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• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R001200260001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: January 12, 2017
• Document Release Date: August 20, 2010
• Sequence Number: 1
• Publication Date: July 2, 1984
• Content Type: MEMO

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0 2 JUL 1984
MEMORANDUM FOR: (See Distribution List)
Chief, Strategic Resources Division
Office of Global Issues
SUBJECT: Eastern Europe's 1984 Grain Crop
1. The attached memorandum assesses current grain
production prospects in Eastern Europe and the resulting grain
trade implications.
2. This assessment was produced by
Agricultural Assessments Branch, Strategic Resources Division,
Office of Global Issues.
3. Comments and questions are welcome and may be" addressed
to the Chief, Agricultural Assessments Branch,
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Attachment:
Eastern Europe: Early Outlook
for Grain Production in 1984
GI M 84-10120, 2 July 1984
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SUBJECT: Eastern Europe's 1984 Grain Crop
OGI/SRD/AAB~ I(2 July 1984)
Distribution:
1 - Gerald Bange, Agriculture
1 - Elmer Klumpp, Agriculture
1 - Richard Smith, Agriculture
1 - Donald Novotny, Agriculture
1 - Edwin Cissel, Agriculture
1 - Keith Severin, Agriculture
1 - Anton Malish, Agriculture
1 - Harvey Shapiro, Treasury
1 - William Griffith, State
1 - Mary Ann Peters, State
1 - Frank Vargo, Commerce
1 - Susanne Lotarski, Commerce
1 - Ja Bur ess, Commerce
1 - DIA
1 -
1 -
1 -
1 -
1 -
1 -
10 -
1 -
1 -
1 -
5 -
1 -
8 -
SA DD I
Executive Assistant
DDI
DDI/PES
NIO/USSR-EE
NIO/Econ
EURA/EE/EW
CPAS/ISS
DD/OGI, D/OGI
C/SRD
C/SRD/AAB
OGI/EXS/PG/C
OGI/EXS/PG
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Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
0 2 JUL 1984
Eastern Europe: Early Outlook for Grain Production in 1984
Summary
Based on our analysis of weather data and imagery, we
believe East European plans to produce a total of nearly
117 million metric tons of grain are already well beyond reach.
Even with favorable weather for the balance of the growing
season, production is not likely to reach the 99-million-ton
harvest of last year, primarily because sowing shortfalls and
drought have reduced winter grain prospects. While the outlook
for spring grains is brighter in most countries, only Poland and
East Germany have good overall production prospects.
With near-average production, we expect Eastern Europe's
grain imports at a minimum to remain near the estimated 8 million
tons contracted for in the last marketing year. The availability
of credits to finance -grain imports has improved and the region
needs to rebuild livestock herds. If adverse weather cuts grain
production further, increased imports will be likely. We foresee
no gain in US grain exports to the re ion, however, unless more-
attractive credit terms-,.are offered.
This memorandum was prepared by Agricultural 25X1
Assessments Branch, Strategic Resources Division, Office of
Global Issues. Comments may be directed to Chief, 25X1
Strategic Resources Division, 25X1
GI M 84-10120 25X1
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Eastern Europe: Early Outlook for Grain Production in 1984
Introduction
,Grain production in Eastern Europe averages about 96 million
metric tons per year,l but most of the countries do not regularly
produce enough grain to attain self-sufficiency. Individual
countries differ significantly in climatic conditions, types of
grain grown, and degree of self-sufficiency. The grain-importing
northern countries--Czechoslovakia, Poland, and East Germany--
have a shorter growing season and winter grains provide
60 percent of their total production. Wheat, rye, and barley are
the main grain types. The southern countries--Romania, Bulgaria,
Hungary, and Yugoslavia--are net grain exporters as a whole, and
their more favorable climate allows spring grains, chiefly corn,
to account for 60 percent of total production. Winter wheat is
the other major grain type. Only Hungary, however, is a
consistent net exporter, while the other three countries import
varying amounts of grain from year to year as production
fluctuates.
The size of Eastern Europe's grain harvest is a key factor
in the region's efforts to overcome its economic troubles. In
response to the credit squeeze of 1981-82, countries have curbed
their reliance on imported feedgrains, reducing annual grain
imports from the 17-million-ton average of the early 1980s to an
estimated 8 million tons in marketing years (MY) 1982/83 and
1983/84.2 They have done so, however, at the cost of stagnating
meat production, rising retail food prices, selective rationing,
local food shortages, and long lines for consumers. In addition,
the southern countries have pushed grain exports at the expense
of domestic consumption in order to improve foreign trade
balances. US sales of grain to Eastern Europe have fallen
sharply in recent years, largely because favorable credit terms
have not been offered. Attempts by the regimes to stimula-te--
grain production have been unsuccessful in eliminating import
needs however, especially since the northern countries cannot
produce some key grain types, chiefly corn. A shortfall in grain
production this year would spell increased imports-for Eastern
Europe, depending on the ability of each country to find
financing-and on the willingness of regimes to risk unrest by
squeezing consumers further.
