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During talks at the department only a few weeks ago, a Soviet grain team insisted that it had reported all the purchases it had to. Rasped an Agriculture official: "That was a technically accurate statement. But it also was a goddamn lie. They hornswoggled us."
For months, Soviet farm experts in Moscow had spoken of average and possibly even record harvests. Agriculture Department inspectors visiting the U.S.S.R. were taken out to collectives to see sturdy stands of corn and wheat—fields that they now know to have been exceptions. Even the CIA was taken in. It has been trying to keep tabs on Soviet agriculture with eye-in-the-sky photo satellites, and its findings have been reasonably accurate in the past. But this time the photo interpretations went awry, because of what the agency calls bad 'ground truth" data—information from the observers escorted by the Russians.
Actually, there were ample signs this summer of trouble in the Soviet harvest. In Chicago, grain traders heard reports of big Russian purchases eight weeks ago. And in mid-July the Russians were chartering grain-carrying ships. This was done secretly, through Soviet front companies in Paris; bills of lading were rewritten at sea from "Destination Rotterdam" to "Transshipment Rotterdam, Destination U.S.S.R." Not only was the Russian demand for ships an omen that the U.S.S.R. planned to buy more gram than would be necessary with a good harvest, but it lifted world freight rates by 15%,which should also have produced alarm. Finally, U.S. prices of wheat and corn took a slight upward tick from August through October, a rare happening at harvesttime, when prices are almost always depressed. The only explanation: large foreign purchases.
Agriculture Secretary Robert Bergland insists that the poorer than anticipated Soviet harvest was "probably" caused by a late period of bad weather and does not simply reflect poor intelligence. Indeed, Agriculture picture analysts say they were revising their estimates of the Soviet harvest downward before Brezhnev made his announcement.
Bergland says that he intends to "ask the Soviets to be more precise in the future about their gram requirements." He adds: "They don't always tell us exactly what their needs are." Evidently. But no major damage seems to have been done by the latest Soviet caper in the gram markets. This time the Kremlin does not stand to make as big a killing on its U.S. purchases, because they are not subsidized by the Government. The Russians will pay for their grain in cash at prices agreed to at the time of purchase. Yet their savings could be as much as $100 million—the difference between what they will actually pay and the higher price they would have paid had then" true needs been known.
Grain belt farmers are pleased with the Russian purchases. Record harvests this year have already depressed prices to the lowest levels since 1972. The Soviet buys should eat into the surpluses and help lift farm incomes.