Scientific Journal of KubSAU

The article highlights high level of agricultural production and promising export potential of the Krasnodar region. The authors provide analysis of market segments of export growth in grain business, consider opportunities of increasing competitiveness by improving production of grain, import substitution, and focusing on export. It is noted, that the cost of imported food in value chain terms in our country had reached an enormous rate, and that government had realized the need of strengthening food security and transferring production of traditional produce, which are forming the basis of consumption of the local population, to the domestic market. The authors point out that we need temporary moderate state protectionism and protection of the domestic market with the aim of modernizing the economy, attracting investors in the important fields of production with high risks. The main problems and solutions that will help to further successful implementation of this strategy in the sectors of grain economy are also defined. The article shows that the Krasnodar region has the most effective rural industrial structure, the best climate in the country, enlarged crop rotation, cheap labor resources, extensive experience in agricultural business. The authors propose adopting a set of measures of reducing systemic risks and enhancing competition in grain business; to reduce lending rates to 3-5 % to revive the lost ground in livestock breeding, particularly in pig and cattle, the basis of which is the production of grain, and also improve the scheme of distribution of state support

This article notes that agricultural production is not a self-regulating system. The article highlights specific features of agricultural production and forms of ownership of the major productive resource – land, ineffective policies of promoting development and introduction of innovative technologies. It is noted that the system of measures and tools of state regulation of agricultural production have two directions of influence: governmental regulation of the agricultural market mechanism and industrial governmental support for manufacturers. The authors give classification of methods and instruments of state regulation, liberalization of the agricultural sector in the WTO, levels of aggregate support for agriculture; as well as identifies the key growth areas of the governmental support and discusses the basic institutions of governmental regulation: ownership, legal Institute of economic management and the Institute of organization management. It's pointed out that the current dynamics of the development of agricultural production in our country is determined by four major external factors: the Institute of Western sanctions imposed against our country, Russia's integration into the international market by joining the World Trade Organization, the functioning of the Single Economic Space within the Customs Union, and the necessity of solving problems of import substitution and food security of our country. Implementation of these methods requires significant institutional transformation and transition into the new levels of legal, commercial, and economic regulation with observance of equitable international cooperation. In conclusion, the authors discuss an insufficient level of development stimulation in domestic agriculture

The problems of import substitution, resource features of the agrarian economy, through which you can generate significant competitive advantage, are discussed. It is noted that low abroad interest rates on loans create obvious unequal starting opportunities throughout the domestic business. As a result the cost of imported food in value chain terms reached in our country an enormous rate of $45 billion and that government realized the need of strengthening of food security, transferring of production of traditional kinds of products which form the basis of consumption of the population in our country, to the domestic market. It is noted that we need temporary moderate state protectionism and protection of the domestic market with the aim of modernizing the economy, attracting investors in the important field of production with high risks. The main problems and solutions that will help to further successful implementation of this strategy in the sectors of our economy are highlighted. It is noted that our region has the most effecting rural industrial structure, the best country’s climate, enlarged crop rotation, cheap labor resources, extensive experience in agribusiness. It is proposed to perform a set of measures to reduce systemic risks in agribusiness

Practice shows that the state support in our AIC comes to the wrong addressees. Helping big agricultural businesses at the expense of other participants, which often are inherently more efficient and competitive, still makes the position of the existing system of state support very problematic. More correctly in this situation would be to increase help for small- and medium-sized businesses, which are often created from scratch without any support, and, therefore, are more motivated to efficiency and growth. For example, small farms are producing up to 40% of the total agricultural production, but receive only about 10% of the state support allocated to agriculture. This imbalance distorts the competitive environment and hides great injustice of the entire agricultural policy. This is the main reason for incomplete implementation of the reserves in the segment of small businesses. This has a great negative impact on the key units of crediting and selling of small agribusiness forms (SAF). The authors propose restructuring the general support of regional agriculture by blocks of crop production and small agricultural economy in benefit of the SAF due to the possibilities of state support of crop production in the ratio of 2:1, that is to leave the crop to 66.7%, and for the SAF to 33.3%. Under this scheme, small forms over the next 5 years will receive 14.2 billion rubles instead of the planned 6.4 billion. This decision will contribute to the emerging of a healthy competitive environment in the domestic agricultural market and increase the faith of the owners of small businesses in possibilities of their growth and weakening of the principles of cooperation

The authors note, that the system of state regulation of agribusiness sets the rules and creates a relatively equal competitive opportunities for all market participants. The state support though is directed to increase efficiency of the state regulation of all agricultural subjects, including small-scale farming. Classics of retrospective of market relations’ development have shown that the manufacturing business can be quite successful in a self-regulatory market. Later, the practice of using the Marxist economic theory revealed the insolubility of the contradictions in the functioning of the classical market model. The Paradigm of the Keynesian school has confirmed the contradictions of the classical equilibrium theory of the free market. In the result, the strategy of the industrial markets development has swept in the direction of the neo-conservative models of regulation. Today, the integration models that are using synthesis of state-and market-based regulatory instruments are remaining the philosophy of many Worlds’ developed economies. At the same time, in our agrarian economy, the balanced and equilibrium proportions of the development are absent, what requires greater state involvement in the regulation of the agribusiness growth. The authors believe that the latest Western sanctions provide additional opportunities for the development of domestic agricultural production. The state should actively use its capabilities in the development and strengthening of domestic agricultural production and access to foreign commodity markets. After achieving adequate competitive position providing sustainable economic growth of the agricultural economy, the intervention of state protectionism can be reduced and, simultaneously, the role of the liberal approaches should be increased

