PROSPECTS FOR AGRICULTURE IN COMMUNIST COUNTRIES AS OF MID-AUGUST 1968

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001600010061-3
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 12
• Document Creation Date: December 22, 2016
• Document Release Date: October 1, 2009
• Sequence Number: 61
• Publication Date: August 1, 1968
• Content Type: IM

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Confidential
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
Prospects for Agriculture in Communist Countries
as of Mid-August 1968
y'1
Confidential
ER IM 68-111
AUGUST 1968
COPY NO. 76
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WARNING
This document contains information affecting the national
defense of the United States, within the meaning of Title
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Its transmission or revelation of its contents to or re-
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GROUP I
[XCLUILn n1OM AUTOMATIC
OONN(IIIADINO AND
DLCLAIINI-ICATION
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CONFIDENTIAL
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
August 1968
Prospects for Agriculture in Communist Countries
as of Mid-August 1968
Summary
Agricultural prospects as of mid-August were
relatively favorable in the USSR and the northern
coui.:ries of Eastern Europe, but were below average
in Communist China and in the southern countries of
Eastern Europe. Total production of grain for the
Soviet Union and Eastern Europe taken together will
be close to the level achieved in 1967, but the
output of other important food crops will probably
be somewhat below last year. Preliminary indica-
tions are that Communist China's grain harvest will
be appreciably below last year's excellent results
(see the table) .
Communist China's grain imports in the 1969
trade year (1 July 1968 - 30 June 1969) are likely
to be larger than the 4.2 million metric tons im-
ported in the previous year. The USSR probably will
not import grain during the 1969 trade year, other
than the 4 million tons specified in the three-year
agreement with Canada, which runs through mid-1969.
Indeed, if the harvest turns out as now expected, the
USSR probably will continue to be a net exporter of
grain. Eastern Europe's demand for imported grain
is expected to exceed that of last year by nearly a
million tons.
Note: This memorandum was produced s o Ze Zy by CIA.
It was prepared by the Office of Economic Research.
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There were wide differences this year compared
with 1967 in the size of the already-harvested bread-
grain crops (wheat and rye) among the Eastern European
countries, ranging from little or no change in Poland
and Czechoslovakia to a decline by one-fourth in
Bulgaria and Hungary. The outlook for fall-harvested
row crops such as corn, potatoes, sugar beets, and
oilseeds is less favorable than a year ago in both
the USSR and Eastern Europe.
The early grain harvest in Communist China was
substantially below the favorable one for 1967.
Moreover, preliminary evidence concerning the size
of the more important fall harvest indicates that
this crop will also be appreciably below last year's
excellent results. Crop prospects and the govern-
ment's domestic grain procurement effort: are further
endangered by the unfavorable effects of the Cultural
Revolution on agriculture.
Production of Grain in Selected
Communist Countries
Calendar Years, 1965-68
Million Metric Tons
1965 1966 1967 1968 a%
USSR 100 140 122 About 122 to 125
Eastern
Europe 60 65 67 About 60
Communist
China 185 to 195 180 to 195 190 to 200 Significantly
reduced
a. Preliminary
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1. With the possible exception of livestock
production, agricultural prospects are generally
favorable in the USSR. It is tentatively estimated
that total grain production in 1968 will be slightly
above both last year's relatively favorable hurvest
(122 million tons) and the average for the years
1964-66 (120 million tons). More importantly, bar-
ring unfavorable har""csting conditions in September,
wheat production (preliminarily estimated at 65
million to 70 million tons) should be the second
largest of the present decade.
2. Timely rains this year in late June and early
July bolstered crop prospects in the new lands
spring wheat areas of Kazakhstan and West Siberia.
An average level of production in these areas and an
outstanding grain harvest in the Volga, Urals, and
the central black-soil zones of European Russia are
expected to compensate for a reduction in grain out-
put in the Ukraine and North Caucasus caused by
drought. However, inclement weather during the
harvest -- a rather frequent occurrence -- could re-
duce present grain prospects in the new lands areas
where harvesting has just begun. In addition,
frequent press reports concerning the shortage of
trucks and railroad cars for transporting grain
suggest that harvesting losses may be higher than
usual in areas yet to be harvested.
3. As a result of dry weather during the spring,
the 1968 production of sugar beets and potatoes is
not expected to be quite as high as the. record
levels of 1967. Precips.tatic.i in ,Tuly, however, im-
proved prospects for these crops to average or
above-average levels. The upward trend in production
of sunflower seed is likely to be interrupted in
1968 as a result of some reduction in both acreage
and yield. Cotton production is expected to be near
the record harvest of the last two years.
