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ANALYSIS OF THE FACTORS AND WAYS OF MEAT SUBCOMPLEX DEVELOPMENT
IN THE REPUBLIC OF MARI EL
Danilova O.A., Nikolaeva L.V., Associate Professors Mari State University, Yoshkar-Ola, Russia E-mail: [email protected]
ABSTRACT
Disparity of prices in the Republic of Mari El leads to the redistribution of value, created by the producers of meat raw materials, in favour of the processing industry and trade through reduced prices when buying raw meat. However, the exchange between the related sectors should be equivalent, that is, to ensure the normal level of profit on expended equal capital. One of the main conditions of the intensive development of meat industry in the Republic of Mari El is an accelerated growth of the consumption of meat inside the Republic, which means the transfer of this product category to the goods of prosperity for the inhabitants of the Republic. This will require significantly increasing production capacities of meat processing enterprises in the territory of the Republic, which, in turn, leads to the establishment and development of regional meat cluster.
KEY WORDS
Meat subcomplex; Meat market; Regression analysis; Meat corporation; Meat cluster.
Analysis of the price formation and channels of the sales of meat-processing complex in the Republic of Mari El, and the practice of price regulation of the food market has revealed a number of problems that require further improvement of economic and organizational statements, deepen and expand the range of methodical developments for practical realization of marketing.
Among the factors that negatively affect the economic situation of agricultural producers in the Republic of Mari El, relatively low prices of agricultural products, especially of livestock may be called. This is largely due to the low demand, as well as unequal exchange relations between farmers and the enterprises of the third sphere of agro-industrial complex, which was especially evident in the first years of price liberalization and privatization of the processing enterprises.
Currently this problem has undergone some changes, and is not so acute. On the one hand, the impact of anti-monopoly measures of control by the federal and regional executive authorities, on the other - the leaders of the processing enterprises have long understood the danger of the destruction of the resource base. All this created the preconditions for the organizational and economic convergence of agricultural and processing enterprises, starting with coordination of activities and ending with their complete integration.
The central problem of any agro-industrial formation is associated with the optimization of the mechanism of economic relations between processors and suppliers of agricultural raw materials, for whom barter aspect of relations is very important.
MATERIALS AND METHODS OF RESEARCH
To solve this problem, research is carried out as follows: the substantiation of accounting prices for raw materials and processing products and the subsequent establishment of the proportion of raw material cost in the estimated purchase prices in the value of the marketable products of processing plant (in the accounting wholesale prices or selling prices).
Earnings of enterprises - participants of corporation are formed on the basis of the share of each of them in the final results of the corporation performance. Appropriate standards of cost are set, with the help of which the total cost of production, processing and
realization of products are determined calculating per 1 ton of delivered meat and its share attributable to each intermediate stage of the accepted level of the depth of meat processing.
RESULTS OF RESEARCH
The dependence of the volume of the meat products market in the Republic of Mari El from factors such as average per capita incomes, consumer spending, the number and average monthly wages of the population, as well as the average total consumer price of meat and meat products have been studied. Baseline factors for multiple regression analysis are shown in Table 1.
Table 1 - Baseline factors for analysis
n/n 2006 2007 2008 2009 2010 2011
The volume of meat products market, tonnes 40000 48900 55600 60400 66200 74300
Cash income per capita, RUB/month 3198,4 4769,4 6033,7 8050,4 8939,8 10266,6
Consumer spending per capita RUB/month 2253,4 3341,1 4380,2 5834,2 6515,6 7149,3
Number of resident population, people 711500 706680 703220 700118 698176 695380
The average monthly wage, RUB 5160,4 6526,1 8389,2 10614,6 11357,1 12669,4
The average total consumer price of meat and meat products, RUB/ Kg 99,79 117,71 124,40 154,26 164,45 175,19
Factors of the resident population and the average monthly wage can be excluded. First - because it is obvious that the decrease of the population cannot have a positive impact on the growth of the market, and second - because it is similar to the factor of cash income per capita, but the last is a more objective indicator. Results of the regression analysis are presented in Fig. 1.
