Organizational Communications In Small Business Management In The Agro-Industrial Sector

Abstract

The economic nature and features of the changes of the agricultural and industrial production determine the need for legislative and financial strengthening for the small and medium-sized enterprises (SMEs) strides, it implies intensive state regulation processes in this area. Improving communications in the public administration system will enhance the SMEs activity in the agricultural and industrial production of Russia. The positive dynamics of our country agro-industrial complex’s functioning is revealed, the shift of agro-industrial production from the processes of import substitution to the processes ensuring the intensification of agricultural exports is recorded. The article defines the need for government intervention, the main trends and components of state regulation of SMEs changes at various levels of government are presented. The formation of a multilevel system of state regulation of SMEs adjustment for the agricultural sector should be implemented at all levels (federal, regional and municipal) of government. The presented targeted solutions lead to further strengthen the food security of our country and focus on the growth of agricultural exports. Optimization of agroindustrial production will make it possible to achieve its steady state, create conditions for the implementation of innovative processes, shift the emphasis from import substitution processes to processes that ensure the intensification of agricultural exports.

Keywords: Communicative impactcommunication strategysmall and medium businessstate regulationagricultural and industrial production

Introduction

Problem Statement

The problem of the study is to consider possible ways for improving the communicative strategy in the practice of public administration aimed at activating small business in the development of the agricultural and industrial production of the Russian economy. A communicative strategy, in this case, is a specific strategic plan on the part of state and municipal authorities for such target audience as representatives of SMEs in the promotion of the agricultural and industrial production of the Russian economy. The communicative impact will enhance the processes of formation and sustainable progress of small enterprises in agribusiness.

Research Questions

To justify the need for state regulation of the processes of stimulating small and medium-sized businesses entrepreneurial activity in the agricultural sector.

To identify the main stages of regulatory processes of small and medium-sized businesses activity at the regional and municipal levels on the part of the state.

To present the main components of a multi-level state regulation system of creating and SMEs progress in the agricultural and industrial production of Russia.

Purpose of the Study

The objective of this research was to overlook the current trends and possible directions for improving communications in the field of public administration of the small and medium-sized businesses development for the agricultural and industrial production of Russia. The tasks are set: to determine the schemes and the main components of the processes of state regulation of small and medium-sized businesses activities in agricultural production at all levels of government: federal, regional, municipal.

The object of the study is the state regulatory processes of creation and progress of small business enterprises in the agricultural and industrial production for the Russian economy. The study period includes 2013-2018.

Research Methods

The study is based on a combination of general scientific methods, such as analysis and synthesis, deduction and induction, as well as a statistical method that allows identifying emerging patterns. Official data of the RF Government site, significant information data presented in public media and on the Internet are the informational and empirical base of the article.

Findings

In the medium term, progressive dynamics in agricultural and industrial production is forecasted. The main factors stimulating this process are:

Climatic;

Sanctions and countermeasures;

Increased demand for food;

A change in macroeconomic proportions in foreign and domestic markets;

Intensification of agricultural products export;

Single economic space.

An important area of 2019 is the development of an updated industry support program. Considerable attention has been paid to financing export activity, which will be strengthened by government support. The influence of such external factors as geopolitical decisions and macroeconomic indicators minimizes the impact on the dynamics of behavior and the degree of investment attractiveness of the industry.

In 2018 a shift of agricultural production from import substitution processes to processes ensuring the activation of exports was indicated. The food embargo which has been in force since August 2014 was prolonged. Pursuant to the Decree of the Head of our state Putin (2018) “On the National Intentions and Strategic Tasks of the Propulsion of the Russian Federation for the time up to 2024”, the strategic goal was set, that is to double the volume of agricultural exports. The passport of the National Project “International Cooperation and Export” was developed. The Federal Project “Export of agricultural products” is a priority component of it. The main indicators of the project determined the increase of agricultural products export up to $ 45 billion by 2024 ( Passport of the Federal project “Export of agricultural products”, 2018) The State Program “Agricultural Development and Regulation of Markets of Agricultural Goods, Raw Materials and Foodstuffs for 2013-2020” was extended until 2025 (Order of the Administration of the Russian Federation No. 98, 2019). The indicator of agriculture gross value added shows a positive dynamics in the period 2013-2018 (Table 01 ).

It should be noted that only 89% of the planned values for 2018 were fulfilled. The labor productivity index in relation to the previous period is reduced, which is determined by various factors. For example, in 2018, the reduction of this very indicator by 3 percentage points (p.p.) is primarily due to the instability of the macroeconomic situation, difficult weather conditions, and the prolonged sowing campaign. The value of agricultural products exports is growing at a faster pace. In 2018, the actual implementation of this indicator was 119.3% compared to the planned 106.5%.