The definition of "small agricultural businesses" (SAB) is clarified, the effective functioning and regulation of development of subjects SAB are elaborated. The authors used the principles of systemic-functional analysis, methods, rationale, economic-statistical, monographic, SWOT-analysis, graphic and others. The author's definition of small agricultural businesses was offered. The functioning and regulation of development of subjects of SAB are refined and systematized. The modern competitive opportunities of SAB and others are identified and systematized. It’s being said that the competitive position of subjects of small agrarian farms (SAF) are often provided with increasingly innovative approaches with flexibility of internal management, the ability to quickly adapt to constantly changing conjuncture market. However, as practice shows, the direction of development in small economies does not act as a priority of modern agricultural policy in this field, often dominated by declarative intent rather than running behind these statements required volumes of investment in regulation of SAF subjects development

It is noted that the grain market has a key influence on food supply in our country. Today, in the conditions of import substitution, many animal products continue to be received from abroad in large volumes, among which grain is a feeding base, although those products can be produced domestically with high profits. In recent years, our country has become a large grain exporter and had been set among the four world's largest grain sellers at the world market. Now, the main problem of the grain business has become not manufacturing but the effective management and marketing of grain sale on domestic and foreign markets. Under the "grain market", the authors understand an integrated mechanism covering the entire process of production - processing - logistics - marketing of grain products, ensuring access to the consumer. The authors note that today there should not be rigid boundaries in the management segments of the grain market, as all sectors of the market are technologically linked through a set of integrated activities. Also they are bringing up their model of functioning management of the grain market, which clearly demonstrates the basic blocks of the investigated production systems, their connections and relationships. The practical implementation of such cooperation promises to participants of the grain market to get a certain synergistic effect due to the systemic functioning of technological, logistics, marketing and other business relationships between all parties; as well as adjustments to price ratios and more sophisticated economic instruments for investment in that business

The author shows the classification of the stages of development of state regulation of agrarian economy, consisting of four blocks; and provides a brief description of them. There are shown the boundaries of state authority regulation, which are defined by legal, legislative, budgetary, tax, social, and environmental functions of the state. Methods of regulation with participation of the state are divided into direct (administrative) and indirect (economic). Economic and administrative tools have some similarities and common features, and, at the same time, they are the opposed. The author notes the predominance of economic methods, at the same time dividing five areas of economics, in which the use of administrative methods is compulsory to achieve the condition of balanced development of agrarian economy. With that being said, it is very important to: have governmental control over monopolistic markets, prevent negative impact on non-renewable resources, environment, and ecological situation; as well as maintaining acceptable living standards of the rural population. A special place takes the support of international trade links, politics of a moderate protectionism for the protection of agricultural markets with customs barriers, export licensing, import control policy. It is noted that the indirect intervention of the government in the agricultural economy implies the implementation of a system of measures affecting external and internal economic environment. Here, the authors refer fiscal policy by manipulating the state budget, government spending and taxation, measures of credit regulation, monetary and investment policy, regulation of the system of labor recruitment, employee income, and other tools

Domestic and foreign experience of operation of the segment of "small" rural economy shows that its capabilities are still being used not completely out of the difficulties and risks of development. The main reason for the slow dynamics of the modern development of subjects of small farming (SAF), according to the authors, is the inaccessibility of the credit market in this sphere since the key rate of the Central Bank at 10.5%, which is too high and, therefore, significantly reduces the efficiency of the investments in this risky industrial sector. In addition, the most narrow «neck bottle» is remaining a unit of realization of products of small businesses. The authors propose a refined definition of "small agricultural businesses" that differs from the previous definitions by its conciseness and by including small enterprises of not only 1-st production, but also the 2-nd processing of agricultural sector. The study revealed that the most distinctive features of small agricultural forms are: high autonomy, independence, and self-protection from adverse environmental factors. The authors propose to adjust the long-term regional development program, and suggest the method of determining the capacity of the market for products of small agricultural farms with possibilities of a differentiated accounting of consumers by their income, residency, and consumption of domestic and other animals. They believe that the problem of affordability of lending and perfecting of system of marketing of small agricultural farming today is largely able to solve with the multi-level agricultural credit and sales-living cooperatives. The authors believe that the government should create a high-in-demand SAF productive assets and then transfer them to the operational management of cooperatives, with subsequent transformation of them into equity of the small participants of cooperatives

Availability of cooperation in the field of processing, storing, crediting and selling channels is the key to further successful development of subjects of small agrarian farms. It is shown, that modern cooperation allows creating 1-st level agricultural consumer cooperatives at the district level. Based on the region level, the 2-nd level Unions of cooperatives are being formed. The 3-rd level cooperatives may also appear on the Federal level or the level of Federal districts. The authors give the dynamics of financing of regional target programs of development of agricultural credit and sales cooperation in the Krasnodar region. Today, the province operates a two-level system of consumer agricultural cooperatives with the regional Guarantee Fund, which is supporting their development. The main aim of the Guarantee Fund is to ensure access of small farms to financial and material resources. For the 1-st level cooperatives, the Fund provides the possibility of further development and allows adding on 1 ruble of budget support additionally 9.1 credit ruble. Analysis of economic activity of subjects of small farming has showed that improving of the availability and timeliness of accessing loans from agricultural credit consumer cooperatives for the purpose of production of gross amounts volume and production profitability of agricultural products. Moreover, the development of the practice of multi-level cooperation as condition is to improve the functioning of small agricultural farms, their credit new loan program and product distribution are illustrated