1 Throughout this text the term "average production" refers to
that achieved during the 1978-82 period.
2 1 July to 30 June.
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Press accounts, US embassy reporting, and our analysis
suggest that the East European countries plan to produce close to
117 million tons of grain this year on approximately 29 million
hectares (Tables 1 and 2). Attainment of such a goal is out of
the question, and adverse conditions experienced so far will make
it difficult for individual countries to achieve above-average
production.
Data on Eastern Europe's planned grain production and
hectarage are incomplete, contradictory, and nonuniform.
Countries provide information on either total grains, winter and
spring grains, or individual grain types such as wheat or corn.
The data, however, often omit some grain types or neglect to show
what proportions of wheat and barley are winter or spring
crops. Production plan data are usually not broken down in the
same manner--total, winter and spring, or grain type--as
hectarage plan data. Bulgaria discloses the least information,
Romania's is the most unreliable, and Hungary's is the most
accurate. Czechoslovakia's separate plans for its Czech and
Slovak republics rarely coincide with the few reported national-
level figures.
We estimate that sown areas in the southern countries this
year will not be large enough to achieve their production plan of
73 million tons of grain, which is a sharp rise from their 56-
million-ton average. Romania's unrealistic production goal of
29 million tons will not-be met with the announced hectarage
plans, which are not large enough to provide the necessary boost
in output. Bulgaria has kept its 1984 production plan of "over"
10 million tons in line with last year's goal, although this
-level of output would require increased sown areas, which have
not been indicated. Yugoslavia has increased its plan this year
to an estimated 19 million tons,?a difficult goal despite higher
planned hectarage. In contrast, Hungary's current target of
15 million tons is only a slight increase from 1982's record
crop, and the country's hectarage plan exceeds sown areas of
recent years.
The northern countries' grain production plan of almost
44 million tons is more in line with previous plans and actual
achievements. Czechoslovakia's 11-million-ton plan remains the
same as last year's fulfilled one, although the hectarage goal
appears somewhat small to support another record harvest.
Poland's plan of 22.2 million tons seems reasonable in relation
to last year's output, and the country's hectarage target tops
the area sown in recent years. East Germany's current plan,
10.5 million tons, exceeds the production records set in the past
two years, and we believe that the sown area target is not high
enough to achieve this goal.
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Crop Conditions To Date
Agricultural conditions across Eastern Europe vary
dramatically .3 Thus far prospects are best in,Poland and East
Germany, where bumper crops are still possible, and worst in
Romania, where a below-average crop is likely. Problems began
last fall when no country met planned planting goals for winter
grains, and only East Germany, Poland, and Hungary came close.
Persistant drought severely reduced soil moisture in Romania,
Bulgaria, Hungary, and Czechoslovakia. Winter grains in these
countries remained weak or unevenly developed at the onset of
winter. Only in East Germany, Poland and Yugoslavia were crops
generally in good condition.
During the winter drought continued in Romania, Bulgaria,
Hungary, and Czechoslovakia. On the plus side, temperatures were
moderate and winterkill was normal or less in all countries.
Winter grain prospects improved in East Germany, Poland, and
Yugoslavia, although precipitation in the two northern countries
was not plentiful enough to bring soil moisture reserves to
optimal levels.
As spring arrived, relief from drought conditions came to
Romania and Bulgaria during March in the form of excessive rain,
which further damaged some winter grains and put spring grain
planting well behind schedule. Dry weather persisted in key
grain-producing areas of Hungary and Czechoslovakia until May,
when plentiful rainfall halted the deterioration of winter
grains. Poland and East Germany also experienced dryness but
received rainfall before winter grains could be damaged.
Yugoslavia's ample soil moisture further enhanced prospects for
winter grains. Spring grain planting progressed well in Hungary,
Yugoslavia, Czechoslovakia, Poland, and East Germany, and we
estimate that these countries will meet or come close to meeting
hectarage plans. The improved soil moisture situation by the end
of May brightened prospects. for spring grains, which emerged
well.
Outlook for Winter Grains
As winter grains in Eastern Europe reached the crucial
flowering stage of growth, improved soil moisture conditions
brightened production prospects. In the north, Poland and East
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Germany can expect bumper harvests, while-Czechoslovakia's early
season losses will tend to depress production toward average
levels. In the south, Romania appears headed toward below-
average output as a result of drought followed by water damage.
In Bulgaria, where weather extremes were not as great, lighter
losses will hold production toward average levels. Early season
damage in Hungary and a small sown area in Yugoslavia have made
bumper crops unlikely.