Foreign trade in agricultural products and food is characterized by a negative trade balance. We note the positive changes: in the last two years the indicator of foreign trade increased by 9.9% or by $ 4,979.7 million; export growth rates significantly exceed import growth rates, respectively, 119.3% and 102.8% (Table 02 ).

The share of agricultural products in the export structure of the Russian Federation is insufficient – 5,5%. Grain crops (40.7%), fish and seafood (19.9%), vegetable oils (9.3%) are the key positions in the agricultural commodity exports structure. The growth of cereals and legumes, wheat or wheat-rye flour, pork and pork offal, poultry meat, pastries and confectionery was shown among the exported products in 2018. At the same time, there was a significant decrease in exports of sunflower seeds, white sugar, rice, and tobacco products.

In 2018 the share of imported food products and agricultural raw materials in the import structure of the Russian Federation amounted to 12.4%, i.e. it significantly, more than 2 times, exceeds the share of exports. Import priority is given to fruits and nuts, alcoholic and soft drinks, processed meat, vegetables, dairy products. In the import structure there has been a reduction in the supply of pork meat, sunflower and corn seeds, milk and dairy products, and grapes. At the same time the volumes of live cattle, sugar, palm oil, other supplies are increasing. Based on data to the Ministry of Agriculture, world prices for agricultural raw materials and food in 2019 will exceed the values of 2018, as a result, one can predict an increase in ruble prices. A slowdown in development and relative stagnation are expected in the poultry and sugar industries (Order of the Administration of the Russian Federation No.1352-r, 2019).

The economic nature and peculiar development of agriculture need for state regulation ( Aimurzina et al., 2017). Targeted decisions to ensure further strengthening of the food security of our country by the state authorities can be implemented in the following areas:

• Legislative and financial support for small-sized business;

• Domestic seed industry and pedigree farming base recovery;

• Regulation in the field of aquaculture (fish farming);

• Improving the management system of socio-economic development of rural areas;

• Formation of the modern production potential of agricultural machinery;

• Creation of the material opportunities and facilities of agricultural production based on the introduction of innovative technologies;

• Attracting young specialists to the agricultural sector, creating conditions for increasing the level of their professional training.

The implementation of the first relevant area – help for SMEs - involves the activation of state regulation processes in this area.

The need for state intervention in the processes of formation of small business in agriculture is determined by the following objectives ( Koptseva & Kirko, 2016; Mironenko, 2016):

• Stability of economic growth;

• Sustainable financial performance;

• Lower inflationary expectations;

• Providing a high level of employment for the able-bodied population;

• Equity in income distribution.

The goals are based on the consistent solution of the following tasks: the introduction of the legal framework for the effective functioning of agricultural sector; formation of a competitive environment; stimulation of entrepreneurial activity of small-sized businesses; formation of entrepreneurial infrastructure. The presented goals and tasks can be reached through measures of state regulation for small business in the agricultural sector. The following measures can be referred to these ones:

• Support for the types of businesses identified as a priority for the development of the domestic economy;

• Developing a rational tariff and pricing policy, an effective tax system;

• Redistribution of limited resources;

• Protection of consumer rights, creating a competitive environment and restriction of monopolistic activity;

• Creation of a legal basis for entrepreneurial activity.

An appropriate organizational mechanism for small-sized business must be created at all levels: national, regional and local. State regulation of small business development for all the members of the Federation specifies requirements, delegates authority, determines competencies, compliance with the legislative framework of the Russian Federation, takes into account regional conditions and features ( Kozhakhmetov & Rakhimgulova, 2017; Regionalization…, 2019). Schematically, Figure 01 presents the stages of the process regulating the small and medium-sized business activities at the regional level:

• National goals are specified taking into account the characteristics of the region;

• Regional goals and objectives aim the promotion of small-sized business;

• Creation of the resource potential of the region is focused on solving regional problems;

• Redistribution of resources, taking into account the identified priorities and region’s resource potential limits among business entities;

• Creation of optimal conditions in the regional environment for the effective functioning of the small business production structures.

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The main stages of managing the small business regulation process at the local government level are determined by the composition and structure of the municipality. The scheme (Figure 02 ) provides:

• Setting municipal economy goals and objectives is focused on the priority of small business development;

• The resource potential of the municipality is distributed between small businesses through economic mechanisms: municipal order, priorities and restrictions;

• Development of the municipal territorial-production complex on the basis of business and investment activity of small and medium-sized business enterprises;

• Creating favorable conditions for the establishment of small and medium-sized businesses entrepreneurial structures.

