SOLVING THE SOVIET LIVESTOCK FEED DILEMMA: KEY TO MEETING FOOD PROGRAM TARGETS

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Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Directorate of Secret Intelligence Solving the Soviet Livestock Feed Dilemma: Key To Meeting Food Program Targets PRQ7FX.Z' NU&u~ktt I WMOK PAGE NUMBERS TOTAL NUMBER OF COPIES 5S ) DISSEM DATE EX'T'RA ODPIES RECORD Secret SOV 86-10003 January 1986 Copy 4 2 9 ILLEGIB Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Directorate of Intelligence Food Program Targets Solving the Soviet Livestock Feed Dilemma: Key To Meeting Economic Performance Division, SOVAO Office of Soviet Analysis. Comments and queries are welcome and may be directed to the Chief, This paper was prepared by Secret SOV 86-10003 Januari1986 25X1 25X1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret Solving the Soviet Livestock Feed Dilemma: Key To Meeting Food Program Targets Key Judgments In large measure, Soviet consumers will judge General Secretary Gorba- Information available chev's commitment to their well-being by his ability to put more meat on as of 23 October 1985 the table. The Food Program-advanced by Brezhnev in 1982, strongly was used in this report. endorsed by Gorbachev, and largely repeated in recently published targets for the 12th Five-Year Plan (1986-90~-calls for boosting per capita meat consumption by 17 percent over the next five years. Such an increase would contrast sharply with the near stagnation in meat availability over most of the last decade. Achieving this goal-and we believe the chances are good, barring bad weather-would go a long way toward boosting popular support for Gorbachev's regime and, by implication, his calls for greater ef- fort on the part of the Soviet work force. Between 1975 and 1983 Moscow was unable to sustain annual increases in per capita meat availability even with record imports of grains and meat. Despite outlays of hard currency for these commodities averaging nearly $5 billion annually since 1975, Soviet consumers have only a little more meat than they had then. Moreover, the domestic budgetary drain has been increasing rapidly. The leadership has insisted on maintaining stable, relatively low prices in state retail stores even in the face of rapidly rising costs of producing meat. As a result, subsidies paid to farms for producing meat increased from about 13 billion rubles in 1975 to 21 billion rubles in 1984. Chronic shortages of all types of animal feeds have been a major constraint on domestic meat production, but meat output also has suffered from a substantial imbalance among those feeds available-high-protein feeds such as soybeans, concentrates such as grain, and roughages. Because of this dietary imbalance-due, in part, to misplaced emphasis on the importance of grain in animal diets-Soviet livestock take twice as long to achieve market weight as those in the United States while requiring 1.5 to 2 times as much feed to do so. To increase the output of product per farm animal, Gorbachev has moved aggressively to implement Food Program initiatives that emphasize the use of roughages and protein in animal diets, provide the resources-including additional fertilizer-for increased production of these components, and enhance feed quality by improving facilities for processing and storage of feeds. Secret SOV 86-10003 Januari' 1986 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret We believe that Moscow will make enough progress on these initiatives to result at least in larger supplies of better balanced feed rations per animal. Thus, even with little or no improvement in the rate at which farm animals convert feed to product, larger supplies of feed per animal, together with greater proportional use of roughages in the feed ration, should result in an increase in meat per animal and milk per cow. This, in turn, should both help hold down steadily rising meat production costs and put more meat on the table. Nonetheless, under most scenarios, Western grain will still be needed to achieve the ambitious 1990 meat production goals. The amount of required imports, as always, will depend in large measure on weather conditions: ? Our most likely scenario is for average weather and a continuation of the recent trend in fertilizer deliveries. Meeting 1990 meat production targets under these conditions would require some 40 million tons of grain imports, even with increased quantities of domestic feed per animal. A qualitative improvement in the composition of feed rations, however, particularly an increase in the protein content, could lower feed conversion ratios slightly and, in turn, reduce import demand to some 30- 35 million metric tons of grain and save increasingly scarce hard currency. ? Very good weather, complemented by a boost in yields of grain and roughage from more fertilizer and accompanied by a smaller share of grain in feed rations, could totally obviate the need for Western grain imports. ? Poor weather during the period, particularly if accompanied by failures to boost fertilizer supplies, would force Moscow to cut back on its meat production goals. Hard currency constraints alone would preclude im- porting the quantities of grain needed-some $8 billion worth (in 1985 prices) in 1990-to offset domestic production shortfalls. Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Importance of the Livestock Sector Feed: Key to Livestock Productivity Feed Production Lags Reducing the Protein Shortage Gains in Feed Availability ... But Other Outcomes Are Possible B. The Protein Content of Soviet Livestock Feed 1. USSR: Output of Livestock Products, Selected Years 2 2. Projected Fulfillment in 1990 of Soviet Plans for Feed Availability 9 3. USSR: Roughage Availability-Plan and Actual 1 1 A-1. USSR: Selected Statistics on Feed and Livestock Herds 18 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Solving the Soviet Livestock Feed Dilemma: Key To Meeting Food Program Targets General Secretary Gorbachev is continuing the Soviet leadership's longstanding emphasis on developing the livestock sector and increasing per capita consumption of meat. Progress toward these goals has long been hindered by factors such as unsuitability of livestock breeds; lack of adequate veterinary service and sup- plies, daily care, and sanitation; shortages of skilled labor, machinery, and equipment; and shifting gov- ernment policies. The most limiting factor, however, has been a chronic shortage of feeds and an imbalance among the major feed components. The imbalance in feed rations includes a serious protein deficit, which in large part explains why the fattening process takes twice as long as in the United States and requires 1.5 to 2 times as much feed. To reduce the disparities between supply and demand for meat, the Food Program, first put forth by Leonid Brezhnev in 1982 and supported by his three succes- sors, calls for boosting per capita meat consumption from the present 60 kilograms to 70 kilograms in 1990.' Gorbachev clearly recognizes the need for increased labor productivity throughout the economy and sees an improved quality of diet as an important factor in meeting that need. At an April 1985 Central Committee plenum, he stated that the Food Program "required particular attention" and "could not be put aside." His numerous complaints about foot-dragging and "departmental interests" thwarting the develop- ment of agriculture and related industries highlight his concern. Moreover, Food Program proponents are encouraged by his repeated statements on the need to improve support services not only to farm production but also to the transportation, storage, and handling Food accounts for about half of Soviet household expenditures on consumer goods and services. The availability of meat-together with increasing variety in the diet-is a key factor by which Soviet consumers judge their well-being. Although money incomes have grown steadily, the leadership has continued its policy of maintaining stable, relatively low prices in state retail stores-where most meat is sold-in the face of stagnating meat output. Consequently, demand for meat has grown far more rapidly than supply. Con- sumer dissatisfaction with the resultant queuing and chronic shortage has negatively affected labor produc- tivity. Keeping retail prices constant-the last increase was in 1962-has also led to substantial budgetary drain. Subsidies for meat alone reached 21 billion rubles in 1984, compared with an estimated 13 billion rubles in 1975. According to one Soviet economist, the cost of production and procurement of beef was quadruple and that of pork double the retail price in 1983. network. data. Successful grain crops allowed Moscow to increase meat supplies during the last half of the 1960s (table 1). In 1972, however, in an effort to sustain annual gains in meat production in the face of a crop shortfall, the leadership resorted to major grain im- ports. In 1975 the USSR responded to a widespread, drought-driven grain crop failure by importing record quantities of grain and by reducing herds drastically to cut the demand for grain. Smaller herds led to reduced meat output in 1976. Not until 1978 did meat output regain the trend level implied by 1960-75 Meat