Organizational and economic bases for grain products sub-complex innovative development in Russia


A.I. Altukhov, V.I. Nechaev, P.V. Mikhailushkin








ORGANIZATIONAL AND ECONOMIC BASES FOR GRAIN PRODUCTS SUB-COMPLEX INNOVATIVE DEVELOPMENT IN RUSSIA















MOSCOW 2017

UDC 005.591.6:631.145:631.1
LBC 65.325
R e v i e w e r s :

A.I.Kostyaev - director of the FSBScI «North-West Research Institute of Economics and Organization of Agriculture», Doctor of economy, professor, RASc academician;
P.M.Pershukevich - director of the FSBScI «Siberian Research Institute of Agricultural Economics», Doctor of economy, professor, RASc academician.



   Altukhov A.I., Nechaev V.I., Mikhailushkin P.V.
            Organizational and economic bases for grain products sub-A _^ complex innovative development in Russia [Tr. From Russian Tamara S.
       Nepshekueva]. - Moscow : Publishing House Scientific Adviser, 2017. -258 p.
      ISBN 978-5-9908932-5-2

      The monograph reveals the modern problems of development of grain products sub-complex of the country and possible ways of their solution on the basis of increasing the effectiveness of grain farming and grain market, radical transformation of the seed crops, improvement of innovation and its organizational-economic mechanism taking into account specific operation of individual subcomplex units.
      The book is intended for researchers, teachers and students of higher educational institutions, heads and specialists of management bodies of the agroindustrial complex of the Federal and regional levels.

UDC 005.591.6:631.145:631.1
                                                                 LBC 65.325








ISBN 978-5-9908932-5-2

            © Altukhov A.I., 2017
            © Nechaev V.I., 2017
                                       © Mikhailushkin P.V., 2017
                                       © Publishing House Scientific Adviser, 2017

        CONTENT


INTRODUCTION..............................4
1. MODERN PROBLEMS OF THE GRAIN PRODUCTS SUBCOMPLEX DEVELOPMENT AND POSSIBLE WAYS
OF THEIR SOLUTION.........................5
2. IMPROVING THE EFFICIENCY OF GRAIN FARMING
IS THE BASIS OF SUSTAINABLE RUNNING OF GRAIN PRODUCTS SUB-COMPLEX.....................50
3. THE RADICAL TRANSFORMATION OF GRAIN CROPS SEED BREEDING AS AN INNOVATIVE FACTOR FOR ACCELERATED GROWTH OF GRAIN PRODUCTION
AND ITS QUALITY IMPROVEMENT...............69
4. INNOVATION IS A STRATEGIC TREND OF GRAIN PRODUCTS SUB-COMPLEX DEVELOPMENT..........108
5. METHODOLOGICAL PROVISIONS FOR EVALUATION
OF THE EFFECTIVENESS OF INNOVATIVE ACTIVITIES....137
6. FEATURES OF GRAIN CROPS NEW VARIETIES AND HYBRIDS ECONOMIC EVALUATION AS OBJECTS OF INTELLECTUAL PROPERTY..................... 171
7. IMPROVING LEGAL PROTECTION AND USE OF SELECTION ACHIEVEMENTS....................217
8. IMPROVEMENT OF ORGANIZATIONAL AND ECONOMIC MECHANISM OF GRAIN PRODUCTS SUB-COMPLEX INNOVATIVE DEVELOPMENT........234
CONCLUSION................................252

