's overall current account deficit.
Factors both within and beyond the control of the
East European regimes account for the region's poor
performance in agricultural trade. Policies that over-
heated consumption and hobbled production bear
most of the blame, but bad weather, changing con-
sumer tastes, and Western protectionism also played
important roles. The upswing in Eastern Europe's
need for agricultural imports came at a time when
Western exporters were anxious to expand sales-on
credit if necessary-and the USSR proved less able to
meet the region's requirements (table 1). (See appen-
dix Afor an in-depth discussion of agricultural trade
in the 1970s.)
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Figure 2
Eastern Europe: Agricultural Trade With the West,
by Country, 1970-82
-Export
- Imports
0 1970 75 80 82 0 1970 75 80 82
1.0 ~ 'r
~ ~ ~ ~~ ~~ I
0 1970 75 80 82 0 1970
0 1970
1.0 '^~
I ~~ ~ ~ I
0 1970
75 80 82
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Figure 3
Eastern Europe: Agricultural Trade With the West,
1971-75 and 1976-80
1971-75 average
1976-80 average
Poland
East Germany
Czechoslovakia
Romania
Hungary
Bulgaria
Yugoslavia
0 0.5 1.0 .1.5 2.0
Billion US $
Poland
East Germany
Czechoslovakia
Romania
Hungary
Bulgaria
Yugoslavia
Poland
East Germany
Czechoslovakia
Romania
Hungary
Bulgaria
Yugoslavia
0
Percent
I I I
0 20 40 60 80
US $
0
Percent
Poland
East Germany
Czechoslovakia
Romania
Hungary
Bulgaria
Yugoslavia
Poland
East Germany
Czechoslovakia
Romania
Hungary
Bulgaria
Yugoslavia
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During 1981-82 Eastern Europe's hard currency fi-
nancial situation worsened dramatically and slowed to
a trickle the flow of Western credits to finance
imports of agricultural commodities. Both France and
Canada failed to renew long-term grain agreements
with Poland while the United States, traditionally the
supplier of more than half of Polish grain imports, cut
off Commodity Credit Corporation (CCC) credits
after martial law was imposed in December 1981. The
little credit that was available generally carried much
shorter maturities and higher interest rates than
previously.
In response to the credit squeeze, Eastern Europe
moved to cut imports and boost exports. A record
grain harvest in 1982 together with another good
harvest in 1983 in the northern countries helped ease
the initial impact of the import cuts. The regimes,
nonetheless, had to impose tough new measures to
limit domestic demand.
Improved Trade Balances
A reduction in hard currency agricultural imports,
primarily grain and feedstuffs, offered immediate
help for Eastern Europe's financial problems. In 1981,
the value of Eastern Europe's hard currency agricul-
tural imports fell for the first time in five years. In
1982 the imports plummeted nearly $3 billion, ac-
counting for 37 percent of the total reduction in the
region's hard currency expenditures. Cutbacks in
purchases of grain, oilmeal, coffee, tea, cocoa, and
spices led the decline and amounted to roughly 80
percent of the falloff in agricultural imports. Grain
imports declined by almost 40 percent, and oilmeal
imports fell by more than 10 percent.
All countries reduced hard currency purchases in
1982.' On a percentage basis, Romania and Poland
made the deepest cuts-about 50 percent-while
imports fell by about 16 percent in East Germany,
Czechoslovakia, and Yugoslavia. Although the reduc-
tion in imports slowed to $500 million in 1983 based
on preliminary data, agricultural purchases continued
to account for roughly 40 percent of the decline in
Eastern Europe's hard currency outlays. Poland again
made the deepest cuts as it reduced agricultural
purchases by about one-third or approximately $400
million. Yugoslavia and Czechoslovakia cut imports
by about $100 million. By contrast, we estimate that
Hungary increased its purchases by roughly $80
million and Bulgaria by $40 million.
Many East European countries tried to improve their
balance-of-payments positions by boosting agricultur-
al exports to the West even if it meant diverting
supplies from domestic markets. Yugoslavia's 1983
plan called fora 10-percent increase in agricultural
and food products to the West despite declining
availabilities at home. Poland stepped up exports of
high-quality meat, primarily beef, in exchange for
increased imports of less expensive, lower quality
meats, primarily poultry. Romanian President
Ceausescu repeatedly called for an increase in agri-
cultural exports in order to fund hard currency im-
ports and to reduce foreign debt.
in early 1983 both Romania and
Hungary offered increased supplies of pork for. export
to the West. The Hungarian exports were to come at
the expense of deliveries within Eastern Europe or to
the USSR. In an effort to be more competitive in
world markets, Hungary reduced export prices for
ham to most Western markets.
The regimes tried to increase exports by offering
various incentives, including:
? Reducing or eliminating taxes on certain goods
produced for export.
? Authorizing foreign trade organizations (FTOs) to
pay higher prices for agricultural output delivered
to them above planned export targets.
? Allowing FTOs to retain a larger percentage of
foreign exchange earnings for the purchase of raw
materials.
Most of these efforts proved unsuccessful. Following a
$716 million decline in 1981, the region's hard cur-
rency agricultural exports fell $243 million in 1982.
By putting a very tight squeeze on consumer supplies,
Romania was the only country to record a modest
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increase in agricultural sales to the West in 1982. On
the basis of preliminary data for 1983, we believe the
region's exports to the West probably fell by another
$100 million.
Several factors account for the failure of attempts to
increase hard currency sales. Available supplies for
export declined in 1981-83, the result of poor grain
harvests in 1981 and in the southern countries in
1983, declining livestock yields, and difficulties in
procurring sufficient supplies in domestic markets
because of unfavorable pricing policies. Poland's meat
exports, for example, fell by almost half in 1981 to
89,000 tons and dropped by another 14,000 tons in
1982. Recession in the West and heightened competi-
tion dampened demand and held down prices for most
livestock products, the region's dominant hard curren-
cy agricultural export. The average price received for
Yugoslavia's exports of canned pork to the United
States in 1983, for example, was the lowest price in
the past 10 years. With a record harvest in 1982,
Hungary, Yugoslavia, and Romania tried to market a
larger-than-normal share of grain to the West but
lower prices limited hard currency earnings. More-
over, reduced foreign currency earnings of Middle
Eastern countries limited agricultural exports to these
important markets.
Even with the falloff in exports, Eastern Europe's
hard currency agricultural trade deficit was more
than halved in 1982, declining from the record 1981
level of $4.8 billion to $2.2 billion. There were
improvements for every country, with Poland and
Romania gaining the most. We estimate the region's
total trade deficit with the West fell by an additional
$400 million in 1983. The gain resulted from contin-
ued improvement by net-importing countries. Prelimi-
nary data indicate that Poland cut its deficit by an
additional $500 million, Yugoslavia by $100 million,
and Czechoslovakia by $40 million. Net exporters
Bulgaria and Hungary, however, saw their surpluses
narrow by some $40 million and $200 million, respec-
tively.
Other Trade Adjustments
The East Europeans also tried to address their finan-
cial problems through unconventional trade arrange-
ments. Most countries tried to obtain financing from
new or secondary suppliers, but on balance their
efforts met with little success. The only exception has
been East Germany, which purchased grain from
Canada and Austria on the basis of government-
backed credits and sharply increased purchases of
grain and oilmeal from West Germany, taking advan-
tage of special credit facilities available in intra-
German trade. In general, however, most major ex-
porters of grain and oilseed products-Australia,
Argentina, France, and Brazil-were reluctant to
offer credits, either because of their own inability to
extend credit or because of doubts about Eastern
Europe's creditworthiness. Lacking financing from
major suppliers, Eastern Europe turned to nontradi-
tional and relatively minor suppliers-Great Britain,
Spain, South Africa, and Sweden-for grain pur-
chases.
Most East European countries also stepped up efforts
to secure countertrade deals. Although it is difficult to
assess the significance of countertrade in securing
agricultural imports, we believe that such transactions
have been only moderately successful:
? Romania has been the leading proponent of counter-
trade, telling Western suppliers that without credits
they could import agricultural goods only if West-
ern companies were willing to accept such items as
cement, fertilizer, chemicals, and textiles in
exchange.
? Poland was able to barter 500,000 tons of coal for
160,000 tons of French wheat in late 1982.
? Yugoslavia has entered into arrangements with
large Western grain firms to import soybeans, oil-
meal, fishmeal, and sunflower seeds for cash equal
to that earned from exports of Yugoslav corn
through Western firms.
Eastern Europe has been successful in obtaining some
commodities-coffee, tea, spices, sugar, vegetable
oils, fruits-from less developed countries (LDCs) in
exchange for exports of manufactured goods. Barter
deals with the West, however, offer less hope for
obtaining large quantitites of grain and high-protein
feeds: Because markets for East European industrial
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Reducing Domestic Requirements
Eastern Europe has implemented various measures to
adjust demand to reduced imports and to free up
domestic production for export. Large food price
hikes, particularly for rneat, were announced in most
countries over the past three years, and selective
rationing was begun, most notably in Poland, Roma-
nia, and Yugoslavia. Grain requirements were slashed
by slaughtering livestock or by slowing down the
planned growth of livestock numbers. The grain con-
tent of feed rations was reduced while herd composi-
tion has been changed to emphasize growth in cattle
and other ruminant animals while cutting back inven-
tories of hogs and poultry, large consumers of grain.
Wheat supplies were stretched by increasing flour
milling rates and by substituting rye for wheat in
baking bread.
