Newparadigm Of The Economic Development Of The Regional Rural Territories

Abstract

The article proves the need to develop a new concept of economic development of rural areas of the Russian regions under external challenges and a high degree of uncertainty. The authors define the problems of the development and implementation of strategic plans for the development of rural areas in relation to Russian practice. A brief analysis of the current state and development of agricultural organizations in rural areas on the materials of the Non-Black Earth Zone of the Republic of Bashkortostan is presented. The article states that the non-black earth zone of the region has a significant production potential, which, if used effectively, allows for the sustainable development of rural areas. The authors update the possibility of applying the methods of cluster analysis and economic and mathematical modeling for the formulation of a strategy for the development of rural areas at the zonal level. The results of modeling the industrial structure of the agricultural organizations of the non-black earth zone of the region for moderate, compromise and optimistic development options are presented. The article shows that the increase of the level of efficiency of agricultural production is an important factor expressing the social development of rural areas. It summarizes that a multiplier effect is formed as a result of the improvement of the rural economy, which will manifest itself in the sustainable development of the social component of the rural area, raising the level and quality of life of rural residents.

Keywords: Agricultural organizationsdevelopment strategyeconomic and mathematical modelingrural areas

Introduction

At present, the creation of favorable conditions for the effective development of rural areas is one of the strategic objectives of the state's agrarian policy. Its achievement will help to improve the competitiveness of domestic agricultural producers and improve the social situation of rural residents significantly. The new paradigm of the development of rural areas of the Russian Federation determines the rational use of natural resources, increasing the efficiency of production and economic activities of agricultural organizations, solving the problem of increasing employment and a significant increase in incomes of the population.

The narrow-sectoral agrarian orientation to the development of rural areas dominated in the post-reform period, the lack of a systematic approach in the functioning of rural areas determined the negative processes of irrational distribution of productive forces, the formation of certain disparities in the development of production and social spheres, which, in turn, affected the living conditions of the rural population. The discrepancy between the size of rural areas and the number of inhabitants living in them reflected in the reduction of the population network, the depopulation of rural areas and may lead to the loss of control over these territories. The character of these destructive processes in rural areas has been systemic over the past decades.

The effective development of rural areas largely determines the solution of key problems of the sustainable functioning of the agricultural sector and raising the standard of living of the rural population. The instability of the production and economic situation of agroformations, the deterioration of the social situation of the villagers cause the formation of a new concept for the development of rural areas of Russian regions.

Today, there is a growing interest of the Russian scientific community to the problems of effective development of rural areas, the ability of agricultural organizations to survive and adapt to changes in the external environment in conditions of a high degree of uncertainty and a decrease in the regulatory role of the state. However, despite the significant number of scientific publications on the problems of socio-economic development of rural areas, a number of theoretical and methodological aspects related to the development of their strategy are debatable and remain insufficiently studied.

There is an active discussion on fundamental issues and the conditions for the transition of rural areas to the vector of sustainable development among domestic scientists. At the same time, there is no unified position on the assessment of progress towards the concept of strategic development of rural areas. Polar methodological approaches to the development of social and economic programs for rural development exist, a contrast assessment of their alternatives and the viability of the compiled agricultural development projects is given.

It should be noted that the main theoretical principles for ensuring the concept of sustainable rural development have been developed and summarized at the federal level. The Federal Law “On the Development of Agriculture” highlights the key imperatives of sustainable rural development, including the rational use of land and other natural resources, the growth in the production of agri-food products, and an increase in the standard of living of the rural population (Federal Law of December 29, 2006 No. 264-FL “On the Development of Agriculture”, 2007).

The federal target program “Sustainable Development of Rural Territories of the Russian Federation for 2014-2017 and for the period up to 2020” determined the functioning of rural areas at the legislative level until January 1, 2018. The current mechanism of rural development is the State Program for the Development of Agriculture and Regulation of Agricultural Products, Raw Materials and Food Markets in 2013-2020 (Resolution of the Government of the Russian Federation, 2012).

