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UDC 338.436 (2Russ - 4 Orl)
POTENTIAL OF COOPERATION OF SMALL-SCALE BUSINESS PATTERNS IN RURAL AREA OF THE OREL REGION
Proka N.I., Doctor of Economic Sciences,
Polukhin A.A., Candidate of Economic Sciences,
Savkin V.I., Doctor of Economic Sciences,
Surovtseva E.S., Kuznetsova T.M., Candidates of Economic Sciences,
Orel State Agrarian University, Orel City, Russia
E-mail: niproka@mail.ru
ABSTRACT
The article analyzes the cooperation potential of small-scale business patterns in rural area of the Orel region and justifies the priorities of its territorial development. The main directions, the organizational model and the target codes of perspective development of cooperation of small-scale business patterns in the region are worked out.
KEY WORDS
Consumer cooperation; Small-scale business patterns; Potential; State support; Farm enterprises; Marketing and processing cooperatives; Development; Indicators; Assessment criterion.
Publication is prepared on topic №11 «Improvement of the mechanism of cooperation of small-scale business patterns in rural area of the Orel region» within the frame of the grant for realizing scientific researches given by the Department of Agriculture of the Orel region.
Multistructurality of Russia economics provides the conditions for functioning of various business patterns including small-scale ones. Especially small-scale business patterns acquire particular importance for development of agriculture and rural areas. But due to different reasons their level of competitiveness in comparison with large subjects of agrobusiness is still rather low. The rich national and international experience proves conclusively that the main way to solve the problem of efficiency increase of small-scale business patterns in rural area belongs to the sphere of their cooperation.
Efficient and reasonable cooperation incorporating resource potential and business efforts of small enterprises, farm holdings and personal subsidiary economies allows: reducing the expenses providing their competitiveness in the WTO conditions; providing production of ecologically clean production and in general efficient Agro Industrial Complex development; promoting production including agricultural one more actively in the domestic and foreign markets; forming of mechanisms of strategic partnership with big business and the state; increasing profitability of small scale business patterns; developing steadily rural areas; providing employment in the rural area; increasing living standards of rural areas residents; keeping conventional ways of rural living and hence providing population fixation in the rural localities.
The social economic importance of cooperation of small-scale business patterns in the rural area is obviously great and cooperation potential is unlimited. Its importance increases with the factor that 34,2 % of the Orel region population or 265,3 thous. live in the rural areas as at 01.01.2013 [1]. At the same time the rural area population continues to decrease with priority rates. It has reduced for 2010-2012 by 2,3 % versus 0,9 % in urbanized areas.
Though for the last years the cooperation process is paid special attention from the state side but cooperation has not been defined as strategic direction of the modern agrarian policy development.
The process of involving small-scale business patterns in rural areas of the region into a single cooperation mechanism that increases their competitive advantages is an escalated
and objective. From the other side it is a long process. Its efficiency largely depends, the first, on the complex of economic, technique technologic and social psychological conditions evolving in the region, and the second, on the state support level.
State support mostly provides increase of resource potential of small-scale business patterns. Thus, particularly in the Orel region it is characterized with the following parameters: number of employed in the sphere of small and medium enterprise corresponds to more than 60 thousand people, or 25,4% from total number of employees of all organizations of the region; ratio of production being produced by the subjects of small and medium enterprise in overall volume of gross regional product corresponded to 26,8% in 2012; turnover of output, works and services of small and medium business in 2012 corresponded to more than 127 bn. rub. Or by 40% more than in 2009; volume of tax revenues into the consolidated budget of the region from subjects of small business corresponded in 2012 to more than 1,1 bn. rub. or by 71,9% more than in 2009 and others
One of the most popular forms of interaction of small-scale business patterns in the rural area of the region is agricultural consumer's cooperation. Figure 1 presents the structure of consumer's cooperatives according to their activity directions.
Figure 1 - Structure of consumer’s cooperatives according to their activity directions in the Orel region (according to data for 01.01.2013)
In quantification the processing, distribution and marketing consumer’s cooperatives have become the most popular in the Orel region.
The main indicators of activity of agricultural consumer’s processing cooperatives in the Orel region are presented in Table 1. Their number for 2011-2012 did not change considerably but the parameters of their functioning, structure, number of cooperative members, income, the volume of shipped goods of own production, works and services using own resources and others changed.
