RESTRICTION OF THE SIZE OF SUBSIDIES TO ONE AGRICULTURAL PRODUCER: NEED, MECHANISMS, CONSEQUENCES

Issue № 11, 2017, article № 2, pages 12-31

Section: Agrarian policy: problems and decisions

Language: Russian

Original language title: ОГРАНИЧЕНИЕ РАЗМЕРА СУБСИДИЙ ОДНОМУ СЕЛЬХОЗПРОИЗВОДИТЕЛЮ: НЕОБХОДИМОСТЬ, МЕХАНИЗМЫ, ПОСЛЕДСТВИЯ

Keywords: CONCENTRATION OF SUBSIDIES, INFLUENCE OF CONCENTRATION ON INCREASE IN PRODUCTION, RULES AND CONSEQUENCES OF RESTRICTIONS OF THE SIZE OF SUBSIDIES

Abstract: In article the problem of restriction of the size of subsidies to one recipient and influence of such decision on growth of agricultural production is considered. The conclusion is drawn that policy concentration of subsidies creates exclusive competitive advantages to the largest producers and leads to replacement of small and medium business, reduces efficiency of branch. Subsidies to agricultural producers for the last 25 years concentrated in separate major agricultural firms and agro holdings of Russia more and more. Among other agricultural producers the share of those who didn't receive anything or received very insignificant state support grew. Such agrarian policy of the state promoted creation of exclusive advantages to the separate large companies, concentration at them the huge areas of the earth, to the accelerated replacement from the agrarian market of medium and small business. Around the world in agricultural production this business has priority development thanks to the state support rendered to him. The large business which isn't getting such support is forced to work under the contracts with small business, contributes to his development, relies on him, but doesn't ruin. The network organization of business in agrarian and industrial complex promotes his diversification, the solution of environmental problems, fast building of a share of the separate companies in the market of end products. Legislative restriction of the size of subsidies to one recipient is universal practice. The lack of such restrictions in the Russian legislation, according to the author's hypothesis, constrains development of branch. On the basis of the carried-out calculations the author shows that many small investment subsidies allow receiving more considerable gain of production, than small quantity of big subsidies. A conclusion of the author will be coordinated also with the general theory of the state support of agriculture focused on the decision not only economic problems of branch but also sustainable social development of the village.

Authors: Uzun Valerii IAkimovich