The formation of effective prerequisites for social development of rural areas, including raising the prestige of agricultural labor, providing employment and creating new jobs, improving the demographic situation and housing welfare of the rural population plays particular importance in the Concept of the Long-Term Socio-Economic Development of the Russian Federation for the period of up to 2020 (Order of the Government of the Russian Federation, 2008). The Concept of Sustainable Development of Rural Territories of the Russian Federation for the period until 2020 determines the effective use of the functioning potential of the entire set of rural settlements a strategic priority is and reflects the need to draw up regional and municipal program documents that take into account the specific features of sustainable development of rural areas of the Russian Federation (Order of the Government of the Russian Federation, 2010).

The implementation of the Strategy for the Sustainable Development of Rural Territories of the Russian Federation for the period until 2030 scientifically summarizes and clarifies methodological approaches for the strategic planning of rural development (The strategy of sustainable development of rural areas of the Russian Federation for the period up to 2030, 2015). Legislative initiatives on the socio-economic development of rural areas, formed and adopted at the federal government level, must be supplemented with regional and municipal strategic programs that will be aimed at improving the livelihoods of rural areas.

The problematic of socio-economic development of rural areas is determined by the versatility and dynamism of various scientific approaches to its solution. In our opinion, the new paradigm of rural development should be based on a concept that would widely use a systematic approach and modern scientific methods of economic research.

Problem Statement

The formation of an effective strategy for the development of rural areas involves several stages: from theoretical study to economic-mathematical models’ development and their implementation based on the use of the scenario approach. The economic formulation of the objective of this study is as follows: it is necessary to determine the optimal sectoral structure for agricultural organizations at the zonal level considering the assessment of the current state and economic development of specific rural areas, as well as scientifically based volumes of resources and corresponding cost standards that are planned to be realised in agricultural organizations for a short-term development period.

Research Questions

The Russian approach to the development of rural areas is based on the existing traditions of long-term territorial planning with the use of technologies based on the principles and methods of strategic management. The growth of the level and quality of life of the population represents the main target orientation in the domestic and foreign practice of managing rural areas (Averkieva, Dan’shin, Zemlyanskii, & Lamanov, 2017). A positive example in this area are scientific developments on the creation of individual programs for the socio-economic development of local rural areas - agro-towns in the Republic of Belarus.

At the same time, domestic researchers do not sufficiently well present scientific research on the sustainable development of rural areas, allowing to design a balanced functioning of the industrial and social sphere and to determine possible conditions for the growth of the agrarian economy. As academician A.I. Altukhov rightly emphasizes that sustainable development of rural areas should be included among the priorities of the long-term socio-economic development of the country (Altukhov, 2014).

World experience shows that models of distribution of production resources at the management level of individual agricultural organizations, rural areas associated with taking into account risk factors and uncertainties, building various production development scenarios are becoming more common (Gameiro & Martins, 2018). The main objectives of rural development models are: working out a strategy for the development of food policy, providing the population with agricultural products of their own production, determining the reaction (response) of agro-economic systems to making political decisions and actions of the external economic surroundings (environment) (Losch, 2015). The compilation of alternative scenarios for the development of rural areas is carried out on the basis of program planning with a regional orientation (Chepurnykh, Novoselov, & Merzlov, 2006). When working out strategies for the development of rural areas by foreign researchers, they model developments in food self-sufficiency of the population are taken into account as an integral part of achieving a high level and quality of rural residents’ life.

The working out of European models of rural development is carried out in accordance with the concept of Regional Rural Development and is coordinated by the activities of regional structural funds. Thus, in the EU countries, rural development projects are consistent with the activities of the European Rural Development Fund, the European Regional Development Fund, the European Social Fund, the European Fund for Agricultural Orientation and Guarantees, the Cohesion Fund. An effective measure to form a strategy for socio-economic development of rural areas is the introduction of special programs aimed at supporting projects and realizing the potential of rural areas, like the European programs Leader 1, Leader 2, Leader + (Pelucha & Kveton, 2017).

