Academic journal article European Research Studies

Problems and Contradictions of the Financial System of the Agro-Business Industry of Russia in Contemporary Conditions and Methodological Aspects of Their Overcoming

Academic journal article European Research Studies

Problems and Contradictions of the Financial System of the Agro-Business Industry of Russia in Contemporary Conditions and Methodological Aspects of Their Overcoming

Article excerpt

Introduction

Agro-industrial complex or agribusiness industry of Russia is the most important economy sector determining the food security and the country's national security in general. In recent years, particularly, in the period of foreign financial and economic sanctions against Russia and reverse restrictions on imports of agricultural products from abroad, there have been some positive trends and investment exhilaration in the agribusiness industry of the country and its individual regions. However, despite some increase in regional food markets of domestic, and in particular, regional agricultural products, the agricultural economy and processing industry remain in a state of decline and stagnation. The majorities of natural and industrial resources that determine agricultural industry potential of Russian regions are not involved in the socio-economic reproduction, and continue to lose their historic significance and macroeconomic value. In consequence of the recession and the crisis of agribusiness industry, Russia is losing natural and production capabilities to ensure own food security. Besides, this process is accompanied by reduction in the standard of living of the rural population, as well as exacerbation of social tensions in rural and agricultural regions of the country in general.

The problem of restoration of economic growth and development of agribusiness industry and improvement of socio-economic conditions of rural areas is associated with insufficient investments in agribusiness industry, their imperfect structure in terms of both agribusiness industry sectors, and territorial (regional) context, as well as their extremely low efficiency. This predetermines the need for a thorough scientific-methodological research and identification of the problems and contradictions of financial security of agribusiness industry, as well as development of the ways of their overcoming.

Problems concerning financial security of investment in the Russian agribusiness industry are investigated in works of many modern Russian researchers. At that, various approaches and methods to increase the investments into development of agribusiness industry of Russia, enhance the financing efficiency of agribusiness industry, improve the effectiveness of financial security, and provide growth of investment attractiveness of both Russian agribusiness industry in general and its regions, are proposed based on the analysis of the existing system of financial security.

Suggested ways and methods to improve financial security of investing activities of the agribusiness industry do not reflect the totality of internal problems and contradictions arising in the development of certain elements of the financial system. Our study aims at systematizing and clarifying the basic problems of agribusiness industry development, revealing contradictions in its financial support system, as well as developing and justifying methodological approaches and organizational-methodical measures (focus areas) to overcome them. In the course of research, we identified the basic problems in the development of agribusiness industry of Russia, revealed four major contradictions in the financial security of agribusiness industry development, and proposed approaches and measures to overcome these contradictions.

Materials and methods

Legislative acts of the Russian Federation, normative and methodical materials of the Russian Federation ministries and departments and Bank of Russia, information from periodicals and scientific publications on the issues of financing and development of investing activities of the agribusiness industry were used as the information base for the current study. The study was conducted based on the use of general research methods of a comprehensive, systematic, and logical analysis of financial and economic mechanisms and tools applicable to the development of investing activity of the agribusiness industry entities. …

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