Food Security and Import Substitution: Major Strategic Objectives of Contemporary Agricultural Policy

Abstract

Rural areas and the agricultural sector are currently experiencing a radically new social and economic situation which barely fits the existing national agricultural policy as a long-term instrument for stimulating the agri-food market and government’s support of the agrarian sector and, primarily, agriculture that underlies it.

In the age of globalization of national agri-food markets, food supply security based on import substitution can be ensured in a macro-economic environment that favors the development of a competitive agricultural industry. The main factor preventing the industry from developing is the unequal inter-industrial exchange biased against the rural economy. The article proposes the author’s simple tried and tested schema for evaluating how inter-industry pricing relationships and governmental financial support (in the form of subsidies) to agricultural organizations affect their margins. The evaluation leads to the following conclusions:

– Given its real contribution to the national economy, the agro-industry is self-sufficient for its own development, i.e. the state objectively has the potential to increase its expenses on the elimination of the negative consequences from an unequal inter-industry exchange;

– Federal expenditures on such state support must secure a margin for agricultural goods producers that enables stimuli for workers’ efficiency and an affordable credit system for the technical and technological upgrade of the facilities required for the production of competitive goods;

– The issues of competitive growth of agricultural products require solutions primarily on a federal scale.

An essential factor of competitive growth of individual types of national food and agricultural raw materials should involve science proven EEU agricultural treaties. The article discusses the major priorities in developing a common agricultural policy in the new integration institution.