Currently, the following areas of research for the development of rural areas can be identified:

  • development of rural areas based on the achievement of environmental efficiency, the use of resource-saving technologies. This direction implies the priority of development, first of all, the eco-economy of rural areas;

  • the functioning of rural areas, including the innovative development of agricultural production, improving the competitiveness of agricultural production;

  • development of rural areas with a social orientation based on the multifunctionality and complexity of the functioning of rural areas. This direction is considered from the standpoint of economic and social self-sufficiency of rural areas, as a tool for solving social problems of rural areas.

Also, in our opinion, it is necessary to note one more promising direction of domestic research on the development of rural areas, related to the solution of the problems of food security and import substitution of agri-food products. This problem is particularly relevant in the modern conditions of the imposition of sanctions by the United States and its allied countries and the response of the Russian food embargo.

Purpose of the Study

The main goal of the research is to determine the optimal size of the combination of crop and livestock industries of agricultural organizations at the zonal level, considering their full use of production potential and maximizing profits from the sale of agricultural products when constructing economic and mathematical models. The goal is determined for three model variants of development: moderate, compromise and optimistic. These optimal variants consider various combinations of changes in the external and internal conditions for the development of agricultural production, probable fluctuations in cost indicators.

Research Methods

We propose a methodological approach based on the integrated use of methods of economic-mathematical modeling and cluster analysis, which allows determining the optimal parameters of the sectoral structure of agricultural organizations at the rural level. Thus, cluster analysis methods are widely used by researchers for strategic planning of rural development and in determining typical farms in economically developed countries (Solvell, 2009). As academician Kantorovich (2011) declared in relation to agriculture, agrarian production is one of the most effective applications of linear programming methods. Methods of correlation and regression analysis and the construction of trend models are used in predicting crop yields and productivity of farm animals (Gusmanov, Stovba, & Nizomov, 2017).

Findings

The territory of the Republic of Bashkortostan (by analogy with the territory of the Russian Federation), is devided into the Black earth and Non-black earth zones in accordance with the soil characteristics. A comparative analysis of the functioning of rural areas will be correct if they are in approximately equal climatic and soil conditions. Given this circumstance, the object of this study is not the entire territory of the Republic of Bashkortostan, but its component part – the Non-black earth zone, which can be considered as a reference for the Russian Federation.

The territory of the Non-black earth zone of the Republic of Bashkortostan includes 308 rural settlements and 22 rural municipalities (Socio-economic situation of municipal areas and urban districts of the Republic of Bashkortostan: a statistical compilation, 2017). The predominant part of the territory under consideration possesses enough bioclimatic and soil resources that make it possible to form stable prerequisites for the development of agricultural production sectors and a high degree of food security for urban and rural residents.

Households of all categories within a zonal scale produced 24% of the total regional gross agricultural output in the amount of 41 billion rubles in 2016. In total, about 31% of the total agricultural land of the region, 28% of farmland and 24% of crop acreage are concentrated within the Non-black earth zone. The zone accommodates 29.3% of the total number of cattle, 16.1% of the number of pigs and 37.4% of the number of sheep at the regional level.

The leading areas of specialization of the agricultural sector of rural areas are the following: grain farming, production of vegetables, potatoes and other crops, dairy and meat cattle breeding. Farms of all categories produced 19.2% of the total regional volume of grain, 20% of vegetables, 34.2% of potatoes, 30.1% of milk, 25.4% of meat and 37.1% of wool in 2016.

Significant organizational changes have taken place in the production system of the agrarian sector of the considered territory of the republic over the past decades. So, if in 2000, 343 agro-organizations functioned at the level of the Non-black earth zone, in 2016 their number was only 233 units.

The structure of the economically active population of the countryside has not improved during the analyzed period. So, the total number of employees of enterprises and organizations of rural areas of the zone decreased by 105 thousand people in 2000-2016 and it was 65 thousand people in 2016. However, despite the decrease in the number of workers, the agricultural sector remains the most important type of labor activity in rural areas of the Non-black earth zone.

A remarkable fact is that the number of officially registered unemployed residents of rural areas in recent years is not growing, and even declining. The decrease in the official unemployment rate among the rural population can be explained by the insignificant amount of unemployment benefits paid, the expansion of the shadow economy and the lack of motivation of specialists from the employment agencies of some municipalities of the republic to register unemployed residents officially.

