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COUNTRY COMPETITIVENESS OF AN AGRO-FOOD SECTOR
OF THE SOUTH OF RUSSIA
For
the first time the indicator of country competitiveness was developed by the
World economic forum in 1996.
The
world economic forum uses multiple-factor vector models grouped in eight
aggregated factors: internal economic potential, foreign economic relations,
state regulation, credit and financial system, infrastructure, a control
system, scientific and technical potential, manpower.
A
high level of competitiveness of a country testifies about a level of development
of productive forces, flexibility of an economic system capable of reorganization
according to changes in the world market.
Country
competitiveness unites competitiveness of the goods, competitiveness of a commodity
producer and branch competitiveness.
World
experience offers two base models for development of competitiveness of the
country: orientation to export, import replacement.
Demand
parameters a special place have (M. Porter's theory) – demand capacity, dynamics
of its development, differentiation of demand for product kinds, buyers
insistence to the goods and services quality.
A
concept of competitiveness at a country level is competitiveness in use of
resources. A country can specialize in those branches and market segments where
its enterprises are rather competitive. Competitiveness of branches which have
competitive advantages in a foreign market, rises prices for labor and capital
in a country [3, with. 25]. The initial primary possession of manufacture
factors promotes occurrence of competitive branch in a foreign market.
Great
Britain and France depended on import of grain from America and Russia in the
XIX-th century. Japan passed from the agriculture taxation to its subsidizing.
The state established a level of procurement prices which covered material and
labor costs and provided profit on 10-20% more, than on the goods intended for
internal consumption in Vietnam. Gradually there was an alignment of levels of
economic development of the cooperating countries and rapprochement of national
economies through integration.
For
example, in the USA, the income of export in agriculture makes about 4-5
billion dollars/$. From agricultural production sunflower seeds, barley, wheat,
wool of sheep use the greatest demand.
The
Russian foreign trade develops since Peter I when intensive development of the
European market under such export items as: raw materials and agricultural
production products, subjects of small-scale and manufactory manufacture (more
than 40%) began. In XIX-XX centuries export promoted formation of the large
domestic industry. In comparison with Holland Russia advanced Italy and
Austro-Hungary in foreign trade.
Generally,
Russian export of agricultural production, is carried out at the prices above
the internal. Intermediary commercial structures through which passes more than
70% of export of articles of food, buying agricultural production at the cheap
internal prices, realize it to foreign countries at higher prices, receiving
from it high incomes, without aspiring to invest in development of agro-food sector.
Domestic
producers lose from such transactions monetary resource while in the EU
countries export subsidizing strengthens competitiveness of commodity producers
and promotes competitiveness of agriculture.
The
law grants the right to the Government of the Russian Federation to stimulate
export of agricultural production, raw materials and the foodstuffs if it
doesn't break competitiveness of the
home market. The home market, as well as a foreign market can be characterized
as a sphere of an exchange of the goods (groups of the goods) between
manufacturers and consumers, developed on the basis of division of labor and
competitiveness of separate manufactures.
For
increase of country competitiveness of Russia, it is necessary to change an
economic system and a control system at a level of a separate enterprise, a
branch, a region in a context of the world economy of current competitiveness
of separate enterprises and branches.
Most
strong sides of the Russian economy are scientific and technical potential,
manpower, and the weakest – the state role in economy, a control system of the
enterprise and credit and financial sphere.
The
basic agrarian regions are located in the south of Russia. Southern regions of
Russia import wheat and corn from France, Hungary, Moldova, the Ukraine, the
USA, Yugoslavia.
Corn is a making part of mixed fodders for
feeding animals. However, manufacture of mixed fodders has decreased because
of low solvent demand in animal
industries of the south of Russia. Reduction of livestock of animals had increased
as a result demand for such forage crops, as barley and corn decreased.