Figure 1 - The results of the regression analysis
Thus, the multiple regression equation is: Y = 42759,36 + 10,5x1 - 5,48x2 - 228,9x3.
Square of multiple correlation coefficient RI (coefficient of determination) is an extremely important feature, it shows the share of the total spread relatively the sample average of the dependent variable that is explained by constructed regression. The values of the coefficient of determination ranges from 0 to 1. In our case, the coefficient of determination is 0.99, which is very good value, and means that the constructed regression explains more than 99% of the spread values of the dependent variable Y (volume of the meat products market) relative to the average.
Distribution of the residuals (random, without any regularities) shows that the regression model is adequate for the results of observations and can be used to assess the
effect of income growth, consumer spending and the average total consumer price of meat and meat products on the growth of meat production market volume (see Fig. 2).
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Thus, with increasing the level of income and expenditure, for example, on 10%, and the average price by 5%, the volume of meat products market will be 76068 tonnes. As a consequence, the impact of these factors will lead to the growth of the meat products market in the Republic of Mari El on 2.38%.
Analysis of price formation and channels of sales of meat-processing complex in the Republic of Mari El, and the practice of price regulation of the food market revealed a number of issues that require further improvement of economic and institutional arrangements, deepening and expanding the range of methodological approaches to the practical implementation of marketing.
Among the factors that negatively affect the economic situation of the agricultural producers in the Republic of Mari El may be called relatively low level of agricultural products prices, especially for livestock. This is largely due to the low effective demand, as well as the unequal exchange relations between farmers and agribusiness enterprises of the third sphere, which was especially evident in the first years of price liberalization and privatization of the processing enterprises.
Currently this problem has undergone some changes, and is not so acute. On the one hand, the impact of anti-monopoly measures of control by the federal and regional authorities, on the other - the leaders of the processing enterprises have long understood the danger of the destruction of the resource base. All this created the preconditions for the organizational and economic convergence of agricultural and processing enterprises, starting with coordination of activities and ending with their complete association.
The central problem of any agro-formation is associated with the development of mechanisms of economic relations between processors and suppliers of agricultural raw materials, which is very important aspect of barter relations. We propose a new structure of the wholesale and retail prices for beef and pork meat in the structure of the corporation (Table 2, 3). Cost of raw materials for meat processing enterprises of the Republic of Mari El has been defined as the average purchase price of meat in live weight for «ZAO Yoshkar-Olinskiy MK», «LLC Myasokombinat Zvenigovsky» and «OAO Mari Meat Company» [8].
Analyzing the data in Table 2, it can be concluded that one of the criteria for equivalent exchange in the structure of the Meat Corporation is the redistribution of revenue in proportion to the cost of production, processing and sale of products, and the production capacity more loaded.
Table 2 - Structure of the wholesale and retail price for 1 ton of beef in Meat Corporation
Indicators Actually Recommended option
RUB % RUB %
1. Cost of raw materials 50110 28,60 71691 40,92
2. Value added in processing 86264 49,24 71691 40,92
3. Wholesale price 136374 77,84 143382 81,84
4. VAT 8626 4,92 7169 4,09
5. Wholesale selling price 145000 82,77 150551 85,94
6. Trade allowance 30190 17,23 24639 14,06
7. Retail price 175190 100,00 175190 100,00
Table 3 - Structure of the wholesale and retail price for 1 ton of pork in Meat Corporation
Indicators Actually Recommended option
RUB % RUB %
1. Cost of raw materials 65500 36,01 74432 40,92
2. Value added in processing 82273 45,23 74432 40,92
3. Wholesale price 147773 81,24 148864 81,84
4. VAT 8227 4,52 7443 4,09
5. Wholesale selling price 156000 85,77 156308 85,94
6. Trade allowance 25890 14,23 25582 14,06
7. Retail price 181890 100,00 181890 100,00
There is a reduction of added value from the 86264 to 71691 rubles per 1 ton of beef, as well as from 82273 to 74432 rubles per 1 ton of pork. Cost of raw materials increased from 50110 to 71691 rubles for 1 ton of beef and from 65500 to 74432 rubles per 1 ton of pork. The share of revenue is distributed proportionally to the costs of production: 40.92% for agricultural producers and processors, 14.06% for resellers. This scheme is chosen because of its ability to reflect the structural characteristics of production and calculate price ratios and proportions of the distribution of the final result (revenue from sales) in the corporate structure of the meat processing industry.
