End Note

HILLARY CLINTON IN UKRAINE. On the final day of her tour of former Soviet republics, U.S. First Lady Hillary Clinton visited a synagogue in the west Ukrainian city of Lviv on 17 November. She also went to a neonatal center together with Ukrainian First Lady Galina Kuchma. Speaking at a memorial to victims of communism, Clinton affirmed U.S. support for the Ukrainian people's "fight for freedom and democracy," which she said entails "building a civil society where the rule of law, not the rule of crime and corruption, prevails." LF

CHORNOBYL CLOSURE STILL IN DOUBT. Energy Minister Yurii Kostenko on 17 November said that if Ukraine does not receive the estimated $2.5 billion funding needed to honor its commitment to close the Chornobyl nuclear plant by 2000, it may upgrade the third reactor and run it for another 10-15 years, Russian agencies reported. That reactor is currently being repaired and will be restarted in March 1998. Kostenko said Kyiv has neither the equipment nor the technology to remove the remaining nuclear fuel from the fourth reactor at Chornobyl, which was destroyed in April 1986. Meeting in Kyiv with Ukrainian Deputy Prime Minister Sergei Tigipko, UNESCO Director-General Federico Mayor said his organization will provide funds for Ukraine to set up a laboratory to monitor the after-effects of the Chornobyl catastrophe, Interfax reported. LF

BULGARIAN NUCLEAR MATERIAL TO TRANSIT NEIGHBORING COUNTRIES. Bulgaria, Russia, Ukraine, and Moldova have reached a preliminary agreement on the transportation by land of nuclear material for the Kozloduy reactors. An official from the Bulgarian National Electricity company told Reuters on 17 November that the four-country agreement will be signed at a 25 November meeting of the Bulgarian-Russian governmental commission in Sofia. He said the four-country agreement is for ten years and will be automatically extended if there are no objections. A separate agreement has been reached with neighboring Romania, he added. MS


Potatoes are the measure of Ukraine's agricultural crisis. Ukrainians are growing more potatoes than they have in years--and less of just about everything else.

Bumper potato harvests are not a success story for the cooperative farms that have emerged out of Ukraine's half-hearted agricultural reform. On the contrary, the decline of large farms means the country now produces half as much meat and grain as it did in 1990.

The real success in Ukrainian agriculture are the 11 million garden plots distributed among two-thirds of the population by presidential decree at the end of 1992. Data from the Paris-based Organization for Economic Cooperation and Development (OECD) show that although those private plots constitute only 14 percent of farmland, they accounted last year for 95 percent of the potato crop and 82 percent of all vegetables. Household plots also produced more than half of the country's meat and milk and two-thirds of its eggs.

Not only is private farming more efficient than the large agricultural cooperatives. But continued delays in agricultural reform also are forcing Ukrainians to survive, as they did under communism, by living off what they grow themselves . Poorly managed cooperatives simply are unable to feed the country.

Until the 1990s, Ukraine was a net grain exporter with a reputation as the breadbasket of the former Soviet Union. But today's cooperatives, stranded half-way between central planning and a market economy, are producing far less than their Soviet-era predecessors.

And the decline is continuing. Last year saw the worst grain harvest since the mid-1960s. Deputy Agriculture Minister Boris Supikhanov says this year's harvest will be better. But his projection of 37 million tons (cleanweight) still would be lower than most grain harvests since 1985. The sugar beet harvest last year was the smallest in 30 years and is expected to be even smaller this year. The OECD also notes declining numbers of livestock and large decreases in milk and egg production.

Britta Bjornlund, an economist with the U.S. Department of Agriculture, says that although the majority of Ukraine's farms have been transformed on paper into joint-stock cooperatives, few have changed their managers, production choices, or methods of resource allocation. Because of corrupt and inefficient managers, most largescale cooperatives are unprofitable and falling deeper into debt. The failure to create a competitive market economy also means there is little money to replace aging Soviet-era equipment.

The European Bank for Reconstruction and Development (EBRD) said in a report this month that opposition from the parliament is the main reason for the failure of Ukraine's agricultural reforms. Acceleration of land and farm privatization is on the agenda, but the legislature is dominated by former Communists who continue to pass piecemeal laws to stall the creation of market-oriented agriculture. To date, there has been no restitution to former owners of property nationalized under communism.

Volodymyr Lanoviy, the embattled acting director of the State Property Fund, which oversees the privatization process, says stalled reforms benefit the political and economic allies of legislators. Many cooperative managers previously held power within local communist hierarchies and still maintain loyalty to ex-communist deputies. Reforms that rid the country of inept cooperative managers also would dismantle much of the current legislature's agrarian power base.

Bjornlund says the success of private gardens could be the foundation of an expanded private farming sector. Most produce from those plots is kept for personal use or sold by the growers themselves through farmers' markets and trade organizations. She says those channels must be expanded as private farming grows in importance.

She also says unclear legislation on privatization must be revised with the aim of creating a class of landowners out of farm workers, rather than groups of cooperative shareholders with little understanding of their rights and options. Uncertainties about land titles also must be clarified, official limitations on farm sizes must be removed and access to roads and irrigation systems must be provided to those who choose to farm outside of the collectives.

A credit system is necessary to help private farmers buy seed and fertilizers for large-scale planting. Bjornlund notes that competition must be introduced between agro-industrial firms. For years, the parliament has blocked the privatization of that critical market link by declaring agro-industrial firms as "strategically vital state interests."

Given the entrenched interests of the parliament, it could be years before market-oriented agriculture is allowed to evolve in Ukraine. Until then, most Ukrainians will have to remain content with less meat on their plates and more home-grown potatoes.