Presentation Maximov ENG1

Slide1: 

THE RUSSIAN AGRO-INDUSTRIAL COMPLEX TODAY AND TOMORROW

The Role of Agriculture in the Country Economy (2003 - 2004): 

The Role of Agriculture in the Country Economy (2003 - 2004) 27% - percentage of rural population (38.4 mln people); 11% - percentage of people employed in agriculture; 5.4% - share in the Gross Domestic Product (GDP); 2.9% - investments in capital assets; 18% - (agriculture + food industry) production share in the country economy. Second only to machine building.

Role of Agriculture in Economy: 

Role of Agriculture in Economy Agriculture is a catalyst of dynamic development in other spheres of the country economy. Growth of production volumes in agriculture by every 1.000 Rubles is estimated to result in: Growth in demand for machinery and equipment by 2.300 Rubles; In other industries supplying resources – by almost 3.000 Rubles; One person employed in agriculture can secure jobs to 6-7 people in other spheres of the country economy; Agriculture is the principal kind of economic activity and employment in rural areas.

Slide4: 

THE STRUCTURE OF AGRICULTURAL BUSINESSES BY FORMS OF MANAGEMENT* (as on January 1. 2005)

Slide5: 

THE STRUCTURE OF AGRICULTURAL PRODUCTS BY CATEGORIES OF BUSINESSES ( % of the total; at then current prices)

Areas Under Crops: 

Areas Under Crops

Productivity and Gross Yield of Crops: 

Productivity and Gross Yield of Crops

Slide8: 

NUMBER OF CATTLE AND POULTRY

Livestock Products: 

Livestock Products

Main Products of Food, Flour-and-Cereals, and Fodder Industries: 

Main Products of Food, Flour-and-Cereals, and Fodder Industries

Results of Work for the Last 6 Years: 

Results of Work for the Last 6 Years Positive results Agricultural production has increased 26%; We put an end to the lingering crisis of the 90s. when the agricultural and food-industry gross product almost halved; In 2003 - 2004 the amount of bad debts decreased 33.8%; A share of unprofitable businesses reduced; The industry, which was chronically unprofitable, began to make a profit, although the level of income is not high enough for extended reproduction in most of the businesses.

Changes in Budgetary Policies and Taxation: 

Changes in Budgetary Policies and Taxation Ineffective direct subsidies have been abolished. Subsidies to pay interest on credits are used instead, and the Federal budget reimburses 2/3 of the Central Bank rate; Government-backed harvest insurance has been expanded to cover almost 25% of the harvest; In 2002 the State company Rosagroleasing was set up, through which more and more machinery and cattle are supplied under leasing agreements; A single agricultural tax is levied.

Results of Work for the Last 6 Years: 

Negative tendencies Shrinking areas under cereal crops – 20 mln hectares less in the last 15 years, total area under crops shrank by 39 mln hectares; Cutback of cattle and pig population. In the reform years, compared to the 90s, the figure is 33 mln, including 10 mln cows, 24 mln pigs, and 41 mln sheep; Lower potential of agroindustrial enterprises. Results of Work for the Last 6 Years

Agrobusiness Enterprises Classified by Their Financial Situation: 

Agrobusiness Enterprises Classified by Their Financial Situation Group 1 – 18.1% - financially sound enterprises. Most of them have no bad debts; Group 2 – 27.3% - solvent enterprises. They have bad debts and no sufficient security to receive credits; Group 3 – 31.4% - temporarily insolvent enterprises. They still have a possibility to restore their paying capacity; Group 4 – 13.5% - unprofitable enterprises. Their debts are twice their sale proceeds. Most debts are bad. Group 5 – 9.7% - enterprises, which financial and economic system is completely wrecked.

Financial and Economic Characteristics of Agricultural Enterprises : 

Financial and Economic Characteristics of Agricultural Enterprises

Profitability of Agricultural Product Sales. %: 

Profitability of Agricultural Product Sales. %

Profitability of Production in Leading Enterprises (100 enterprises in every industry) and in Other Russian Enterprises (2002–2004): 

Profitability of Production in Leading Enterprises (100 enterprises in every industry) and in Other Russian Enterprises (2002–2004)

Financial and Economic Characteristics of Agricultural and Food-Industry Enterprises *: 

Financial and Economic Characteristics of Agricultural and Food-Industry Enterprises *