4. Prospects for continued long-term expansion
in the output of livestock products during the
balance of 1968 and early 1969 are not favorable.
In some areas the supplies of livestock feed have
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been adversely affected by drought and, as a result,
some distress slaughtering of animals probably will
occur. Feed availabilities in other areas may be
at or slightly above normal levels.
5. The Soviets are expected in the near future
to purchase at least a portion of the 4 million tons
of grain remaining under a three-year agreement with
Canada that ends in mid-1969. The USSR took 3 million
tons in the first year and 2 million tons in the
second year of the agreement. Recently, grain imports
from Canada have been used as a more economical means
of supplying the needs of the USSR's Far East areas and
to fulfill the Soviet commitment to Cuba, which to-
gether total about 2 million tons per year. Although
the size of the Soviet 1968 wheat harvest promises
to be adequate for domestic needs and for export
commitments to Eastern Europe, the area's require-
ments for feed grains will not be met.
Eastern Europe*
6. The mid-August outlook for agricultural
production continues mixed, with prospects ranging
from very good in the northern countries to average
or below in the southern countries. Total produc-
tion of grain for the region is forecast at about
60 milli-on tons, or 10 percent below the bumper
year 1967. The decline largely reflects the adverse
effects of an extended spring drought on yields of
breadgrains (wheat and rye) in the southern countries.
Although harvests of breadgrains in these countries
turned cut better than expected earlier, estimated
declines in output from the level of last year's range
from 17 percent in Yugoslavia to as much as 25 percent
in Bulgaria and Hungary. By contrast, breadgrain
harvests in Poland and Czechoslovakia were at least
equal to 1967 and in East Germany were less than 10
percent below 1967.
* Including the northern countries of East Germany,
Poland and Czechoslovakia and the southern countries
of Bulgaria, Hungary, Rumania, and Yugoslavia.
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i. East Europe's output of other important
crops, such as corn, potatoes, forage, sugar beets,
vegetables, and oilseeds, will not reach 1967 levels.
This forecast is based on reduced acreages of these
crops in most countries and on lower yields in the
southern countries. Although the drought in many
areas was largely broken by mid-July, irreparable
damage to crops planted in late spring already had
been done. The outlook is still not bright, because
soil moisture reserves were considerably below normal
at the end of July in the southern countries and
eastern Czechoslovakia (see chart). Therefore, good
rains during August and September will be needed
to prevent a further reduction in the yields of fall-
harvested crops.
8. The outlook for livestock production for 1968
is favorable in the northern and poor in the southern
countries. Most southern countries have expressed
concern over the large numbers of cattle and hogs
currently being marketed for slaughter by collective
farms, a situation related to the shortage of feed
grain and roughage supplies and resultant higher
feed prices. Hungary and Bulgaria have taken steps
to import feed grain and to restrict state purchases
of livestock in order to prevent a drop in numbers
of hogs and cattle, particularly on private holdings,
but the effort is unlikely to be successful. Gains
made by the cattle industry during the past three
years could be wiped out. While excessive slaughter-
ing may raise meat output in 1968, production of
eggs and dairy products will be down from last year's
level. The full impact of the abnormal slaughtering
will show up in reduced meat supplies by early 1969.
9. In the northern countries, gains in output
and procurement of most livestock products are ex-
pected in 1968. Favorable pasture conditions and
good hay crops will contribute to higher production
of milk and beef. The emphasis on beef production
and the effort to hold down the expenditure of hard
currency for imports of feed grain, however, may
restrict gains in pork and egg production during the
next year. in Poland and East Germany the numbers
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of cattle, cows, and sheep as of mid-year were
higher than a year ago. The production of livestock
products in Czechoslovakia for the first half of
1968 showed gains, but these gains may not be sus-
tained because of deteriorating prospects for output
of forage crops and pastures in Slovakia and the
po_, -ible adverse impact of the rec--:nt political
crisis.
10. Eastern Europe's demand for imported grain
in the 1969 trade year* is expected to exceed that of
last year by nearly a million tons, reflecting the
increased needs of Bulgaria, :iungary, and Yugoslavia.
In spite of Bulgarian and Hungarian official state-
ments claiming that this year's wheat production was
sufficient to cover domestic requirements, both
countries may have to import small quantities be-
fore the 1969 harvest. Their import needs as well
as Yugoslavia's have been tempered, however, by
larger-than-normal carryovers of wheat from the
bumper 1967 crop. Hungarian and Bulgarian require-
ments for imports of feed grain and feed supplements
will be larger than those for wheat. Hungary has
recently announced plans to import at least 600,000
tons of feed grain, nearly 400,000 tons more than
originally planned for 1968. Rumania, a relatively
large exporter of wheat and corn in 1967 (2.3 mil-
lion tons), will have to cut back grain exports
sharply this year. Little change is expected in the
total grain import requirements of the major im-
porting countries of East Germany, Poland, and
Czechoslovakia, which amounted to approximately 5.5
million tons in 1967.