con- sumption is stated in terms of the Soviet definition, which includes 25X1 25X1 25X1 25X1 25X1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret Table I USSR: Output of Livestock Products, Selected Years Meat a (million metric tons) Milk (million metric tons) Eggs (billions) 1970 12.3 40.7 1975 15.0 57.4 56.2 61.2 1978 15.5 1979 15.3 93.2 1980 15.1 90.9 67.9 1981 15.2 88.9 70.0 a In addition to beef, pork, mutton and lamb, rabbit, and game, the Soviet definition of meat includes poultry meat, edible offals, and slaughter fat. To be comparable to Western measures (retail weight), the quantity should be reduced by roughly 18 percent. b Estimated. Based on 10-month results. Figure 1 USSR: Availability of Meat Per Capita, 1960-84 a Kilograms 60 Domestic output a Soviet official statistics on meat production are adjusted to conform to Western definitions of retail weight (trim, including slaughter fat and hone. is removed). During 1979-82, annual meat production lagged be- low the 1978 peak. High import levels of grain could not offset a four-year period of poor-to-mediocre grain crops. The regime-anxious to avoid a repetition of the 1976-78 experience-chose to sacrifice growth in meat production to maintain herd numbers, accepting the lower animal productivity associated with smaller feed rations. Only by importing record quantities of meat-an average of about 900,000 metric tons annu- ally during the 1980-82 period-did Moscow keep per capita meat consumption close to the previous record achieved in 1975 (figure 1). The shift in emphasis from distress slaughter to herd maintenance was a gamble; disease or bad weather could have killed large numbers of animals weakened by reduced feed rations, particularly as production of other feeds also stagnated. The gamble paid off. Meat output reached a new high in 1983, aided by record forage production in 1982 and 1983, a better grain crop in 1983, and large imports of grain. In 1983 per capita meat availability-domestic production of 16.4 million tons, adjusted for slaughter fat and trim, plus an increase of net imports to 960,000 tons-rose by almost 6 percent. Further growth occurred in 1984, Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Figure 2 USSR: Growth in Cost of Production of Livestock Products, 1975 and 1984a Collective farms 180 a Derived from Soviet statistics on the ruble cost of producing 1 ton of liveweight gain. 1 ton of milk, and 1.000 eggs. with meat output reaching 17.0 million tons. Yet, just to maintain per capita availability at roughly the 1983 level, production was again supplemented by large imports. Feed: Key to Livestock Productivity Livestock feed comprises concentrates (feeds with high nutritive content such as grain and oilseed meals) and roughages (feeds with high cellulose and/or water content such as hay, silage, potatoes and other feed roots, and pasture) (see inset).' Animals gain weight more rapidly and require less feed per unit of gain 2 Concentrates as reported in Soviet sources exclude those that are of animal origin-meat and bonemeal, fishmeal, milk, and so on. State farms 180 when the feed ration contains sufficient energy (calo- ries) and is correctly balanced between concentrates and roughages as well as in nutrient content-protein, minerals, vitamins, trace elements, and so on. A ration is considered fully balanced when it achieves the maximum output of product for a given quantity of feed units in the most economical combinations.' ' There is no one balanced ration for each animal or group of animals. The same output can be achieved through varying combi- nations if adequate supplies of needed feeds and supplements are available. This is not the rule for Soviet farms, which often are forced to feed uneconomical rations because elements are not available. In market economies, farmers adjust their feed rations according to relative cost of the various feeds and supplements, thus 25X1 25X1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret Feeds Glossary Concentrates "Crop "feeds containing a large percentage of digest- ible nutrients and relatively small percentages of water or fiber: ? Grain. ? Oilseed meals. ? Milling byproducts. ? Dried residues of the starch, beet sugar, and brewing-distilling industries. ? Dried grass meals. Roughages (Forages) "Crop "feeds high in moisture or fiber content and relatively low in digestible nutrient content: ? Coarse feeds- "crop "feeds with a high fiber content: - Hay. - Haylage-chopped green feed partially dried after cutting. Must be stored in airtight facili- ties to preserve quality. - Straw. - Stover-cornstalks. ? Succulents-"crop"feeds with a high water content: - Silage. - Green chop-chopped green feeds such as grasses and tops from root crops, fed directly as they are produced. - Potatoes. - Sugar beets. - Forage roots such as turnips. - Melons. - Wet beet pulp. - Distiller's mash. ? Summer green feed-a Soviet category offeed that includes pasture and succulent feeds such as silage. Animal and Synthetic Feeds Surplus animal products, byproducts of the meat, dairy, and fish processing industries, and industrially produced protein supplements. ? Milk. ? Skim milk. ? Buttermilk. ? Whey. ? Fishmeal. ? Meat and bonemeal. ? Single-cell protein. Balanced Ration A ration that provides the needed proportion and amount of all the required nutrients to produce the maximum quantity of product per unit of feed con- sumed in the most economical combination. Energy Derived from feed and used to meet daily mainte- nance needs. Any surplus is used for growth or work. Energy is usually evaluated in terms of calories and is primarily supplied by carbohydrates (organic com- pounds composed of carbon, hydrogen, and oxygen) and fats, but also by protein. Calorie The amount of energy as heat required to raise the temperature of 1 gram of water by 1 degree Centi- grade. Protein Essential to all plant and animal life. Comes, in varying amounts, from plant, animal, and industrial sources. Feed Unit The USSR defines a feed unit as containing the quantity of energy available in a kilogram of oats. Other feeds are converted to "oat-equivalent "feed units by relating their energy content to that of 25X1 25X1 25X1 25X1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 rations, without addressing the need to improve pro- Moscow's need for grain imports results largely from the size of the domestic grain crop, although a number of other factors-such as size of animal inventories, availability of other feeds, changes in feeding efficiencies, and quantities of meat, milk, and eggs to be produced-help determine the need. Quan- tities of grain needed for seed, food, and industrial needs have been relatively stable over the past two decades and are not likely to change much through the 1980s. The effect on grain requirements of a steady decline in per capita consumption of grain products is being offset by the increasing share of higher quality flour being produced, a trend that is expected to continue. More high-quality white bread and assorted bakery goods needing low-extraction grades offlour are now available. In contrast, the livestock sector has been expanding rapidly since Brezhnev launched his first program to improve consumer diets in 1965. The emphasis on increased feeding of concentrates led to a more than doubling in quantities of grain feed since 1965. In the face of lagging grain output, central planners until recently did not emphasize the production of other feed crops sufficiently to meet the growing demand for feed. Consequently, Moscow has resorted to im- ports of grain to make up part of the shortfall in needed energy. Grain is widely traded, easily trans- ported, and to an extent can be substituted for other types of feed in many feed rations. Roughly 55 percent of total available grain (production and im- ports) is now used as livestock feed. Clearly, the USSR's longtime goal of agricultural self-sufficiency is secondary to that of producing ever larger quanti- ties of meat. Rations that are out of balance add substantially to the cost of livestock products, because larger daily feed rations are required to achieve the same amount of product-meat, milk, and eggs. Soviet writers estimate the cost of feeding unbalanced rations may be higher by more than one-third. In an attempt to match US livestock feeding efficiencies, Soviet animal nutritionists have stressed-too strongly in our opin- ion-the importance of increasing the absolute amounts and the share of concentrates in livestock tein content. Moreover, costs of meat, milk, and egg production have risen substantially since 1975 (figure 2). In part this results from the increasing cost of feed, which makes up roughly 50 percent of the cost of production. For example, special prices for mixed feeds sold to state and collective farms were abolished in 1975. At the same time, however, Soviet agricultural research- ers note that over the last decade most of the growth in production of livestock products has been achieved by increases in numbers of animals. This, in turn, requires additional expenditures for buildings, for operation of facilities, and for labor, which have contributed to the production-cost escalation. Feed Production Lags Despite some growth in production of