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FEATURES OF PRICING IN THE MARKET OF GRAIN AND PRODUCTS OF ITS PROCESSING
© Zhamkeeva M.K.*
The Kazakh economic university of T. Ryskulov, Almaty
In article pricing questions in the market of grain crops are considered. The analysis of change of dynamics of prices of corn and products of its processing is provided.
Keywords: grain, price, pricing, price level, system of the prices.
In the organizational and economic mechanism of the grain market paramount value belongs to the price policy which purpose consists in ensuring profitability, first of all producers of grain and stabilization of market prices of it. The price which at the same time serves as an indicator of quality of production and the supply and demand measuring instrument on a concrete type of grain becomes a basis of the economic relations between participants of the grain market [1].
Price level on grain defines dynamics of the change in price of the majority of food therefore, having adjusted mechanisms of its regulation, the state will be able to carry out thereby necessary impact on all other food markets. Thus in the grain market the general regularities of development of the agrarian and industrial complexes commodity markets most distinctly come to light and it also is a backbone platform of animal husbandry.
The system of the prices in the grain market causes association of the separate enterprises, production and branches in uniform process of formation of expenses for production of goods and services, movement of one price of this system has essential impact on level of other prices. Importance for interacting in production of grain and grain products of branches definition of an optimum level of the prices, the direction and dynamics of their change, and also functioning of the mutually beneficial price relations in system «have the agricultural prices -the prices of means of production - the prices of intermediate and finished goods». Dynamics of their relations in the market can be characterized through ratios: the prices of grain crops to the prices of means of production and services for agriculture; the prices of grain crops by their types; the prices of grain crops to retail prices of the bakeries made of grain [2].
The first ratio defines payback of grain and is one of the factors having crucial importance for the income of rural producers and the general environment, developing in grain sector the second ratio considerably determines grain structure; the third influences scales of intersectoral monetary transfers and transfers of the income.
* Старший преподаватель кафедры «Менеджмент».
In the economic analysis of price level and the price relations most often use so-called scissors of the prices. They show, in what degree the prices received by farmers for agricultural products, exceed or don't reach the prices of bought goods and services. The general tendency in change of a ratio of prices for products of agriculture and material the technical resources arriving in branch from the industry, are characterized by dynamics of the prices (table 1).
Apparently from table 1, the prices of realization of wheat in 2009-2012 grew by 64,7 %. The prices of the manufacturing enterprises of a flour wheat in 2012 developed at the level of 111 000 tenges for ton while in 2009 they made 91 000 tenges for ton, i.e. growth rate was equal 21,9 %. Growth rate of price of bread wheat for the analyzed period made 23,1 %. Each producer in a tovaroproizvo-dyashchy network pursues the aim of receiving a maximum of profit, and rationality of passing of goods to the end user doesn't excite him. However such approach doesn't meet the requirements of ensuring food security and further development of the grain market [3].
Table 1
Grain prices and products of processing of grain in the Republic of Kazakhstan for 2007-2012, in tenge for ton
Indicators 2007 2008 2009 2010 2011 2012 Growth rate of 2012 in % to
2007 2011
Grain prices 21727 27235 19344 26196 22069 31860 146,6 144,3
The prices on wheat the premium 91000 107000 91000 93000 99000 111000 121,9 112,1
Price of bread wheat 73000 88000 123000 127000 144000 151000 206,8 104,8
The note - it is made by the author on the basis of a source [79]
Thus, if to consider the market from the point of view of interacting subjects, it represents set of participants of transactions on an occasion of advance of production from the producer to the consumer. Grain and grain products can arrive from one participant to another in the following order: grain in the form of raw materials for further processing and change of consumer properties; the grain which has passed a side job with acquisition qualitatively different from initial consumer properties; flour of standard quality for baking of bread and bakeries; bread and the bakery products delivered in outlets [4].
Direct participants of transactions in a technological chain are rural producers, purchasing, processing, baking, trade enterprises and intermediaries. And the price, being the regulator of the economic relations between the interconnected branches of a zernoproduktovy subcomplex, not only considers expenses, but also regulates their placement, increases competitiveness of grain through capital «modulation» in various branches.
