The Program for Organising Vertically-Integrated Agricultural Companies for Increasing Effectiveness of Agricultural Industry in Russia

Abstract

The paper presents a version of a program that works out, tests and improves a model for getting agriculture out of crisis through vertical integration of raw material production and its conversion. The problem setting includes analysis of social, economic and organisational issues of agriculture development.
The levels of environment, influencing or having a possibility to influence agricultural output are distinguished: personal subsidiary plot (PSP), collective farms, region (including raion and oblast')/ Ministry and Federal Assembly, corporations and banks. The type of interaction between them defines possible way for institutional changes in agriculture.
Three versions of changes models are analysed: PSP turning into farms; self-co-operation of workers into producing associations; organisation of collective farms where industrial enterprises conversing raw materials participate. The following conclusion is made: prevalence of farming as the main form of institutional changes in the rural areas is connected with a number of the hardest problems which still do not have a real solution. The second way does not show what mechanism for eliminating risk of frozen credits is. The most prospective way the overcoming the crisis is organisation of vertically-integrated agricultural holdings. Although organisation of combinations oriented at long-term administration of agricultural companies, all the assets of which belong to the combination, should be the starting point for that.