Soviets Call Off Plan to Triple Bread Prices

Afraid of bread riots and protest strikes, Soviet lawmakers on Thursday prohibited the government from tripling bread prices on July 1 as planned and instead ordered it to develop a new, less painful, less risky strategy for reducing food subsidies.

The Supreme Soviet, the country’s legislature, voted overwhelmingly, 319-33 with 12 abstentions, to delay at least until September any rise in bread prices despite the government’s insistence that an immediate increase is an essential part of the overall program for economic reform that was approved Wednesday.

“The people had been fooled more than once, and there is much mistrust now,” Deputy Alexei Boyko, chairman of the commission that reviewed the economic plan, explained later. “They are afraid of being duped again.”

Government officials, despite many statements by Prime Minister Nikolai I. Ryzhkov and his deputies and ministers, failed to persuade Soviet consumers that they will be protected from most of the planned increases in food prices through higher pay.

The officials have also argued that there should soon be more food because farmers will be paid more for what they grow, and that through this process, the government’s budget deficit will be cut as the food subsidies are transformed into higher wages paid by Soviet enterprises.

“What kind of sleight-of-hand economics is this?” one deputy asked during the renewed debate this week. “The government wants to raise bread prices but give us back the money in our pay packets. Why bother? There must be more to it than they are telling us. Imagine a socialist government tripling bread prices!

“Well, the workers won’t be fooled. They will go on strike across the country in protest. Woe be to us if we approve this!”

Alexander Kraiko, a Moscow scientist, described the vote as “a defeat for the government but also a defeat for the Supreme Soviet.”

“Parliaments cannot shrink from difficult, unpopular decisions,” he said.

But with fresh memories of the panic buying that emptied stores in Moscow, Leningrad, Kiev and other major cities last month when higher prices were first announced, the lawmakers were clearly unwilling to test popular sentiment.

Coal miners, oil field workers and railway men, moreover, have all threatened strikes in recent weeks over pay and living conditions.

The miners, meeting in the Ukrainian industrial center of Donetsk, on Thursday demanded that the Ryzhkov government resign because of the failure, acknowledged by senior government ministers, to honor commitments to improve living conditions that were made to end a coal strike last summer.

“The government of the Soviet Union does not have our trust,” the miners said in a telegram to the Supreme Soviet. “We urge workers in other industries to cut their ties quickly with this government.”

Bread is the main staple, making up 20% of the average diet. For Russians, bread on the table is essential at every meal--as much to assure them of their well-being as to nourish them.

But for many of the 41 million Soviet citizens who are below the official poverty line--about 15% of the population--bread and other subsidized foods are essential to their survival. Deputies expressed considerable concern Thursday that the proposed increases in pay, pensions and welfare allowances would not cover the increases in food prices--and those that would inevitably follow in other goods and services.

In the end, however, the real focus of fear among the lawmakers was Central Asia, where social discontent is now so high that the smallest developments can cause massive unrest.

A quarrel over new land being allocated for housing and private farming led to inter-ethnic riots this month in Kirghizia. The Soviet Interior Ministry on Thursday put the death toll at 155, but Radio Moscow’s Interfax news service said that 170 deaths had been registered with the military commandant’s office in the Kirghiz city of Osh, the center of the rioting.

“The deputies from Central Asia were very worried that the increase in bread prices would create discontent,” Boyko said. “There, the discontent could be serious indeed.”

The price increase was expected to bring in about $24 billion, at the official rate of exchange, significantly reducing the government’s current consumer subsidies of $120 billion a year and its overall budget deficit of $144 billion.

During the debate Thursday, deputies rejected a series of alternative proposals that would have permitted the government to make a decision before the next parliamentary session.

The government’s proposal to consult “high bodies of state power” and report back to the legislature was not even put to a vote as deputies made clear that they wanted to retain control of the sensitive issue.

The Supreme Soviet instead ordered the Council of Ministers to draft a new plan that, it said, must be acceptable to the governments of the Soviet Union’s 15 constituent republics. The lawmakers will review this proposal when they meet again in September.

BACKGROUND

Bread is truly the staff of life to the Soviet citizen, especially those living below the poverty line. But the government contended through the three weeks of debate over the economic reform program that bread is priced so low that it is wasted in huge amounts. The current price of about 37 cents for a loaf that weighs 1 kilogram (2.2 pounds) has been unchanged for nearly 30 years. Imports account for about 40% of the grain consumed, making bread subsidies even more expensive.