nongrain feeds, Moscow has also been forced in recent years to import large quantities of other feedstuffs as well as grain (see inset).' During the five-year period of 1979-83, imports of nongrain feedstuffs averaged nearly $675 million per year and totaled over 7 million tons of soybeans, almost 3 million tons of soybean meal, 0.75 million tons of mixed feed, and 0.50 million tons of manioc.5 Imports thus effectively constituted about one-fourth of total concentrates fed during the 1979- 83 period.' Even with these imports, feed-in terms of energy available per animal-was still nearly 20 percent below announced Soviet standards.' The Soviets may have overshot their aim by focusing on expanding the use of grain in feed rations. Such increases did not of feed. ` Problems in the use of manioc (tapioca), the cessation of the US partial embargo on sales of grain and other feedstuffs to the USSR, and the world surplus of grain and consequent favorable grain purchase prices combined to turn Moscow away from continued large imports of manioc. thus releasing domestically produced grain for feed. ' Soviet standards appear reasonably comparable to US standards. Soviet feeding texts indicate 33 quintals of feed units annually per standard animal (cow equivalent): US feeding guides suggest 32 to 25X1 25X1 25X1 25X1 25X1 25X1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret Figure 3 Structure of Soviet and US Livestock Herds, 1982-83a Figure 4 ?~ r-opnok n nnrlexn~p Hn n C TaKON renewnON Hain KOr1XO3 6e3 KOPMOB He OcTaHeTCA!Is ,~ l/narr tarot rnrtn0,rn m:Clrri lrrd Pinratrrrnrni hrr ~nnr llrri llrldrA lb, v~ttr frill prnridr. Cattle, excluding cows rations Poultry, rations are 85-to- are less than 20-percent 95-percent concentrates concentrates a Total numbers of cows. cattle excluding cows, hogs. and poultry including broilers for each countre are weighted by relative Soyiet feed requirements per type of animal to derive share of total herds Sheep and goats are not included in the calculations because they are primarily forage consumers these animals account for nearly 10 percent of Soviet herds but less than I percent of US herds. ~'"Wfill such tecluutlogy, Out kolkhoi won't he left without Iced this rear." result in corresponding increases in average animal productivity because of the continued shortage of energy and inefficiency of rations in terms of balance! For example, during 1971-80 the use of grain for milk production rose by 17 percent, or nearly twice as fast as milk output; the use of grain for cattle feeding increased by 35 percent, while beef production grew by only 22 percent. The share of concentrates is now about 34 percent in the Soviets' overall livestock feed supply-close to the share in the US supply, which has ranged from 34 to 41 percent since 1975. Howev- er, the herd structure in the USSR differs markedly from that in the United States (figure 3). A simplified ' Our analysis also indicates that productivity gains from the proliferation of large-scale specialized livestock production facili- ties, which improve feeding efficiency by as much as 50 percent, according to Soviet agricultural specialists, were largely offset by lower efficiency in the remainder of the livestock economy, which suffered shortages of important feed supplements because the calculation indicates that, if cows, other cattle, hogs, and poultry in the USSR were fed the same concen- trate-roughage balance as their US counterparts, concentrates would account for only 25 percent of the total-a reduction in their use from the 142-million- ton average fed during 1980-83 to 110 million tons. Perhaps recognizing that the steady increases in feeding of concentrates had not helped to achieve targets, Soviet leaders in recent years have stressed the importance of feeding forage crops and even of reducing quantities of concentrates fed. At the July 1978 agricultural plenum, then General Secretary Brezhnev highlighted the need to improve the quality and quantity of forage crops. But the several decrees Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 that followed had little effect as even a cartoon published in Krokodil, the Soviet satirical journal, illustrates (figure 4). By late 1982, however, the priority that farms gave roughage production apparently was upgraded. Three general factors undoubtedly contributed to this change: ? The Food Program directed that increased quanti- ties of chemical fertilizer and additional investment in machinery and storage facilities be allocated to expanding roughage production. ? The repeated warning to farms not to count on state stocks of grain to cover onfarm feed shortages, combined with the series of poor grain crops, could have caused farms to devote more effort to produc- tion of harvested roughages. ? Good weather in 1982 and 1983 led to a quick payoff from increased emphasis on forage produc- tion, giving farmers the confidence to continue expanded production and use of forage. According to the Soviet agricultural press, farm man- agers are well aware of the improved animal produc- tivity that can be achieved by feeding better balanced livestock rations. At the same time, Gorbachev's complaints about foot-dragging suggest he feels that forage production has not been stressed sufficiently. Improving the Protein Content Although the USSR has recently made progress in achieving larger per head feed rations and a better balance between concentrates and roughages, head- way in improving protein content has been lagging. Soviet livestock specialists indicated that feed rations in 1980 were roughly 15 percent short of the quantity of protein needed for fully balanced rations. Since then, protein content has been slowly increasing.' To have eliminated the protein deficit with soybean meal-a readily available high-protein feed-would have required almost 11.5 protein content was up to 100 grams, about 10 percent short. (We think this calculation refers to mid-1984.) See appendix B for a million tons of imports in 1980, far in excess of the 438,000 tons imported. Upgrading the protein content to the norm would have, in turn, reduced the 20- percent calorie deficit to 5 percent or less. The improved balance in the ration would have raised productivity, in turn lowering the ruble cost of pro- duction. Although the resulting reductions in amount of feed required and length of the period needed to bring animals to market weight cannot be quantified, the direction toward improved efficiency is clear. Western observers have long urged Soviet imports of soybeans and soybean meal as a "simple and quick" solution to the protein deficit.'? Moscow, however, refused to do so until the end of the 1970s, perhaps because the mixed-feed industry did not have ade- quate mixing facilities and trained workers to process the meal efficiently. Moreover, shipping and handling losses could be substantial. The sharp reduction in soybean meal imports from 2.3 million tons in 1983 to an estimated 200,000 tons in 1984 indicates Moscow's earlier reluctance to import large quantities was well founded. Major domestic sources of high-protein feeds-those containing 20 percent or more of their weight as crude (total) protein-include nonprotein nitrogen (which converts to protein in the digestive process), oilseed meals, animal products such as meat and bonemeal, and single-cell protein." Less concen- trated but valuable sources of protein include milk and crops such as pulses, alfalfa, and clover. The USSR lacks the agronomic conditions to produce large quantities of soybeans; production averages about 500,000 tons annually compared with over a 50-million-ton average US crop during the 1981-84 "? D. Gale Johnson, The Soviet Impact on World Grain Trade, British-North American Committee, USA, May 1977, pp. 12-19. " Crude protein refers to all the nitrogenous compounds in feed; digestible protein refers to protein utilized by the animal and is estimated by coefficients derived over time from feeding trials. Single-cell protein is a collective term including protein-rich micro- organisms such as bacteria, algae, and fungi (yeast and molds) grown on byproducts of oil, on methanol, or on organic wastes from agriculture and industry. For a discussion of high-protein feeds, see Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret period. Substantial amounts of other oilseed meals (particularly sunflower and cottonseed) are produced, but the quantity is far less than needed to fully alleviate the protein deficit. To increase domestic supplies of high-protein feed, the USSR, over two decades ago, chose to develop the single-cell protein (SCP) industry (see inset). Although both startup and operational costs are high for this specialized product, the long-run gains for the USSR, with its aversion to becoming dependent on the West, are substantial: ? Protein content of feed rations is increased with no dependence on foreign suppliers. ? The product is handled and stored with little diffi- culty and can be easily incorporated into feeds. ? Finally, there is an increasing body of test results in the United States indicating that the payoff in improved efficiency per gram of protein from SCP is higher than that from oilseed meals. Experimen- tal work has not yet been able to