        INTRODUCTION


      In modern conditions the most important strategic priority of grain products sub-complex of the country development is scientific and technological progress, based on innovative processes allowing continuous updating of agrarian and industrial production through accelerated introduction of science and technology achievements which determines the use of effective organizational and economic mechanism of their development, promoting transition of this important for the country products sub-complex to innovative and investment development model.
      Conditions and factors of effective application of scientific and technical potential of grain products sub-complex in general and grain farm in particular are diverse. This is due to the complexity of the scientific and technical activities compared to others of its types. Diversity is determined as well by the fact that the process of scientific product output consists of various steps and specific stages, from ideas inception and development, undertaking research to specific innovations development, testing it and mastering directly in the production.
      In market relations when produced scientific and high-tech products are the goods, a clear and scientifically substantiated mechanism of its promotion to consumer is needed at the expense of constant interaction of managing market subjects through realization of their mutual economic relations and interests.
      As state government bodies, scientific institutions and commercial organizations of the country constantly feel the need in objective assessment of scientific developments, economic substantiations of scientific projects for a more focused selection of scientific subjects that form scientific and technical programs and subprograms of the Federal and sectoral levels of functioning of specific grain products sub-complex subdivisions, the materials reported in this monograph on organizational and economic bases of their innovative development would promote the solution of the above problems.

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1. MODERN PROBLEMS OF THE GRAIN PRODUCTS SUBCOMPLEX DEVELOPMENT AND POSSIBLE WAYS OF
THEIR SOLUTION

     A necessary condition for sustainable functioning of the domestic grain products sub-complex, as a complex production and economic system, is the provision of expanded reproduction of all its interconnected units, acting together as a single unit.
     Integrity is one of the main characteristics of this products subcomplex as a system and it means ultimately the inherence of each of its subsidiaries, the functions of which, in turn, serve the common purpose of forming and dynamic development of the whole industry.
     And grain products sub-complex functions as a relatively independent unit within a more complex system, which is agro-industrial complex (AIC), and the latter - within the socio-economic system of the state.
     Stability of functioning of grain products sub-complex is determined by the stability of its various units with respect towards internal and external influences, and ultimately largely depends on the stability of the weakest sub-complex unit.
     Traditionally in the sub-complex such unit is grain farming, despite its importance in the reproduction process of this major country's grocery industry. It is the development of grain farming that depends largely on the effectiveness of the whole sub-complex functioning; its ability to ensure food security of the country in terms of a reliable supply of grain and processing products, as well as those produced using grain.
     In the pre-reform period in Russian economic theory the nature of social reproduction was interpreted mainly from the perspective of production and distribution priority to the detriment of other important elements of reproduction - exchange and consumption which in practice often resulted in underestimation of commodity-money relations importance, various distortions in the economic mechanism and disproportions in the reproduction process development in AIC and its specific industries and sub-industries. Mostly it concerned the

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development of the grain farming where state actually possessing a monopoly on almost all commercial grain, regulated the production, exchange, distribution and consumption of grain mainly through administrative-command methods, with all following negative aspects for the development of grain products sub-complex and its specific units. In this respect, grain farming can serve as a classic example of containment for grain problem solutions mirror in the country because of the shortcomings in the economic relations of the state and producers of marketable grain regarding its exchange and distribution at all levels of AIC management.
     But in the years of market reforms the expectations of the "invisible hand of the market" were not met that would more equitably resolve many of the contradictions in the system of production, exchange, distribution and consumption of grain and its products.
     As is known, the main properties of the sustainable running of the grain products sub-complex are equilibrium, balance, proportionality, and as a natural result - the efficiency, stability, dynamism and efficiency of its development. Thus, in the equilibrium conditions it is possible to fairly reliably predict both the most likely development of the reproduction process in the sub-complex as a whole, and its individual stages and each unit.
     However, in reality, economic processes are at best approaching the equilibrium state, relative to balanced demand and supply, the largest total effect of applied cost, balanced incomes and expenses of all participants of grain products sub-complex and each of them separately. Here business practices, and accordingly, economic theory, face new tasks, the complexity, dynamism and scale of which increases especially in the transition period to the new economic relations when social and economic policy of the state allows sharp shifts in the reproduction process as it often happened in agrarian sphere of economics in the last twenty-five years of market reforms.
     Even if social and economic transformations in the country are realized through evolution, not considerably contributing to qualitative changes in the equilibrium state, the practice forces to constant

