Strategies of farms towards the production of collective goods in the Russian agricultural sector

STRATEGIES OF FARMS TOWARDS THE PRODUCTION OF COLLECTIVE GOODS IN THE RUSSIAN AGRICULTURAL SECTOR

Member of the laboratory : LEMNAProfessor assistant at the Université de Nantes

GROUIEZ Pascal

Rural’Est, SFER-INRA, 20 octobre 2011, Dijon

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Emails :

[email protected]@gmail.com

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OUTLINE

I Theoretical Framework

II Results

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1.1 SOME STYLIZED FACTS ON THE RUSSIAN AGRICULTURAL SECTOR

Some inefficient farms have been preserved Some Corporate farms keep their social roles Some Individuals farms develop social roles

Barriers to entry / inefficient economic rules (Csaki et al., 1996 ; Shagaïda, 2005 ; Brooks et al., 1994, 1996 ; Lerman (ed.) 2008 ; Serova, 2005, 2008) ; eyes on elections (Amelina, 2002) ;

Hybridation process (Wegren, 2005 ; O’Brien et al. 1998, 2004)

Existence of multifunctionality of farms

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1.2 THEORETICAL APPROCHMultifunctionality

Industrial Organization approachPatrimonial concepts

Community of interest Commercial relationship and patrimonial relationship

The concept of « productive configuration » can help us to understand all the strategies of actors and to link market and non-market productions according the institutional context

Multifunctionality can be considered as strategies that economic actors apply in order to develop business and reproduce communities of interests in a highly competitive context

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1.3 EMPIRICAL WORK

Goal : understand what kind of role the integration of farms into various supply chains plays in their MFA strategy.

Problems in the statistical analysis Not easy to identify the relation between agriculture

and agro-food industry in Russian statistics The Soviet « troïka » representation of farms does not

evolve

50 interviews with farmers and agro-businessmen in the Orel Oblast’Statistical tests to validate our typology

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OUTLINE

I Theoretical Framework

II Results

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TYPOLOGIE OF FARMS ACCORDING TO THE GOSKOMSTAT

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49,27

42,59

8,13

Share of production value in %according to the different kinds of farms in 2007

corporate farmshousehold plotsindividual farms

Data : Goskomstat, 2010

WHO ARE THE ACTORS OF THE TRANSITION IN THE AGRICULTURAL SECTOR? The « Farmers » : individual farmers,

managers of agroholdings (public or private), directors of corporate farms and owners of household plots.

Public actors : governor of Orel Region, department of agriculture from Orel Region, “Ministry” of agriculture

Private actors : Investor from work sector, from oil sector, from agribusiness sector, middlemen, individuals and communities which own plots of land.

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2.1 PRODUCTIVE CONFIGURATIONS

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public agrholdings

corporate farms individual farms household plots Agroholdings

commercial relationship

to deliver products to the agroholding at a lower price than the market price

competition with other PC on the

local market

patrimonial relationship collective goods housing for young people (1) food security (2)

collective goods

local and federal regulations (1) access to credit (2) credit for housing projects access to credit

from regional banks

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PRIVATE AGROHOLDINGS IN THE OREL REGION

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Head office of the agroholdings Name of the owners

Usable farmland in ha.

Investment in 2007/ 2008 (Md. r.)

Mean activity/Activity in Orel

Number of Corporate Farms in Orel

OAO Agrofest-Don Aleksej Fedoryčev 31000 0,134football/grain production 10

Mossel'prom (in 2009) Sergej Lisovsko n.a. n.a.Television and press/Pig breeding 3

Agroholding (AMS-Agro) Četverikov 30000 2 Politician/ n/a 9

Belyj Fregat Anatolij Butorin 100000 1,3Grain Import /Poultry farm 5

ZAO AVK Eksima (Eksima Agro) . Nikolaj Demin 46000 4

Meat international trade /Pig breeding 4

Set-Holding Aleksandr Samusev 50000 0,004 Oil/grain production 4Agroteh-M Žanna Mahova 8500 1 Oil/Daily cow breeding 3Nobel-Ojl (Nobel-Agro) Grigorij Gurevič 90000 0 Oil/grain production 3

OOO PlanetaPerelygin Gennadij Leonidovič 8800 0,016 n/a /Daily cow breeding 2

Agriko (Šablykinskij agrokompleks) Vladimir Bovin 6000 4

International Trade of Grain/Pig breeding 2

holding ЗАО Orelinvestprom Il'âžov M.A. 40000 6,5

Cement works/Pig breeding 2

Avtobaza Il'inskoe V. P. Veŝikov 9500 0,03Construction firm in Moscow/Potato 2

Al'kor Holding Vladimir Džangirov 11200 1 bank/sunflower oil 1

Prodimeks Holding Hudokormov Igor' (RAZGULÂJ) 14400 n.a.