explain this phenomenon. Today, the USSR is by far the world's largest produc- er of SCP. By 1983, output had reached 1.3 million tons, and SCP supplied 22 percent of the protein available from high-protein feeds (figure 5).'2 In con- trast, only comparatively small amounts of SCP are produced in the West, because the cost of production is at least double that of soybean meal, making it uneconomic for Western feeding operations. There also are widespread fears of the possible carcinogenic properties of SCP produced from hydrocarbon sources. Soviet specialists argue these fears are base- less. "Soviet sources indicate that only a negligible amount of SCP is being used experimentally to develop foods suitable for human Development of Single-Cell Protein in the USSR The USSR began experimental production of cellu- lose-based single-cell protein (SCP) from hydrolyzed straw in 1936. A Soviet textbook reports that by 1943 industrial production had begun. The initial impetus was to provide high-protein food for human ingestion. After World War II, the emphasis shifted to supple- menting annual feed. Experiments to produce SCP from liquid paraffin (obtained from crude oil) began in the mid-1960s. The USSR is in a good position to undertake devel- opment of the SCP industry. Raw materials, particu- larly hydrocarbon and agricultural wastes, are readi- ly available. Until recently, however, production fell far short of plan. Average annual output during the 1976-80 period, for example, was at least 25 percent short of plan, and press comment noted that output in 1981 and 1982 also 'failed to meet plan. " In mid- 1984, however, a Soviet official claimed that 1983 production-1.3 million tons-had exceeded the plan by 10,000 tons and that first-half 1984 production had met the plan. Output reached 1.4 million tons in 1984. Meeting the 1985 target of 1.9 million tons is not likely. In common with most industrial experience in the USSR, growth in production of SCP has been hindered byfailure to commission new capacity on time and by shortfalls in supplies of raw materials, frequently because of transportation difficulties. Many of the raw materials corn cobs, rice husks, straw, wood shavings, and sawdust-are compara- tively bulky but lightweight, and trucking enterprises (which are paid by weight) are unwilling to haul them. Shortfalls have also occurred in deliveries of hydro- carbon raw materials. Finally, production of SCP has been held back by problems with equipment corrosion and the aging of the older plants. 25X1 25X1 25X1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Figure 5 USSR: Importance of Single-Cell Protein in Supplies of High- Protein Feeds, 1965, 1975, and 1984a Percent Oilseed meals 0 Single-cell protein Plans To Increase and Improve Feed Supplies Growth in Production The 1981-85 Five-Year Plan called for increasing the supply of feed to 500-509 million tons of feed units by 1985, and the Food Program extended the goals to 540-550 million tons by 1990. Achieving even the lower end of the targets for 1985 (500 million tons) and 1990 (540 million tons) is unlikely. Feed use during the 1981-84 period averaged nearly 415 mil- lion tons of feed units annually, far short of the 1985 target." Late in 1985, supplies of feed-from a 200- million-ton grain crop, a new record in production of Table 2 Projected Fulfillment in 1990 of Soviet Plans for Feed Availability a Total feed Concentrates At Least 50 to Less Than 90 Percent 89 Percent 50 Percent of Plan of Plan of Plan Concentrate- X roughage balance Protein content b X Other high- X protein crops Single-cell X protein c a Given our most likely scenario, grain imports of 40 million tons and no soybean imports b Norm level rather than plan. Total protein content is closer to plan than the components listed because several important compo- nents, such as milk and fishmeal, that already are in adequate supply are not included. Assumes planned growth for 1986-90 is the same as that in the revised 1981-85 Plan. harvested roughages, and roughly 40 million tons of grain imports (calendar year)--suggest that total feed used during the year will be up roughly 3 percent over 1984." Current feed conversion ratios indicate that about 500 million tons of feed units would be sufficient to produce the livestock products and support the herd growth targeted for 1990. Because this quantity is " Our estimated 40 million tons of grain imports in calendar year 1985 includes 28 million tons imported during January-June, needed because of the lower 1984 grain crop, and 12 million tons Total feed use reached a record 410 million tons of feed units in 1978 and then fell back to about 400 million tons for the next four years. Increased supplies of both grain and roughages in 1983 boosted reported feed use to a new record 424 million tons, which Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret somewhat less than the Food Program target, we may understate the Soviet potential to increase livestock production in the sections ("Concentrates" and "Roughages") that follow." Alternatively, the Soviets may not attempt to rigorously follow an integrated plan. In a recent television interview, a leading acade- mician of the Academy of Agricultural Sciences said, "We have not had balanced plans for years," and that the plan is used primarily to exert pressure on manag- We believe that the Soviets will have mixed success in carrying out their ambitious plans for increasing the availability of feed. Our estimates of the likely degree of plan fulfillment for both the quantity and quality of major categories of feed are summarized in table 2. If Moscow continues importing large quantities of grain, roughly 90 percent of the 1990 target for availability of total feed will be achieved. Protein content will also come close to its target but will still be 5 to 8 percent short of the Soviet norm. Milk, meat and bonemeal, and fishmeal will continue to be major sources of high protein supplements, but availability of protein from domestically produced oilseeds, other high-protein crops such as pulses, and SCP will fall well below plan. A more detailed review of each of these feed categories is presented below. Concentrates. The share of concentrates in total feed used dropped from 36 percent in 1980 to 35 percent in 1982 and to just under 34 percent in 1984. "The difference may arise from a number of reasons. Perhaps the plans for feed production are not derived from planned product output but from plans for herd growth and normed quantities of feed per animal; perhaps feed production plans and feed consump- tion plans are not checked for consistency, particularly those for the private sector, which still produces about 30 percent of total meat, milk, and eggs; perhaps the current reported feed conversion ratios do not represent real averages but a better-than-normal situation. (Soviet animals are still largely marketed at lower weights than most Western animals and gain weight slowly, although, according to Soviet textbooks, weight is one of the criteria used in planning feed needs.) Finally, it is also unlikely that feed for livestock not included in the calculation-camels, oxen, buffalo, mules, and reindeer account for much of the difference. On I January 1971, the most recent data available, there were fewer than 4 million such animals, and well over half of these were reindeer. There were 7.5 million The goal of maintaining the one-third share of con- centrates in the overall livestock feed supply during 1986-90 implies an absolute increase planned in con- centrate feeding of 13-14 million tons from 1985 to 1990 (including 1 1-12 million tons of grain). But if the grain area harvested remains constant and if our "most likely" estimate of the increase in grain yields is correct, grain production would increase only by some 10 million tons from the 1985 trend level (190 million tons) over the next five years.16 Consequently, in the absence of improvements in feeding efficiency or adjustment to differing needs for concentrates among different classes of animals, grain imports associated with the 1990 crop would have to be roughly 10 million tons higher than the 30 million tons associated with the 1985 crop." " Long-term weather patterns and trends in fertilizer delivery to agriculture suggest that Soviet grain production during the 1986-90 period probably will average 195 million tons annually, reaching rou hly 200 million tons in 1990. Largely because of unusually favorable precipitation during the crop season, we estimate 1985 grain output was about 10 million tons above the long-term trend. The estimate falls well within the 95-percent probability range or within 15 million tons of the projected crop (op. cit., p. 11). " These calculations are sensitive to assumptions about feeding efficiency-the change in quantity of feed required per unit of output. In view of the relatively stable feed conversion ratios in the USSR since 1970, we believe the conversion coefficients are likely to remain close to current levels for the balance of the decade unless plans to increase supplies of domestically produced high-protein feeds are at least partially achieved. If, however, feed conversion ratios for each type of meat, for eggs, and for milk were