03 February 1999
TEXT: USDA ANNOUNCES U.S., RUSSIAN FOOD AGREEMENT
(Agreements add poultry and seeds to food aid package) (920) Washington -- U.S. Agriculture Secretary Dan Glickman says the United States and Russian governments have signed agreements adding 50,000 metric tons of U.S. poultry parts and 15,000 metric tons of planting seeds to a U.S. food assistance package agreement announced in December 1998. The value of the poultry parts agreement is estimated at $35.5 million and the value of the planting seeds agreement is estimated at $33 million, a U.S. Department of Agriculture (USDA) news release said February 3. The 50,000 metric tons of chicken legs and other poultry parts are providing an important, low-cost source of protein for many lower and middle-income Russian consumers, Glickman said. The 14,000 metric tons of maize seed and 1,000 metric tons of vegetable seeds are to be used for the next Russian grain planting season, he said. Initial shipments in the food assistance package are expected to begin in February, USDA said. In December, the United States and Russia agreed to a food assistance package for Russia that totaled an estimated three million metric tons of U.S. grains, meats, oilseeds and dry milk worth approximately $830 million. Following is the text of the USDA news release: (begin text) USDA ANNOUNCES RUSSIAN SIGNING OF POULTRY AND SEEDS AGREEMENTS Washington -- Agriculture Secretary Dan Glickman today announced that the United States and Russian governments have signed agreements in Moscow adding 50,000 metric tons of U.S. poultry parts and 15,000 metric tons of planting seeds to the U.S. food assistance package. "Having just returned from Moscow early last week, I am very pleased that the remaining details could be resolved and these agreements signed so quickly," Glickman said. "The Department of Agriculture's Commodity Credit Corporation (CCC) will provide a long-term, low-interest loan for the Russian government to purchase 50,000 tons of U.S. chicken legs and other poultry parts. In addition, the Department will donate 15,000 tons of corn and vegetable seeds urgently needed by Russian farmers before the beginning of this year's planting season." According to Glickman, the poultry meat purchases will help supplement dwindling supplies of an important, low-cost source of protein for many lower and middle-income Russian consumers, while providing some assistance to the U.S. poultry industry. Russia was the world's largest market for U.S. poultry meat until the devaluation of the Russian ruble late last summer. The commodity value of the poultry parts is currently estimated at around $30 million. USDA's Commodity Credit Corporation will also finance an estimated $5.5 million in transportation costs and pay an ocean freight differential for U.S. flagship vessels. The poultry meat will be sold on the Russian market, and proceeds from the sales will go to the Russian Pension Fund to meet pressing social needs. "The donations of high-yielding U.S. seeds are part of our effort to help the Russian agricultural sector recover from the current crisis. The lack of credit, affordability, and availability of high-quality seeds in Russia could threaten their next harvest," Glickman said. The value of the planting seeds is currently estimated at about $33 million, with CCC also paying freight costs. The donations will include around 14,000 tons of corn seed and 1,000 tons of vegetable seeds. The seeds will be sold to Russian farmers, with proceeds from the sales going to the Russian Rural Credit and Cooperative Development Fund and to Russian seed research institutes, including the Vavilov Institute. The food assistance agreements with Russia mandate extensive monitoring and reporting arrangements on the distribution of U.S. commodities. The U.S. government will undertake a major monitoring and oversight initiative. A dedicated USDA staff will be supplemented by a "country team" effort drawing on the expertise of other sections of the embassy, the U.S. consulate, and other U.S. government offices in Russia. The United States retains the right to delay or halt shipments if abuses are detected. The United States is also exercising care to avoid actions that might disrupt international markets, hinder the development of agricultural markets within Russia, or reduce incentives for Russian farmers. "While in Moscow, I told Russian officials that the United States would be willing to consider additional assistance in the future, if needed, but both sides agreed that we first need to make sure that the aid already planned reaches the people it's intended to help," Glickman said. "Meanwhile, we are also continuing to work with the U.S. industry on a larger poultry package that would involve the private poultry sector in Russia." The documents signed in Moscow include the new Food for Progress agreement on seed donations and an amendment to the previously announced P.L. 480, Title I, agreement, which was signed by both governments in late December. The poultry purchase is part of the amendment to the Title I agreement. Other U.S. commodities to be purchased under the Title I agreement are corn, soybean meal, soybeans, wheat, rice, beef, and pork. Under the same amendment, 30,000 tons of U.S. nonfat dry milk that was previously included in the Title I purchase agreement was shifted to the Food for Progress donation program that also covers seeds. Other changes in the amendment deal with transportation issues and technical details. Initial shipments under the U.S. food aid package are expected to begin in February. The new seed donation agreement and the P.L. 480, Title I, amendment do not become effective until countersigned in Washington, D.C., by USDA's general sales manager. (end text)
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