And the Reaper, and the seller, as the chain stores can feed Russia

Talk about the dominance of the trading network of companies stuffed mouth. Publicly stigmatize retailers has become the norm, and calls to curb their appetites, or to constrain development. Meanwhile, worldwide networkers been transformed from an implacable enemy into a reliable partner manufacturers. How to achieve this in Russia?


photo: Natalia Muslinkina

Russian agriculture is once again deadlocked. After harvest last year, this year the agrarian sector in the best case will not mark the spot, and at worst show a negative trend. Want to make sure? Then get ready for the palisade statistics that shed light on the true situation in our agriculture.

So, according to preliminary data, the aggregate growth of agricultural production last year amounted to 4.8%. It would seem, is an excellent result. However, count on the fact that the village in its current organizational status will be the driver of economic growth, employment, empty: share of agricultural products in the total volume of last year’s GDP was only 6.5% (5.6 trillion to 86 trillion rubles). Which, incidentally, is in General in line with similar shares in other countries.

The figure is a 4.8% increase against the General decline in the economy is impressive. However, the “experience” will disappear when we analyze the structure of the increment. The increase took place almost entirely at the expense of crop production: last year the gross grain harvest increased by 13.7%, sunflower — by 15.2%, and sugar beet — as much as 23.8%. Some hotheads in the government predicting Russia’s world leadership in the export of grain, but what’s the point if its export will be duty free and the domestic market will remain without quality of wheat?

More of us, unfortunately, nothing to be proud of. At the end of December 2016 compared to the corresponding date in 2015 the number of cattle decreased by 1.6% (of cows was reduced by 1.9%), milk production has stagnated (a decrease of 0.2%), and, say, potatoes were harvested less by as much as 7.8 percent.

Against the background of inconsistencies of the agricultural real breakthrough looks increasing the production of tractors and combine harvesters: the release of the first increased by 16.1%, the second — almost half (46.1%). Growth in agricultural production continued in the first quarter of this year: in monetary terms, the increase was more than 39%. The secret to accelerated growth of agricultural production is simple: the government compensates the plants discounts for consumers. Without a doubt, this is the right step.

If the builders “holiday” in the first quarter of this year continued, the farmers started to “deflate”. A comparison of the starting blocks 2017 and 2016 shows that the volume of agricultural products in the first quarter of this year grew by only 0.7% (last year — by 3.6%), the number of cattle decreased by 1.4% (including cows — by 1.3%), behind the current year and the dynamics of milk production.

So get ready, reader, to another talk show on the theme “how do we reorganize the village” and not something, one never knows, the ruble weakened, and imports will once again become impregnable, besides import substitution in full force and effect and has not worked. And when that happens — remember that simple and tested in most developed countries a way to increase domestic agricultural production was proposed, and so it remained unclaimed.

This material is not in vain began with a mention of retailers. In the last twenty years, the Russian retail sector has become a powerful distribution structure, and today is not without excesses, of course (and who doesn’t?), — continuing to provide the nationwide sale of food. Meanwhile, the economic potential of the networks banal Commerce is not exhausted.

Overseas networkers have long been producing and selling products under their own brands, there was even a special term “own brand” (private label, or Private label). Manufacturing products under the brand STM as a rule, is conducted by the departments retailers or transferred to third parties that STM allows the owner to focus on marketing and sales. The main conditions of economic efficiency STM — availability of established distribution network, private customers and, of course, large-scale financial component.

Represent the share of STM in the turnover of European retailers in 2015. In Scandinavian countries this figure ranged from 29 to 32%, in the Central part of Western Europe, from 35% in France to 43% in Germany, and the leaders are great Britain (46%), Spain (50%) and Switzerland (52%).

For comparison: in Russia the share of STM in the total volume of network sales is 5 (five) percent. In other words, the productive capacity of commercial networks remains unclaimed. Amazingly, the government and the Ministry of agriculture in the development strategy of food security of the country, that is, missed this important method of increasing the production and processing of agricultural products, fascinated by the distribution of loans financing the purchase of fuel and distribution of agricultural machinery in leasing.

What are the expected benefits of the STM concept to the state and consumers?

First, the continued food insecurity of Russia in the presence of sad experience nepeivoda farming and the increasing monopolization of the agricultural sector by large producers to restart agriculture without trade networks is impossible. You can arbitrarily long time to adjust the trade Act, to open fair weekend, or arrange a trade with the trays, but when the producers eventually have nowhere to trade all of these iterations will about anything. And so it will be as long as Russia at least catch up with Europe, the population that provided stores about twice as good.

Second, due to heightened competition, minimize the number of mismatched “distributors” guaranteed to increase sales through own outlets, financing of production through internal sources will decrease or, at least, will not grow at the same rate, the retail food prices. Additional tax revenues will be silent because of the evidence of this plus.

Third, agricultural land returned to agricultural turnover and transferred (sold) to companies — partners of large networks, will finally be used for its intended purpose. The retail sector in cooperation with agricultural producers able to revive and sunk into Oblivion machine-tractor station as the industrial base of agricultural production, which will lead to an output growth of Russian agricultural machinery as well as highly effective Institute of consumer cooperatives, since a significant portion of agricultural products historically produced in personal subsidiary farms. Finally, the establishment processing of agricultural raw materials within the country will push process the food import substitution.

Fourth, the development of production under the “cap” of STM will clarify the overall purpose of the producers, as networkers better than other market participants know what consumers want. In turn skooperiruetes with networkers farmers will have strong incentive to increase production, because they will have guaranteed sales. The issue of preservation of own brands farmers — the question of negotiations: it is unlikely that a network company would want to kill the goose that lays not one, but two Golden eggs, one of which will go to retailers, and second — production workers.

Fifth — and, perhaps, most importantly, significantly improve the quality of food. Today, networks are without guilt for someone else’s fake, the transition to STM will eliminate this problem. If the retail will become not only a customer but also a co-investor in production of STM, for example with joint shares in the capital of the company, he will be entitled to tightly control production at all stages. The current random checks of Rospotrebnadzor and the “mosquito” fines for noncompliance with technology gives manufacturers tremendous opportunities for fraud in product quality. Another important aspect: organization of production of STM automatically classify the quality of manufactured products to business reputation networks. The intangible asset of the network, whose securities are traded on world markets, cherish as the Apple of his eye.

Of course, the easiest way to do selection of the breadfruit tree, the invention of the tablecloth-Samobranka or finding milk and honey. Easier then it is easier, Yes, but the results will be disappointing. To eat, as we know, always want.

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