to improve by 0.5 percent per year over the five-year period, the decreased need for feed would reduce the requirement for grain imports by some 10 million tons in 1990. A 0.5-percent annual improvement is roughly the rate achieved by several West European countries in production of pork and eggs over the first half of the 1970s. Although the West European countries were generally at higher levels of feeding efficiency in 1970 than are currently observed in the USSR, many of their practices such as the ways in which roughages were stored were similar to present Soviet operations. While there is much room for improvement in feeding efficiency, we believe that some of the gains anticipated from, say, increased protein in the feed ration-could be offset by failure to improve other factors that have been affecting feed quality. For example. given past practice, upgrading and expansion of storage facilities sufficiently to preserve nutritional content of increasing quantities 25X1 25X1 25X1 25X1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret Table 3 USSR: Roughage Availability- Plan and Actual 1975 Plan Actual Coarse feed 251 238 Hay and haylage 142 NA Of which: Hay NA 79 Succulent feed 449 502 Of which: Silage 258 171 Pasture fed NA 387 Summer green feed 762 NA Succulent and summer green feed 1,211 NA Succulent feed and pasture fed NA 888 Gosudarstvennvy pyatiletniv plan razvitiva narodnogo kho- zravstva SSSR na 1971-1975 godv, Moscow, 1972, p. 175. h Narodnove khozvav.stvo SSSR v 1980 g., p. 253. G. C. Gaponenko, Osnovnvve napravleniya razvitiva sel'skogo khozvavstvo v desvatov pvatiletke, Moscow, 1976, p. 76. d G. P. Rudenko, Razvitive agropromvshlennogo kompleksa v odinadtsatov pyatiletke, Moscow, 1982, pp. 42, 44. Ya. P. Ryabov, .Sotsial'no-ekonomicheskoye razvitive SSSR v odninadtsatoy pva- tiletke, Moscow, 1981, p. 41. Includes a portion of summer green feed. Million tons expressed in physical terms 1980 1985 Plan Actual Plan ,i 248 232 NA 159 NA 187 to 192 NA 79 NA 436 586, NA 254 199 260 to 275 NA 363 NA 747 NA 690 1,183 NA NA 949 Roughages. Coarse feeds, primarily hay and haylage, are to supply 20 percent of total feed units in 1985- an increase from the 15-percent share in 1980. To- gether with the planned increase in availability of total feed units, this share implies a growth in coarse feeds of about two-thirds from 1980 to 1985. Plans for the second major category of roughages, succulent feeds, are difficult to interpret because of terminology and overlapping categories. Succulent feed reported by the Soviets as "used" includes silage and "summer green feed" but excludes pasture grazed. The plan category "summer green feed" in Soviet planning parlance, however, appears to include the "pasture fed" category of feed use (table 3). Plans for feed grazed from pasture are seldom published, nor (except in rare cases) do data appear on total summer green feed used. Consequently, any conclusions about meet- ing plans for these categories are highly tentative. The 1985 plan calls for the share of feed units from succulent and summer green feed to be roughly the same as that actually supplied by succulent and pasture in 1980, implying an increase of about one- fourth in supply. The supply of roughages will probably improve, al- though targets are likely to remain out of reach. As in the past, several factors militate against meeting plans: ? Planned fertilizer deliveries are not yet sufficient to raise yields to the levels needed to meet output goals. Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret ? Yield increases from land improvement (irrigation and drainage) are slow in coming. ? Specialized equipment for harvesting continues in short supply. ? Storage facilities are woefully insufficient even for current production levels. Nonetheless, the shortfall from plan in availability of roughages is likely to decline from 20 percent in 1980 to an estimated 12 percent in 1990. A continued slow improvement in supplies of crucial inputs is probable. Conservatively, growth in produc- tion of harvested roughages will average about 2 percent annually, somewhat less than the unusually high average of 2.8 percent achieved during the 1981- 84 period, but above the 1.1-percent average regis- tered during the 1971-84 period. Quantities of feed from pastures-which will probably continue to be the residual claimant for fertilizer, seed, pesticides, irrigation equipment, and water supply-probably will be relatively unchanged. Reducing the Protein Shortage An obvious short-term solution to the Soviets' live- stock-feed protein shortage is imported soybean meal; however, as we have noted, very large quantities would be required. Such imports would be expen- sive-for example, 10 million tons at mid-1984 prices would cost about $1.7 billion, an annual cost that Moscow could expect to repeat indefinitely-and would confront the mixed-feed industry with the technical difficulties inherent in incorporating the meal into feed rations. Reportedly, problems with handling, solidification during storage, and high "shrinkage" (losses) did cause Moscow to draw back sharply in 1984 from the 2.3-million-ton level posted by soybean meal imports in 1983. High-level Soviet officials continue to state, moreover, that the USSR does not want to become dependent on soy imports. Moscow plans to increase the protein content of animal rations in the longer term through three major domestic production efforts: oilseed meals; other crops that have a comparatively high-protein content, such as pulses, alfalfa, and clover; and single-cell protein. Plans for production of all three groups are ambitious, and goals appear to be beyond reach. Moreover, we do not expect substantial increases in the supply of animal-based protein feeds. If plans to supply the meat-processing industry with updated and complete equipment for processing byproducts are carried out, output of meatmeal and bonemeal could be increased by at least one-fourth, adding the equivalent of a few thousand tons of soybean meal as meat production continues to increase. Oilseed Meals. The area sown to oilseed crops- sunflowers, cotton, soy, rape, and so on has been fairly constant, averaging 10 million hectares annual- ly during the 1979-84 period. Yields, however, have shown no increase during this period. The sunflower and cotton crops supply seed for roughly 85 percent of oilseed meal produced from domestic resources. Production of sunflower seed averaged 5.1 million tons during 1981-84-well below the nearly 6-million- ton crops of the early I 970s and even further below plans to produce an average of 6.7 million tons during the 1981-85 period. Persistent hopes to improve sun- flower yields have been thwarted by a lack of high- yielding and disease-resistant hybrid seeds; weather difficulties (particularly drought during periods cru- cial to growth); and increasingly frequent outbreaks of disease (mold and mildew), which are possibly the result of incorrect crop-rotation practices. For these reasons, plans to produce 7.2-7.5 million tons of sunflower seed annually during the 1986-90 period appear to be too optimistic. In contrast, cotton production during 1981-84 aver- aged 9.4 million tons, somewhat above the 1981-85 plan for 9.2 million tons annually. Although currently available at roughly the planned level, cottonseed is not so desirable a source of oilseed meal as sunflower seed because it is low in lysine and several other important elements. It also contains the substance gossypol, which is toxic to nonruminant animals such as hogs and causes mottling of egg yolks if fed to laying hens. Soybean production continues to disappoint Soviet agricultural planners. Agroclimatic conditions are generally unsuitable; where production is possible, 25X1 25X1 25X1 25X1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 yields are less than one-third US yields. Moreover, incentives for soybean production are lacking. Earlier plans to produce 1.4 million tons annually during 1981-85 and 2.2-2.3 million tons annually during the 1986-90 period were based on unrealistic expecta- tions; production averaged only 530,000 tons annually during the 1981-84 period." The 1986-90 Plan may be scaled down. The USSR has usually used rape, which provides excellent forage, for grazing and green feed; it has used both the spring crop and an unreported but probably large area of the winter crop. Soviet plans call for output of rapeseed to increase to 500,000 tons in 1985 and 1.5 million tons in 1990. These goals, too, appear to be overly ambitious; winter rapeseed pro- duction reached a high of 35,000 tons in 1983; production of spring rapeseed is not published, but regional press reports indicate it is insignificant. We believe rapeseed meal will not add large quantities of protein to animal rations through the 1980s. Pulses and Other High-Protein Crops. Plans to in- crease area sown to pulses to 7.0-7.5 million hectares in 1985-roughly 50 percent more than was sown in 1980-came close to being achieved. Preliminary data indicate 6.8 million hectares were planted to these valuable crops. Much of the increased area is in the Ukraine where yields have run as much as 50 to 80 percent higher than the countrywide average. Larger plantings in higher