Outlook for Spring Grains
It is still too early in the crop season to accurately
assess spring grain production, but the outlook is favorable in
most countries, which had made substantial progress toward
fulfilling sowing plans by late spring. If normal temperatures
and precipitation prevail during the summer, Hungary, Yugoslavia,
and the northern countries could produce above-average spring
grain crops. On the other hand, planting delays in Romania and
Bulgaria dimmed prospects for spring grain production, especially
in Romania where a serious shortfall in the corn area was shaping
up.
Grain Trade Implications
Imports -
During the 1981-83 period financial problems forced a major
adjustment in Eastern Europe's grain trade with the West. The
flow of Western credits to finance agricultural imports slowed to
a trickle, and the regimes gave debt repayment a higher priority
than domestic consumption. In response to the credit squeeze,
Eastern Europe cut hard currency grain and feed imports
sharply.
We believe that the adjustment phase in Eastern Europe's
agricultural trade with the West is coming to an end. Further
reductions in grain imports seem unlikely for most countries.-, and
the region's- agricultural-trade deficit probably-will begin to
widen. The level of these imports will depend upon the
interaction of several key factors--the size of the domestic
harvest, the availability of Western credits, the.intens ty of
consumer discontent and the sensitivity of regimes to such
complaints, and competing demands for hard currency. We expect
purchases of agricultural commodities to remain at least at the
1982-83 level or, more likely, to increase slightly.
While below-average agricultural performance this year would
increase import requirements, good grain harvests probably would
not allow for a reduction in imports. Below-average harvests
would increase Eastern Europe's need for Western grain
dramatically because there is now little "fat" left to cut out of
consumption. A continuation of recent (1982/83) above-average
harvests, on the other hand, would not allow much leeway for
further import reductions, because the regimes must continue
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importing at roughly the 1982-83 rate of 8 million tons simply to
stabilize current consumption levels. A decision to increase
consumption would require, in turn, a rise in imports. Moreover,
the region's grain requirements are likely to rise because of the
distressed situation in the livestock sector and the need to
rebuild herds.
Credits to purchase agricultural commodities, grain in
particular, are now more readily available than in 1981-83, but
resumption of large-scale borrowin is unlikely in our view.
According to press reports, commercial bankers
have regained some confidence in the region's creditworthiness
and are extending more trade loans. The bankers, however, are
reluctant to accept large increases in exposure and are setting
tough terms. In addition, Western governments are extending
credits and credit uarantees to support sales of agricultural
products. ~ 7
East Germany and Hungary appear to be taking advantage of
the improved lending climate. Western banks, including some US
banks, have recently shown a greater willingness to extend new
loans for grain purchases to East Germany. In early March 1984,
Hungary's state-owned agricultural trading company received a
$135 million loan from Western banks to purchase imports needed
to produce hard currency agricultural exports. Because of their
generally good credit rating, Czechoslovakia and Bulgaria should
be able to raise loans needed for agricultural purchases. Poland
and Romania, on the other hand, are not likely to see any
significant improvement in credit availability.
The reluctance of US banks to extend credits to Eastern
Europe and the limited availability of Commodity Credit
Corporation (CCC) financing will continue to curtail US
agricultural exports to the region. We estimate that US grain
sales to Eastern Europe in MY 1983/84 will total only about 1.7
to 2.0 million tons compared with the 7 million ton average of
MY 1976-1980. As a result, the US share of the East European
grain market is expected'to range between 20-25 percent,"near
last year's level, but well below the 50 percent share of the
late 1970s. If indeed grain production is near or above average
in 1984, we see little prospect for change. Since CCC credit
guarantees are now available only for Yugoslavia and Hungary, the
bulk of US sales will be made on a limited commercial credit
basis or for cash.
Exports
If Eastern Europe is to afford more imports and sustain
improved trade performance, the region must revive exports of
food and agricultural raw materials. Though some growth in
exports is probable, booming sales seem unlikely. Developed
Western economies are beginning to recover, strengthening East
Europe's export opportunities. In addition, prices for livestock
products, the region's chief hard currency agricultural export,
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are expected to rise during 1984. Nonetheless, major obstacles
remain to improved export performance. Increasing sales to LDCs,
a large growth market of the 1970s, will be most difficult
because of their own financial problems, and a reduction of
protectionist barriers in the developed West seems unlikely. The
southern countries are trying to increase grain exports for hard
currency or to barter for hard currency goods, but their success
will be limited by the size of their domestic harvests and by
fluctuations in grain prices. Although we anticipate some
improvement in agricultural exports, increases in imports are
likely to outpace export gains in the foreseeable future.
