Early indications are that the area sown to winter grains, for harvest in 1998 has declined by up to 12 percent from last year’s peak, partly in response to localized shortages of seed after last year’s floods. Indications are that the shift out of barley into wheat has continued. Official data indicate that the area sown to barley has halved to about 60 000 hectares while the decline in the wheat area (to 536 000 hectares) is less pronounced. The decline in the area sown to grain may not be as steep as initially indicated. With the farm privatization process now underway it is more difficult to obtain representative information over both the public and private sectors. Following the 1997 grain harvest, estimated by FAO at about 1.2 million tonnes, the cereal import requirement is estimated at over 400 000 tonnes of cereals in the 1997/98 marketing year. Against this requirement, food aid pledges amount to 53 000 tonnes, and most of the balance is expected to be made commercially. Food aid pledges include 35 000 tonnes of wheat to provide a revolving fund for imports from the Strategic Cereals Reserve. Relief food aid for targeted distribution continues to be needed by the vulnerable population, including the internally displaced. GDP has grown by about 5 percent in 1997 but the unresolved issue of the status of Nagorno Karabakh and surrounding areas means that a large number of people continue to be internally displaced. WFP plans to reach some 245 000 beneficiaries during the winter months and reduce the caseload to 200 000 in the spring. Beneficiaries include IDPs, social institution inmates, hospital patients, children living in boarding schools and Chernobyl victims. WFP needs for 1998 amount to 13 000 tonnes, of which 7 000 tonnes are still not covered.