How to Ensure Sustainable Development of Agribusiness in the Conditions of Trade Integration: Russian Approach

Discussion

Even today, the majority of Russian agricultural industries cannot equally compete with foreign producers. The dependence on import deliveries is critically high. Local agricultural and food products cannot find their customer neither on foreign nor even on local Russian markets.

However, the “secret” of success of foreign farmers on the Russian market is not only in the unique high quality of their production. Agriculture in global economics is one of the most protected and “closed” branches. The main method of protection is to give a huge volume of subsidies to the agricultural producers. Annual expenses of WTO member countries for agriculture reach dozens of millions US dollars. Half of “agricultural” expenses of WTO member countries are the measures distorting trade and production which has a negative influence on the global agricultural market, leading to the excess production and fall of prices for agricultural and food products.

Currently almost all-global volume of agricultural support is distributed between EU producers (39%), USA (36%) and Japan (15%). These countries provide more than 90% of total volume of subsidies worldwide. The share of state support in GDP of agriculture is 36% in EU, 37% in Japan and 39% in USA (Table 1). Herewith USA and a range of other developed countries remain the net exporters of food products and save the high level of food sovereignty. USA and France are fully independent and provide themselves with agricultural and food products on 100%, Germany – on 93%, Italy – on 78%, Japan (which almost has no land resources) – on 40%.