Measures to limit demand have been effective in most
countries. Reductions in animal numbers and lower
quality feed. rations saved an estimated 8 million tons
of grain in 1981-82. Despite increases in wages and
social benefits in many countries, sharp price hikes
increased the real cost of food. Higher meat prices in
Poland in 1982, for example, reportedly put the full
ration allowance beyond the reach of many consum-
ers, and surveys showed that Polish expenditures for
food had increased to as much as 70 percent of total
household expenditures. In Czechoslovakia, rising
prices have reduced per capita meat consumption
from 86 kilograms in 1980 to 80 kilograms in 1983. In
Hungary, price increases on grain products, chocolate,
and confectionery goods have reduced per capita
consumption of these items by roughly 5 percent.
While import restraint has provided ashort-term
solution to Eastern Europe's financial problems,
measures to reduce domestic demand have entailed
economic and political costs. Most of the savings have
not been achieved through reductions in waste or
through increased production efficiency, but rather by
limiting raw material inputs and by squeezing con-
sumer supplies.
Impact on Supply
Eastern Europe has achieved greater self-sufficiency
in the past two years largely at the expense of current
and future output, lower productivity, and higher
production costs:
? Adjustment measures have led to feed shortages,
which in turn have reduced livestock yields and
output. The value of the region's total livestock
output fell by 4.5 percent in 1981 and by 2.5 percent
in 1982. Meat output in 1982 declined some 3
percent; milk and egg production each declined 2
percent. The loss of meat output over the past two
years would have been greater had distress slaugh-
tering not increased supplies.
? Import cuts have reduced the availability of fertiliz-
ers, herbicides, fungicides, and pesticides, which in
turn has depressed crop yields, particularly for
many nongrain crops such as sugar beets and
sunflowers.
? Interruptions or restrictions on raw material imports
have caused many agriculturally based industries-
meat processing, textiles, leather, footwear, oilseed
crushing, and feed mills-to shut down at times or
to operate substantially below capacity thus raising
production costs sharply.
Curtailing imports also has diminished returns to past
investment, particularly in livestock production and
processing. Animal inventories, for example, fell
sharply in the northern countries in 1981-82. The
situation remains most serious in Poland where hog
numbers dropped about 9 percent in both 1982 and
1983, leaving early 1984 hog inventories about one-
fourth below 1979 levels.
Interruptions in feed supplies jeopardize the effort
made to "industrialize" livestock production. Return
on investment in modern, capital-intensive livestock
facilities, equipment, and breeding animals depends
on supplying animals with a continuous well-formu-
lated feed ration. Poland's broiler industry, for exam-
ple, almost entirely dependent on imported corn and
soybean meal, suffered large losses in 1982 when the
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~onnaent~a~
United States cut off CCC credits for grain pur-
chases. Polish authorities claim that cutbacks in grain
and oilmeal imports have reduced poultry output over
the past two years by almost three-fourths and output
of pork on industrial farms by 17 percent. Because.
Yugoslavia, Romania, Hungary, and Poland have all
invested heavily in large projects to produce livestock
for export to Western markets, feed shortages could
endanger future export earnings.
Increased Consumer Discontent
The decision of most East European regimes to
depress domestic food consumption has produced
some increase in consumer discontent. Consumer
grumblings have been widespread-most notably in
Poland and Romania-as price hikes and long queues
have become more common and rationing tightened.
Consumers are well aware that exports of food, meat
in particular, have been pushed while domestic needs
are unmet. Worker morale and productivity also have
`been affected. According to embassy and press re-
ports, food shortages have resulted in spontaneous
worker protests including work stoppages, threats to
strike, and increased absenteeism in Poland and Ro-
mania and to a lesser extent in East Germany.
Nonetheless, East European authorities have defused
troublesome situations-particularly during major
holiday seasons-by releasing food from state reserves
and, in a few instances, by allowing imports of luxury
food items.
We believe that the adjustment phase in Eastern
Europe's agricultural trade with the West is coming
to an end. Further reductions in agricultural imports
seem unlikely for most countries, and the region's
agricultural trade deficit probably will begin to widen.
The level of these imports will depend on the interac-
tion of several key factors-the size of the domestic
harvest, the availability of Western credits, the inten-
sity of consumer discontent, the sensitivity of the
regimes to these complaints, and competing demands
for hard currency. We expect purchases of agricultur-
al commodities will remain at least at the 1982-83
level or, more likely, will show a slight increase.
Although we anticipate some improvement in agricul-
tural exports, increases in imports are likely to out-
Prospects for Supply and Competing Demands
While poor agricultural performance in the next few
years would increase import requirements, good har-
vests probably would not allow for a reduction in
imports. A repetition of the poor harvests of the late
1970s would increase Eastern Europe's need for
Western agricultural goods dramatically because
there is now little "fat" left to cut out of consumption.
A continuation of recent above-average harvests, on
the other hand, would not give the regimes much
leeway for further import reductions. The regimes
must continue importing at roughly the 1982-83 rate
simply to stabilize current consumption levels. A
decision to increase consumption would require, in
turn, a rise in imports.
Even with good harvests, Eastern Europe needs siz-
able imports to obtain commodities that cannot be
produced domestically (for example, citrus fruits,
coffee, and cocoa) and to recoup some of the losses
caused by recent import cuts. Imports are needed to
supplement domestic production of oilseed products,
corn, hides; tobacco, cotton, and sugar because cli-
mate and deficiencies in agrotechnology.tyill prevent
major increases in domestic output of these commod-
ities. The region's grain requirements, in particular,
are likely to rise because of the distressed situation in
the livestock sector and the need to rebuild herds.
Poland, for example, plans to triple imports of protein
feeds in 1984 because the lack of such feeds was a
major cause of declining livestock inventories in 1983.
To reduce dependence on imports, most countries plan
to increase crop output more rapidly than livestock
output in 1981-85. Most regimes are counting on
productivity gains to increase output because invest-
ment funds and the area available for expanding crop
production are limited. These plans, however, are
unlikely to succeed. Attempts to stimulate output
through higher producer prices and improved services
to the agricultural sector have fallen short in the past.
The regimes typically have failed to sustain economic
stimulus necessary for a significant improvement in
output. Even if favorable weather permits above-
average grain harvests, output is likely to fall short of
demand, and the region will remain dependent on
imports
pace export gains in the future.
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Because import cuts during the past three years have
affected all sectors, East European planners must
balance the need for increased agricultural imports
against demands for more capital goods, spare parts,
chemicals, steel, nonfood consumer goods, and so
forth. Heavy industry's needs for more investment
and inputs almost certainly are as pressing as those of
agriculture and the food industry. Producers of food
and clothing, nonetheless, can make a strong case for
their requirements not only because they help satisfy
domestic consumers, but also because they are major
hard currency earners. These arguments should en-
sure some priority funding for raw material imports
needed in the production of textiles (wool and cotton),
footware (hides and skins), and meat (grain and oil
meal).
Availability of Western Credits
Credits to purchase agricultural commodities, grain in
particular, are now more readily available than in
1981-83, but resumption of large-scale borrowing is
unlikely, in our view. According to press
reports, commercial bankers have regained
some confidence in the region's creditworthiness and
are extending more trade loans. The bankers, howev-
er, are reluctant to accept large increases in exposure
and are demanding tough terms on new loans. In
addition, Western governments are extending credits
and credit guarantees to support sales of agricultural
products (see inset).
East Germany and Hungary appear to be taking
advantage of the improved lending climate. Western
banks, including some US banks, have recently shown
a greater willingness to extend new loans for grain
purchases to East Germany. In early March 1984,
Hungary's state-owned agricultural trading company
received a $135 million loan from Western banks to
purchase imports needed to produce hard currency
agricultural exports. Because of their generally good
credit rating, Czechoslovakia and Bulgaria should be
able to raise loans needed for agricultural purchases.
Poland and Romania, on the other hand. are not likely
to see any significant improvement in credit availabil-
ity.
Consumer Pressures
Although the political fallout from tight food supplies
has been minimal, most regimes probably do not want
O~cia! Credits jor Agricultural Purchases
Many Western governments have shown a willingness
to extend oj~cial credits to Eastern Europe either for
political reasons or tofnd markets for surplus grain.?
? Canada appears particularly anxious to expand its
sales to Eastern Europe through the use ojgovern-
ment-backed commercial credits. In September
1983, Ottawa and East Berlin signed along-term
grain agreement callingjor East German purchases
of 1 million tons per year in 1984-86 f nanced by
ojfcially guaranteed credits. Press reports indicate
that Canada also has pursued talks with Romania
on a two-year agreement.
? Although only a small supplier, Austria, in our
view, will continue to use government-backed cred-
its to ring up sales to Eastern Europe.
? Despite refusing to renew its long-term agreement
with Poland, France is providing Warsaw with
short-term government guarantees jorfnancing
grain sales.
the credits were promised before imposition of
martial law, and Paris will maintain them as long
as Poland keeps payments current. Although con-
cerned about East Germany's creditworthiness, .
France reportedly will continue to extend guaran-
tees jor grain shipments.
? West Germany apparently has been encouraging
domestic commodity traders to provide credit lines
to East Germany.
? US CCC credits are available to Yugoslavia and
Hungary. Because ojjunding limits, however, CCC
(nancing will be more limited in fiscal year 1984
than in the previous year. Hungary has been allo-
Gated only $15 million ojits $76.5 million request
and Yugoslavia,$125 million oI its original $341
million request.
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to risk further reductions in consumption. Two years
of declining food supplies have left little room for belt
tightening, making further reductions in consumption
more risky. Such considerations, in our judgment,
argue against a further cut in imports and could result
in an increase.
