Rivers of Lithuanian beef do not flow to Moscow

VILNIUS - A letter of intent for Lithuanian food exports to Moscow, signed by Lithuanian Agriculture Minister Edvardas Makelis and the Russian capital's authorities in August, has produced no practical results so far. It shows that government intervention can not have a significant influence on market relations, even in trade with Russia, say observers.

On Aug. 11, Makelis signed a memo of understanding with the Moscow city government for exporting 5,000 tons of beef, 4,000 tons of butter, 2,000 tons of powdered milk, 4,000 tons of cheese and 20,000 tons of grain to Moscow over half a year.

Moscow has a set system of quotas for the import of food and other products, inherited from communist rule. Moscow city officials made proposals for increasing the quota set on Lithuanian goods over a year ago.

It is already October. However, not a single cooperation agreement, based on the letter of intent, has been signed between Lithuanian and Moscow businessmen yet, say officials of the Lithuanian Agriculture Ministry. "We can't force foreign businessmen to buy our goods," said Makelis

Vladimir Resin, Moscow deputy mayor, visited Vilnius in the beginning of October and said that the main problem is price.

The Lithuanian food industry receives far smaller subsidies from the state than that in the European Union, implementing a more socialist-style policy in agriculture, complains Ramunas Karbauskis, leader of the Peasants' Party.

"Price is a subtle thing. It is up to Lithuanian and Russian businessmen to find a common ground on prices," Resin said.

Raimundas Duzinskas, presidential adviser on economy issues, is not convinced of the need for government intervention in what he sees as fundamentally an issue of trade. He says that it is time for Lithuanian officials to realize the private sector, not the state, is occupied with trade. Economy Minister Valentinas Milaknis seems not to be too upset with the Moscow story. "Moscow is just one of the variants. For example, Germans, Uzbeks, Turks and others show interest in the import of Lithuanian food," Milaknis said.