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Eastern Europe: Grain Productiona
Actu
al Prod
uction
Plan Actual
Plan
1978-82
Average
1978 1979
1
980
1981
1982
1983
1984
Eastern Europe
95.5
96.2 90.9
9
6.3
92.2
102.1
110.3
99.1
116.7
Southern Countries
56.4
-54.0 55.5
5
4.7
54.2
60.6
67.8
56.0
73.0
Romania
19.1
19.0 19.3
2
0.2
17.5b
19.7b
25.3
17.6b
29.0
Bulgaria
8.2
7.7 8.5
7.8
8.6
8.6b
10.3
7.5b
10+
Hungary
13.5
13.4 12.1
1
4.0
12.9
14.9
14.5
13.7
15.0
Yugoslavia
15.6
13.9 15.6
1
5.7
15.2
17.4
17.7c
17.2
19.0c
Northern Countries
39.1
42.2 35.4
3
8.6
38.0
41.5
42.5
43.1
43.7
Czechoslovakia
10.1
10..9 9.2
1
0.7
9.4
10.3
11.0
11.0
11.0
Poland
19.6
21.5 17.3
. 1
8.3
19.7
21.2
21.2
22.1
22.2
East Germany
9.4
9.8 8.9
9
.6
8.9
10.0
10.3
10.0
10.5
a
Grains include wh
eat, rye, barle
y, oats, corn,
mixed g
rains;
in the
southern countries rice is also included; in Bulgaria, legumes.
higher than crop conditions during those years seemed to indicate. Romania
and Bulgaria have not announced exact production for 1983.
Our estimate of the total annual prodiuction plan consists of the corn and wheat plan,
plus 1 million tons for other grains.
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I I
East
er
n Europe: Grain A
rea
1978-82
1984
Win
ter
19
84 Winter
1984 Spring
Average
1983
1984 Plan Grai
n P
lan
G
rain Sown
Grain Plan
Eastern Europe
28,860
28,230
29,190 16,
240
15,810
12,950
Southern Countries 15,810
15,000
15,900 7,
950
7,730
7,950
Romania 6,320
5,700
6,290a 3,
150
a
3,120a
3,140a
Bulgaria 2,280
2,040
2,090a 1,
410
a
1,370a
680a
Hungary 2,880
2,880
2,980 1,
640
1,610
1,340
Yugoslavia 4,330
4,380
4,540a 1,
750
a
1,630a
2,790
Northern Countries 13,050
.
13,230
13,290 8,
290
8,080
5,000
Czechoslovakia 2,630
2,580
2,520b 1,
490
1,390
1,030b
Poland 7,910
8,110
8,200 4,
800
4,700
3,400
East Germany 2,510
2,540
2,570 2,
000
1,990
570
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b Czechoslovakia's announced spring grain area plan for 1984 may not include
corn, which is usually planted: on 180,000 to 190,000 hectares. 25X1
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Figure 1
Adverse Crop Conditions in Eastern Europe
Berlin
{ i East Warsaw
lb L ' sii R 1 t"i lr
West Czechoslovaki<
Germany
Italy
Adriatic
Sea
Bet raUe
iii//////r/%%iiii//r//rrrr/ri
z a~y/ rrrr////
*Budapest
Hungary
Drought damage to winter grains,
October 1983-February 1984
Delayed spring planting due to
excessive rainfall,
March 1984-April 1984
Based on USAF weather data,
collateral reports, Landsat imagery,
and reconnaissance satellite imagery.
/i//rrrr//// rrrr
//rrrr/.rrrr/ /rrr/////r/
rrr rrrr/rrrr/r~~,8~k///rrrr
Black
Sea
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Figure 2
East German and Bulgarian Grainfields
Central East Germany, Late April 1984
ftN
Favorable weather has promoted healthy plant development
this year in East Germany, as shown by the uniform light tone of
the winter grainfields in this photo. The outlook for spring
grains is also good, because they were planted on time and
received adequate rainfall.
Eastern Bulgaria, Late April 1984
Bulgaria's 1984 crop prospects were reduced first by
drought, then by excessive rains. The dark, uneven tones of
these winter grainfields indicate a thinly developed crop, which
has been further damaged by standing water.
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Figure 3
Polish and Romanian Grainfields
Northwest Poland, Mid-May 1984
The outlook for Poland's grain production this year is
favorable, because timely spring rainfall maintained soil
moisture. In this Landsat photo, the bright red fields indicate
healthy grain crops.
Southeast Romania, Mid-May 1984
Romania's drought ended in March, but many of these winter
grainfields have failed to regain the bright red color which
denotes good crop vigor, as evident in the irrigated fields near
the river. Though some winter grains improved, excessive amounts
of rain over much of the country fostered weed growth, hindered
application of fertilizers and protective chemicals, and
seriously delayed planting of the important corn crop.
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