Over the past two months, workers at the Sokolniki flour mill in northeastern Moscow have unloaded 184 rail cars full of wheat, shipped courtesy of a U.S. food aid program aimed at needy Russians. No complaints, said Viktor Drozdov, the mill's director, but for one thing: The Sokolniki flour mill doesn't really need the wheat.
Drozdov said the mill was able to supply seven of the city's bread factories just fine before the food aid arrived. Indeed, in all of Moscow, it would be difficult to find a market whose shelves are not laden with bread or bags of flour.
Supplying the well-stocked Sokolniki mill through a sweltering summer was surely not in the plan when the White House mounted a massive food aid program last November to save Russia from what looked like a bitter, hungry winter ahead. But critics say bad timing and a skewed list of recipients are only the most obvious problems with the $1 billion effort. They say the aid was unnecessary and benefited American farmers and shippers more than the Russian people.
Armed with Russian reports of a disastrous harvest the previous summer and a drastic drop in imported food supplies caused by the financial crisis here, the U.S. Agriculture Department declared it would give Russia about $600 million worth of wheat. It also provided a 20-year loan at 2 percent interest so Russia could buy an estimated $400 million worth of corn, soybeans, poultry, meat, seeds and rice.
"It is in our interest to make sure that Russians are fed through the winter," said Agriculture Secretary Dan Glickman on Oct. 28.
Eight months later, it may be the program itself that needs help. Among the problems: The winter came and went before cranes hoisted the first shipment -- 2,000 tons of pea seeds -- onto a St. Petersburg wharf in March. The bulk of the commodities are coming only this summer just as Russian farmers begin gathering in their own new harvest.
"If I was waiting for this corn, I would have killed all my birds by now," said Nikolai Bandurin, who runs a poultry farm in the Rostov region on Russia's western border.
Of the deliveries so far, 40 percent of the wheat and about one-fourth of the corn have gone to the regions around Moscow and St. Petersburg, the richest, best supplied cities in the country. Program documents listed on the Internet show that the Moscow and St. Petersburg regions are slated to receive as much food as the Far East and Arctic regions, the only areas that reported food shortages this winter.
The American foodstuffs, plus another $400 million worth of aid from European countries, are the equivalent of 10 percent of Russia's annual agricultural output, according to minutes of a meeting of foreign agricultural attaches convened at the World Bank. To keep from undercutting Russian producers, the food aid was to be sold at current market prices.
But a dozen Russian buyers of the food aid said they are paying well under the Russian market price -- less than half of it, in some cases.
Otherwise, "why is it called humanitarian aid?" demanded Alexei Yakovlev, a regional agricultural official who is helping to manage sales of U.S. corn to poultry farms in the Rostov region.
Beyond the problems of pricing and timing, it is not clear that Russia needed food aid to begin with. The World Bank argued from the start that the problem was not lack of food, but the cost of food. Even the bleakest regions got through the winter without mass hunger.
Instead of the 5 million ton grain deficit that officials in Moscow had predicted, government statistics compiled by the World Bank indicate that the country wound up with a surplus in June of about 2 million tons, not counting the foreign food aid.
To the program's critics, the conclusion is hard to miss: The real beneficiaries of the food aid are not Russians, but American farmers, who were able to unload some of their own record surpluses at taxpayer expense. Food aid also helps American shipping companies because U.S. law mandates that they deliver it.
But for Russians, said Yevgeny Serova, an agricultural economist in Moscow, the aid is not only unnecessary, it is dangerous. In her view, it threatens Russia's fledgling market system and agricultural producers and revives the old Soviet-style food chain that capitalism was supposed to dismantle.
"Eight years we have been waiting for this market system to emerge," said Serova. "Now we try to destroy it."
Not surprisingly, U.S. officials see it differently. Asif J. Chaudhry, the U.S. agricultural official in charge of the program in Moscow, pointed out that the Russian government itself asked for help last October. He said the amounts of food aid provided are simply too small to disrupt the market system and that prices were carefully negotiated to match existing market standards.
Although food seems abundant in Moscow and St. Petersburg, Chaudhry said the cities needed aid because they were the most heavily dependent on imported food. And as for timing, he said, "The aid has come in at a point when previous stocks and supplies have run out, and these supplies have come in and filled the gap." He disputed the estimates distributed by the World Bank, saying that Russia is facing another bad harvest with no grain left in stock, not even donated goods.