For an assessment of efficiency of a commodity distribution network we will analyse the economic mechanism of distribution of revenue in it which assumes
compensation of expenses to each participant, and also receiving profit depending on participation in production. According to the criteria offered above gained income between participants of association can be spreaded.
through a ratio of the expenses developing at different stages of a food chain (production of grain, its processing and further realization of finished goods). So, it is possible to compare actually developed structure of expenses and a share of each participant of a commodity distribution network in the profit got in the course of production of end products (table 2).
Table 2
The developed level of allocation of costs and profit in a commodity distribution network
Operation name Distribution between participants
Expenses share of participants, % Profit share of participants, %
Production of grain 49,60 19,57
Storage and side job sphere 10,61 20,21
Production of a flour 19,89 27,77
Bread baking and wholesale trade 19,90 32,45
In total 100,00 100,00
The note - it is made by the author on the basis of research
According to data of table 2, settlement shares of participants of association in expenses were distributed as follows: agricultural producers - 49,6 %, the sphere of storage - 10,6, processings - 19,89 and bread baking - 19,90 %. Indicators testify to economic groundlessness of distribution of profit. The fundamental principle of the balanced functioning has to be that - equal profit on the equal capital regardless of the sphere of its application (the enterprise of the industry or agriculture), i.e. the profit has to be shared in proportion to a contribution of the enterprises to production of end products [5].
Due to the above, the price mechanism which will provide objective distribution of the got intersectoral profit in the end result of production of finished goods on the basis of establishment of standard profitability is necessary.
Proceeding from the developed structure of the expenses received from realization of end products, the profit is offered to be shared between certain participants of technological operation in the following ratios: production of grain - 50 %, the storage and side job sphere - 10 %, flour-grinding production - 20 % and baking production - 20 %. Certainly, in each case the ratio of shares of agriculture, processing and trade depends on the corresponding objective and subjective conditions [6].
However, such ratio will answer the principle of equitable distribution of the income and to provide to each participant of a commodity distribution network effective conducting production with profitability not lower than 20 % for the processing enterprises, and for agriculture - not less than 40 %.
Without having sufficient financial and material resources, agricultural producers are compelled to be subject to the conditions of commercial and intermediary structures.
The calculations carried out by us testify that in a technological chain of production of end products of a grain subcomplex rural producers remain the most unprotected subjects among all participants of the grain market.
The value added in a commodity distribution network is defined still as a difference between total sales from sales and the cost of the intermediate production, thus all internal expenses of agricultural enterprise, and also profit join in a value added [7].
The arisen disparity of the prices demands obligatory participation of the state for preservation of satisfactory proportions. It should be noted that the operating system of pricing concerning grain production of Kazakhstan is in a stage of permanent development and formation that significantly reduces level of price transparency in the grain market in regions and efficiency of functioning of a grain complex as a whole. At the same time technological lag, chronic disparity of the prices of agricultural production and means for its production, undeveloped social infrastructure are peculiar to agrarian sector of national economy.
However, according to forecasts of the international research centers, in the short term grain sector it is necessary to become one of the main engines of economy thanks to modernization of agriculture and its transition to an innovative way of development.
As we see, the prices operating in the grain market for the present not fully carry out functions, peculiar for them, and stimulate use of potential opportunities for production and realization of more competitive grain insufficiently. For Kazakhstan a number of competitive advantages, such as extensive land grounds, a variety of climatic zones and agrolandscapes from the North to the south and from the West to the east is characteristic [8].
In world market practice the wide range of methods of regulation of the markets of grain production by means of system of the prices is used, but all of them demand investment of considerable budgetary funds. We offer the system of pricing for grain raw materials considering specifics of conditions of Kazakhstan. The central link in the recommended system of the prices are the target prices which are often called still control, orient, basic or normal. As it was already noted, important the directions of state regulation of the grain markets are subsidizing and dating of production. But these factors very poorly influence on efficiency of the domestic grain market. Still the disparity of the prices takes place, and this factor defines need of the state participation for preservation of the acceptable settlement proportions [9].
