State regulation of foreign economic activity in the agro-industrial complex of Russia

State regulation of foreign economic activity is carried out within the framework of foreign economic policy, which deals with issues of foreign trade, attracting foreign investment, capital outflow abroad, implementing foreign loans, establishing joint ventures, implementing joint economic projects, and is generally aimed at achieving the internal economic goal of effective growth and development of the country's economy.

Foreign trade in food products and agricultural raw materials is of particular importance for the socio-economic development of the country, since the standard of living of the population depends on their availability, both physical and economic. In addition, foreign trade in food products and agricultural raw materials is one of the most important factors in the state and development of the agro-industrial complex. In the 1980s, the share of imports of agro-industrial complex products increased significantly. At the same time, the import structure was dominated by the import of wheat grain, corn, barley, and most of it was used for forage purposes.

In the 1990s, due to the liberalization of foreign economic activity, significant structural changes occurred in foreign trade.

In the commodity structure of imports, food products and agricultural raw materials moved to second place after machinery, equipment, and transport vehicles. The share of processed products in imports increased sharply. Since the liberalization of foreign trade was not supplemented by effective measures of state regulation, crisis phenomena in agriculture and the agro-industrial complex as a whole intensified. Agriculture, for most goods, turned out to be unable to compete not only in the foreign market, but also in the domestic one. The situation began to improve slightly from 2000, and the devaluation of the ruble in 1998 played a certain role in this. There was a partial import substitution of food products and agricultural raw materials with domestic products, which revived production at agricultural enterprises. In addition, the regulation of the industry was activated and its state support was increased. In 2003, this was reflected in the decrees of the Government of the Russian Federation "On measures for the protection of Russian poultry farming", "On amendments to the Customs Tariff of the Russian Federation", "On regulation of imports of fresh and chilled beef", "On the abolition of licensing for the import of raw sugar into the Russian Federation", etc.

Exports and imports of main types of food and agricultural raw materials are shown in Table 18.1. Of particular importance in the system of state regulation are the stimulation and support of exports of domestic products, primarily grain and environmentally friendly food products.

The main directions of state support for exports can be named as follows: ◊ provision of state guarantees for loans attracted by exporters of agro-industrial products from credit organizations of the Russian Federation; ◊ subsidizing interest rates on loans attracted by exporters from federal budget funds; ◊ support for the organization of trade fairs and advertising campaigns to promote domestic goods and services; ◊ creation of a state insurance system for Russian exporters against political and long-term commercial risks;

◊ assistance in the development of export infrastructure to increase its capabilities; ◊ creation of favorable conditions for the access of Russian goods and services to the foreign market; ◊ support for the participation of Russian agricultural enterprises in the implementation of investment projects abroad and their participation in international projects; ◊ improvement of customs tariff and tax regulation of exports of domestic goods.

T a b l e 18.1. Export and import of main types of food and agricultural

Indicator 2004 2005 2006 2007 2008

3292.0 4492.0 5514.0 9090.0 9298.0 102.3 cultural raw materials, million USD Meat, thousand t 0.3 0.2 0.5 0.3 0.2 66.7 Milk, thousand t 46.3 51.6 47.7 45.8 49.0 107.0 Butter,

7.1 4.2 2.6 4.1 4.0 97.6 thousand t Sunflower oil,

230.6 385.8 752.0 678.5 532.5 78.5 thousand t Grain crops,

5863.6 12250.2 11151.6 16673.0 13593.0 81.5 thousand t Sugar, thousand t 122 135.6 169.3 302.2 53.8 17.8 Chemical fertilizer,

24903.5 25946.7 25946.7 27053.0 25441.0 94.0 thousand t Wool, thousand t 7.7 6.4 8.8 11.7 8.2 70.1

13854.0 17430.0 21640.0 27626.0 35173.0 127.3 cultural raw materials, million USD

Indicator 2004 2005 2006 2007 2008 to 2007,% Meat, thousand t 1030.8 1339.4 1411.3 1489.4 1710.9 114.9 Milk, thousand t 116.0 146.0 145.0 131.0 160.0 122.1 Butter,

148.1 132.8 165.0 129.4 140.1 108.3 thousand t Sunflower oil,

161.2 131.5 100.0 132.0 111.9 84.8 thousand t Grain crops,

2898.5 1449.0 1957.0 1066.6 959.0 89.9 thousand t Sugar, thousand t 2122.0 2893.0 2629.0 3709.4 2585.0 69.7 Chemical fertilizer,

133.4 155.3 100.9 79.5 79.2 99.6 thousand t Wool, thousand t 7.7 6.4 8.8 15.8 12.3 77.8

Methods of state regulation of foreign economic activity in the listed main areas, such as customs tariff regulation, non-tariff regulation, prohibitions and restrictions on foreign trade in services and intellectual property, administrative and economic measures, are used in accordance with international treaties of the Russian Federation, the legislation of the Russian Federation, in particular the Federal Law "On the Basics of State Regulation of Foreign Trade Activity".