The regions with the existing industrial production structure, usually, already is a developed social and industrial systems such as «core - periphery» with the presence of cities, influencing the development of other socio-economic elements of the region and providing increased employment, profitability and efficiency, the speed of capital turnover, the growth of aggregate demand [1, p. 94].
CONCLUSIONS
1. Livestock remains the most unprofitable branch of agriculture in Mari El. Thus, the dynamics of the cost price for all kinds of meat annually ahead the similar growth of actual selling prices. Only sales of poultry meat bring profit for regional farmers, and most unprofitable is the production of sheep and goat meat.
2. Despite the unprofitability of a significant number of livestock enterprises, the production of meat products in the Republic of Mari El increases every year, as the prices for these products. Thus the dynamics of prices for beef ahead of a similar rise in prices for all other kinds of meat on a background of the annual decline in its production.
3. The fastest growing areas of the meat subcomplex in the Republic of Mari El are pig and poultry farming. While the import of finished meat products in the Republic of Mari El is growing every year, causing the displacement of national producers from the domestic food market.
4. The main participants of the meat market in the Republic of Mari El is «LLC Myasokombinat Zvenigovsky» (43% of production), «ZAO Yoshkar-Olinskiy MK» (25%), «OAO Mari Meat Company» (5%). The largest share of poultry meat production belongs to: «ZAO Mariyskoe» (47%), «LLC Poultry Akashevskaya» (30%), «LLC Poultry Zvenigovskaya» (7%), «LLC Poultry Yoshkar-Olinskaya» (3%), SUE RME «Poultry «Volzhskaya» (3%).
5. The main suppliers of raw materials are agricultural enterprises in the Republic of Mari El, the share of livestock and poultry for slaughter in live weight is 65% of the total amount of the national total. At the same time the largest manufacturers seek to create their own raw material base and the formation of vertically integrated structures.
6. As shown by the analysis, the most effective is functioning of meat-processing and cattle breeding in a single integrated production structure, which allows to provide the production by high quality raw materials and is the basis of intensive development of the meat industry in modern conditions. So, «LLC Myasokombinat Zvenigovsky» has its own raw material base - «SPK Zvenigovsky», the share of pork production is 55% of republican production. Creation of agricultural holding «Yola», which include the «ZAO Yoshkar-Olinskiy MK» and «ZAO Plemzavod Shoybulaksky» ensures an uninterrupted supply of raw material of its own production to the enterprise.
7. Besides, studies have shown that at the present time in the Republic of Mari El, there is the possibility of the integration of livestock producers with processors, feed companies, organizations, service, trade and financial structures. One of the most promising ways is to create vertically integrated food corporations.
8. Integration development is a reflection of objective changes of the competitive process at the present stage and in line with best international experience, which shows that the efficiency of all related elements of the production system is provided within the framework of the most stable forms of economic cooperation - meat cluster.
Despite the unprofitability of a significant number of livestock enterprises, the production of meat products in the Republic of Mari El increases every year, as the prices for these products. Wherein the dynamics of prices for beef ahead of a similar rise in prices for all other kinds of meat on a background of the annual decline in its production. The fastest growing areas of the meat subcomplex in the Republic of Mari El are pig and poultry farming.
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