From all active small-scale business patterns 1055 or 58,2% are engaged in agricultural production. This very group of subjects can form new cooperatives in the rural region or enter correspondingly the creating cooperatives structure. At the same time the maximum potential of cooperation exists in plant breeding. It is 803 units of subjects of small agro business or 76,1% from total number of small enterprises registered according to the type of activity « agriculture, hunting and forestry» in the Orel region.
[2].
Table 1 - Indicators of development of agricultural consumer’s processing cooperatives
Indicators 2011 2012 2012 in % to 2011
total including: total including:
meat and meat products production and processing bakery goods production meat and meat products production and processing bakery goods production
Number of active agricultural consumer’s cooperatives, units 10 6 4 11 5 6 110,0
Total share fund, thous. rub. 534 486 48 557 474 83 104,3
Contributions of associated members, thous. rub. 2 0 2 37 0 37 -
Contributions into inspection union, thous. rub. 69 69 52 52 75,4
Reserve fund, mln. rub. 2,5 2,5 0 2,6 2,5 0,1 104,0
Number of members, people 180 142 38 193 129 64 107,2
Shipped goods of own production, works and services done with own resources, mln. rub. 95,2 50,7 44,5 146 68,8 77,2 153,4
Income from sale of goods (works, services) sale услуг) from agricultural activity, mln. rub. 36,3 26,5 9,8 97,2 50,5 46,7 в 2,7 раза
Table 2 - Potential of cooperation of small-scale business patterns in rural areas of the Orel region
Indicators 2012
Total number of small enterprises being registered by “agriculture, hunting and forestry» activity type in the Orel region - total, units. 1813
From them: directly engaged in manufacturing agricultural production, units. 1055
Ratio of small-scale business patterns, engaged in manufacturing agricultural production from their total number according to the type of activity « agriculture, hunting and forestry », % 58,2
Number of small-scale business patterns engaged in production:
Plant products 803
ratio, % 76,1
Animal products 252
ratio, % 23,9
Number of small-scale business patterns engaged in agricultural production - total units: 1055
From them: small enterprises 194
ratio, % 18,4
Farm holdings 861
ratio, % 81,6
Number of small-scale business patterns engaged in plant products - total units: 803
From them: small enterprises 129
ratio, % 16,1
Farm holdings 674
ratio, % 83,9
Number of small-scale business patterns engaged in animal products - total units: 252
From them: small enterprises 65
ratio, % 25,8
Farm holdings 187
ratio, % 74,2
Data are used at calculation [3].
Presented in Table 2 data show that cooperative potential in the region is sufficient enough for intensive development of cooperation of small-scale business patterns and creation of powerful system of cooperative ties.
Today farm holdings dominate in the structure of small-scale business patterns in agrarian sector of the region. In total output of agricultural production portion of farm holdings is 7,2%. Portion of resource potential of farm holdings of the Orel region as a percentage from enterprises of all categories (data for the end of 2012) corresponded to: cultivated areas 16,5%; cereals and grain legumes areas - 20,7%; cattle population - 4%, cows - 5%; sheep
- 9,1% [4].
Their resource potential ground consists of lands intended for agriculture, that occupy now only 9,5 % from total area of lands intended for agriculture of the region. The structure of type of lands intended for agriculture being used by farm holdings, depending on the legal position is given in Table 3. It is seen that 67,2% of lands intended for agriculture and being used by farm holdings corresponds to different lease forms and only 29% corresponds to personal property portion.
Table 3 - Composition and structure of legal types of lands intended for agriculture and being used
by farm holdings of the Orel region
Legal types of lands intended for agriculture and being used by farm holdings 2012
thous. ha structure in %
Lease of joint shared property of citizens 77,2 40,2
Lease of corporate ownership 6,7 3,5
From state and municipal property on lease 45,2 23,5
From state and municipal property in lifetime heritable tenure 6,5 3,4
On the right to use 0,8 0,4
Property 55,7 29,0
Total 192,1 100,0
Data used [5].