The regimes do not want to reach the "trigger point"
that could produce more overt consumer unrest and
are likely to be very sensitive to signs of dissatisfac-
tion. The Polish Government, for example, recently
bowed to public pressure and imposed smaller food
price increases than it had originally planned. Roma-
nia, on the other hand, seems intent on squeezing the
consumer even harder but has, according to press
reports, established special food reserves for Bucha-
rest and coal-mining centers where labor unrest has
broken out in the past. Because the other East
European countries are better able to afford imports
than. either Poland or Romania, their leaderships are
even more likely to offer some concessions to consum-
ers in the form of improved food supplies.
Export Prospects
If Eastern Europe is to afford more imports and
sustain improved trade performance, the region must
revive exports of food and agricultural raw materials.
The following factors will shape Eastern Europe's
export prospects:
? The strength of economic recovery in the West,
including that of the food deficit, oil-exporting
countries of the Middle East.
? The region's success in reducing restrictive Western
trade barriers, particularly those of the European
Community (EC).
? The ability and willingness to divert domestic out-
put and imports toward export.
? The ability of FTOs to be more competive in world
markets.
? Pressures exerted by the USSR for more deliveries
of agricultural products
The region can probably expect some growth in
exports, but booming sales seem unlikely. Developed
Western economies are beginning to recover,
strengthening Eastern Europe's export opportunities.
In addition, prices for livestock products are expected
to rise during 1984. Nonetheless, major obstacles to
improved export performance remain. Increasing sales
to LDCs, a large growth market of the 1970s, will be
most difficult because of their own financial prob-
lems. Areduction in protectionist barriers in the
developed West seems unlikely given Hungary's fail-
ure to obtain larger beef export quotas from the EC.
Should Spain and Portugal gain entry to the EC, 25X1
additional barriers would restrict Eastern Europe's
exports of fruits and vegetables. Institutional changes
in FTOs will not produce results overnight, and
resistance to change and the lack of qualified personel
will remain serious constraints. Growing demands
from the USSR for more balanced trade may force
the East Europeans to divert goods from Western
markets
Implications for Balance of Payments, Food Supplies,
and US Exports
If our forecast of a widening agricultural trade deficit
proves accurate, Eastern Europe will face problems
maintaining, much less increasing, the hard currency 25X1
trade and current account surpluses achieved in 1983.
Agricultural trade made the largest contribution to
the region's improved hard currency balances in 1981-
83, and the capacity of other sectors to play a larger
role is uncertain. Depending on the availability of
credits and current account targets, the regimes may
well heighten pressure on nonagricultural sectors to
boost exports and to limit imports to offset an increas-
ing deficit in agricultural trade. The import needs of
these nonagricultural sectors, however, are high, and
the competitiveness of their products in the West is
weak. Efforts to place more of the adjustment burden
on nonagricultural sectors could impede industrial
modernization and growth, complicate export com-
mitments within the Council for Mutual Economic
Assistance (CEMA), and limit supplies of consumer
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East European consumers cannot expect the gains in
the quantity and quality of food supplies achieved in
the 1970s, but a severe decline in consumption seems
unlikely for most countries. Because imports will
remain below the record 1980 level and pressures to
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Continuing Food Supply Problems
in Poland and Romania
Although food supplies improved in Poland in the
last haU'4f 1983, prospects for the coming months
indicate continuing shortages and more price hikes.
Rationing oJ'meat, animaljats and butter, sugar,
JTour, and rice is expected to continue well into 1985.
With livestock herds down sharply and feed supplies
curtailed, meat output this year is expected to fall
below that of 1983. Warsaw is planning to import
100,000 tons ctJ'meat in 1984-more than haU'oj
which is reportedly to be purchased lrom Hungary
for hard currency-to maintain meat rations. Given
Poland s limited amount ojhard currency, imports of
meat this year will probably fall short ojplan, as
they did in 1983.
Romania is in the worst condition among the south-
ern countries. Bucharest has already announced that
meat rations will be lowered by 1 S percent and flour
by 13 percent in 1984. To gain tighter control over the
supply and distribution ojjood, the regime recently
announced new measures, including provisions to
expropriate land {f necessary, to force private farmers
to increase sales to the state. Although the new
measures are unlikely to increase production, they
will put a larger proportion ojavailable supplies at
the state's disposal. With exports taking precedence
over domestic needs, consumer shortages are likely to
increase.
The reluctance of US banks to extend credits to
Eastern Europe and the limited availability of CCC
financing will continue to curtail US agricultural
exports to the region. The value of US agricultural
exports to Eastern Europe dropped from $2.3 billion
in fiscal year (FY) 1980 to $827 million in FY 1983
(figure 4). We now estimate that US grain sales to
Eastern Europe in marketing year (MY) 1983-84 will
total only about 1.7-2.0 million tons compared with
the 7-million average for MY 1976-80. As a result,
the US share of the East European grain market is
expected to range between 20 and 25 percent, near
last year's level, but well below the 50-percent share
of the late 1970s. Since CCC credit guarantees are
now available only for Yugoslavia and Hungary, the
bulk of US sales will be made on a limited commer-
cial credit basis or for cash.
Although the reduced availability of US credits has
given other countries the opportunity to increase
agricultural sales to Eastern Europe, Canada will
probably remain the only major grain exporter to use
government-backed trade credits aggressively to ex-
pand its market share. Other large grain and oilseed
exporters-Australia, Brazil, and Argentina-remain
reluctant to jump in and fill the trade gap. France will
probably continue to extend some credit on a selective
basis, but Paris appears cautious about financing a
major expansion of grain sales to Eastern Europe.
While Austria stands ready to provide grain credits, it
can be only an occasional and minor supplier of grain
to the region. We expect West Germany to continue
backstopping East Germany's grain requirements be-
export will continue, domestic supplies will be tight
and further increases in food prices are likely to occur
throughout the region. The shortfalls will, we expect,
be most severe in Poland and Romania where many
foods are already in short supply and pressures to
restrict imports and boost exports are the greatest (see
inset). While the rest of the region will suffer spot
shortages of meat and dairy products, we believe the
major food problems largely will be higher prices and
reduced supplies of semiluxury foods. On the other
hand, a major crop shortfall in any country-without
an offsetting surge in imports-would probably cause
a significant deterioration in domestic food supplies.
cause of Bonn's strong interest in supporting the East
German economy and improving political ties. As a
net grain importer, however, West Germany is unlike-
ly to stake out along-term share of East Germany's
grain market and would probably reduce its role if
other financing becomes available.
We believe that US exporters could quickly recoup
much of their lost market share if US commercial and
official lenders eased their restrictions on new loans to
Eastern Europe. Some East European countries have
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Figure 4
Eastern Europe: Imports of US Agricultural Commodities,
Fiscal Years 1977 to 1983
Source: US Foreign Agrrcu/rural Trade Statistics/Reports, Fiscal Years
1977-1983, Economic Research Service, United States Department
of Agricu[ure.
threatened to boycott purchases of US grain over
what they term "discriminatory financing practices."
Most traders; however, contend that Eastern Europe
would quickly return to, the US market should credit
become available on favorable terms.
Hides and skins
Soybeans
Wheat
-Soybean meal
~ Feed grains
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Appendix A
Factors Affecting Agricultural
Trade in the 1970s
Growing Demand and Shortfalls in Production
Consumers fared well in the 1970s as consumption of
high-quality foods increased in all countries. Between
1970 and 1975, per capita consumption of meat in
Poland, for example, rose by as much as it had in the
preceding 20 years. Consumption ~of dairy products
and eggs, sugar, and vegetables and fruits also in-
creased, and there was a decline in the share of
starchy foods-grains and potatoes-in the diet (table
A-1). At the same time, consumers acquired a taste
for more expensive, semiluxury foods not produced in
Eastern Europe, such as troyical fruits, coffee, tea,
cocoa, and spices
The rapid rise in consumption occurred as a result of
rising consumer incomes and artificially stable retail
food prices. Most regimes heavily subsidized food
prices because they feared the political repercussions
of forcing consumers to bear the full costs of produc-
tion and imports. Consumer price subsidies often
amounted to at least half the retail price and for some
foods equaled the actual selling price. By the end of
the decade, food subsidies amounted to roughly 40
percent of the state budget in Poland, 10 percent in
Czechoslovakia and Hungary, and 5 percent in East
Germany
Agricultural production in the first half of the 1970s
nearly kept pace with the region's growing appetite.
Spurred by large investments in fertilizer, machinery,
improved plant varieties, and livestock breeds and
generally favorable weather, agricultural output grew
at an average annual rate of 3.9 percent in 1971-75
compared with 1.7 percent in 1966-70. Growth rates
of both crop and livestock output more than doubled.
Eastern Europe's plans for sustained growth in agri-
culture went awry after 1975. The rate of growth in
output in 1976-80 fell to less than half that achieved
earlier in the decade, largely because of a slowdown in
investment, poor incentives, bad weather, and dimin-
ishing returns to capital and technology (table A-2).
Poland was particularly hard hit as the average
annual rate of growth in agricultural output plummet-
ed from 4.1 percent in 1971-75 to 0.2 percent in 1976-
80~
A change in the composition of agricultural output
added to the imbalance between requirements and
production. Most of the growth in Eastern Europe's
agricultural output during the 1970s occurred in the
livestock sector. The growth of livestock output, with-
out acompensating increase in crop output, severely
strained the region's feed base. Increasing livestock
numbers, concentration of animal production into
large-scale "industrialized units," and the adoption of
more modern feeding practices led to more intensive
use of grain for feed. Despite a substantial increase in
domestic feed output, the region's requirements for
grain and high-protein feed supplements easily out-
paced production (see inset).