yielding areas and good moisture raised average yields to an estimated 14 quintals in 1985, only 5 percent short of the record yield achieved in 1970. Nonetheless, to meet the 1990 production target of 18-20 million tons, a yield in- crease of about one-third over the 1985 estimated level would be needed even if the area devoted to pulses reaches the previous record (10.8 million hect- ares in 1963). Yields will, however, remain relatively low, because chronic difficulties in seed selection and in maintaining seed purity are not likely to be over- come soon. Similarly, longer range plans to raise the alfalfa area to 10 million hectares and the clover area to 8-9 million hectares by 1990 (from 1984's 6.8 and 6.2 million hectares, respectively) are not likely to be met. Another, perhaps key, factor slowing expansion of these crops is the limited development of high-yielding and disease- and pest-resistant varieties. Until recent- ly, shortages of good-quality seed also hindered pro- gress. The establishment of specialized seed-produc- ing farms in the past few years, however, apparently has been beneficial. In December 1984, TASS report- ed that collective and state farms' needs for alfalfa seed will "now be basically satisfied." " Single-Cell Protein. During the 1981-85 Plan period, nearly 3 billion rubles were scheduled to be invested in further development of the microbiological indus- try. The share to be directed to producing SCP has not been published, but it undoubtedly is large. SCP accounts for an estimated two-thirds of the value of the microbiological industry's production. Production of single-cell protein was slated to reach 1.9 million tons by 1985-more than double the 1980 level and about one-third more than was produced in 1984. No plans for 1990 have been published. The numerous chronic shortages of raw materials (particu- larly of paraffins) for growing SCPs, the slowness in commissioning new capacity, and "acute problems in using available capacity" suggest that 1985 plans will not be met. Although SCP is not a panacea for the protein deficit in livestock feed, it will contribute to raising the protein content of feed rations toward the established target. For many years to come, however, the avail- ability of domestically produced oilseed meals and animal products (particularly milk and skim milk) will be more important determinants of the overall protein content of the feed supply. "This is noteworthy if true. In January 1984, Sei'ska' a rhi:n, the central agricultural organ, reported that the majority of farms producing seed failed to meet plans for selling seed to the state. The article did not quantify the extent of the short fa I 25X1 25X1 25X1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret Gains in Feed Availability The Food Program's emphasis on expanding forage crop production and increasing meat output has not yet had a marked effect on productivity, that is, on the changing relationship between inputs of feed units and output of meat, milk, or eggs. When examined in quantitative terms by comparing aggregated livestock output with the appropriately weighted quantities of feed required to produce it, productivity increased by only 1.2 percent over the 1981-84 period. Since 1980, feed conversion ratios (state and collective farms only) for milk have gone up slightly, those for beef have been relatively constant, and those for pork have gone Because herds are planned to grow only slowly and we believe farm managers will adhere to this plan, this scenario implies a substantial gain in feed per animal and a slowdown in the rapid rise in production costs noted since 1975.20 Moreover, the share of concen- trates would be slightly under 33 percent, suggesting a further, albeit slight, improvement in achieving a concentrate-roughage balance similar to that which exists in the United States. If, in addition, plans for domestic production of high-protein supplements are partially achieved, the protein content will also in- crease. Achieving half the planned increases would, for example, raise protein content from the present 25X1 estimated 98 grams to 100 to 102 grams per feed unit. Nonetheless, because programs of the past few years appear to be having an impact on increasing domestic supplies of feed, although to only a limited degree per animal so far, we believe that substantial progress toward meeting meat production goals may well occur. Indeed, if paired with good weather the de- mand for imported grain may be substantially re- duced. Because the development of the farm sector to 1990 will depend strongly on weather and on how Gorbachev carries out his stated intentions, we pre- sent three scenarios: first, a most likely scenario and the gains for the consumer implied by this outcome, and then two alternatives, favorable and unfavorable. A more suitable concentrate-roughage balance and increased protein content should lead to improved efficiency. If herd growth is kept to the planned rate, the shortage of energy per animal would be cut in half, to about 10 percent. The increased protein content would also improve utilization of the available feed. As a result, producing the targeted quantities of livestock product would probably require grain im- ports of less than 40 million tons. Although quantities cannot be estimated precisely, the reduction could be as much as 5-10 million tons. At the same time, much of the gain from increased protein content may well be offset by other factors such as the lack of adequate storage facilities for maintaining high-quality harvest- The most likely scenario for livestock feed availability by 1990 suggests the USSR would have roughly 500 million tons of feed units-somewhat less than plan but enough to meet planned meat, milk, and egg goals and to support planned herd growth-if: ? Grain production increases at 2 million tons per year, the rate we project, on the basis of long-term weather patterns (average) and the trend in fertilizer delivery to agriculture. ? The supply of harvested roughages increases about 2 percent a year, somewhat slower than the nearly 3- percent growth achieved during 198 1-84 but above the long-term rate. ? Current feed conversion ratios are unchanged. ? Grain imports equal roughly 40 million tons in 1990. ed roughages through the winter months. Gains for the Consumer Achieving the recently announced 1990 meat-output goal of 21.0 million tons would mean a 17-percent gain in production per capita from 1984, an average of about 3 percent annually.21 Per capita meat avail- ability, however, would grow less rapidly-2 percent "'Gorbachev has consistently argued the need to improve animal productivity, and planners appear to be incorporating this convic- tion into their plans. For example, according to the Soviet press. three-fourths of the gain in milk output during the 1980s is scheduled to come from increasing milk yield per cow. In Soviet terms, meat includes poultry and is defined as slaughter weight, including slaughter fats and edible offals. To be comparable to Western retail measures of meat, roughly 18 percent of the total--slaughter fat and trim- should be deducted. This goal represents a slight reduction from the 21.7 million tons announced in the Food Program but is still sufficient to cover the per capita Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret annually-unless Moscow continues to import meat at the record near-million-ton level of recent years. Even this lower rate of growth far exceeds the 1- percent growth in availability achieved since 1975 and would help reduce shortages and queuing for meat. The leadership, in turn, would benefit from having proved its ability to successfully implement a program based on improving levels of living. More Favorable Than Earlier Estimates ... This scenario presents a far more favorable outlook for the USSR than our previous analysis predicted. This outlook is based largely on the excellent rough- age outturns of the past few years. Continuing the roughage expansion will require steady yield in- creases, a continuation of the current government policy that allocates resources toward their produc- tion, and continuation of current incentives for farms to produce roughages.22 ... But Other Outcomes Are Possible In the first alternative scenario, unusually good weather throughout the balance of the 1980s would allow increases in production of all crops. Very good weather and the meeting of planned targets for fertilizer deliveries and application-up 6 percent a year-would increase grain production to 230 million tons, about 30 million tons higher than our most likely scenario, thus substantially reducing the need to import grain for feed.23 Because Moscow would continue to emphasize the necessity to produce rough- ages and to direct resources toward that end, the scenario also assumes that roughage output plans-as well as those for adequate harvesting and storage of these crops-would be met. These levels of grain and roughages production would provide more than enough feed units to produce-at present feed-conver- sion ratios-planned output of meat, milk, and eggs. 11 The overall area devoted to roughages cannot be expanded substantially except at the cost of other crops, although limited gains can be