A significant imbalance between the demand and supply of labor in the labor market in the rural areas of the zone under consideration can be noted (Kuznetsova, 2018). Moreover, an excess of vacancies in some specialties in rural areas is accompanied by a shortage of other personnel. High unemployment in the agricultural sector is conditioned by the specific working conditions of rural residents. At the same time, a paradoxical fact is that agricultural organizations have certain needs for qualified specialists in the conditions of existing unemployment. An increase in the number of highly skilled workers can certainly increase the pace of modernization of agricultural production sectors.

A negative trend is the fact that the average monthly nominal wage of employees of organizations of the territory under consideration was always lower than the average national indicator in 2000-2016. The average monthly nominal wage of employees of organizations of the Non-black earth zone was 22.8 thousand rubles, or 19% less than the average in the country in 2016. A comparative assessment of statistical data showed that this indicator was less than the corresponding regional value in nineteen rural municipalities in 2016.

Land resources are the main factor in the development of agro-industrial production. In accordance with the zonal features, the location of the main agricultural crops, in general, corresponds to their natural-climatic and soil conditions. Herewith, the total area of agricultural land in agroformations at the zonal level decreased by 15 thousand hectares, the total area of arable land decreased by 311 thousand hectares in 2000-2016. The total sown area of crops used by households of all categories of the zone decreased by 299 thousand hectares in 2000-2016 and it was equal to 743 thousand hectares in 2016. Crops of grain crops, sunflower seeds for oilseeds, vegetables, potatoes and forage crops considerably decreased in 2000-2016 at a zonal level (table 01 ).

Table 1 -
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The main reasons for the reduction of agricultural crops are the problems caused by the processes of their storage and sale and the low level of production profitability.

The yield of crops is one of the key factors in the production of agricultural products. The increase in this indicator helps rural producers to significantly reduce labor costs for cultivating the land and reduce the amount of material resources used. Natural conditions determine the actually formed level of crop yields in agroformations of the zone (Table 02 ).

Table 2 -
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The use of optimal doses of mineral and organic fertilizers applied for crops cultivated in the territory in question plays an important role when conducting an economic assessment of the use of production resources by agricultural producers. It should be noted that the volume of mineral fertilizers (calculated per 1 hectare of crops) in 2016 decreased on average from 6.6 kg to 6.1 kg compared to 2000 in the agricultural organizations of the Non-black earth zone.

The qualitative increase in the level of crop yields is substantially associated with the performance of certain technological operations in optimal time periods. However, the needs of agriculture in modern technology are not fully met in the considered agroformations of the zone. Reduction of the volume of capital investments directly in agricultural organizations is one of the main reasons for the decrease in the rate of renewal of equipment. In general, the number of forage harvesters in the Non-black earth zone of the region in 2016 decreased by 5.9 times compared to 2000, the number of combine harvesters decreased by 5.9 times for the comparative period.

The most important economic indicator of livestock development is the livestock of farm animals. Negative tendencies in the reduction of livestock of farm animals have occurred in farms in recent years. So, the number of cattle in 2016 compared to 2000 decreased by 201 thousand heads at the zonal level (Table 03 ).

Table 3 -
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In general, the number of pigs decreased by almost a third in the zone during the comparative period. At the same time, an increase in the number of sheep in the farms of most rural areas of the Non-black earth zone can be noted, mainly due to the contribution of private farming.

A significant problem of rural producers is the increase in the productivity of farm animals, primarily due to the imbalance in the structure of feed rations of livestock. Most of the feed harvested by agricultural organizations of the Non-black earth zone is of poor quality, which is directly related to the insufficient number of forage harvesters available in agricultural organizations.

It is necessary to state that farms at the zonal level increased the production of grain, sunflower for oilseeds, vegetables, and potatoes in 2016 compared to 2000 (Table 04 ).