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ly specify economic decisions and correspondingly correct their scientific substantiation and maintenance. Hence the conclusion that the balance in such a complex and dynamic economic system, which is grain products sub-complex, is crucial and at the same time, the relative characteristic of the reproductive process. It largely determines the constant search for better methods and mechanisms of management, production organization and technological processes and the movement of goods, the management system functions harmonization, adequate to the state of relative equilibrium in the economy of grain products sub-complex and its subdivisions.
     The second most important criterion of effective functioning of grain products sub-complex as a complex economic system and its individual units - the development sustainability. It primarily depends on how agricultural production is ensured by advanced technique and how possible and effective is the use of advanced technologies. But as is known, even with the same technological development level economic results, production efficiency can vary significantly. A crucial role in ensuring the highest possible return from the available resource potential is played by subjective factors in economic activity, including professionalism of "managers" and "quality" of the practical management implementation. In this regard, it should also be noted that regulatory and self-regulatory role of the market is large, it is undeniable and well proved by the world practice for many centuries, which in essence determines the transition of the national economy and its agrarian sector to market relations. But in the market in addition to the inherent creative force there is a destructive power. To neutralize the latter as fast as possible is a crucial task of its state regulation. Hasty and unjustified withdrawal of the state from such regulations - a direct way to crisis, all sorts of risks and socio-economic shocks. This is evidenced by the crisis of the Western system of management in the 30-ies of the last century and of domestic - the 90-ies.
     In modern conditions socio-economic situation is qualitatively different from that of before "perestroika" and of market reforms.

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     Strategically it develops in line with the processes of rational combination of market self-regulation with an active state of adjustment mechanisms of the market.
     If the administrative-command methods of economic improvement and of management of primary links of the grain products sub-complex, of AIC, of the entire economy, as a rule, did not aim at maximizing the economic effect, since its solution was mainly execution of the specified on the top plan, often at any cost, the formed new organizational-economic mechanism strategically aimed at elimination or mitigation of various kinds of distortions and deformations, at the solution of the tasks dictated by the market, its supply and demand, competition rules, that is at the more effective utilization of the available resource potential, its quality improvement, technical and technological renovation and modernization.
     However, the real economic difficulties put the fulfillment of these tasks in a relatively "narrow" frame, connected with the current unstable economic condition, inter-farm and inter-sectoral imbalances, non-payments, lead to the violation of price and overall market equilibrium, although not changing the general focus of economic activities on scientific and technological progress, stimulated by the very essence of market relations.
     The more persistent and more consistent management personnel of all levels of AIC and economics will acquire knowledge of the nature and mechanism of economic relations, the more professional, "more correct" and more quickly they will use the state regulation levers of reproduction process, the more active and meaningful will be its impact on the pace and efficiency of production, the results of ongoing socio-economic transformation in the country.
     In recent years in researches of domestic scientists - agricultural economists on the development of grain products sub-complex and its specific units sectoral aspects of the problem usually dominate and primarily grain farming as the main core of the subcomplex, nevertheless there is no unity in solutions and positions on many problems including on the very definition of the most important subsystem of AIC.

