IMPACT OF US GRAIN SANCTIONS AGAINST THE USSR AND POLAND

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R000200370056-4
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 4
• Document Creation Date: December 20, 2016
• Document Release Date: June 25, 2007
• Sequence Number: 56
• Content Type: REPORT

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Impact of US Grain Sanctions Against the USSR and Poland
Background
Moscow and Warsaw are relying heavily on imports of Western
grain to cover domestic production shortfalls. The Soviet Union
experienced an unprecedented third consecutive harvest failure in
1981. Although no official announcement has yet been made, the
grain crop is expected to be only about 170 million tons--65
million tons below plan. We estimate the Soviets will import
grain at a rate of 45 million. tons a year--the maximum amount
their ports can handle--for the foreseeable future. They have
already purchased or have commitments for 30-31 million tons of
grain from all suppliers in the LTA year 1 October 1981 through
30 September 1982. The United States has authorized the sale of
23 million tons. So far this LTA year the USSR has lifted more
than 11 million tons, including 4.6 million tons of the 10.9
million contracted to date from the United States. Currently
Moscow has arranged to ship roughly 2 million tons a month from
US ports during January-March..
Poland's grain harvest last fall rebounded after two
disastrous years, reaching an estimated 20.5 million tons. Large
increases in domestic production of potatoes and sugar beets--
important sources of livestock feed--further reduced the need for
imported feed grains. Poland thus is expected to cut back grain
imports by roughly 20 percent from last year's record level to
about 6 million tons. Warsaw was counting on the US to supply
roughly half its imports. The US suspension of export credits
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after the imposition of martial law would effectively deny Poland
.1.6 million tons of US grain it had requested. F__1 25X1
Impact on the USSR
A US embargo on future grain sales to the USSR might deny
the Soviet Union 12 million tons of the 23 million tons
authorized for purchase this LTA year. If the United States also
refuses to ship the 6.3 million tons already under contract but
not shipped as of 7 January, the USSR would face an initial grain
import shortfall of more than 18 million tons.
In either case, a portion of the denied US supplies would
undoubtedly be made up from non-US suppliers. With expectations
of a possible record world grain harvest this year, other major
exporters would be anxious to increase sales to the USSR.
Indeed, because of the current US-USSR political climate, non-US
exporters have been actively pushing to conclude new sales
contracts. Some of this activity probably is replacing part of
the 23 million tons of US grain the USSR was authorized to
purchase. Judging by Soviet success following the imposition of
the Afghan grain sanctions, we believe the Soviets would
reasonably expect to replace at least two-thirds of the 18
million tons they would otherwise have had access to.
A denial of 6 million tons of imported grain would have its
principal effect on domestic meat consumption. Every million
tons of imported grain, if allocated to meat production, would be
converted into 80,000 tons of meat. Thus a denial of 6 million
tons at most could reduce meat output by roughly 500,000 tons, or
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by about 3 percent. Some of this reduction would be offset by
imports of meat above current intentions.
Impact on the USSR and Poland
An extension of a US grain embargo to include Poland as well
as the USSR would further complicate matters for the Soviet
Union. Fairly quickly the Soviet leadership would have to decide
what priority to attach to Polish needs. While the Polish grain
requirement from the United States is relatively small--only 1.6
million tons--Warsaw's options are limited. A decision to help
Warsaw would entail (1) supplying Poland from its own limited
granery, (2) calling on its East European partners to fill the
void from their limited stocks, or (3) buying replacement grain
in the West for hard currency (at the cost of about $200 million)
at a time when its foreign exchange position is deteriorating.
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