The Import Surge
Faced with a growing gap between demand and
domestic output, Eastern Europe turned to foreign
suppliers of agricultural commodities. Between 1970
and 1980, the value of Eastern Europe's agricultural
purchases-from both Western and non-Western
sources-grew from $3.4 billion to $12.7 billion.
Much of the import growth centered on feedstuffs to
meet the needs of the livestock sector. Purchases of
grain, oilmeal, and oilseeds doubled, accounting for
more than 40 percent of the growth in Eastern
Europe's agricultural imports (table A-3). The share
of grain and feedstuffs in the total value of agricultur-
al imports rose from nearly 25 percent in 1970 to
approximately 36 percent in 1976-80 (figure A-1). By
the late 1970s, imports accounted for nearly 12
percent of the region's total grain consumption and
roughly two-thirds of all high-protein feeds, with
particularly heavy reliance on foreign feedstuffs in the
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Table A-1
Eastern Europe: Trends in Per Capita
Consumption of Livestock and
Cereal Products
Meat and meat products-
including offal and fats
(kilograms, in meat
equivalent)
Romania
NA
31.2
45.7
62.0
Bulgaria
32.7
43.7
60.6
64.9
Hungary e
47.6
58.1
68.5
71.7
East Germany e
55.0
66.1
77.8
89.5
Poland
49.9
61.2
78.4
82.1
Czechoslovakia a
56.8
71.9
81.1
85.6
Yugoslavia
29.8
35.6
48.3
54.0
Milk and dairy products-
including butter (kilograms,
injresh milk equivalent)
Romania b
NA
111
133
180
Bulgaria
126
161
198
234
Hungaryb
114
110
127
166
East Germany
101
106
108
NA
Poland
363
413
432
451
Czechoslovakian
173
196
210
233
Yugoslavia
80
79
93
111
Eggs (pieces)
Romania
NA
142
214
270
Bulgaria
84
122
146
204
Hungary
160
247
274
317
East Germany
197
239
269
189
Poland
143
186
209
223
Czechoslovakia
179
277
297
316
Yugoslavia
66
141
166
190
Grain products (kilograms,
in Jlour equivalent)
Romania
NA
173
167
NA
Bulgaria
190
174
162
160
Hungary
136
128
122
115
East Germany
102
97
95
95
Poland
145
131
120
127
Czechoslovakia
126
113
108
107
Yugoslavia
186
184
183
179
a Excludes fat.
n Excludes butter.
Sources: CEMA Statistical Yearbook 1982; for Romania, Scinteia,
13 June 1978, and Era Socialista, 5 May 1981; for Yugoslavia,
Statistical Pocket Book, 1982.
Table A-2
Eastern Europe: Average Annual Rate
of Growth in the Value of Agricultural Output
1.0 2.1 0.6
2.1 4.8 2.2
northern countries.? Roughly 25 percent of the grain
consumed in these countries came from abroad, and
20 to 30 percent of their meat production depended
upon imported feedstuffs. Semiluxury commodities
were the second major growth area in agricultural
imports, and their volume rose by more than 65
percent between 1970 and 1980.
The import surge burdened Eastern Europe's hard
currency accounts because only exporters in the devel-
oped West and Third World could meet the region's
rising needs for feedstuffs and semiluxury goods. The
West displaced the USSR as the major agricultural
supplier to Eastern Europe, supplying nearly three-
fourths of the increase in Eastern Europe's agricultur-
al imports during the 1970s. By 1980, the developed
countries and the LDCs were meeting roughly two-
thirds of the region's import requirements compared
with about one-half in 1970. Beset by growing domes-
tic requirements and production problems of its own,
the Soviet Union's share in East European imports fell
from about 30 percent in 1970 to just under one-tenth
in 1980
Abundant Financing
Easy access to Western private and government-
backed credits fueled the boom in hard currency
agricultural imports. Eastern Europe's decision to
`The northern countries are Pbland, Czechoslovakia, and East
Germany. The southern countries are Romania, Bulgaria, Hunga-
ry, and Yugoslavia. The two groups are discussed separately
because they differ in climatic conditions, natural resources, agri-
cultural development, and degree of self-sufficiency in agricultural
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The rise in Eastern Europe s grain consumption and
imports during the 1970s resulted from expansion of
livestock output. Livestock numbers increased by
more than 20 percent between 1970 and 1980 with
inventories 4f'hogs and poultry-large consumers oI
grain-rising by more than SO percent. Grain con-
sumed as.1eed increased at an average annual rate 4f
4.3 percent between 1970 and 1980 while domestic
production rose by only 1.9 percent annually. By the
late 1970s grain utilized Jor livestock feed averaged
about 70 million tons annually, or roughly two-thirds
c~J'the region's total grain consumption.
The growing gap between feed supplies and require-
ments boosted the region's grain imports Jrom 8.2
million tons in 1970 to a record 18.7 million tons in
1980. Because ct1'increased feed requirements, im-
ports ct1'coarse grains-corn, barley, oats, and sor-
ghum-accounted for almost 82 percent ojthe in-
crease. By 1978 corn had displaced wheat as the
leading grain import
Dependence on grain imports varied sign~cantly by
region and country. The northern countries normally
accounted for all ct1'the region's net grain imports
while the southern countries, with the exception ctj'
Yugoslavia, were traditionally net exporters. Poland
was the largest importer gJ'grain and gjter 1975
received roughly one-haUc~1'the region's net im-
ports-much 4I'the growth serving Warsaw's meat
exports. East Germany and Czechoslovakia were the
second- and third-largest importers. By the late
1970s imports accounted for roughly 25 percent of
total grain consumption in the northern countries (see
table B-1 J.
upgrade food production and consumption coincided
with the onset of detente when Western governments,
farmers, commodity traders, and bankers were anx-
ious to boost sales through generous credit extensions.
As the 1970s progressed, most East European coun-
tries directed an increasing share of trade credits to
the purchase of agricultural commodities, particularly
grain and feedstuffs. Poland, for example, reported
To satiny its requirements, Eastern Europe had to
turn toward the developed West. The United States
and the European Community increased their East
European grain market shares largely at the expense
c~'the USSR and Argentina (see table B-2). The
USSR, which until 1976 supplied more than haU'oJ
the region's wheat imports, has been only a sporadic
supplier in recent years because c21'its own harvest 25X1
problems. Argentina figured prominently in the re-
gion's wheat imports only in 1977 when it supplied
nearly 20 percent cd'requirements.
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The United States has been Eastern Europe's major
supplier of feed grains since the mid-1970s and the
only sign cant supplier 41'corn, which accountslor
more than 60 percent oJ'the region's coarse grain 25X1
imports. By 1980 the US share oJ'Eastern Europe's
coarse grain imports had reached 70 percent.
The increase in grain imports has been accompanied
by a steady rise in imports c~1'oilseeds and oilseed 25X1
meal. Between 1970 and 1980 the volume g1'these
imports rose 225 percent. As with grains, Poland was
the primary importer ojoilmeal followed by East
Germany and Czechoslovakia. Brazil and the United
States supplied roughly 70 percent ojthe region's
oilmeal imports. Secondary suppliers included the
EC and India. Soybean meal, largely derived from
US soybeans, constituted the bulk aT EC exports. In
the case cd'India, peanut meal was the ma,/or oilmeal
export.
that 15 percent of its trade credits in 1976 were
utilized for grain and fodder imports; by 1980, the
share had risen to more than 20 percent. ~
Major grain-exporting countries worked hard to de-
velop markets in Eastern Europe, often offering subsi-
dized financing. Both France and Canada extended
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Table A-3
Eastern Europe: Imports of Grain and Feedstuffs a
Sources: Statistical yearbooks of the various countries; CEMA
Statistical Yearbook, 1982; and FAO trade tapes, 1981.
credits for grain purchases under long-term agree-
ments with Poland. US Commodity Credit Corpora-
tion export financing greatly facilitated US agricul-
tural sales. Between fiscal years 1970 and 1982, US
agricultural exports to Eastern Europe financed under
CCC sales programs totaled more than $3 billion with
more than $2.5 billion in credits going to Poland
(figure A-2).
Poor Export Performance
The sharp decline in export performance with the
West during the latter 1970s dealt a severe blow to
the region's effort to control hard currency deficits.
The failure to boost sales of agriculture goods to hard
currency markets was particularly troublesome be-
cause, relative to industrial goods, Eastern Europe's
food exports traditionally had been well received in
Western Europe. Poor export performance can be
attributed to several factors:
? A trend toward stable world prices for many agri-
cultural goods.
? Slower growth of supplies available for export be-
cause of declining growth rates of output and rising
rates of domestic consumption.
? Protectionist restrictions applied by the European
Community.
? The inability of foreign trade organizations to react
These factors affected all of Eastern Europe's major
agricultural exports-fruits and vegetables, wines,
tobacco, and grains-but they hit particularly hard at
livestock products, the dominant hard currency agri-
cultural export. After rising rapidly in the early
1970s, export prices for meat and slaughter animals
stagnated in the second half of the decade because of
waning demand in the West and a glut on world
markets. Eastern Europe suffered aterms-of-trade
loss because prices of the region's imports, particular-
ly feedstuffs, generally rose throughout the decade
(table A-4)
Export supplies of livestock items were squeezed-
most notably in Poland-by the slowdown in the
growth of livestock output and by increased domestic
consumption. In Poland exports of canned meat fell
from roughly 42 percent of total production in 1970 to
18 percent in 1980. A noticeable exception to this
trend was Hungary, which translated increased agri-
cultural imports and investment into export growth.
