Russia May Look to Europe, Not U.S., for Grain : Commodities: Yeltsin calls for a new strategy, saying purchases from America and Canada may not be in his country’s best interests.

Russian President Boris N. Yeltsin called Friday for “a new grain strategy” that would include shifting much of Russia’s grain purchases from American farmers to their European rivals.

Yeltsin told residents of the Siberian city of Omsk that he believes Russia should take advantage of European surpluses of grain and that the tradition of buying grain from distant America and Canada is “not based on the most profitable conditions for Russia,” the Interfax news agency reported.

Such a step would be a big blow to U.S. agriculture, which ships about 21% of its wheat exports and 14% of corn exports to the former Soviet Union. But grain experts in Washington were skeptical that any significant shift will occur.

Yeltsin may see the current European grain surplus as an opportunity to demand better terms from U.S. farmers, but he needs American aid too much on other fronts to risk angering Congress or the White House, Administration sources and others said.

Moreover, the European Community has failed to provide the credit guarantees that Russia needs, while extensive U.S. farm export subsidies have been in place since January, 1991, for the staggering ex-Soviet economy, they said.

“All he may be doing is trying to start a bidding war. It sounds like he is opening the negotiations for the next round of credit agreements,” said Robert Kohlmeyer of World Perspectives Inc., grain trade consultants.

Agriculture Department officials in Washington had not heard of Yeltsin’s remarks on Friday. But a spokesman disputed the suggestion that Russia could win better terms from Europe than from America.

“They are America’s fifth-largest export market, and we will certainly try to stay in it,” said Roger Runningen, the department’s spokesman. “I’d regard us as being pretty competitive right now.”

But while Yeltsin may only be posturing now, the European Community “really sits in an advantageous position” to eventually become a major supplier of grain and other farm products to the Russian people, said Mechel Paggi, a senior economist at the American Farm Bureau Federation in Chicago.

Yeltsin emphasized that he is not calling for total rejection of the American grain market. But any disruption in the shipment of grain to Russia would send a shiver through the American agricultural community.

The former Soviet Union’s needs have become so important to U.S. farm production plans that failure to buy as much grain as expected could send farm prices tumbling and undercut the federal budget by driving up U.S. farm price support payments.

The Russian government on Friday also announced a new grain-growing program, dubbed “Russia’s Bread,” that is meant to make the country self-sufficient in grain by 1995.

Russia already grows enough grain to feed itself. But an estimated 30% is lost to spoilage between the field and the dinner table because of bad roads, poor processing plants and inefficiency.

Under the incentives of Russia’s Bread, along with a plan to increase production of harvesters, the country would produce 125 million tons of wheat and coarse grains by 1995, compared to this year’s expected harvest of 96 million tons.

Badly strapped for cash, Russia is already cutting back on its grain imports, hoping to approximately halve them next year.

Woutat reported from Detroit, Goldberg from Moscow.