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COUNTRY COMPETITIVENESS OF RUSSIA SOUTH
AGRO-FOOD SECTOR
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, control system,
scientific and technical potential, manpower.
A
high level of country competitiveness testifies about a level of productive forces
development, economic system capable flexibility 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 competitiveness development 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, p. 25].
The initial primary possession of manufacture factors promotes competitive
branch occurrence 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 economic
development levels of the cooperating
countries and national economies rapprochement 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 manufacture (more than 40%)
began. In XIX-XX centuries export promoted formation of the large domestic
industry. In comparison with Holland, the Russia advanced Italy and
Austro-Hungary in foreign trade.
Generally,
Russian export of agricultural products, is carried out at the prices above the
internal. Intermediary commercial structures through which passes more than 70%
of food export, 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 Russian Federation Government 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 labor division and competitiveness of separate
manufactures.
For
increase of Russia country competitiveness, 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 current competitiveness world economy 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, 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 and the 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 Russia south. Reduction of animals’ livestock 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 Russia south are Moldova, Poland; frozen of fishes - Iceland,
Mauritania, the Ukraine.
Regions
of the Russia south 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 plant export is growing production by regions of the Russia south.
It is caused by the price factor. The rise of prices for plant growing
production means the growth of plant export competitiveness and growing production.
In the price relation the most competitive
goods on plant export and growing production by regions of the Russia south are sunflower seeds, sugar and confectionery. The most competitive
goods under the factor of average physical volume of plant export and growing production
are wheat and barley.
As
a result, country competitiveness and export specialization of the Russia south
regions in plant growing production depends from the prices for wheat and
barley export; volumes of foreign trade in sunflower seeds, sugar and confectionery.
According to the research results, the basic
foreign trade partners are influencing on country competitiveness of the Russia
south regions on wheat export are Uzbekistan and Azerbaijan; barley – Cyprus;
rice – Azerbaijan and the Ukraine; sugar and confectionery – Kazakhstan and
Kirghizia.
Let's consider factors of import country competitiveness of the
agricultural goods in the Russia south regions (Table 1).
Table
1 - Factors of import country
competitiveness of the agricultural goods in regions of the Russia south
countries and far abroad[1]
|
The goods |
Country |
Direction of the
factor change |
||
|
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 sugar beet internal manufacture volumes
in regions of the Russia south has led
to half using of capacities of sugar factories that was reflected on 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 restriction conditions of the sugar beet manufacture. 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 the customs duties in depending
input on the sugar beet price. It is an artificial measure of competitiveness
sugar manufactures increase. A real measure is an introduction of modern technologies
of sugar beet cultivation, 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 consumption course is put. Between the moment of
production properties education 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 the 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 exporters’ states 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 Russia south 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 in 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 direction
- 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/$, the
Ukraine – 410,4 million dollars/$, the Finland – 437,7 million dollars/$, the France
– 125,5 million dollars/$; the countries of Asia: the Israel – 190,8 million dollars/$,
the Kazakhstan – 139,8 million dollars/$,
the China – 290 million dollars/$, the Syria – 218,5 million dollars/$, the Turkey –
1388,3 million dollars/$; the countries of America: the Brazil – 151,3 million dollars/$;
the countries of Africa: the 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/$).
Krasnodar
Territory increases volumes of agricultural production export, grain crops
especially. Wheat, barley is taken out from region’s seaports.
The
basic volumes of grain purchases from
Krasnodar Territory are in the countries of the Near East and the North Africa: Saudi Arabia, Algeria, Lebanon,
Syria, etc. These states import wheat, barley. Wheat is exported to the CIS countries.
For example, wheat and fodder barley are exported to Georgia. Others heavy
buyers are Italy, Albania and Greece. Basically fodder wheat is delivered to
Italy; wheat - to Albania, wheat and barley - to Greece. Sugar and
confectionery are exported to Moldova, the Ukraine and Uzbekistan.
The
basic volume of agricultural production import is in sugar and confectionery.
The second place on agricultural products import is occupied with citrus fruit
crops. Import of this production is carried out from Turkey.
On
food stuff and agricultural raw materials import growth over export conducts to
food protection threat not only of the Russia
south, but also Russia in whole.
In
Krasnodar Territory and others regions of the Russia south the poor corn
harvest that increases demand in home market of Krasnodar Territory is noticed
and it promotes an increase in volume of import of highly productive corn seeds. Sunflower-seed oil is imported from the
Ukraine through the external borders of Krasnodar Territory.
Low fertility of soil, untimely and insufficient
processing of crops, low solvency at calculations by combustive materials lead
to the poor quality wheat, which is poorly realized on internal and the world
market. Incomparability of Russian quality standards with the world’s reduces
competitiveness of the wheat great bulk which is grown in Russia in the world
market. There is a situation of overstocking by poor quality wheat, suitable
for cattle is forage, when deficiency of food wheat. The largest exporter of
grain is Kazakhstan. Its annual export reaches about 3 million dollars/$.
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 manufacture intensification on the modern
technologies basis; development of manufacture
competitiveness and the foodstuffs distribution, taking account of economic
subjects considering balance; perfection of competitiveness system and
management structure.
The
import protection policy 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 the external economic competitiveness state regulation in
agro-food sector are re-structuring of agriculture branch, foreign trade activities
(foreign trade activities) liberalization, 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 branch competitiveness development.
The
basic tendencies analysis of the world market allows to reveal integration
potential of Russia and regions of the Russia
south, a direction of its escalating and use. Import is justified, if a country
or a region uses the foreign trade exchange for the import products which are
not made in the country, in its unique nature-geographical site.
To
support a certain level of export competitiveness and agricultural production,
effective conditions of foreign trade or foreign trade efficiency development
of 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. Competiveness of Krasnodar
Territory agro-food sector 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.