Hungarian food exports increased approximately
three times faster than agricultural output, and for
several commodities-poultry, live cattle, and
sheep--exports equaled almost half of total produc-
tion.
quickly to changing world market conditions.
? Pressures to increase deliveries to the USSR.
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Figure A-1
Eastern Europe: Commodity Shares of Total Agricultural
Imports and Exports, 1976-80 Average'
Other
Oilseeds-2.7
Sugar and
honey
skins
Livestock
products
Beverages
Fruits and
vegetables
Feedstulls
Plant and
ariimal fiber
Coffee, tea,
and spices
Figure A-2
Poland's Dependence on US Official Credits
To Finance Purchases of Agricultural Commodities,
Fiscal Years 1970 to 1981
Million US $
Oilseeds-1.0
Cereals
Animal and ,~~~ I iIG'III~'gp,~'VI a-I ~u Ig~Iri~16111111"; Fruits and
vegetable oils , , IVI~ IVllll~~lliw ~?`' ,~~i ~~ifVl",'IuLI~iIV11ihIV.o vegetables
Sugar and
honey
Beverages
and tobacco
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Table A-4
Eastern Europe: Export and
Import Price Indexes for
Selected Agricultural Products
lndex:1970=100
1970
1973
1975
1977 1980
Imports
Grain
100
143
220
191 254
Oilmeal and cake
100
231
180
~ 250 252
Oilseeds
100
155
239
228 227
Coffee, tea, cocoa,
and spices
100
123
162
419 372
Citrus fruits
100
128
153
177 278
Exports
Live animals
100
186
143
165 187
Meat and meat
preparations
100
163
141
171 208
Dairy products and
eggs
100
141
188
236 325
Source: Calculated from FAO trade tapes, 1981 edition. Unweight-
ed average.
The region's exports were dealt a severe blow in 1974
when the EC imposed tight restrictions on imports of
beef and slaughter cattle. As a result, Hungary's
exports of live cattle and beef fell from approximately
36 percent of its agricultural sales to the developed
West in 1973 to some 7 percent of sales in 1975. The
same restrictions also curtailed Polish and Romanian
exports. The EC's trade barriers continued to hamper
East European efforts to increase sales of meat and
other commodities through the rest of the decade.
Eastern Europe's increased food exports to the Soviet
Union in the late 1970s presumably contributed to
declines in the growth rate of sales to the West. Poor
harvests in the USSR and the rising costs of Soviet
energy deliveries found Moscow putting greater pres-
sure on the East Europeans to step up deliveries. We
cannot, however, readily measure the extent to which
the increased exports to the USSR came at the
expense of sales to the West or, more important, at
the expense of hard currency earnings. To some
extent, the USSR served as an outlet for East Europe-
an production that could not be sold in the West
because of weak demand and trade restrictions. Qual-
ity control, sanitary inspection, and refrigerated
transport requirements hampered Eastern Europe in
marketing many agricultural goods, livestock prod-
uots in particular, in the West. Very few of these
restrictions applied to goods exported to the USSR.
Moreover, the East Europeans received hard currency
or hard goods from the Soviets for some of their food
shipments. Moscow, for example, agreed to buy Hun-
garian beef and slaughter cattle for hard currency
after Budapest was shut out of the EC market in
1974. In all likelihood, the Hungarians bartered
agricultural goods for above-plan deliveries of Soviet
oil and raw materials as well. Romania also paid for
purchases of Soviet oil through agricultural exports to
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Appendix B
The Regional Pattern of Eastern
Europe's Agricultural Trade
Agricultural trade between Eastern Europe and the
developed West assumes very different degrees of
importance for the two regions. The developed West
has supplied nearly half of Eastern Europe's agricul-
tural imports and has absorbed roughly 35 percent of
its exports since the mid-1970s. Eastern Europe, on
the other hand, supplies only 2 to 3 percent of the
developed West's agricultural imports and is a market
for only 3 percent of its exports.
Western Europe
Western Europe is Eastern Europe's most important
trading partner in the developed West. In 1980
Western Europe accounted for slightly more than
one-half of the developed West's agricultural sales to
Eastern Europe while taking 85 percent of East
European exports to the developed West (tables B-1,
B-2, B-3). Western Europe's importance as a supplier
to Eastern Europe has declined, however, since the
early 1970s. Increased imports of grain and feedstuffs
nearly doubled the combined market share of the
United States and Canada over the past decade while
Western Europe's share fell by roughly one-third. ~
The EC's protectionist measures on agricultural im-
ports have been very troublesome to Eastern Europe,
because of the region's heavy reliance on the West
European market. In 1974, for example, the EC
imposed discriminatory restrictions on imports of beef
and cattle. As a result, Hungarian exports of these
goods fell from roughly $175 million in 1973 to $29
million in 1975. Similarly, Yugoslavia's meat exports
to Greece were reduced by about $80 million in 1981,
and Hungary lost $40 million in sales as a result of
tariff and quota restrictions applied when Athens
joined the EC. Quotas for wine, tobacco, fruits, and
berries have also restricted East European access to
the EC markets.
The United States
Agricultural commodities dominate US trade with
Eastern Europe, accounting for approximately two-
thirds of all US exports to the region and about one-
fourth of US imports (table B-4). As a share of total
exports to individual countries, agricultural commod-
ities have constituted more than 90 percent of US
sales to East.Germany but only 25 to 40 percent of
exports to Yugoslavia and Hungary. In value terms
Poland traditionally has been the largest customer of
US exports, taking about one-third of all US agricul-
tural exports to Eastern Europe from 1977 to 1981.
Eastern Europe's share in total US agricultural ex-
ports has averaged about 5 percent. US sales to the
region rose steeply from approximately $600 million
in 1977 to a record $2.0 billion in 1980 before
dropping sharply in 1981-82. Grains, soybeans and
soybean meal, cattle hides, and cotton account for
nearly all US agricultural exports. US agricultural
imports from Eastern Europe-roughly $280 million
in 1981-are comprised largely of processed meats,
vegetable products, and tobacco. Poland, Yugoslavia,
and Hungary supply nearly all East European agricul-
tural goods to the United States.
25X1
Favorable financing from the US Commodity Credit
Corporation has greatly facilitated US exports to
Eastern Europe. Since the mid-1950s, US agricultural
sales to the region financed under CCC programs
have totaled more than $4.5 billion, with more than
half that occurring between fiscal years 1977 and
1982. In FY 1981, CCC credits financed a record
$693 million in sales to Eastern Europe, about 40
percent of all US exports to the region. Poland has
received the lion's share of CCC financing, roughly
$2.6 billion in direct credits and credit guarantees
between FY 1970 and FY 1982 or more than 80
percent of all CCC-financed sales to Eastern Europe.
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Table B-1
Eastern Europe's Agricultural Trade
With the Developed West a
1970
197$
1980
Total b
100.0
100.0
100.0
United States
23.8
3$.$
42.2
Canada
2.8
9.6
6.4
Australia
0.2
0.$
0.1
Japan
0
1.4
0.2
Western Europe
73.2
$2.8
$1.1
EC Nine
$2.4
31.3
37.1
Netherlands
$.6
4.2
3.3
Belgium/Luxembourg
1.7
0.6
0.$
France
8.6
$.3
11.1
Germany
21.0
8.7
9.6
Italy
7.1
$.9
2.8
Denmark
$.1
4.0
3.0
United Kingdom
2.8
2.6
$.8
Ireland
~.$
NEGL
1.0
Other Western Europe
20.8
21.6
14.0
Austria
2.1
2.4
2.2
Finland
0.7
NEGL
0.1
Sweden
1.3
3.6
1.2
1970
197$
1980
100.0
100.0
100.0
8.2
11.2
12.1
0.4
0.6
0.4
0.2
0.2
0.4
1.3
2.0
2.3
89.9
86.0
84.9
72.$
64.8
61.9
2.7
2.2
2.6
1.9
2.8
2.4
6.6
9.8
7.$
22.2
22.4
24.7
2$.0
21.4
20.7
0.8
0.8
0.8
13.0
$.3
3.2
0.3
0.1
NEGL
17.4
21.2
23.0
$.6
6.8
7.4
0.7
0.8
1.0
2.7
2.3
2.8
a OECD 19. Agricultural trade is based on the United Nations'
Standard International Trade Classification (SITC): 0-food and
live animals; 1-beverages and tobacco; and 4-animal and vegeta-
ble oils and fats.
b Because of rounding, totals may not add.
