Agribusiness in rural areas: Management Issues

Abstract

The present article analyzes the trends determining the development of agribusiness in rural areas at the present stage of economic development, and highlights the new and most relevant features of its organization and management. At present, one of the important trends in the development of agribusiness in rural areas is the deepening process of production specialization with a simultaneous increase in the concentration of production and financial, industrial and commercial capital. The production specialization has an active influence on the structure of the sectors interacting in agribusiness in rural areas, which is manifested in the following situation. The size and number of agricultural enterprises is increasing and their number is gradually decreasing, while the total area of agricultural land owned by peasant (private) farms is gradually decreasing. According to the Ministry of Agriculture and Food of the Republic of Tatarstan, the total number of agricultural enterprises in 2007 was 751, including 607 profitable and 81 unprofitable ones. The overall profitability was 8.9 %. By 2018, the number of farms decreased to 486, out of which 443 were profitable, 43 unprofitable ones. The level of profitability for these farms was 9.6 %. Simultaneously with the decline in the number of agricultural enterprises, the population employed in agriculture was also declining. At the same time, in 2007, 104.9 thousand people were employed in agriculture, which equaled to 11 % of the rural population; by 2018, employment in agricultural activities decreased to 59.4 thousand people, which was 6.6 % of the rural population. With the deepening of specialization, the complexity in the organization and cooperation of activities in the agribusiness system has increased. Individual producers have lost their independence. They largely depend on related participants. In these conditions, the problem of centralized coordination and regulation arises and the role of administrative management is strengthened to ensure the coordination of specialized activities. In the food policy pursued by the state, an increasing number of agrarian business entities are forced to apply directly to the government for resolving certain issues related to land use regulation, environmental protection, etc.