The main problems of the development of the agro-industrial complex in Russia are social institutions and infrastructure (VIDEO)

Opening the expert discussion on the development of the agro-industrial complex, which was held at the Gaidar Forum, Natalia Shagayda, Director of the Center for Agri-Food Policy, RANEPA, drew attention to the changes that, in her opinion, will affect the state policy in the field of agricultural production in future.

First of all, over the past few years, the final denationalization of the agricultural sector has taken place: the share of state-owned enterprises is currently only 2.7%. “State-owned agricultural enterprises have become less efficient than privately-owned enterprises,” says Natalia Shagayda. In addition, the speaker believes that there was a de-collectivization of the agricultural business, since the share of enterprises with more than 500 participants is 0.4%. Also the agrarian structure has changed significantly. “For 10 years, almost 40% of regions are characterized by a corporate structure, that is, more than 50% of products are generated by agricultural organizations,” says the director of the Center for Agri-Food Policy, RANEPA. Now, due to the support of progressive enterprises, 100 large organizations of agricultural production — this is only 5% of the total number — account for a third of the assets of agricultural organizations and 60% of bank loans. According to Natalia Shagaida, the number of enterprises supported by subsidies decreases from year to year.

Relying on data from his region, Dmitry Butusov, Deputy Chairman of the Government of the Orel Region for the development of the agro-industrial complex, drew attention to the trend to reduce the number of personal subsidiary farms (PSF). He also noted some factors accompanying this trend: an increase in the concentration of production, a decrease in the budgetary efficiency of the agrarian business, a demand for a completely different list of professions, and an increase in the environmental burden. The speaker believes that the agricultural sector of individual regions has passed a certain path of development, and at the moment it is time for a qualitative review of the goals and objectives. For the sustainable development of the agro-industrial complex, the speaker proposed to solve some problems that are associated with social and digital infrastructures. For example, one of the key factors is the creation of the institutional environment of the digital economy.

Sergio Schneider, a professor at the Federal University of Rio Grande do Sul, spoke about the development of the agro-industrial complex in Brazil. He noted the active use of technology and state support with low-interest loans for the development of family farms and agricultural organizations. These factors have drastically changed and improved the system of agricultural production throughout the country. In addition, the speaker noted that the sustainable development of rural areas in the future will be associated with an emphasis on the environment.

According to Alexander Merzlov, President of Association The Most Beautiful Villages in Russia, the “Sustainable Development of Rural Territories” program should focus on the quality of life of the rural population, rather than sectoral interests, which sometimes coincide and sometimes completely contradict the interests of the population. “We are a social state; therefore, the main beneficiary of such strategies and programs as “Sustainable Development of Rural Territories ”should be the rural population, and not a narrow circle of owners of agricultural holdings,” Alexander Merzlov believes. He is also sure that it is necessary to change the approach of state support of agricultural enterprises, which is now aimed at large-scale investment projects of the agro-industrial complex, since ignoring this problem can lead to a further imbalance of public and private interests in the village.

In her report on the development of agriculture in Denmark, Marina Mityanina , Attache for Agriculture and Food of the Embassy of Denmark in Russia, focused on the story of cooperatives that currently work well in the system of the agro-industrial complex. According to the speaker, they are interesting since farmers sell together, purchase too, and the production participants share profit in accordance with the production volumes pursuant to the schemes agreed in advance by the organization’s charter.

Summing up the expert discussion, Dmitry Butusov answered the question of where to move in agricultural restructuring, and said that, first, we must develop two institutional environments – social institutions and infrastructure.

Sophia Shishkova, RANEPA

All records of live broadcasts from the Gaidar Forum 2019

10th Gaidar Forum Organizers:

The Russian Presidential Academy of National Economy and Public Administration (RANEPA);
The Gaidar Institute for Economic Policy (Gaidar Institute);
The Association of Innovative Regions of Russia (AIRR).

The general partners of the Gaidar Forum are Gazprom and Gazprombank; strategic partners include Prosveshcheniye publishing house, Coca-Cola, Pharmstandard group, ACIG Group of Companies, the Russian Textbook Corporation, SANOFI, Novartis, Johnson & Johnson, Russian Railways, MSD, and Mastercard; EY, Cisco and Russian Direct Investment Fund are partners. This discussion’s partners are Philips, Cherkizovo and RVC.

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