The role and structure of the agro-industrial complex in the national economy

Agriculture is a specific sphere of material production and a major industry which, alongside other industries, is part of the national economy. Industries, as a component of a country's economy, differ in their goals, tasks, place and significance, as well as the unique nature of the products produced and the means of production and objects of labor used for this purpose.

The agro-industrial complex (AIC) is a set of industries united by the common goal of delivering food products and goods made from agricultural raw materials to the end consumer. It consists of three spheres: ◊ industries that produce means of production for agriculture and supply it with machinery, equipment, feed, plant protection products and livestock animals, fertilizers, as well as industries engaged in the production and technical maintenance of agriculture; ◊ agriculture (crop production and livestock industries) as the central link of the AIC, as well as fisheries, forestry, and water management; ◊ industries engaged in the procurement, storage, and processing of agricultural raw materials and the sale of finished products.

Agriculture holds a special place in the AIC system, and its successful development depends on inter-industry ties within this system. The functions of various industries and services for producing the end product are carried out in the following sequence: ◊ production of industrial means (machinery, fertilizers, fuel, feed, etc.);

◊ sale of industrial means to agriculture and other industries of the AIC; ◊ production of agricultural products; ◊ sale of agricultural products for direct consumption and as raw materials for processing; ◊ production of consumer goods from agricultural raw materials; ◊ sale of consumer goods from agricultural raw materials.

All these stages are accompanied by agro-service — production-technological and other types of maintenance.

In the system of inter-industry ties, to ensure its production and economic activities, agriculture receives products and services from 80 industries and itself supplies products to 60 industries. Economic relations between enterprises of different industries are built primarily on a contractual basis.

Depending on the purpose of the final product, the AIC distinguishes between: ◊ the non-food goods complex (textiles, oils for technical purposes, a number of light industry goods, etc.); ◊ the food complex, consisting of a number of product sub-complexes (grain, potato, meat, sugar beet, fruit and vegetable, etc.). At the center of each product sub-complex is the corresponding industry (or group of industries) of agriculture — grain production, potato growing, cattle breeding, etc. In relation to agriculture as a whole, they are considered sub-industries or second-order industries.

The role and place of agriculture in the country's economy

The food complex is a set of agricultural and processing industries that supply the population with food, procure and transport food goods, and supply these industries with means of production. The special place of agriculture in the country's economy determines its complex-forming character for all product sub-complexes.

The degree of their development depends on agriculture and can be expressed by the extent to which the consumption norms for specific food products of domestic production are met. If the share of imports in food consumption is quite high, there is a threat to food independence and security.

Food security consists of the sustainable satisfaction of the country's population's needs at the level of scientifically based norms, which does not depend on changes in internal and external conditions and is guaranteed by resources. The degree of food security is characterized by the following indicators:

• the share of imports (in percent) in domestic food consumption;
• the level of self-sufficiency in major product groups;
• carry-over grain stocks in the country in relation to annual demand;
• caloric content of the country's population's diet;
• diet structure by major nutritional components;
• production and consumption of grain per capita.

Tables 1.1 and 1.2 present the production and consumption of individual types of food products per capita in Russia, as well as rational consumption norms.

T a b l e 1.1. Production of major food products per capita

Analysis of the country's population's diet

As follows from Table 1.2, rational consumption norms for fruits and berries, vegetables, and meat have not been reached, while the consumption of bread and grain products exceeds the recommended norm, which indicates an irrational diet. Based on the dynamics of the indicators, it can be concluded that the actual data for 1990 is closest to the normative ones for most products.

T a b l e 1.2. Consumption of specific food products in Russia (kg per capita)