Romania, Yugoslavia, and Hungary received $260 Trade With Developing Countries
million, $233 million, and $17 million between FY
1970 and FY 1982. East Germany, Czechoslovakia, Prior to the 1970s, East European agricultural trade
and Bulgaria have not been eligible for the program with the Third World centered almost exclusively on
because of failure to comply with human rights deliveries from the developing countries. The East
provisions of the 1974 Trade Act. Poland's eligibility Europeans typically sold machinery and equipment on
was revoked in 1982 as a result of that country's medium-_ and long-term credits and received payment
imposition of martial law
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Table B-2
Eastern Europe's Agricultural Imports From the
Developed West, 1976-80 Annual Average a
a OECD 19, SITC categories 0, 1, and 4.
b Because of rounding, totals may not add.
in kind in the form of agricultural raw materials and to North African and Arab countries. The Middle
foodstuffs. In the 1970s the LDCs became a more East is also a major market for Romanian and
important market for East European agricultural Bulgarian exports of meat and live animals for
goods. The LDC share of East European agricultural slaughter, especially sheep and lambs
sales stood at approximately 10 percent in 1980,
roughly double that of 1970. The growth reflected, in Despite growth in exports over the last decade, East-
particular, increased exports to the oil-producing ern Europe continues to run large deficits in agricul-
countries of the Middle East. These countries devel- tural trade with the LDCs. Imports of many tropical
oped a strong demand for high-valued livestock prod- commodities-such as coffee, cocoa beans, and citrus
ucts-red meat, slaughter animals, poultry meat, and fruits-as well as oilmeal and grain rose rapidly
eggs and dairy products. More than half of Hungary's
exports of slaughter cattle, for example, are directed
23 Confidential
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Table B-3
Eastern Europe's Agricultural Exports to the
Developed West, 1976-80 Annual Average a
Bulgaria
Czechoslovakia East
Germany
Hungary
Poland
Romania
Yugoslavia
Total n
100.0
100.0
100.0
100.0
100.0
100.0
100.0
United States
10.9
3.6
0.2
5.2
22.3
10.0
16.5
Canada
0.5
0.0
0.0
0.6
0.6
0.5
0.3
Australia
1.0
0.1
0.0
0.2
0.1
0.6
0.4
Japan
4.7
13.1
3.7
0.5
1.2
1.2
1.0
Western Europe
83.0
83.4
96.1
93.6
75.8
87.9
81.8
EC Nine
54.7
58.0
75.6
66.7
63.7
61.0
58.1
Netherlands
2.7
3.7
2.5
3.2
2.3
4.3
1.3
Belgium/Luxembourg
1.4
5.1
17.8
1.5
2.4
0.5
0.9
France
10.4
3.6
40.1
6.3
9.9
9.0
4.7
West Germany
23.6
36.5
26.3
24.6
26.4
19.5
Italy
13.1
6.4
11.9
26.4
15.8
17.5
29.4
Denmark
1.1
0.4
2.7
0.6
1.9
0.1
0.2
United Kingdom
2.4
2.3
0.6
2.4
6.8
3.2
2.1
Ireland
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Other Western Europe
28.3
25.4
20.5
26.9
12.1
26.9
23.7
Austria
10.2
12.3
10.8
10.3
2.9
8.9
4.2
Finland
2.3
0.0
0.4
1.2
0.7
0.8
0.2
Sweden
2.7
2.0
1.6
2.5
3.2
3.8
1.0
Spain
0.9
1.3
6.3
1.1
0.8
4.8
0.3
Norway
0.4
1.3
0.0
0.2
0.6
0.8
0.2
Switzerland
3.5
6.5
1.0
7.9
1.9
4.5
2.3
Greece
8.3
2.0
0.4
3.7
2.0
3.3
15.5
a OECD 19, SITC categories 0, 1, and 4.
s Because of rounding, totals may not add.
during the 1970s as the regimes tried to improve the
assortment of foods available to consumers. The LDC
share of Eastern Europe's total agricultural imports
rose from 16 percent to roughly 21 percent between
1970 and 1980.
Most LDCs favor increasing agricultural trade with
Eastern Europe. Until very recently, Eastern Europe
has been a growing and relatively stable market for
many of their basic exports. This contrasts sharply
with the many tariff and quantitative restrictions
faced by the Third World in exporting commodities to
Western markets. Many LDCs, particularly those of
Latin America, have concluded with East European
long-term bilateral trade arrangements that include
agricultural commodities.
USSR
The USSR increased in importance as a market for
Eastern. Europe's foodstuffs during the 1970s while it;c
role as a supplier diminished. Exports to the USSR
more than quadrupled between 1970 and 1980, in-
creasing the Soviet share of the region's exports from
25X1
25X1
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~,unuuenuai
Table B-4
Agricultural Commodities, Share of Total
US Exports to Eastern Europe, 1976-818
percent of its agricultural exports to the USSR,
Hungary about 30 percent, and Romania roughly 20
Eastern Europe
71.3
57.3
57.8
69.8
69.4
66.5
Bulgaria
73.0
11.2
83.0
72.6
80.6
79.1
Czechoslovakia
90.2
82.8
75.4
92.1
87.0
75.1
East Germany
98.4
98.1
92.6
95.1
95.5
96.7
Hungary
35.5
51.4
53.9
34.0
37.7
16.6
Poland
77.6
67.5
74.8
82.6
81.4
87.2
Romania
68.6
45.5
47.4
67.8
65.4
75.3
Yugoslavia
13.3
19.9
23.4
40.7
38.0
22.6
Including estimated transshipments through Belgium, Canada,
East Germany, and the Netherlands.
Source: Eastern Europe: Review q/'Agriculture in 1981 and
Outlook jor 1982, Economic Research Service, United States
Department of Agriculture, Supplement 3 to WAS-27.
26 percent to roughly 33 percent. By contrast, the
value of imports from the USSR increased only
marginally during the 1970s. The Soviet Union sup-
plied about one-fourth of Eastern Europe's agricultur-
al imports in 1970, but only 9 percent in 1980. (u)
The increase in exports to the USSR and stagnation
in imports largely reflects poor Soviet harvests and
Moscow's own attempts to improve food supplies. As a
result of the differing trends, Eastern Europe's agri-
cultural trade balance with the USSR shifted from a
$208 million deficit in 1970 to a $1.8 billion surplus in
1980.
Livestock products dominate Eastern Europe's agri-
cultural trade with the Soviet Union. Collectively, the
region provides roughly 40 percent of total Soviet
meat imports and approximately 65 percent of total
Soviet egg and egg product imports. Fruits and
vegetables, wine, grain, and tobacco products are
other important agricultural exports to the USSR.
Bulgaria, Hungary, and Romania account for roughly
90 percent of the region's deliveries to the USSR. In
the last half of the 1970s, Bulgaria directed about 55
percent
total Polish imports.
Intra-East European Trade
In contrast to the changing pattern of trade with the
USSR, trade among the East European countries in
agricultural commodities has remained relatively sta-
ble. Intra-East European trade averages roughly 15
to 20 percent of the region's total agricultural trade
turnover. Grain, fruits and vegetables, and meat are
among the commodities most frequently traded within
the region. Hungary is the leading exporter, followed
by Bulgaria and Romania. East Germany and
Czechoslovakia are net importers of food and raw
materials within the region. In 1980 each was depend-
ent on the region for roughly 20 percent of its total
imports. In 1978 Poland became a net importer of
agricultural products within the region for the first
time since the mid-1960s; imports from other East
European countries accounted for about 7 percent of
Intra-CEMA Hard Currency Trade
An unusually large portion of agricultural trade with-
in CEMA, particularly trade with the Soviets, in-
volves hard currency payments or barters of hard
goods (commodities salable on Western markets) at
prevailing world market prices.s Under fixed agree-
ments, Hungary, for example, exchanges 50,000 tons
of slaughter cattle annually for Soviet crude oil and
about 10,000 tons of pork for Polish coal. In the last
half of the 1970s, roughly two-thirds of Hungary's
agricultural exports to the USSR-meat in particu-
lar-are estimated to have been conducted on a dollar
basis. Romania also has bartered agricultural goods
for Soviet oil.
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Appendix C
Statistical Survey of
Eastern Europe's
Agricultural Trade
Table C-1
Eastern Europe: Dependence Upon Grain Imports,
1971-75, 1976-80
Thousand metric tons
(except where noted)
Bulgaria
Czechoslovakia East
Germany
Hungary
Poland
Romania
Yugoslavia
Eastern
Europe
1971-75 average
Grain production
7,266
9,349
8,679
11,256
20,933
14,757
14,476
86,717
Net grain
imports
-105
1,414
2,748
-608
3,531
-72
380
7,288
Total grain
consumption a
6,983
10,347
10,936
9,744
24,740
14,684
14,653
92,001
Imports as a per- NA
cent of consumption
13.7
25.1
NA
14.3
NA
2.6
7.9.
1976-80 average
Grain production
7,783
10,063
9,038
12,510
19,496
19,166
15,556
93,696
Net grain
imports
143
1,607
3,123
-726
7,034
71
535
11,727
Total grain
consumption a
7,937
11,352
12,019
11,406
26,424
19,237
16,006
104,380
Imports as a per- 1.8
cent of consumption
14.2
26.0
NA
26.6
0.4
3.3
11.2
a Includes grain for feed, seed, food, and industrial use plus dockage
waste.
Source: Reference table of the Grain and Feed Division, Foreign
Agricultural Service, USDA.
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Table C-2
Eastern Europe: Average Sbare of Grain, Soybean, and Oilseed
Meal Imports, by Source a
1971-75
1976-80
1971-75
1976-80
1971-75
1976-80
Total
100.0
100.0
100.0
100.0
100.0
100.0
United States
27.2
43.8
77.4
79.9
25.2
33.8 b
USSR
38.1
3.9
e Excludes Yugoslavia. Source: Eastern Europe: Agricultural Production and Trade Pros-
b Soybean meal. pects Through 1990, Cook, Cummings, and Vankai, Economic
Austria, Denmark (1971-72); Greece, Spain, Sweden, Switzerland, Research Service, Foreign Agricultural Economic Report Number
United Kingdom (1971-72). 195.
