4.3.FINANCES
4.3.4.
Grain bond
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Nizhni Novgorod relies on grain imports
(both domestically and
from abroad). In 1991, local production accounted for only
1,625,000 tons of grain out of the 3,363,000 tons required,
meeting a mere 48% of regional needs.
Owing to a low grain yield in the region,
social and economic
stability in Nizhni Novgorod are to a considerable extent
determined by the availability of sufficient grain to ensure
the uninterrupted provision of bread and bakery products
for
the population, and combined feed for producers of livestock
products.
As in the past, grain is bought at fixed
prices throughout
Russia on a centralised basis via low-interest credits provided
by the Central Bank of Russia. Owing to high inflation rates,
such a purchasing mechanism requires massive budget funds
and
at the same time fails to meet the grain requirements of
the
region.
To stabilise the region's grain supply,
the purchasing
mechanism must be radically revised. Grain should be bought
with regional funds by the Nizhni Novgorod administration,
which thereby becomes the actual owner of the grain.
Funds are obviously needed to buy the grain.
Consequently the administration will issue
grain bonds in
conjunction with the regional Soviet. Subsequently the
Nizhegorodkhlebproduct (Nizhni Novgorod Grain Products)
system
will buy the requisite grain. Grain bonds will be distributed
among the population via the sale of corresponding bonds.
The bonds will be sold to the public at
a nominal price, equal
to the annual cost of a minimum set of basic foodstuffs,
calculated at the time of issue of the grain bonds.
Each month, holders of grain bonds may partly
redeem them
against resources from a special fund, at the current value
of
the monthly minimum set of foodstuffs. Individuals may cover
virtually all their current monthly food expenses (within
the
minimum set).
Enterprises of the Nizhni Novgorod Grain
Products system will
preserve and process the purchased grain. They will not
own the
grain. The grain will be sold throughout the year on order
by
the administration, at contractual prices for flour, bread
and
combined feed production. These products will also appear
in
shops at unrestricted prices and be sold to the public at
large. Consequently the administration will periodically
receive funds from grain processing and retail trade sales.
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