Meat production decreased by 9 thousand tons in agroformations of the zone in 2000-2016. For the same period as a whole, milk production increased by 5.1 thousand tons, wool production increased by 352 tons for all agroformations of the zone.

Table 4 -
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It can be concluded that the contribution of the considered agricultural organizations to the regional food security is not significant at present. So, in 2016, the agricultural organizations of the Non-black earth zone produced 19.2% of grain, 0.9% of sunflower, 20.1% of vegetables and 34.4% of potatoes of the total regional production of the respective types of products.

Thus, a number of agricultural organizations in the zone are using existing production resources inefficiently and are developing disproportionately. Currently, the problems of optimal combination of agricultural production sectors are not solved, even though the climatic and economic conditions are favorable for the development of agricultural organizations.

In our opinion, it is necessary to develop and implement specific strategic measures oriented on model solutions in the modern conditions of development of the agrarian sector of rural territories. The study of the current state and prospects for the development of the agricultural sector of rural areas necessitated the compilation of economic and mathematical models for agricultural organizations of the zone.

It is considered in a methodological sense, that the needs of livestock industries are fully ensured by agricultural organizations with their own forage when simulating calculations. According to the model variants, rational use of produced feeds is possible at a balanced structure of feed balances for certain animal species, which, in turn, determines the increase in their numbers in agricultural organizations of the Non-black earth zone.

Improving the structure of crop acreage and the increase in the number of agricultural animals during the implementation of model decisions determine the creation of sustainable prerequisites for increasing the sales of agricultural and food products of agricultural organizations at the zonal level (Table 05 ).

Table 5 -
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The obtained model results reflect not only the quantitative growth in sales volumes of grain, sunflower, rapeseed, potatoes, meat and milk, but also determine the increase in the level of economic efficiency of the production of agricultural organizations (Table 06 ).

Table 6 -
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Profit from sales of products, depending on the choice of the model option will increase from 415 million rubles in 2016 to 469-506 million rubles. The increase in the volume of food production in model options leads to the creation of new jobs in the agricultural organizations under consideration. In most agricultural organizations of the Non-black earth zone, there will be a concentration of leading branches of agricultural production and a deepening of their specialization.

The solution of optimization models adapted to the conditions of development of the branches of plant growing and cattle breeding shows the potential for improving the economic status of agricultural organizations in the zone. Optimal options determine the positive trend of improving the production structure of agricultural organizations in general and are acceptable and adequate for increasing the volume of production of agri-food products.

Conclusion

Currently, one of the areas of diversification and growth in the rural economy is the development of a strategy for the development of rural areas, which ensures the optimal use of natural resources, the achievement of full employment and an increase in the standard of living of the rural population. The modeling of the production structure of agricultural organizations is an important component of the formation of a strategy for the development of rural areas. In turn, the design of the strategy will make it possible to determine in which rural areas it will be economically feasible to carry out agricultural production or develop alternative types of production.

The new paradigm of functioning of rural areas determines the change of certain strategic priorities, namely: the transition from state paternalism to reliance on internal reserves and self-development. At the same time, rural areas represent a complex socio-ecological-economic system of society, and their development strategy goes beyond the framework of agro-industrial production.

In our opinion, it is necessary to consider multifunctional processes occurring in rural areas when forming this strategy. The multifunctional nature of sustainable rural development is determined primarily by a significant increase in the level of economic efficiency of agroformation production activities, the creation of new jobs in agricultural organizations, growth in the production of basic types of food, and ultimately it affects the increase in income of agricultural producers. As a result of improving the economy of rural areas, a multiplier effect is formed, which will manifest itself in the sustainable development of the social component of rural areas, improving the level and quality of life of rural residents.

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02 April 2019

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Avzalov, M., Stovba*, E., Kuznetsova, A., & Gusmanov, R. (2019). Newparadigm Of The Economic Development Of The Regional Rural Territories. In & V. A. Trifonov (Ed.), Contemporary Issues of Economic Development of Russia: Challenges and Opportunities, vol 59. European Proceedings of Social and Behavioural Sciences (pp. 206-217). Future Academy. https://doi.org/10.15405/epsbs.2019.04.24