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     There are many controversial issues in other areas of economic research, issues associated with building rational inter-industry linkages with the sub-complex, effect of organizational-economic mechanism of the sub-complex taking into account the influence and interaction of other related product sub-complexes at all management of AIC.
     The starting point of the analysis of the socio-economic problems of grain products sub-complex development is its essential characteristics, role, and place in AIC and the economy, which is given in different width depending on the applied evaluation criteria and metrics. For example, historically the value of grain farming and the whole industry in the economy is paid more or less attention depending on the extent to which issues of ensuring the country grain and products of its processing are dealt with.
     The crisis in the agrarian sector of the economy causes increased interest to the problems of grain products sub-complex development both from the scientific point of view, and in terms of the practical improvement of its organizational-economic system, including structural and other aspects of the industry.
     In modern socio-economic conditions, in spite of the reduction of the resource potential, quantitative and qualitative indicators of successful development, grain products sub-complex in its economic and social importance for the country remains one of the main subsystems of the national economy, dominating in the scale of production and in the production of indispensable food for human. Manufactured "foods" are "the first" condition of the immediate producers’ life as well as the whole production in general. Vital to the country, the importance of grain products sub-complex is determined primarily by the fact that its system uses an indispensable means of production - land, with its property of natural fertility, which allows in improving it to produce the growing number of quality food products based on the use of grain and products of its processing.
     Land resources reproduction in the system of grain products sub-complex, where in grain business most of the arable land of the country is under the grain crops in, itself forms the largest national

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economic problem with the appropriate management subsystem and mechanism of land relations. However, due to the incompleteness of the land register and work on the economic valuation of land the latter is not accounted for in the resource potential and production assets of both grain farming agriculture and sub-complex foundations. But in this case, the grain products sub-complex maintains, in fact, its dominant socio-economic position in the AIC and the economy of the country and most of its regions, primarily on the utilization of resources, acting as one of the main consumers of fuel, metal, energy and other material resources.
     Problems of development of grain farming and the whole system of grain products sub-complex in conditions of market transformations in the socio-economic system of the country is so dynamic, complex and multifaceted that the successful solution of them is possible only on the basis of appropriate scientific support, reinterpretation of many scientific beliefs and the conceptual approaches which before radical reforms were inviolable, including the theory and methodology of reproduction in the system of AIC. Only through science the situation in this system can be changed, reliable ways and directions of development of the complex as the leading socio-economic subsystem in the structure of social reproduction justified and offered, management be brought into compliance with the new requirements of conducting agricultural production, systems of organizational-economic measures on the rational use of land, labor and other production resources be developed. This constantly requires improving the methodology and evaluation of production and economic processes in AIC and especially in its grocery sub- complexes and primarily in the grain productions sub-complex, which is of strategic importance for the country. The study of the problems of economic efficiency of production in the grain productions subcomplex and its specific sectors, sub-sectors and industries in many scholarly works of agro-economic orientation and scientific researches devoted to the profitability level formation of individual sub-complex units, effectiveness evaluation of specific economic, organizational, technical and technological measures are of great

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importance. These research works highlight some central issues of the various areas of organizational-economic mechanism functioning and possible measures for its improvement. It is important to follow proven methodologies of economic analysis and based on it to figure out how grain products sub-complex of the country operated in a monopoly of a single public ownership, and most importantly to identify what is happening and how this product sub-complex will develop in the future in conditions of the WTO membership and its participation in regional associations in the CIS and above all in the Eurasian economic Union. In theoretical and methodological respects, this problem may be successfully solved on the basis of modern trends analysis and identification of the grain products subcomplex development patterns, which manifested themselves in the past, take place today and will determine the nature of their possible changes in the future. This implies the need to deepen the concept of sub-complex development, to define its essence, assess structural and functional changes, as these issues are still ambiguously interpreted from the perspective of market relations and market mechanisms, inter-sectoral industries’, sectors’ and production subcomplex interaction in AIC and in the economy of the country.
     In determining the nature of constructing and evaluating the impact of structural and functional elements of grain products subcomplex in terms of methodology it is necessary to be based on patterns of social division of labor and cooperation, to take into account that the sub-complex has the internal driving forces and selfdevelopment factors, but it requires close economic ties with "adjacent" industrial sectors, which, in turn, themselves require the use of sub-complex units activity quantitative and qualitative results. In this complex economic system which is the grain products sub-complex, act both centrifugal and centripetal forces, reflecting social division of labor in agro-industrial production, the emergence of new independent industries, sectors and specialty industries, their organizational and economic interaction until the creation of various kinds of integrated units.

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