"All over the country, we have seen factory after factory and mill after mill are processing U.S. wheat, and they are all indicating that if they had not received U.S. wheat, they would be shut down," Chaudhry said.
The United States and the European Union, which mounted its own support program, decided to come to Russia's aid last fall at a time of real uncertainty about what lay ahead. Russia's devaluation of the ruble and default on its domestic debt in August meant the country faced skyrocketing prices and dwindling deliveries of imported food, which made up as much as half of Russia's food supply. On top of that, the coming harvest was said to be the smallest in 40 years.
But noted economists and some government officials argued that predictions of famine were vastly overblown and that the crisis might be a blessing in disguise for Russian producers because they could sell more at home. While the harvest was bad, economists noted, the previous year had produced a bumper crop. They said it was a given that Russian farmers had under-reported production, so official figures of stocks could be off by as much as 20 percent or more.
When the government queried Russia's 89 regions in early October, only one -- Magadan, on Russia's Far East border -- reported food shortages.
A number of Russian government officials opposed the foreign aid, including the minister and deputy minister of agriculture and the minister of finance. But the decision rested with Gennady Kulik, a deputy prime minister who had spent 20 years managing state-controlled agriculture under the Communist government. Accepting the food aid not only alleviated fear, it increased Kulik's power, because it gave him goods to hand out -- or not -- and state contracts to award. Against government rules, one of four firms chosen in a closed auction to distribute the food is headed by a well-known friend of Kulik's.
Calculating prices for different goods to be sold in different regions at different times proved a daunting task. Officials finally set minimum prices and left the Russian sales agents to figure out and collect the additional funds if the regional market price were higher.
The proceeds from the food aid are to go to Russia's chronically under-funded pension fund, theoretically enabling it to pay off $500 million in arrears and sock some away. As of mid-June, only $3.4 million had trickled in, but state agents have months to transfer proceeds from the sales to government coffers.
Mindful of reports of fraud that tarnished a previous food aid program, European governments dispatched hundreds of inspectors throughout Europe and Russia at a cost of about $12 million to monitor the shipment and distribution of the aid. The United States is making do with just 14 inspectors in Russia, although embassy personnel also are supposed to check deliveries during their travels.
How much misappropriation or illegal diversion they can intercept is anyone's guess. On Tuesday , officials seized 10 rail cars stuffed with European rye. The grain was headed across the border to Estonia, despite a strict ban on the exporting of food aid.
Unlike the Americans, the EU refused to ship food to Moscow, St. Petersburg and the "black earth" provinces, which produce much of Russia's basic crops. The Europeans also insisted that certain commodities be sold at higher prices than the Americans demanded.
While officials labored over logistics, the winter passed, with only a few sparsely settled areas in the Far East and north reporting food shortages. Now that the food aid is pouring in, some regions do not want it. The Agriculture Ministry informed the World Bank last week that it is diverting some corn seed shipments to regions for which they were not originally intended to protect Russian seed plants financed by the World Bank.
The Siberian region of Krasnoyarski Krai refused offerings of meat, and the neighboring region of Kemerovo also is apparently not too desperate. Kemerovo dealers are working the Krasnoyarski processing plants, trying to resell food aid sent to their region, according to Russian media reports.
In Rostov, poultry farmer Nikolai Bandurin said he will buy U.S. corn rather than local fodder when it finally arrives. "If they wave it in front of us, of course we'll take it," he said. "But the policy is wrong. This help will be damaging to Russia."
Drozdov, whose Sokolniki flour mill is slated to receive 75,000 tons of grain, said the U.S. wheat is simply replacing what he would have bought in Russia, the other former Soviet republics or European countries, such as Hungary. "We would have managed without it," he said. "The price of bread would have gone up, but not by much."
Although most Russian farmers do not seem to have been hurt by the influx of food aid thus far, Vladimir Kasyanenko, who runs a wheat collective farm in Rostov, is making contingency plans. He said he will simply store his wheat and sell it abroad later when the food aid programs end and export restrictions are lifted.
He might have a bit of a wait. The Russian government is again predicting a poor harvest, this time because of drought and locusts. Said Agriculture Secretary Glickman two weeks ago: "My guess is they're going to want additional assistance."
CAPTION: A Russian worker at a flour plant unloads wheat from the United States out of a train car into a silo.
CAPTION: Food inspector Natalia Malishkina checks American wheat -- part of a large aid effort initiated last fall -- as it passes down a conveyor belt in Moscow.