achieved through shifting crop patterns. This calcula- tion assumes a 2-percent annual increase in feeding of roughages, somewhat less than the 2.8-percent average growth achieved during the 1981-84 eriod, but equally above the 1971-84 average rate. 11 I The likelihood of this outcome-which implicitly assumes that equipment, labor, and facilities to handle these large crops are available-is estimated to Indeed, the increase in availability of roughages would be sufficient to offset the need for any grain imports if planners finally realize the extent to which an increased share of roughages in a larger ration can improve the balance and thus raise milk and meat yields. Under these circumstances, farmers would be told to reduce the share of grain in feed rations substantially below current planned levels. Moscow, in turn, would be able to reallocate domestic grain from feed to stock building and possibly to export. Gains in efficiency arising from ample supplies and better balance of feed per animal would ultimately make even more grain available for alternative uses. It is unlikely that Moscow would use this dividend to boost meat and milk production in the next five to six years; processing and handling even the planned quantities may strain the system. In the second alternative scenario, unfavorable weather would approximate conditions like those in 1961-65, with precipitation equal to the lowest five- year average of the 1961-65 Plan period. Grain production would be 30 million tons less than our most likely estimate. Moscow would talk about the importance of roughages but fail to continue increas- ing the allocation of resources necessary to their production. Growth in availability of roughages would continue at the 1971-84 rate of roughly 1 percent. Consequently, output would be some 20 million tons (in terms of feed units) less than if the supply grew at the 1981-84 rate. The likelihood of this outcome is estimated to be less than I in 20. Even with the ongoing improvement of port capacity, the USSR probably could not handle the more than 75 million tons of grain imports that would be needed-in the absence of marked improvement in feed efficiency- to compensate for both lower production of grain and slower growth in availability of roughages. Purchases of such magnitude would have a marked upward effect on world grain prices, further increasing the USSR's hard currency burden. As in the past, the consumer would bear the brunt of the adjustment. Growth in per capita production of meat would be noticeably slower than planned growth 25X1 25X1 25X1 25X1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret of disposable money income, and the current gap between supply of and demand for meat would widen. Measures to cope with the situation and curb consum- er discontent might include providing large quantities of other desired goods to reduce the demand for meat, expanding even further the specialized food distribu- tion networks, and increasing meat imports substan- tially above the nearly 1-million-ton average of the early 1980s, The last alternative would not necessarily add substantially to hard currency spending because only one-third of the meat now imported is from hard currency trading partners. Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87TOO787ROO0100030002-1 Secret Appendix A Production of Livestock Feed Production of livestock feed, in terms of energy available per animal (feed units), is still nearly 20 percent below announced Soviet standards. It has consistently fallen short of the target. The impact on the average feed ration of those gains in total avail- ability of feed that did occur has been largely offset by the strong emphasis on expanding livestock herds (table A-1). Soviet farms, however, did come fairly close to meeting targets for feeding concentrates throughout the 1970s. In part, this was possible because of the substantial growth in grain production before 1979 (table A-2). Since then, of course, massive grain imports have played a key role. Growth in production of roughages was much slower, and farms fell far short of roughage feeding targets. These crops were slighted in allocation of yield-enhancing fertiliz- ers and pesticides and suffered from a lack of special- ized equipment for harvesting. Moscow apparently did not realize that the growing imbalance between roughages and concentrates-particularly in rations for cattle (which require substantial quantities of roughages for efficient use of concentrates)-was as much a hindrance to increasing animal productivity as the chronic shortages of feed. Soviet animal nutritionists used to stress the impor- tance of increasing the quantities of concentrates fed to livestock, both in absolute amounts and as a share of the ration. Brezhnev's initial agricultural programs outlined in 1965 and 1966-particularly the pur- chase-price increases for livestock products and the removal of sliding-scale crop purchase prices-en- couraged farms to do so. From 1965 to 1980, the quantity of concentrates fed more than doubled, and the share increased from about 23 percent (in terms of feed units) to 36 percent. According to the Soviet press, in some areas (such as Estonia) the share of grain-the major concentrate fed-per standard ani- mal reached 60 percent of the feed rations.21 Such rations are not only expensive but also lead to serious digestive problems and poor reproduction. These ex- tremes occur because of a lack of other feeds (includ- ing other concentrates) particularly in winter and early spring. In the late 1970s-perhaps finally recognizing that the traditional stress was misplaced-Soviet state- ments began to emphasize the importance of forage crops and the need to reduce the use of grain. Pravda, 20 June 1978, stated: "The use of concentrates to make up for shortages of hay, silage, haylage, and root crop in feed is unacceptable." At a July 1978 agricultural plenum, Brezhnev again stressed the im- portance of improving the quality and quantity of forage crops, as he had done repeatedly since 1964. The several decrees that followed this plenum, howev- er, had no more effect than earlier exhortation. Feeding of harvested roughages increased by only 40 percent during the first 15 years of Brezhnev's leader- ship. Reported feed derived from pasture declined by 3 percent despite an 8-percent increase in total farm pasture area (figure 6).25 z? Animals are aggregated to standard units according to feed requirements. A standard unit is equivalent to a cow. Various technical publications indicate that Soviet animal nutritionists consider the optimum concentrate share for cattle rations to be about 20 percent; for hog rations, about 75 percent; and for poultry rations, about 80 percent. These percentages imply an average concentrate share of about 30 percent-given the current Soviet herd structure-but planners continue to reiterate the 33-percent share. 0 zs Official statistics on feed from pasture must be used with caution because, according to Soviet textbooks, they are partly approximat- ed and may overstate or understate true quantities used. F_ 25X1 25X1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87TOO787ROO0100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret Table A-I USSR: Selected Statistics on Feed and Livestock Herds a Total Feed Used Feed per Standard Animal h Growth in Livestock Herds, (million feed units) (quintals offeed units) Yearend (index. 1970=100) 278.5 22.5 92.1 1970 24.8 100.0 1971 24.8 103.6 1972 344.1 24.6 103.5 1973 366.2 25.6 106.6 1974 387.0 26.3 109.7 1975 368.5 25.1 106.4 1976 365.0 25.5 107.7 1977 403.0 27.3 1 12.1 1978 409.6 26.9 1 14.4 1979 403.3 26.1 1 15.6 1980 398.1 25.7 115.7 397.5 25.5 116.6 402.6 25.6 118.4 1983 424.0 26.4 121.2 1984 431.4 121.9 a Narodnoye khozyaystvo SSSR v 1984 g., Central Statistical Administration, Moscow, 1985, pp. 279, 293, and earlier years. n Animals are aggregated to standard units according to feed requirements. For example, a standard unit is equivalent to a cow, and a hog being raised for slaughter is given an equivalent weight of 0.5. Cattle, hogs, sheep and goats, and poultry weighted by respective average prices paid all producers in 1970. During 1981 and 1982, absolute quantities of both concentrates and roughages fed remained essentially constant. By the end of October 1982, however, procurement data indicated record quantities of for- ages were going to be harvested. In part, this resulted from a longer, more favorable growing season that year, but it was also a result of increased quantities of chemical fertilizer and specialized machinery being overall supplies of feed even though concentrate feed- ing remained constant. Late October procurement statistics indicated that a new forage crop record was being achieved in 1985. Apparently, the Food Pro- gram emphasis on increased supplies of fertilizer and equipment, combined with slowly expanding storage facilities for forage crops, continues to have a positive allocated to forage production In 1983 and 1984 forage production continued to expand. Indeed, the supply of harvested roughages in 1984-despite a later start to the harvest and some- what less favorable weather conditions-was still some 6 percent larger than in 1982. The increased