Rice
is imported to the south of Russia from India, Kazakhstan, Turkey, Egypt, wheat
flour - from Moldova; sunflower oil, cotton - from Bulgaria, Croatia, Romania,
Slovakia, Spain, the Ukraine, Turkey, Germany, Greece; white sugar - from
Moldova, the Ukraine, Germany, Turkey, Poland; pasta - from Greece, Iran,
Turkey, the Ukraine; beef – from Austria, China, Cyprus, Denmark, France, Germany,
Italy, the Netherlands, Spain, the Ukraine, Moldova and Poland; fowl – from
Belgium, Denmark, France, Germany, Italy, the Netherlands, Moldova, Great
Britain, the USA; tinned products from meat - Hungary, Poland, the Ukraine; frozen
fishes – from Azerbaijan, Argentina, Bulgaria, Canada, Latvia, the Netherlands,
Norway, the USA, Iceland, Mauritania, the Ukraine, Norvegn.
The
basic importers of beef and fresh pork on the south of Russia are Moldova,
Poland; frozen of fishes - Iceland, Mauritania, the Ukraine.
Regions
of the south of Russia export wheat to
Israel, the Ukraine, Uzbekistan, Azerbaijan, the Republic of Korea, Lebanon,
Tunis, Turkey; barley - to Azerbaijan, Israel, Syria, Cyprus, Georgia; corn -
to Armenia, Georgia; rice - to Azerbaijan, Lithuania, Moldova, Turkey, the
Ukraine; sunflower seeds - to Georgia, Italy, the Netherlands, Spain, Turkey,
the Ukraine, Armenia, Greece, Azerbaijan, Belgium; sunflower, cotton oil - to
Azerbaijan, Germany, Kazakhstan, Kirghizia, Armenia, India, Latvia, Georgia;
sugar and confectionery - to Armenia, Georgia, Germany, Kazakhstan, Kirghizia,
Uzbekistan.
Country
competitiveness of export of plant growing production by regions of the south
of Russia is caused by the price factor. The rise of prices for plant growing
production means growth of competitiveness of export of plant growing
production.
In the price relation the most competitive
goods on export of plant growing production by regions of the south of Russia
are sunflower seeds, sugar and confectionery. The most competitive goods under
the factor of average physical volume of export of plant growing production are
wheat and barley.
As
a result, country competitiveness and export specialization of regions of the
south of Russia in plant growing production depend on the prices for wheat and
barley export; volumes of foreign trade in seeds of sunflower, sugar and confectionery
According to the results of a research, the
basic foreign trade partners influencing on country competitiveness of regions
of the south of Russia on export of wheat are Uzbekistan and Azerbaijan; barley
– Cyprus; rice – Azerbaijan and the Ukraine; sugar and confectionery – Kazakhstan
and Kirghizia.
Let's consider factors of country
competitiveness of import of the agricultural goods in regions of the south
Russia (Table 1).
Table
1 - Factors of country competitiveness of import the agricultural goods
in regions of the south of Russia
the countries of the far abroad[1]
|
The goods |
Country |
Direction of change of
the factor |
||
|
price
|
volume |
cost |
||
|
Corn |
France
|
- |
+ |
- |
|
Hungary
|
+ |
+ |
+ |
|
|
Moldova
|
+ |
+ |
+ |
|
|
The Ukraine |
+ |
+ |
+ |
|
|
The USA
|
+ |
+ |
+ |
|
|
Yugoslavia |
- |
- |
- |
|
|
Rice |
India
|
+ |
+ |
+ |
|
Kazakhstan |
+ |
+ |
+ |
|
|
Turkey
|
+ |
+ |
+ |
|
|
Egypt |
+ |
+ |
+ |
|
|
Wheat flour |
Moldova
|
+ |
+ |
+ |
|
Sunflower, cotton oil |
Bulgaria
|
+ |
- |
- |
|
Croatia
|
+ |
- |
- |
|
|
Romania
|
+ |
- |
- |
|
|
Slovakia
|
+ |
- |
- |
|
|
Spain
|
+ |
- |
- |
|
|
The Ukraine |
+ |
- |
- |
|
|
Turkey
|
+ |
- |
- |
|
|
Germany
|
+ |
+ |
+ |
|
|
Greece
|
+ |
+ |
+ |
|
|
White sugar |
Moldova
|
- |
+ |
+ |
|
The Ukraine |
- |
+ |
+ |
|
|
Germany
|
+ |
- |
- |
|
|
Turkey
|
+ |
- |
- |
|
|
Poland
|
+ |
- |
- |
|
|
The macaroni products |
Greece
|
+ |
- |
- |
|
Iran |
+ |
- |
- |
|
|
Turkey
|
+ |
- |
- |
|
|
The Ukraine |
+ |
- |
- |
|
Reduction
of volumes of internal manufacture of
the sugar beet in regions of the south of
Russia has led to half using of capacities of sugar factories that was
reflected in a financial condition of agricultural enterprises.