Sugar import from Ukraina/Sugar manufacturing 2

Holding Zolotoj Kolos n.a. 2600 0,059Regional agroholding from Tatarstan 1

ОАО «Agropromyšlennyj al'âns Ûg» Isaenko Petr Dmitrievič 8000 1,4 n/a / Pig breeding 4

Moslovo Aleksandr Dragal'cev 35000 -dairy cow breeding and market gardening 2

Ûnost' Sergej Boudagov 2200 - Grain production 1

OOO Omega KompaniâKarmanov Konstantin Nikolaevič 4300 0,45 Nd./dairy cow breeding 1

Total

41 % of the regional usable

farmland 487200 22 58


(2) quotas

FPI

public agrholdings private agroholdings

corporate farms individual farms

household plots Agroholdings corporate farms oligarchs


to deliver products to the agroholding at a low er price than the market price

competition w ith other PC on the

local market

to deliver products at a low er price than the market

price

competition w ith the FPI on the foodstuff markets

patrimonial relationship collective goods housing for young people

(1) food security (2) collective

goodscollective goods to apply a social policy to the countryside

local and federal

regulations

(1) access to credit (2) credit for housing projects

access to credit f rom regional

banks

access to the credit market

(1) access to credit f rom regional banks

food processing industry small producers

corporate farms household plots middlemen individual

farmers household plots middlemen


to deliver products at the market price

improve the competition betw een farms to the benefit

of the FPI

competition w ith private

agroholdings on foodstuff markets

Competition w ith other farmers

competition w ith the other household

plots

(1)encourage the competition betw een small producers to knock dow n prices

(2) f ind outlet opportunities

patrimonial relationship play a kryša role

avoiding the competition w ith the

corporate farmsn.a. to deliver inputs for

the landow ners n.a. Reproduce the identity of the small producers

local and federal

regulations n.a. n.a. unfavorable quota

policy n.a. n.a. n.a.

private agroholdings

corporate farms oligarchs


to deliver products at a

lower price than the market price

competition with the FPI on the foodstuff markets

patrimonial relationship collective goods to apply a social policy to the countryside

local and federal regulations


(1) access to credit from

regional banks(2) quotas

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EXAMPLE : EKSIMA AGRO

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20 corporate farms or factories in Russia (4 corporate farms in the Orel Region)

46 000 ha. of land (35 000 ha. Of arable land)

Owner of Mikoân (a kolabassa manufactory, 20% of the Moscow delicatessen market)

Feed production (760 million Rubles in 2009, 22 million euros)

Eksima spent 75 million rubles (2,1 million euros) in housing, roads, gas networks and subsidies to public schools

(2) quotas

FPI







local market


price





local and federal

regulations



banks









of the FPI





plots







local and federal



food processing industry

corporate farms household plots middlemen FPI

commercial relationship to deliver products at the market price

improve the competition

between farms to the benefit of the

FPI

competition with private



avoiding the competition with

the corporate farmsn.a.

local and federal regulations n.a. n.a. unfavorable quota

policy


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EXAMPLE : ONO NOVOSIL’SKOE Looks for its outlets

by itself

Signed a contract with a dairy factory in Tula (N. sells 90% of its milk production

The local household plots benefit from this commercial contract (at the same price)

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2.2 TYPOLOGY OF PRESENT CORPORATE FARMS ACCORDING TO THE TRANSFORMATIONS

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20% of corporate farms in the Orel Region

(2) quotas

FPI







local market


price





local and federal

regulations



banks









of the FPI





plots







local and federal



small producers

individual farmers household plots middlemen


Competition with other farmers

competition with the other

household plots

(1)encourage the competition between small producers to knock down prices

(2) find outlet opportunities

patrimonial relationship

to deliver inputs for the landowners n.a. Reproduce the identity of the small

producers

local and federal regulations n.a. n.a. n.a.


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TO CONCLUDE Multifunctionality can be considered as a

strategy to insure interests of a community of interests and to develop agricultural activities.

We observed four kinds of strategy which depend on the size and on the political position of the farmer

We observed that, in the Orel Region, the policies have been particularly helpful for the agribusiness investors

Then, Multifunctionality appears as the result of compromises between politicians, oligarchs and communities

We deconstructed categories of statistic in the aim to describe transformations in the agricultural sector and in all the supply chain

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2.3 REGULATION OF THE SECTOR

(2) quotas

FPI







local market


price





local and federal

regulations



banks









of the FPI





plots







local and federal



Advantageousquotas

Disadvantageous quotas 19

Thank you for your attention

Merci pour votre attention

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Strategies of farms towards the production of collective goods in the Russian agricultural sector

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