Soviets Face Food Crisis, Leader Says : Agriculture: Premier cites harvest problems and warns of bread shortage. The result could be explosive social unrest.

The Soviet Union is facing even greater food shortages, and the result might be explosive social unrest, Prime Minister Nikolai I. Ryzhkov warned in a hard-hitting report published Sunday on the country’s deteriorating economy.

The first crisis--the flash point--Ryzhkov warned, could be a severe shortage of bread, the Russian staple.

Serious problems with the summer grain harvest have meant that, although the harvest is likely to be larger than last year, deliveries to state granaries are much lower than a year ago, with less than one-tenth of the expected amount delivered so far.

That translates, Ryzhkov warned, into even greater shortages of bread, flour, cereals, feed for livestock and consequently of meat.

In contrast with past years, however, there is no hoard of dollars, earned by oil exports, to finance Soviet imports of grain from the United States, Western Europe or South America, Ryzhkov said.

With the divisions in the country growing, the Soviet premier continued, the risk of social unrest and possibly an explosion would also increase with the severity of the food shortages, particularly bread.

“We cannot but see that the polarization of political movements is growing in the country,” Ryzhkov on Friday told a joint session of the Presidential Council, the country’s top policy-making body, and the Federal Council, which includes representatives from the Soviet Union’s 15 constituent republics. The report was published Sunday by the government newspaper Izvestia.

“The organizations that are against constructive policies are activating themselves, open calls are heard for the overthrow of the state system and inter-ethnic conflicts do not stop. The growing crisis in the economy only amplifies this social tension.”

Ryzhkov said that real food production, up less than 2%, has barely kept pace with the country’s population growth.

The government’s purchases of grain from state and collective farms are lagging behind last year’s, he said, and the goal of 85 million tons is much higher than the 59 million purchased last year.

At the same time, the Soviet Union’s ability to buy large amounts of grain abroad has decreased sharply as a result of the drop in its foreign currency holdings.

“Unless we fundamentally change the situation, then the country is not in any condition--I can say this categorically--to purchase that much grain,” Ryzhkov said, comparing the 44 million tons imported last year to the less than 20 million that Moscow plans to buy this year.

“That means we have to purchase for the state 60 million tons, which is enough to feed the people, plus 25 million tons to feed the cattle.”

The food situation is continuing to worsen overall, Ryzhkov said, noting that despite an intense national effort, the output of food increased by only 1.7% in the first half of the year, a little ahead of the population growth.

“Enterprises do not comply with the established plans,” he said. “They do not sign new contracts, and the discipline of supplies is declining.”

The supply of consumer goods also remains insufficient, according to Ryzhkov, although there was a 15% increase in the first half of the year.

“I understand what sort of reaction people have when I speak of increases and they see empty shelves in the shops,” he continued. “Supplies of tape recorders increased by 126%, of television sets by 113%, of videotape recorders by 3.2 times, detergents by 10%. So, there are some changes.”

Ryzhkov said that the government would present a modified economic program to the Supreme Soviet, the country’s legislature, when it reconvenes in September with the hope of beginning the much-discussed shift to a “regulated market economy,” away from central planning and a state monopoly in most sectors of the economy.

The Soviet prime minister, whose initial plans were savaged by legislators, said a compromise package is now being worked out to reflect the widely divergent views on the country’s immediate needs.

“Current conditions in the country show convincingly that it is impossible to spend time or energy on confrontation,” he said.

Ryzhkov said the first moves, most of them previously approved by the Supreme Soviet, would include five main elements:

The step-by-step privatization of state-owned enterprises will start this summer in an effort to end the state monopolies, promote competition and gradually to develop a market economy. A large number of enterprises are expected to be sold to their employees or managers--or to entrepreneurs hoping to make them profitable.

* Price reform, long the crunch-point of all economic reforms, will begin with a gradual transition to market-set prices for most commodities--balanced by “mechanisms for social protection” to ensure that the burden does not fall fully on consumers.

* Fiscal reforms, starting with curtailment of federal spending, a shift of programs to the constituent republics, and greater use of state bonds at higher interest rates to finance the continued deficit spending. Interest rates are expected to rise across the board, making money tighter for industry.

* A complex system of indexation to enable workers and farmers to survive the price increases inevitable in the other reforms. This also would be a shift of money out of state revenues into the labor costs of an enterprise in an effort to see which are truly profitable.

* A new relationship between the central government and the constituent republics and among the governments at all levels and the state enterprises, with the emphasis on decentralization and local initiative.

In preparing the government’s next budget, Ryzhkov said that a major effort will go into reducing inflation, though 65% of state spending is now on social programs.

“We will have to apply special measures to stop the inflationary spiral,” he said.