Capacities
of factories, the power equipment were worn out in whole on 60–80%,
reproduction process wasn't carried out, progressive technologies and the equipment
didn't take root.
In many European countries competitiveness of
sugar manufacture and decision of a question about the expanded reproduction
depend on general conditions of restriction of manufacture of the sugar beet. For example, there are such
abstract concepts as A, B and C beet. A – is a quottering beet for all-round
price (high competitiveness), B – dependence on working conditions and pricing
and C – dependence on the world prices in the sugar market, a beet over an
industrial quota at underestimated or very low price.
In
the south of Russia there was a necessity of input of the customs duties
depending on the price on the sugar beet. It is an artificial measure of
increase of competitiveness sugar manufactures. A real measure is an
introduction of modern technologies of cultivation of the sugar beet,
processing, pricing, perfection of mutual relations between manufacturers of
raw materials and sugar factories, the financially-credit policy.
Attraction
of investments for sugar factories expands their participation in the
organization and development of raw-material base. Thus, real quality in manufacture
which is then found out in the course of consumption is put. Between the moment
of education of properties of production and the moment of their display in the
course of consumption there is a direct communication, that is in the course of
delivery and beet acceptance on a sugar exit. [1]
On
the integration principles, one of Russian regions Krasnodar Territory carries
out foreign trade with Commonwealth of the independent states, the Organizations
of economic assistance and development, the European economic community, the
European association of free trade, the countries of Baltic, the Organization
of the states of exporters of oil, the countries Central and the Eastern
Europe, the organizations of Asian-Pacific economic cooperation.
Krasnodar
Territory which is a part of regions of the south of Russia carries out the foreign
trade operations actively. So, for example, according to Southern customs office
of Federal customs service the foreign trade turnover of Krasnodar Territory
only for 2009 made 6395,7 million dollars/$, including with the far abroad
countries – 5600,0 million dollars/$, with the states-participants CIS – 795,7
million dollars/$. Import to Krasnodar Territory - 2759,6 million dollars/$,
export from Krasnodar Territory – 3636,1 million dollars/$. The balance of the
foreign trade turnover in 2009 across Krasnodar Territory developed positive
876,5 million dollars/$, however for 2008 – more positive 1727,2 million
dollars/$.
With
the countries of Europe the foreign
trade turnover of Krasnodar Territory
reached in 2009 - 2375,1 million dollars/$, including the greatest foreign
trade turnover with Germany – 207,9 million dollars/$, Spain – 105,7 million
dollars/$, Italy – 375,1 million dollars/$, the Netherlands – 105,5 million
dollars/$, the Ukraine – 410,4 million dollars/$, Finland – 437,7 million
dollars/$, France – 125,5 million dollars/$; the countries of Asia: Israel –
190,8 million dollars/$, Kazakhstan – 139,8 million dollars/$, China – 290
million dollars/$, Syria – 218,5 million dollars/$, Turkey – 1388, 3 million
dollars/$; the countries of America: Brazil – 151,3 million dollars/$; the
countries of Africa: Egypt – 409, 6 million dollars/$.