In system of state regulation of the market of grain it is necessary to strengthen activity of JSC Kazagromarketing, JSC Prodkorporation, providing monitoring of the prices on grain and reliable dynamics of the prices. Further more effective economic mechanisms of impact on the market of grain will be required. In
this regard for improvement of an equal share of the price relations we recommend the following organizational and economic measures:
- carrying out priority purchases of grain in the state funds directly at a producer without intermediaries;
- establishment on grain of the guaranteed purchase prices providing in the conditions of constant growth production expenses producers of the income sufficient for conducting expanded production;
- formation of reserve (stabilization) funds by the state and regulation of market prices of grain with use of mechanisms of purchasing and commodity interventions;
- implementation of support of producers on the basis of a combination of target budgetary financing to a preferential credit and tax policy;
- increase in credit resources of agricultural producers on the basis of leasing for restoration of machine tractor park and other elements of active part of fixed assets;
- reduction of disparity of the prices and overcoming of its consequences, first of all, in agrarian and industrial complex through various forms of intra corporation grants and compensations.
On the basis of synthesis of practice of the price situation developing in the market of grain of Kazakhstan, it is possible to draw the following conclusions:
First, in relation to rural producers the tendency of decrease in measuring and stimulating functions of price of corn was accurately shown. Decrease in measuring function of the price is expressed in reduction of extent of compensation of production expenses of the agricultural enterprises and falling of level of profitability from grain realization. Practical experience shows that additional costs of use of fertilizers and means of protection of plants on intensive technology at actually developed prices don't pay off now productivity increase from their use.
Secondly, being in the beginning of a price chain of merchandising, in the conditions of incessant disparity of the prices of realized agricultural production both acquired industrial means of production and services, and also the sproso-vykh of restrictions on grain, mainly on fodder, producers of grain have no opportunity to use expensive methods of establishment of the prices of the production and owing to high power and material capacities of technologies to reduce costs for production [10].
Thirdly, in a price chain the big gap between the offer price (at the price of a producer) and at the price of grain acquisition by the processing enterprises that is connected with existence in merchandising of excess quantity of trade and intermediary links, high costs of transportation, storage and a grain side job on elevators and the hlebopriyemnykh the enterprises is observed.
Fourthly, in system of pricing there is no close correlation between seasonal fluctuation in prices of grain and level of formed wholesale prices for products of its processing. If in separate years price of corn falls sharply, it in any way doesn't involve similar reduction of prices of a flour and grain production and, on the
contrary, producers of a flour and bread at establishment of the prices of the production accurately react to seasonal rise in prices for grain.
Literature:
1. Carew, R., 2000. Pricing to Market Behavior: Evidence from Selected Canadian and U.S. Agri-Food Exports. Journal of Agricultural and Resource Economics 25(2), 578-595.
2. Carew, R., Florkowski, W.J., 2003. Pricing to Market Behavior by Canadian and U.S. Agri-food Exporters: Evidence from Wheat, Pulse and Apples. Canadian Journal of Agricultural Economics 51 (2) 139-159.
3. Carter, C.A., MacLaren D., Yilmaz, A., 1999. How competitive is the world wheat market?.Working Paper No. 99-002. Department of Agricultural and Resource Economics, University of California Davis.
4. Cho, G, Jin H. J., Koo, W. W., 2002. Measuring the market power of the U.S. wheat exporters in Asian countries: an issue about adjustment of nominal exchange rate when using as a cost shifter. Selected Paper for presentation at Annual conference of the American Agricultural Economics Association, Long Beach CA.
5. FAO, 2009. Agribusiness Handbook Wheat Flour. Rome, FAO.
6. Goldberg, P. K., Knetter, M. M., 1999. Measuring the intensity of competition in export markets. Journal of International Economics 47 (1), 27-60.
7. Jin, H., 2008. Competitive structure of Canadian wheat exports in the world market. Applied Economics Letters 15 (13), 1059-1064.
8. Knetter M. M. (1989). Price Discrimination by U.S. and German Exporters, The American Economic Review, Vol. 79, No. 1, pp. 198-210.
9. Krugman, P. (1986). Pricing to Market When the Exchange Rate Changes, Working Paper No. 1926. Cambridge, MA: National Bureau of Economic Research.
10. Lavoie, N., 2005. Price Discrimination in the Context of Vertical Differentiation: An Application to Canadian Wheat Exports. American Journal of Agricultural Economics 87 (4). 835-854.
СОДЕРЖАНИЕ И СТРУКТУРА ИНВЕСТИЦИОННОГО КЛИМАТА РЕГИОНА
© Кашенкова К.А.*
Тверской государственный технический университет, г. Тверь
В статье раскрыта экономическая сущность инвестиционного климата региона, определены и проанализированы подходы к трактовке
* Аспирант кафедры Экономики и управления производством.
