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More U.S. Food for Russian Winter : Agriculture: The $1.15-billion package could be the first in a series, an Administration official suggests.

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TIMES STAFF WRITER

Under prodding from Moscow, the Bush Administration announced Monday a $1.15-billion expansion of U.S. agricultural aid to help Russia endure another food crisis expected this winter.

Faced with forecasts of a shortfall again in the Russian harvest, as well as continuing signs of severe disruptions in the Russian food distribution system, the Bush Administration responded to requests two weeks ago from Russian President Boris N. Yeltsin for quick action on food aid before the onset of winter.

U.S. Agriculture Secretary Edward R. Madigan held out the prospect that this may be just the first in a series of Russian aid packages for the coming winter.

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The Administration said it will provide $900 million in credits, or loan guarantees, for Russian purchases of U.S. grain and other agricultural products. In addition, the United States will extend $250 million in food assistance in the form of low-interest loans for the purchase of American surplus products. Much of that direct assistance will be handled by charitable groups.

With Monday’s announcement, Washington has now provided $5.75 billion in agricultural credits to the former Soviet Union since January, 1991. Under the credit program, Washington guarantees repayment of three-year loans taken out by the Russians with Western commercial banks to finance their U.S. food purchases.

The Bush Administration now predicts that the combined grain harvests of the republics of the former Soviet Union will be slightly above last year’s levels. But analysts say that more Western assistance is still badly needed, especially in Russia, where food production and distribution remain severely depressed.

Western analysts warn that the grain harvests in Russia may actually decline again this year, and predict that much of the grain that is harvested will be held off the market by farmers fearful of selling too soon in the face of rampant inflation.

Given such problems, the Yeltsin government hopes to avoid a repetition of last winter’s chaos, when Moscow had to plead for last-minute assistance from Europe and the United States to help stave off widespread political turmoil and the threat of famine.

“They wanted a commitment to humanitarian aid earlier than they got last year,” said a senior Agriculture Department official. “This is an acknowledgment by them that they have not solved their distribution problems, and that their harvest, while improved in some ways, is still not what they need to feed themselves as a nation.”

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The U.S. loan guarantees will not cost taxpayers any money--as long as the Russians repay the debts. But the additional aid comes just as Western governments and analysts are increasingly questioning Russia’s ability to do just that.

Last month, for instance, Canada briefly cut off its grain shipments to Russia after the Yeltsin government fell behind in its payments, sending shock waves throughout the international grain trading business.

“When the Canadians actually stopped loading their ships, that got the Russians’ attention,” observed William Bailey, vice president of World Perspectives, an international agricultural research firm based in Washington.

The Russians quickly made good on the payments and Canada resumed deliveries. Bush Administration officials note that the Russians have been careful never to fall behind in their debt payments for U.S. grain shipments, although they are now negotiating ways to reschedule many of their old debts with the West.

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