Customs tariff regulation is carried out for the purposes of regulating foreign trade, including for the protection of the domestic market of the country and stimulating progressive changes in the economy, through the targeted application of import and export customs duties.

A customs duty is a mandatory payment levied by the customs authorities of the Russian Federation upon the import of goods into the territory of the Russian Federation or the export of goods from this territory. The customs duty is a mandatory condition for such import or export.

Customs and Tariff Mechanism: Rates, Taxes, and Cargo Valuation

State customs and tariff regulation determines the economic conditions for the import and export of agricultural products, protecting the domestic market from unfavorable foreign competition. Properly selected tariff instruments help shape a rational import structure, maintain a balance of foreign trade, and stimulate the development of domestic production. For participants in the agricultural market, this means the need to clearly navigate the procedures for calculating customs payments and the rules for determining the value of imported resources.

Customs duty rates and the commodity nomenclature are approved by the Government of the Russian Federation and depend on the country of origin of the goods. In practice, three types of rates are applied: as a percentage of the customs value, at a fixed amount per unit of goods, or as a combination thereof. For prompt market protection, seasonal duties are used, and imported products are additionally subject to VAT and excise taxes, where the tax base is the value or quantity of the goods.

• The maximum term for seasonal duties is no more than 6 months per year
• Duty calculation formula — customs value (RUB) × rate (%)

The determination of the customs value of goods is carried out according to international standards using one of the six legally established methods. These include valuation based on the transaction price of imported, identical, or homogeneous goods, the deductive and computed value methods, as well as the fallback method. The most common remains the transaction value method for imported goods, where the basis is the amount stated by the supplier in the invoice.

Non-Tariff Restrictions and Protective Measures in the Agricultural Market

Non-tariff regulation allows the state to promptly influence trade processes through quantitative restrictions, direct licensing, and temporary bans. Such measures are introduced by the Government of the Russian Federation to prevent a critical shortage of food in the domestic market or to regulate the import of agricultural products. The introduction of import restrictions is possible if it is necessary to reduce sales of domestic analogs, remove a temporary surplus of products from the market, or regulate the livestock sector, which depends on imported raw materials.

Quantitative restriction of supplies is carried out through quota mechanisms, where a maximum share of imports or exports in physical or value terms is established. The distribution of quota volumes among market participants takes place on a competitive or auction basis, or taking into account their previous trade volumes. In cases established by law, the implementation of foreign trade operations requires obtaining special permits — licenses.

To protect the economic interests of Russian agricultural producers from unfair imports, mechanisms regulated by Federal Law No. 165-FZ of December 8, 2003, "On Special Protective, Anti-dumping, and Countervailing Measures in the Import of Goods," are applied. Anti-dumping measures neutralize the import of goods at prices below their normal value using duties or exporter price undertakings. Countervailing measures, including the introduction of special duties, are used to offset the effect of subsidies provided by foreign states to producers of imported products.

3. What types of foreign economic activity are commonly distinguished? 4. Which stage is the main one in foreign economic activity? 5. Who is a participant in foreign economic activity? 6. Which enterprises are included in the group of exporter producers? 7. Which organizations are included in the group of intermediaries? 8. Which organizations are facilitating? 9. What entrepreneurship is considered joint? 10. What does an enterprise's choice of the type of foreign economic activity depend on? 11. What document serves as the legal basis for the implementation of foreign economic activity? 12. How is a joint venture created? 13. What are the conditions for the accession of new countries to the WTO? 14. What areas of activity does the state's foreign economic policy cover? 15. What goal does foreign economic policy pursue? 16. Why does foreign trade in food products and agricultural raw materials acquire special significance? 17. In which official documents is the activation of state regulation and support for agriculture reflected? 18. How do the export and import of the main types of food and agricultural raw materials of the Russian Federation relate? 19. What main methods are used to regulate the foreign trade activity of the Russian Federation? 20. What elements does the customs tariff include? 21. What taxes are levied on goods in foreign trade activity? 22. What methods of customs valuation are provided for in international practice? 23. What measures are classified as non-tariff state regulation of foreign trade? 24. What are quotas and quoting in foreign trade activity? 25. For what purposes is licensing introduced in foreign trade? 26. For what purposes is the method of special protective measures used

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2007. 2. Dobrynin V.A. Current Problems of Agro-Industrial Complex Economics. Moscow: MSAA Publishing House, 2001. 3. Ivashchenko N.P. Firm Economics. Moscow: INFRA-M, 2007. 4. Kovalenko N.Ya., Petraneva G.A., Romanov A.N. Real Estate Economics. Moscow: KolosS, 2007. 5. Kotler P., Keller K.L. Marketing Management. St. Petersburg: Piter, 2007. 6. Kotler P. Principles of Marketing. Moscow: Williams, 2007. 7. Organization, Standardization, and Remuneration of Labor at AIC Enterprises /

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