At the same time it is impossible not to note that in the Orel region there are still ample funds to increase resource potential of not only farm holdings, but also some other business patterns. There are 35,5 thous. land shares with total area 271,5 thous. among the unclaimed lands (at June, 1, 2013). Their exploration after the solution of the questions connected with their legal position will allow from one side not only to increase the efficiency of usage of land resources in the region in general but also from the other side to extend the resource potential of small-scale business patterns in rural areas as one of the main reserves. It is necessary to take into consideration the fact that there are still some people who wish to develop their own farm holding in rural area but there are no practically unoccupied lands already. This is the main reason to restrain growth and development of many farm holdings in the region.
The starting farm holdings and individual businessmen engaged in agricultural production, face with the number of serious problems including the problems connected with shortage of initial capital. During the last years the creation of new farm holding requires considerable money costs for designing household buildings, their attachment to utility services, and payment of initial fee on lease payments and etc. But at the same time it is necessary to note that all types of state support are outspread on farm holdings and agricultural consumer’s cooperatives.
Special role in state program “Development of agriculture and regulation of markets of agricultural production, raw material and foodstuffs in the Orel region for 2013-2020” is given to development of small-scale business patterns in rural areas. To 2020 the program sets aside annual realization up to 19 projects of starting farmers on creating and developing their holdings by means of state support and up to 7 family livestock farms on the ground of new construction or reconstructed farms.
This means not only to increase of their number, but also, which is very important, to provide functioning of their effective mechanisms of their cooperation. Without this problem
solution as a constituent of the state program is impossible in general to provide the achievement of its prime objective - sustainable development of rural territories, including improvement of life quality of population living there.
Total funding of all activities on development of small-scale business patterns in the frame of the regional state program will correspond to more than 4,2 bn. rub. (Table 4).
Table 4 - Volume and structure of funding of the activities on development of small-scale business
patterns in the rural area in the Orel region
Sources and sponsored activities Volume of financing, mln. rub.
2013-2020 2013 2020
Total in % to final result
Total 4244,7 100,0 394,9 624,2
From them by sources:
Federal budget 417,4 9,8 26, 2 74,9
Regional budget 205,3 4,9 2,5 40,4
Non-budgetary resources 3622,0 85,3 366,2 508,9
including: according to activity types:
Support of starting farmers 214,3 5,1 - 47,1
Development of family livestock farms on the base of farm holdings 161,0 3,8 - 35,4
Support of crediting of small-scale business patterns 3869,4 91,1 394,9 541,6
Data used [6].
According to funding sources the situation is the following: 9,8% - federal budget; 4,9%
- regional and 85,3% falls to share of principal source - non-budgetary resources. In case of analysis of the structure according to the sponsored activities types 91,1% of volume of financing will be directed to support of crediting of small-scale business patterns.
Thus, we observe rather small volume of budget funds and correspondingly small share of direct state support that will be assigned proximately to support and development of small-scale business patterns.
At the same time, it is necessary to note that the state program does not foresee specific and direct forms of support of effective mechanisms of cooperation of small-scale business patterns in the rural areas, including also forms of stimulation for participation in this important process. That is why the dedicated program “Development of agricultural cooperation in the Orel region” is worked out in the region.
In this regard one has to agree with President of the Russian self-regulating organization of inspection union of agricultural cooperatives “Agro control” union A.V. Morozov that “we need targeted support, primarily in the line of the regional, economically significant programs on cooperation development» [7].
All this will provide the conditions to increase food safety of the state [8,9, 10].
The analysis of resource potential of small-scale business patterns and their territory location including farm holdings allows recommending the organization of the regional and interregional marketing consumer’s cooperatives of foodstuff type in the rural areas of the Orel region.
The calculations prove that there are actual resource capabilities on organizing 24 marketing consumer’s cooperatives of foodstuff type also in the rural areas of the Orel region at the corresponding regional support for the nearest future:
• 19 regional marketing consumer’s cooperatives of foodstuff type (fig. 2);
• 5 interregional marketing consumer’s cooperatives of foodstuff type (fig. 3).
To the priorities of the territorial development of cooperation of small-scale business patterns in the region should be referred the following: social economic role and significance in the development of this region and rural area; possibility of positive influence on the living standards of this rural area population; rural population employment; potential opportunities to increase income level of small-scale business patterns and personal subsidiary economies included into the cooperative; increase of rural population income level.