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The formation of a multi-level state regulation system of creating and development of SMEs in the agricultural sector allows us to increase the rate of economic progress of our state.

Conclusion

We believe that the following components are most relevant while forming a state regulated multi-level system for creating and development of small-sized business structures in the agricultural sector

Countering illegal entrepreneurial activity and unfair competition is the most important component of the small business state regulation system in the Russian Federation ( Vilenskii, 2014). A set of conditions stimulating business representatives to “come out of the shadows” should be created, including criminal prosecution of illegal business activities as well as encouraging the best small business taxpayers.

Legal regulation of land relations on the basis of a roadmap approved by the government in November 2018, which includes: a set of measures that determine the rules for the use and protection of farmland; providing a special legal regime for the most valuable lands. Boundaries of these areas are to be defined clearly and traced on the map, besides the quality of supervision over the use and turnover of land should be improved.

A strategic approach to the SMEs changes in the national economy, which involves: creating favorable conditions for maintaining market relations; the availability of investment resources and the identification of opportunities for their rational implementation; formation of a consistent legislative framework; involvement of qualified personnel in entrepreneurial activity, staff training and retraining; development of an effective tax and investment policy. Creating a strategy for a sustainable small business development implies favorable external conditions not only now, but also in the perspective, correspondence with the goals and objectives of the country, regional entities, and large businesses. Measures to support and develop small businesses should include: identifying key priorities and development goals, principles and methods of creating a system of regulatory measures, an assessment of the organization’s external environment, analysis of production potential, and complex target programs (CTP).

A programmatic approach to small business support. Federal programs are specified at the regional level. For example, the Ministry of Economic Development has been consistently introducing a complex target program, according to which subsidies are provided from the federal budget to provide state support to small and medium-sized enterprises at the regional level. Also, in the framework of the state project “Economic Development and Innovation Economy”, introduced in 2014, the subproject “Advancement of Small and Medium Enterprises” is being implemented. It gives priority to measures aimed at changing the activity of a network of organizations that form a service infrastructure model for providing state support. Loans are provided to entrepreneurs operating in priority-recognized industries, including agriculture. Small business can obtain loans at a reduced rate of not more than 8.5% per annum for investment purposes up to about 2 billion. rub. for up to ten years as well as for working capital replenishment up to 500 million rubles for a three-year period ( Order of the Administration of the Russian Federation, 2018; Prudskiy, Demin, Oshchepkov, & Gershanok, 2017; Sharapova & Vlasova, 2018). According to the passport of the national project “Small and Medium-sized Enterprises and Support of Individual Entrepreneurship Initiatives”, the Ministry of Economic Development suggests the formation of a system of support for farmers, the popularization of entrepreneurship, and the development of rural cooperation ( Passport of the National Project…, 2018). The presented national project combined the following five federal projects: improving the business environment, expanding access for SMEs to financial resources, including concessional funding, accelerating SMEs, creating a system of farmers support, development of rural cooperation, and promoting entrepreneurship. Within the framework of the national project, the Ministry of Agriculture believes that the amount of funds aimed at farming support and rural cooperation development will be up to 37.4 billion rubles by 2024, and 7.4 billion rubles in 2019 ( Passport of the Federal Project…, 2018).

Digitalization of the agro-industrial complex. The agricultural sector digitalization involves adapting digital technologies and platform solutions for the Russian agricultural sector. The project "Digital Agriculture" will be implemented in 2019-2024. Surely, this activity will ensure the efficient use of labor potential in farms and other small forms of management ( Amirova et al., 2018).

The quality and safety of agricultural products and food. There is a need to prepare a new edition of the Food Security Doctrine of the RF (2010-2020). The project submitted by the Ministry of Agriculture introduced a new methodology for calculating food safety indicators, indicators have been added that reflect food availability for the population (both economic and physical). In 2019 a legislative amendments concerning updated definition of the concept of “quality of healthy nutrition” is to be introduced, also the responsibility of unscrupulous producers for the production of surrogate products is to be determined. Businesses focused on agricultural products and food production meeting all the specified quality characteristics can count on state support (Gordeev, 2019; Polushkina, Akimova, & Kochetkova, 2016). Importance is given to the development of ecological agricultural production. Support at the regional level for local organic producers is relevant for small businesses.

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