Table C-3
Eastern Europe: Trade in Agricultural Commodities
and Foodstuffs a
1970
1975
1976 197
7
1978
1979
1980
1981
1982
Preliminary
1983
Total agricultural trade b
Imports
3.419
7.039
8.386 9
.011
9.375
11.154
12.675
12.511
10.033
NA
Exports
2.814
6.021
6.682 7
.000
7.690
8.431
9.680
9.411
9.583
NA
Balance
-0.605
-1.018
-1.704 -2
.011
-1.685
-2.723
-.2.995
-3.100
-0.450
NA
Trade with the West
Imports
1.815
4.253
5.552 5
.777
6.117
7.620
8.848
8.734
5.805
5.500
Exports
1.571
3.115
3.443 3
.501
4.053
4.199
4.603
3.887
3.644
3.700
Balance
-0.244
-1.138
-2.109 -2
.276
-2.064
-3.421
-4.245
-4.847
-2.161
-1.800
Includes Yugoslavia.
n Includes infra-East European Trade.
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Table C-4
Eastern Europe: Agricultural Trade
Total
Trade
Socialist Countries
Nonsocialist C
ountries
Total
USSR
Eastern
Europe a
Other
CPEs b
Total
Developed ~
LDCs a
1970
Imports
3,063
1,557
.858
446
253
1,506
1,011
495
Exports
2,477
1,166
650
454
62
1,311
1,198
113
Balance
-586
-391
-208
8
-191
-195
187
-382
1975
Imports
6,284
2,623
1,145
929
549
3,661
2,366
1,296
Exports
5,535
2,789
1,779
883
128
2,746
2,300
446
Balance
-749
166
634
-46
-421
-915
-66
-850
1976
Imports
7,438
2,449
674
1,240
535
4,988
3,417
1,572
Exports
6,028
3,104
1,629
1,231
245
2,923
2,382
541
Balance
-1,410
655
955
-9
-290
-2,065
-1,035
-1,031
1977
Itnports
7,882
2,962
1,071
1,288
603
4,919
2,897
2,022
Exports
6,418
3,362
1,878
1,296
188
3,055
2,310
745
Balance
-1,464
400
807
8
-415
-1,864
-587
-1,277
1978
Imports
8,312
3,001
822
1,390
790
5,311
3,420
1,891
Exports
6,975
3,474
1,950
1,315
209
3,501
2,743
758
Balance
-1,337
473
1,128
-75
-581
-1,810
-677
-1,133
1979
Imports
9,607
3,302
1,019
1,369
914
6,305
4,226
2,079
Exports
7,591
4,060
2,409 .
1,459
192
3,531
2,767
764
Balance
-2,017
758
1,390
90
-722
-2,774
-1,458
-1,317
1980
Imports
10,931
3,507
946
1,542
1,019
7,424
5,177
2,247
Exports
8,531
4,658
2,774
1,524
359
3,873
3,006
867
Balance
-2,400
1,150
1,828
-18
-661
-3,551
-2,171
-1,380
1981
Imports
11,067
3,502
1,000
1,426
1,076
7,564
5,160
2,404
Exports
8,230
5,029
2,963
1,688
378
3,201
2,529
672
Balance
-2,836
1,527
1,963
262
-698.
-4,363
-2,631
-1,732
1982
Imports
8,782
3,965
1,042
1,570
1,353
4,817
3,255
1,562
Exports
8,356
5,371
3,136
1,898
336
2,985
2,365
620
Balance
-426
1,406
2,094
328
-1,017
-1,832
-890
-942
a The CEIvIA six-Poland, East Germany, Czechoslovakia, ~ Developed countries-OECD, South Africa, Japan, Australia,
Hungary, Bulgaria, and Romania. Excludes Yugoslavia. and New Zealand.
n Other centrally planned economies-Albania, China, Cuba, Mon- d Less developed countries-all countries not included above.
golia, North Korea, Vietnam, and Yugoslavia:
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 Confid.,Sanitized Copy Approved for Release 2011/01/28 :CIA-RDP85S00316R000100110007-2
Table C-5
Poland: Agricultural Trade
Total
Trade
Socialist Countries
Nonsocialist
Countries
Total
USSR
Eastern
Europe e
Other
CPEs n
Total
Developed ~
LDCs a
1970
Imports
534
243
182
40
21
291
201
90
Exports
485
95
17
74
04
390
353
37
Balance
- 49
-148
-165
34
-17
99
152
- 53
1975
Imports
1,540
507
345
92
70
1,033
792
241
Exports
983
320
164
146
10
664
581
83
Balance
-557
-187
-181
54
-60
-369
-211
-158
1976
Imports
1,860
360
210
108
42
1,500
1,245
255
Exports
1,055
256
59
175
22
799
670
129
Balance
-805
-104
-151
67
-20
-701
-575
-126
1977
Imports
2,008
536
341
144
51
1,472
1,098
374
Exports
1,095
258
64
173
21
827
715
110
Balance
-913
-278
-277
29
-30
-.647
-383
-264
1978
Imports
2,272
575
248
225
102
1,697
1,321
376
Exports
1,209
294
159
113
22
915
793
122
Balance
-1,063
-281
-89
-112
-80
-782
-528
-254
1979
Imports
2,505
555
303
144
108
1,950
1,420
530
Exports
1,338
355
201
131
23
983
858
125
Balance
-1,167
200
-102
-13
-85
-967
-562
-405
1980
Imports
3,070.
663
317
233
113
2,407
1,816
591
Exports
1,217?
261
120
123
18
956
864
92
Balance
-1,853
-402
-197
-110
-95
-1,451
-952
-499
1981
Imports
3,183
677
381
193
103
2,506
1,930
576
Exports
753
148
49
91
8
605
571
34
Balance
-2,430
-529
-332
-102
-95
-1,901
-1,359
-542
1982
Imports
2,318
1,032
413
261
358
1,286
1,000
286
Exports
873
284
140
117
27
589
553
36
Balance
-1,445
-748
-273
-144
331
-697
-447
-250
e The CEMA six-Poland, East Germany, Czechoslovakia, ~ Developed countries-OECD, South Africa, Japan, Australia,
Hungary, Bulgaria, and Romania. Excludes Yugoslavia. and New Zealand.
n Other centrally planned economies-Albania, China, Cuba, Mon- a Less developed countries-all countries not included above.
golia, North Korea, Vietnam, and Yugoslavia.
Confidential 30
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~.om~uouu~u
Table C-6
East Germany: Agricultural Trade
Total
Trade
Socialist Countries
Nonsocialist C
ountries
Total
USSR
Eastern
Europe a
Other
CPEs b
Total
Developed ~
LDCs a
1970
Imports
1,039
574
302
199
73
465
359
106
Exports
223
28
2
20
6
195
193
2
Balance
-816
-546
-300
-179
-67
- 270
-166
-104
1975
Imports
1,670.
818
316
357
145
852
616
236
Exports
554
102
25
64
13
452
440
12
Balance
-1,116
-716
-291
-294
-133
-400
-176
-223
1976
Imports
2,094
792
157
502.
133 ~
1,302
.,006
296
Exports
707
71
28
26
17
636
619
17 '
Balance
-1,387
-721
-129
-476
-116
-666
-387
-278
1977
Imports
2,063
1,003
275
549
179
1,060
712
348
Exports
439
63
16
37
10
376
366
10
Balance
-1,624
-968
-237
-512
-169
-686
-346
-338
1978
Imports
2,024
923
161
561
202
1,099
880
219
Exports
593
96
17
64
15
496
482
'14
Balance
-1,434
-828
-144
-497
-187
603
-398
-205
1979
Imports
2,353
1,057
253
572
232
1,296
1,071
226
Exports
421
89
16
63
10
332
323
9
Balance
-1,932
-968
-237
-509
-222
-964
-748
-217
1980
Imports
2,552
1,013
181
562
270
1,539
1,319
221
Exports
497
110
18
81
12
387
376
11
Balance
-205
-903
-163
-481
-258
-1,152
-943
-210
1981
Imports
2,405
964
155
549
260
1,441
1,133
308
Exports
494
112
15
86
11
382
371
11
Balance
-1,911
-852
-140
-463
-249
-1,059
-762
-297
1982
Imports
2,185
966
167
549
250
1,219
892
327
Exports
479
105
15
79
11
374
362
12
Balance
-1,706
-861
-152
-470
-239
-845
-530
-315,
a The CEMA six-Poland, East Germany, Czechoslovakia, ~ Developed countries-OECD, South Africa, Japan, Australia,
Hungary, Bulgaria, and Romania. Excludes Yugoslavia. and New Zealand.
n Other centrally planned economies-Albania, China, Cuba, Mon- a Less.developed countries-all countries not included above.
golia, North Korea, Vietnam, and Yugoslavia.
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 Confide~.~Sanitized Copy Approved for Release 2011/01/28 :CIA-RDP85S00316R000100110007-2
Table C-7
Czechoslovakia: Agricultural Trade
Total
Trade
Socialist Countries
Nonsocialist C
ountries
'
Total
US_ SR
Eastern
Europe a
Other
CPEs b
Total
Developed ~
LDCs a
1970
Imports
766
445
223
141
81
321
193
138
Exports
152
46
17
22
7
106
93
13
Balance
-614.
-399
-206
-119
-74
-215
-100
-115
1975
Imports
1,234
611
235
266
110
623
324
299
Exports
361
101
38
54
9
260
225
35
Balance
-873
-610
-197
-212
-101
-363
-99
-264
1976
Imports
1,431
649
137 ~
401
111
782
460
322
Exports
328
168
57
103.
8
160
137
23
Balance
-1,103
-481
-80
-298
-103
-622
-323
-299
1977
Imports
1,649
739
211
422
106
910
430
480
Exports
345
133
52
75
6
212
185
27
Balance
-1,304
-606
-159
-347
-100
-698
-245
-453
1978
Imports
1,592
746
166
416
164.
