In Leningrad, a group of Soviet laborers starts the process of destroying tons of rotting potatoes, decaying into sticky mush in railroad boxcars never designed for storage. The stench is unforgettable, and the workers must wear gas masks.

All told, 75 percent of the huge Soviet potato crop -- five times production here -- never reaches consumers because of the primitive Soviet transportation and storage system. U.S. Department of Agriculture specialists estimate that 40 percent of the fruit and vegetable crops rot after being harvested. Overall, about 25 percent of Soviet farm production is wasted.

These are vivid symbols of the decay of the Soviet economy itself, a mirror image of empty shelves in the stores. Just back from a visit to the Soviet Union, Ed A. Hewett, the Brookings Institution's foreign policy expert, also tells of containers of imported goods that sit unloaded at Soviet ports. The reason: a shortage of equipment needed to load the containers onto railroad cars.

It's been clear for a long time that it is nearly impossible to exaggerate the economic disaster created by 45 years of socialist rule in the Soviet Union. That's why a desperate Mikhail Gorbachev evolved glasnost and perestroika as tools with which he hoped to engineer a turnaround.

But Hewett and other recent visitors to the Soviet Union bring back a story of economic regression that is even worse than anyone had dreamed. And the danger is not only that the Soviet economy might totally collapse, but that the resulting trauma will quickly spread to the fledgling democracies in Eastern Europe that are still heavily tied to Moscow.

The Soviet Union's economic bind will be an unofficial agenda item at next week's summit between President Bush and Gorbachev, but there are no quick fixes to put Humpty-Dumpty back together again.

Ironically, as Sen. Bill Bradley (D-N.J.) pointed out to reporters the other day, Bush and Gorbachev together blew one great opportunity that could have speeded Soviet economic reforms when Lithuania courageously tried to establish its independence.

By refusing to support the Lithuanians, Bush missed the opportunity to reassert America's moral leadership. By attempting to repress Lithuania, Gorbachev lost the chance to generate public support for his own objectives of cutting military expenditures and installing price reforms that inevitably will raise food and energy prices to the Soviet consumer.

Now, as Gorbachev fights a breakup of the Soviet empire, there is growing doubt, in the West, that he -- or anyone else -- can bring the Soviet economy out of its mess.

Because the Soviet economy is so sick, Gorbachev's economic advisers last week approved a plan for a referendum on radical plans to accelerate the move toward a market economy. Reflecting the Soviets' own sense of overwhelming crisis, First Deputy Prime Minister Yuri Maslyukov said the government wants to introduce major elements of reform as soon as possible, bypassing the standing parliament, the Supreme Soviet.

The crash program, patterned after the system followed in Poland, would end some of the large state subsidies on food and other staple products. But even before the referendum takes place, prices for bread -- the staple of the Soviet diet -- will be tripled July 1.

Bradley, an astute student of the Soviet economy, said the other day that basic reforms of this magnitude are acceptable only when there is broad political acceptance of the measures. Thus, the remarkable progress that is being made, painfully, in Poland has been possible only because the Polish people, with faith in the Solidarity union, accepted the urgency of the reforms.

Fresh doubts about the Soviet economy introduce a new problem, the potential spillover of Soviet economic distress into Eastern Europe. At a meeting here last week of the Bretton Woods Committee, the Italian minister of foreign affairs, T.H. Gianni de Michelis, warned that Western Europe, Eastern Europe and the Soviet Union are increasingly interdependent:

"A crisis in one area could not avoid having repercussions on the others. Should the Soviet society and the Soviet economy risk collapse, the threat would extend to these contiguous and partially complementary areas."

Despite the desire of former Soviet satellites to move into the Western European orbit, their economies for the next several years will be tied to that of the Soviet Union -- still the biggest trading partner for all of them.

East Germany is getting a special and separate helping hand from West Germany. But the desperate straits of the Soviet Union underscore the needs of Poland, Hungary, Czechoslovakia and the other former Soviet bloc countries -- not merely for money, but to restore their legal, social and administrative systems and infrastructure.

The problems are deep and pervasive. Western European assistance to Eastern Europe will be substantial, but the damage created over the past 45 years will take generations to repair. America's ability to pitch in has been weakened by its own extravagances in the past decade, now exacerbated by the enormous drain of the savings and loan bailout.

One step that could be taken, both Bradley and de Michelis suggest, is a substantial forgiveness of about $100 billion in government-to-government debt owed by Eastern Europe, $40 billion by Poland alone. But so far as can be determined, that question is not even on the agenda for the industrial nations' economic summit in July.