Why is agricultural production growing faster than industry and the economy as a whole?

Issue № 8, 2019, article № 1, pages 4-15

Section: Agrarian policy: problems and decisions

Language: Russian

Original language title: ПОЧЕМУ ПРОИЗВОДСТВО В СЕЛЬСКОМ ХОЗЯЙСТВЕ РАСТЕТ БЫСТРЕЕ ПРОМЫШЛЕННОСТИ И ЭКОНОМИКИ В ЦЕЛОМ?

Keywords: AGRICULTURE, ECONOMIC GROWTH, ECONOMIC GROWTH PRACTICES, AGRICULTURAL POLICY, INDUSTRIAL POLICY

Abstract: The article addressed the reasons for the economic growth of agriculture from 1999 to 2000, as compared to industry and the economy as a whole. The main method of research is analysis of scientific data. In 2000-2017, the production growth rate in industry, according to the Russian Statistical Agency, was generally lower than the growth rate in agriculture and, in particular, lower than the growth rate in production in agricultural organizations, despite fluctuations in natural and climatic conditions. While, in general, the principle of minimum economic interference in the post-Soviet period were used by the Government in agriculture? This economic policy of the State was significantly differed from policy towards other industries. Agriculture was one of the few industries to introduce credit subsidies in the early 2000s. Agricultural producers are exempt from income taxes, and VAT on agricultural products was set at 10‰. For agriculture since 2006 there has been a national project on agro-industrial complex, as well as two successive state development programs with the volume of financing of about 200 billion roubles in the period 2013-2018. It is shown that this advance is mainly related with some facts. 1) The investments at affordable prices were relatively more affordable due to government subsidies. 2) More efficient technologies were more accessible to manufacturers. 3) Tax burden was lower. 4) Elasticity of food demand by income is higher. 5) Imports sharply reduced in 2013-2014 as a result of devaluation of the Russian rouble. 6) Agro-industrial integration started to develop. 7) The agrarian policies were more effective than state macroeconomic and industrial policies.

Authors: Epshtein David Berkovich