846
440
406
Exports
458
170
63
92
IS
288
244
44
Balance
-1,134
-576
-103
-324.
-149
-558
-196
-362
1979
Imports
2,019
844
223
422
199
1,176
657
518
Exports
528
212
91
109
12
316
263
53
Balance
-1,491
-632
-132
-313
-187
-859
-394
-465
1980
Imports
2,048
801
168
434'
199
1,247
742
505
Exports
680
218
92
115
11
462
362
100
Balance
-1,368
-583
-76
-319
-188
-785
-380
-405
1981
Imports
1,807
729
165
361
203
1,078
561
517
Exports
637
242
93
137
12
395
332
63
Balance
-1,170
-488
-72
-224
-191
-683
-229
-454
1982
Imports
1,825
915
175
482
258
910
573
337
Exports
607
299
100
184
15
308
245
63
Balance
-1,218
-616
-75
-298
-243
-602
-328
-274
e The CEMA six-Poland, East Germany, Czechoslovakia, ~ Developed countries-OECD, South Africa, Japan, Australia,
Hungary, Bulgaria, and Romania. Excludes Yugoslavia. and New Zealand.
n Other centrally planned economies-Albania, China, Cuba, Mon- a Less developed countries-all countries not included above.
golia, North Korea, Vietnam, and Yugoslavia.
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 Sanitized Copy Approved for Release 2011/01/28 :CIA-RDP85S00316R000100110007-2
wwiuCnutti
Table C-8
Bulgaria: Agricultural Trade
Total
Trade
Socialist Countries
Nonsocialist C
ountries
Total ~
USSR
Eastern
Europe a
Other
CPEs n
Total
Developed ~
LDCs a
1970
Imports
166
101
62
6
33
65
37
28
Exports
793
628
440
160
28
165
133
32
Balance
627
527
228
154
- 5
100
96
4
1975
Imports
463
260 '
111
40
109
203
116
87 .
Exports
1,486
1,222
904
245
73
264
165
99
Balance
1,023
962
793
205
-36
61
49
12
1976
Imports
436
196
45
48
103
240
123
117
Exports
1,615
1,343
975
300
68
272
182
90
Balance
1,179
1,148
930
252
-35
31
59
-27
1977
Imports
495
197
70 '
17
110
208
105.
103
Exports
1,682
1,401
1,024
295
82
281
185
96
Balance
1,277
1,204
954
278
-28
73
80
-7
1978
Imports
473
230
66
23
141
243
170
73
Exports
1,863
1,486
1,091
295
100
377
228
149
Balance
1,340
1,255
1,025
272
-41
134
58
76
1979
Imports
554?
250
70
24
156
304
221
83
Exports .
2,095
1,682
1,216
355
111
413
252
161
Balance
1,541
1,432
1,146
331
-45
109
31
78
1980
Imports
616
273
77
39
157
343
249
94
Exports
2,368
1,745
1,287
337
121
623
293
330
Balance
1,752
1,472
1,210
122
-36
280
444
236 ':
1981
Imports
703
267
67
37
163
436
349
87 .
Exports
2,226
1,619
1,287
227
105
608
272
336
Balance
1,523
1,352
1,220
190
-58
171
-77
249
1982
Imports
571
311
72
54
185
260
177
83
Exports
2,499
2,014
1,370
480
163
485
279
206
Balance
1,928
1,703
1,298
420
-22
225
102
123
The CEMA six-Poland, East Germany, Czechoslovakia, ~ Developed countries-OECD, South Africa, Japan, Australia,
Hungary, Bulgaria, and Romania. Excludes Yugoslavia. and New Zealand.
n Other centrally planned economies-Albania, China, Cuba, a Less developed countries-all countries not included above.
Mongolia, North Korea, Vietnam, and Yugoslavia. ,
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 Confide..Sanitized Copy Approved for Release 2011/01/28 :CIA-RDP85S00316R000100110007-2
Table C-9
Hungary: Agricultural Trade
Total
Trade
Socialist Countries
Nonsocialist C
ountries
Total
USSR
Eastern
Europe a
Other
CPEs n
Total
Developed ~
LDCs a
1970
Imports
366
116
58
38
20
250
155
95
Exports
521
260
124
125
11
261
250
11
Balance
155
144
66
87
-9
11
95
-84
1975
Imports
739
276
88
131
57
.463
216
247
Exports
1,273
790
490
281
19
483
430
53
Balance
534
514
402
150
-38
20
214
-194
1976
Imports
815
290
64
144
82
525
221
304
Exports
1,343
879
367
472
40
464
407
57
Balance
528
589
303
328
-42
-61
186
-247
1977
Imports
972
283
84
108
91
689
257
432
Exports
1,582
993
468
489
36
589
489
100
Balance
610
710
384
381
-55
-100
232
-332
1978
Imports
1,021
290
92
115
83
731
287
444
Exports
1,679
958
463
445
50
721
578
143
Balance
658
668
371
330
-33
-10
291
-301
1979
Imports
1,068
305
99
105
101
763
338
425
Exports
1,998
1;211
585
598
28
787
646
141
Balance
930
907
486
493
-73
23
308
-284
1980
Imports
1,128
362
110
156
96
766
305
461
Exports
2,342
1,497
919
531
47
845
711
134
Balance
1,214
1,135
809
375
-49
79
406
-327
1981
.
Imports
1,189
475
120
178
177,
714
345
369
Exports
2,657
1,847
1,187
588
72
810
633
177
Balance
1,468
1,372
1,067
410
-105
96
288
-192
1982
Imports
963
411
128
132
151
552
265'
287
Exports
2,777
1,997
1,231
658
108
779
625
154
Balance
1,814
1,586
1,103
526
-43
227
360
-133
.The CEMA six-Poland, East Germany, Czechoslovakia, ~ Developed countries-OECD, South Africa, Japan, Australia,
Hungary, Bulgaria, and Romania. Excludes Yugoslavia. and New Zealand.
b Other centrally planned economies-Albania, China, Cuba, Mon- a Less developed countries-all countries not included above.
golia, North Korea, Vietnam, and Yugoslavia.
Confidential 34
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Confidential
Table C-10
Romania: Agricultural Trade
Imports
1,516
395
93
118
184
1,121
746
375
Exports
1,426
826
338
337
150
600
400
200
Balance
-90
431
245
219
-34
-521
-346
-175
1981
Imports
1,780
390
112
108
170
1,390
842
547
Exports
1,461
1,060
332
559
170
-401
350
51
Balance
-319
670
220
451
0
-989
-493
-496
1982
Imports
920
330
87
92
151
590
348
242
Exports
1,122
672
280
380
12
450
301
149
Balance
202
342
193
288
-139
-140
-47
-93
a The CEMA six-Poland, East Germany, Czechoslovakia, ~ Developed countries-OECD, South Africa, Japan, Australia,
Hungary, Bulgaria, and Romania. Excludes Yugoslavia. and New Zealand.
n Other centrally planned economies-Albania, China, Cuba, n Less developed countries-all countries not included above.
Mongolia, North Korea, Vietnam, and Yugoslavia.
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Confidential
Table C-11
Yugoslavia: Agricultural Trade a
Total
'Trade
Socialist Countries
Nonsocialist C
ountries
Total
USSR
Eastern
Europe n
Other
CPEs
Total
Developed c
LDCs
1970
Imports
355
47
18
26
3
308
167
141
Exports
338
78
26
51
1
260
255
5
Balance
-193
31
8
25
-2
-224
88
-136
1975
Imports
755
163
85
58
20
592
299
293
Exports
486
117
57
56
4
369
341
28
Balance
-269
-46
-28
-2
-16
-223
42
-265
1976
Imports
948
384
116
204
64
564
264
300
Exports
654
134
68
64
1
520
477
43
Balance
-294
-250
-48
-140
-63
-44
213
-257
1977
Imports
1,129
.271
120
126
25
858
403
455
Exports
583
137
64
70
3
446 ~
414
32
Balance
-546
-134
-56
-56
-22
-412
11
-423
1978
Imports
1,063
257
149
74
34
806
391
415
Exports
715
163
86
72
5
552
504
48
Balance
-348
-94
-63
-2
-29
-254
113
-367
1979
Imports
1,546
232
128
80
24
1,314
790
524
Exports
840
171
51
111
9
669
611
58
Balance
-706
-61
-77
31
-15
-645
-179
-466
1980
Imports
1,746
321
179
121
21
1,425
875
550
Exports
1,152
422
281
129
12
730
587
143
Balance
-594
101
102
8
-9
-695
-288
-407
1981
Imports
1,444
276
162
93
21
1,168
754
414
Exports
1,180
494
331
157
6
686
588
98
Balance
-264
218
169
64
-15
-482
-166
-316
1982
Imports
1,251
263
147
107
9
988
699
289
Exports
1,227
568
376
184
8
659
.548
111
Balance ~
- 24
305
229
77
-1
- 329
-151
-178
Agricultural trade is based on the UN's Standard International
Trade Classification (SITC) categories: 0-food and live animals;
1-beverages and tobacco; and 4-animal and vegetable oils and
fats. Trade data for wool, cotton, oilseeds, hides, and skins were
added to these totals.
n The CEMA six-Poland, East Germany, Czechoslovakia,
Hungary, Romania, and Bulgaria.
Other centrally planned economies-Albania, China, Cuba,
Mongolia, North Korea, and Vietnam.
a Developed countries-OECD, South Africa, Japan, Australia,
and New Zealand.
Less developed countries-all other countries not included above..
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Sanitized Copy Approved for Release 2011/01/28 :CIA-RDP85S00316R000100110007-2