- crops
- fattening cattle
Figure 2 - Cartogram of the location of the recommended regional consumer’s marketing and
processing cooperatives
-grain sales
- processing and marketing of sheep and goat
- sales of milk
. processing and sale of beef
- processing and sale of sheep production
meat
Figure 3 - Cartogram of the location of the recommended interregional consumer’s cooperatives
Cooperation of small-scale business patterns is rather complicated and long process, as from the social psychological and organizational and economic point of view as well as from juristic point of view. Besides, it must objectively take into consideration the regional peculiarities. That is why it is very important to motivate the directions of its long-term development.
The carried out researches allow developing and suggesting the following main directions of long-term development of cooperation of small-scale business patterns in the rural areas of the region.
1. Increase of volume and share of funding for the sake of the federal and regional budgets on targeted support of development of cooperation of small-scale business patterns in the rural areas taking into consideration their social economic significance and role in development of the definite rural area and efficient usage of resource potential.
The level of the state support of the created cooperatives in the process of cooperation of small-scale business patterns must be connected with the indicators of their economy efficiency and must take into account their social role and definite contribution into social development of the rural area. At the first rate the state support must be directed to the subjects of small-scale business patterns that are switched into the cooperative process.
Taking into account social significant role of cooperation of small-scale business patterns, it is necessary to develop new system of the state support for agricultural consumer’s cooperatives.
2. Improvement of regulatory stability providing the advantages of small-scale business patterns in the rural areas in acquisition of property or usage on the ground of other types of legal regulations of unclaimed land shares, with the aim to increase the efficiency of agricultural lands usage, development of resource potential of small-scale business patterns and their profitability level.
3. Increase the importance of assessment criterion of business-plans in the process of competitive selections to get grant for livestock farms development and starting farmers support, the obligatory participation of farm holdings in the consumer’s cooperatives depending on their production activity direction.
4. Creation and development of the center of information consulting services of small-scale business patterns in the rural areas and mechanism of their cooperation on the base of the Department of agriculture or agrarian university but taking into consideration their mutual share of participation.
All stated proposals are considered in the developed and recommended perspective organizational model of directions on support of small-scale business patterns cooperation (Figure 4).
The research of resource potential of small-scale business patterns in the rural areas, the analysis of the state support system and direction of development of the regional agrarian policy allow proving the target codes of perspective development of agricultural cooperation in the Orel region.
The primary assessment criteria of realization of the program measures on development of small-scale business patterns in the region must be:
• number of farm holdings of starting farmers, who fulfilled the projects of organization and development of their holdings with the help of the state support;
• number of built or reconstructed family livestock farms;
• area of land plots registered under the ownership with farm holdings;
• social economic role and significance in development of the region and rural area;
• possibility of positive influence on the living standards of the population of the rural areas;
• employment and employment level of rural population;
• potential opportunities to increase the income level of small-scale business patterns and personal subsidiary economies included into the cooperative;
• increase of income level of rural population.
Figure 4 - Perspective organizational model of directions on support of small-scale business patterns aiming at cooperation
Realization of the suggested recommendations on activation of the process of
cooperation of small-scale business patterns in rural areas will:
• increase the number of rural consumer’s cooperatives;
• increase the educational level of managers and specialists of agricultural cooperation and participants of business activity;
• stimulate development of small-scale business patterns in rural area, increase considerably their importance in social economic development of the Orel region;
• create additional employment in rural areas and increase employment level of rural population;
• attract additional investments into development of rural areas and the region economics;
• realize market saturation with local production and available for small-scale business patterns subjects and rural population finance resources;
• promote the development of cooperative ties between subjects of small and midsized agro business and also large agro holdings on the level of the Orel region and some other regions;
• attract investments in the sphere of giving the state support at creation and establishing rural cooperatives, creating the corresponding educational center for personnel training and also providing state guarantees of repayment of obtained credits.
• Cooperation mechanism improvement will provide in long-term perspective dynamic development of small-scale business patterns in the rural areas of the Orel region and reinforcement of their positions in social economic potential of the region.
REFERENCES
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http://www. rg. ru/2013/01 /30/reg-cfo/u byl-anons.html
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5. Staff conference of the governor. “Orlovskaya pravda ». - 25 June, 2013. - P. 2.
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2013, St.-Petersburg. - M.: Federal State Budget Scientific Institution
«Rosinformagrotech», 2013. - P. 54 (168 p.).
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