11. The shortfall in agricultural production in
the southern countries this year will reduce their
hard currency earnings from agricultural exports.
In addition, Yugoslavia will need to purchase more
than planned amounts of wheat in hard currency areas
and Bulgaria and Hungary will have to make similar
purchases of feed grains. These developments are
likely to create balance-of-payments problems and
may involve cutbacks in imports of industrial goods.
1 JuZy 1968 through 30 June 1969.
C ONFTT)F.NTTAT.
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Communist China
12. In Communist China, crop prospects for 1968
were dimmed by a relatively poor early grain harvest,*
substantially below the fairly favorable one of 1967.
Although it is too early to predict the outcome of
the more important fall harvest, preliminary indi-
cations suggest that this harvest may also be
appreciably below last year's excellent results.
13. Several factors contributed to the shortfall
in the early grain harvest. Wet weather in the fall
of 1967 delayed the sowing of crops in most of the
important winter wheat and barley growing regions
of northern China. In these areas, precipitation
was well below normal during the late winter and
early spring, further stunting the growth of winter
crops. Although precipitation in April was above
normal, it arrived too late to prevent below-average
yields of wheat and barley. Winter grains and early
rice did not fare any better in southern China.
Unseasonably cold weather in the spring destroyed the
sweet potato crop and killed the seedlings for the
early rice crop in some areas of Kwangtung, Fukien,
and Chekiang Provinces. Torrential rainfall in late
May and unusually heavy and prolonged rainfall in
late June and early July caused further damage to
the early rice crop. The latter disturbance, which
affected South, Central, and Easi- China, flooded low-
lying fields and disrupted harvesting operations.
14. The outlook for the late harvest is less
certain, but growing conditions to date are not as
favorable as last year. In geneial, precipitation
has been much greater than normal in areas to the
south and much below normal in areas to the north
of the Huai River. Because the early rice crop in
South China was harvested late, the transplanting of
late rice has been delayed, extending the growing
season into the period of the year when precipitation
is relatively low and uncertain. Growing conditions
have been generally favorable for mid-season rice,
although unusually large amounts of rain fell over
* The early grain harvest consists, in rour,hl ' ~,(/uaZ
proportions, of winter grains (winter wheat, hnr-,'..c t/,
peas, beans, and sweet potatoes) and earl, rice.
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the important Szechwan Basin during July. The
outlook for fall-harvested grains, sweet potatoes ,
and cotton in North China is only fair. Moisture
conditions in the spring were favorable for sowing,
but the weather then turned dry and remained dry
through mid-June. In the southern portion of the
North China Plain, the drought was broken by
torrential rainfall in late June aid in mid-July,
causing waterlogging and flooding over relatively
large areas of northern Anhwei and northern Kiangsu
Provinces. Precipitation has been far below normal
throughout the growing season in Northeast and North-
west China. The major crops -- spring wheat, miscel-
laneous grains, and soybeans -- are likely to be
poor in these regions.
15. Crop prospects are further endangered by the
unfavorable effects of the Cultural Revolution on
agriculture Disruption in farming operations and
in the supply of chemical fertilizer, pesticides, and
other agricultural inputs have been noted throughout
the year. Political unrest and administrative di s-
organization are also affecting the government's
domestic grain procurement effort. Editorials and
reports confirm that these disruptions are more serious
now than in 1967.
1.6. Given these mediocre harvest prospects, Chinese
Communist grain imports in the 1969 trade year are
likely to be larger than the 4.2 million metric tons
imported in the 1968 trade year. A little more than
800,000 tons of grain under old contracts remains to
be delivered during 1969. Additional imports in the
1969 trade year will come from Australia and Canada.
In August, China's negotiations with Australia on a
new contract for delivery beginning in December 1968
were suspended. Negotiations with Canada are also
expected to begin at the end of August. Persistent
rumors of negotiations with France for the purchase
of 1.5 million tons of grain have yet to be confirmed.
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PERCENT
140
EASTERN EUROPE: SOIL MOISTURE RESERVES AS OF 31 JULY 1966-68 AS A PERCENT OF LONG-RUN AVERAGE
PERCENT
140
1966
1967
1968
r
EAST GERMANY POLAND CZECHOSLOVAKIA HUNGARY RUMANIA BULGARIA YUGOSLAVIA
(Vojvodina Area i
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LONG-RUN 100
AVERAGE