The
greatest volume of the foreign trade turnover of Krasnodar Territory is in food stuff and raw materials for their
manufacture (export - 1346,2 million dollars/$, import - 1349,7 million
dollars/$) and production of a fuel and energy complex (export - 1827,6 million
dollars/$, import – 203,2 million dollars/$).
Krasnodar
Territory increases volumes of export of agricultural production, grain crops
especially. Wheat, barley is taken out from region’s seaports.
The
basic volumes of purchases of grain from Krasnodar Territory are in the
countries of the Near East and the North Africa: Saudi Arabia, Algeria,
Lebanon, Syria, etc. These states import wheat, barley. Wheat is exported to
the CIS countries. For example, wheat and fodder barley are exported to
Georgia. Others heavy buyers are Italy, Albania and Greece. Basically fodder
wheat is delivered to Italy; wheat - to Albania, wheat and barley - to Greece.
Sugar and confectionery are exported to Moldova, the Ukraine and Uzbekistan.
The
basic volume of import of agricultural production is in sugar and confectionery.
The second place on agricultural products import is occupied with citrus fruit
crops. Import of this production is carried out from Turkey.
On
food stuff and agricultural raw materials import growth over export conducts to
threat of food protection not only
of the south of Russia, but also Russia in whole.
In
Krasnodar Territory and others regions of the south of Russia the poor corn
harvest that increases demand in home market of Krasnodar Territory is noticed
and it promotes an increase in volume of import of highly productive seeds of
corn. Sunflower-seed oil is imported from the Ukraine through the external
borders of Krasnodar Territory.
Low fertility of soil, untimely and insufficient
processing of crops, low solvency at calculations by combustive-lubricating
materials lead to the poor quality wheat, which is poorly realized on internal
and the world market. Incomparability of Russian quality standards with the
world’s reduces competitiveness of the great bulk of wheat which is grown in
Russia in the world market. There is a situation of overstocking by wheat of
poor quality, suitable for cattle is forage, when deficiency of food wheat. The
largest exporter of grain is Kazakhstan. Its annual export reaches about 3
million dollars/$.
In
this connection, a question about import protection agricultural raw materials
and the foodstuffs, including such directions: as expansion of areas under
crops, including forage crops; growth of an intensification of manufacture on
the basis of modern technologies; development of competitiveness of manufacture
and distribution of the foodstuffs, taking account of economic subjects
considering balance; perfection of competitiveness of system and management
structure.
The
policy import protection represents a series of measures which is directed at
domestic production growth. Economic benefit of import protection is based on
direct and indirect incomes of the state, that is country competitiveness.
The
basic measures of state regulation of the external economic competitiveness in
agro-food sector are re-structuring of a branch of agriculture, liberalization
of foreign trade activities (foreign trade activities), pricing.
Foreign
trade activities liberalization assumes stimulation of the foreign trade
activity, stabilization of home market and attraction of foreign investments
within the limits of development of
branch competitiveness.
The
analysis of the basic tendencies
of the world market allows to reveal
integration potential of Russia and regions of the south of Russia, a direction
of its escalating and use. Import is justified, if a country or a region uses
the foreign trade exchange for import of the products which are not made in the
country, in its unique nature-geographical site.
To
support a certain level of competitiveness of export of agricultural production,
effective conditions of foreign trade or development of efficiency of foreign
trade are necessary for country competitiveness.
References
1.
Goncharov V. D, Larionov V.G. Meat market and meat products in Russia // The
Meat industry. - ¹8. – 1998. – p. 21-24.
2.
Zhuravleva E. A. Compettivness of agrofood sector Krasnodar Territory in
1997-1999 (crisis dynamics): the monography. – Krasnodar: the Krasnodar center
of the scientific and technical information, 2010, 135 p.
3.
Petrikova E. A, Shevtsov V.V. Integration of the enterprises sugar a branch of
agrarian and industrial complex of Kuban as the basic direction of increase of
their competitiveness / the All-Russia student's scientific conference with the
international participation, - 1998. - p. 227-228.