availability of forage meant a substantial increase in Proper storage facilities for harvested forages are crucial, because the nutrient value of forages depends not only on initial quality but also on final quality when fed. In the USSR, proper storage facilities are limited, and physical losses as high as 40 percent have Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Table A-2 USSR: Production of Grain and Selected Feed Crops b Corn for Silage and Feed Roots Green Feed Hay and Green Feed Excluding Corn, in Hay Equivalent'' 82.5 1970 110.3 115.8 223.8 131.2 1977 195.7 135.3 1978 151.7 1979 38.4 134.4 1980 41.6 148.0 1981 158.0 c 232 149.0 1982 180.0 294 160.0 1983 195.0 298 48.1 1984 180.0 312 58.3 Narodnove khozvaystvo SSSR v 1980 g., Central Statistical Administration, Moscow, 1981, pp. 201-203, and other years. n Several feeds combined on the basis of Soviet equivalent feeding values. Unofficially reported. been cited in Soviet literature dealing with agricul- ture. According to Soviet specialists, total annual storage losses for silage and haylage average 20 million tons (physical units) and for hay, 6 million tons (physical units). These losses are equivalent to 8 percent of total average annual silage and haylage use and to 7 percent of average annual hay use, respec- tively. In 1980, for example, only 40 percent of silage, 80 percent of haylage, 10 percent of root crops, and 8 percent of hay were stored in facilities intended for that purpose. One part of roughage production is still neglected- pasture. In the USSR, pastures occupy well over 300 million hectares-roughly half the total agricultural land-and reportedly provide about 18 percent of Million tons e.vpressed in physical units animal feed (nutrient value)." Soviet agricultural spe- cialists have long noted that little chemical fertilizer is used on pasture, that manure is applied at half the recommended rates, and that the large sums devoted to providing water for pasture have had only limited results. Indeed, lack of attention to pasture in the desert and semiarid parts of the country-about two- thirds of total pasture-has caused serious declines in feed quality and yields, slowing growth of mutton and beef production. In 1983 one-third of Kirghizia's natural pasture was "covered" with harmful grasses that livestock would not eat. The Soviets are likely to Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret Figure 6 USSR: Feeds Used by Major Category, 1965-84 a Million tons 500 Coarse and succulent 0 1965 70 75 80 83 84 a Feed supplies are aggregated in Iced units, using oats as the standardthat is. one feed unit contains the nurticnt equivalent of I k ilografl of oats be slower to change pasture management than they have been in recognizing the need to increase harvest- ed roughages. According to the USSR Minister of Agriculture, there is "widespread opinion that pastur- ing of livestock has lost its importance now that animal husbandry is being conducted on a more industrialized basis." Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret Appendix B The Protein Content of Soviet Livestock Feed In 1980 a Soviet livestock specialist wrote that the average feed ration contained 95 grams of digestible protein per feed unit, compared with the long-estab- lished Soviet norm of 105 to 110 grams. According to a later source, in most areas of the country the protein content was up to 100 grams (probably in mid-1984). Our calculations suggest that average protein content reached 98 grams per kilogram of feed units in 1983. fed to cattle, even though they have different require- ments for various supplements.27 In the USSR the major sources of high-protein feeds-those containing 20 percent or more of their weight as crude (total) protein-are nonprotein nitro- gen (which converts to protein in the digestive pro- cess), oilseed meals, animal products such as meat and bonemeal, and single-cell protein.28 The Soviet focus on average or "norm" protein con- tent probably is misguided. Providing the correct quantity of protein for the specific animal is far more important in raising productivity. Rough calculations indicate the Soviet protein norm is reasonably compa- rable to the recent average ratio of protein content to total feed in the United States. If adjusted for herd structure, however, the Soviet norm is somewhat high according to our estimates of a US recommended average for each class of animal. US textbooks on feeding present protein needs according to weight, age, type of animal, and desired productivity rate; the needs are not aggregated or averaged, and recom- mended amounts vary from 44 grams per kilogram of metabolizable energy for dairy cows to as much as 300 grams or more for young poultry. Recently, US specialists have questioned the validity of listing ag- gregate protein requirements. Crude measures of the amount of protein do not take quality-the amino acid composition-or digestibility into consideration. In the United States, major feed users and the many centralized computer systems for individual farmers are determining least-cost feed rations increasingly on the basis of amino acid content (basic components of protein) rather than protein. In the Soviet Union, systems to help farms mix their own feeds most efficiently do not exist. In addition, the farms do not have direct relations with suppliers but are forced to take the feeds allocated to them. In 1984, for exam- ple, about half the mixed feed prepared for hogs was Nonprotein nitrogen. This feed, mainly urea, is used routinely in rations for ruminants (cud-chewing ani- mals such as cattle) in the United States and Western Europe to replace small amounts of plant protein. Western authorities note that the USSR makes little use of this feed because of the risk of poisoning and even death from its incorrect addition to rations or overdoses. During the 1980-83 period, the USSR used annually an average 115,000 tons (nutrient value) of urea in feed, or about 15 percent of the quantity used in the United States, which had a 2-percent smaller cattle inventory during the period. Because urea is used most efficiently in well-balanced, high-energy rations-and not as a supplement to low-quality roughages-the USSR, given its generally poorly balanced and energy-deficient feed rations, is proba- bly wise not to strive for substantial increases in urea use. Oilseed meals. These feeds currently make up about one-third of high-protein feeds, down from about 44 percent in 1965. For much of the period, oilseed meal from sunflower and cotton accounted for over 90 percent of total oilseed meal. From 1978 to 1983, the 'e Crude protein refers to all the nitrogenous compounds in feed; digestible protein refers to protein utilized by the animal and is estimated by coefficients derived over time from feeding trials. Single-cell protein is a collective term including protein-rich micro- organisms such as bacteria, algae, and fungi (yeast and molds) grown on byproducts of oil, on methanol, or on organic wastes from Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret importance of soybean meal increased to a peak of nearly 45 percent in 1983.29 The cutback in imports of both soybeans (which are processed into meal) and soybean meal in 1984 reduced the share to an estimat- ed 30 percent. Animal products. These feeds-mainly whole and skim milk, buttermilk, whey, meat and bonemeals, and fishmeals-supply about half the estimated pro- tein available from high-protein feeds in the USSR. The USSR uses roughly 11-12 million tons of whole milk (12 percent of total production) and more than 20 million tons of fluid skim milk, buttermilk, and whey annually in feeding livestock, roughly the same quan- tities used in 1970. Efforts to reduce these quanti- ties-considered unjustifiably large by Soviet special- ists-have not been successful. Growth in production of starter feeds and fluid milk substitutes has been slow in the USSR. By 1983, for example, annual production of fluid milk replacers such as dried skim milk and whey had reached only 310,000 tons, equiva- lent to 2.4 million tons of milk. Production of fishmeal, meatmeal, and bonemeal grew steadily from 1965 to 1975, but it has held constant since then. Fishmeal output has been con- strained by the effects on Soviet fishing of other countries' expansion of offshore economic zones in recent years. Meatmeal and bonemeal output have been limited not only because of the relative stagna- tion in meat output in some years (notably 1979-82) but also because more than one-fourth of the meat- processing enterprises lack facilities and equipment to process these byproducts. Complaints in the press and in the technical journals about the resulting waste are common. The USSR chose to develop the SCP industry because domestic sources of high-protein feed supplements are limited. Moscow is firm in its desire to remain free of permanent dependency on foreign suppliers. 2 The increase was a result of large soybean and soybean meal imports. Imports of soybeans during the early 1970s were more closely related to the need for vegetable oil than to that for oilseed Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1 Secret Secret Sanitized Copy Approved for Release 2011/03/03: CIA-RDP87T00787R000100030002-1