Economic assessment and strategic potential of agro industries : the case of sugar industry

Abstract

Current economic activity in the beet sugar industry is below its highest point, and this encourages to search for and to shape specific development strategies. This article analyses the current state of Russian sugar markets, domestically and internationally. The investigation over the strategic potential of effective beet sugar sub-complex development has involved 78 large agricultural enterprises and 59 peasant farms of the Republic of Bashkortostan.

By total production output, sugar beet producers are classified into several groups. The first group, which is the highest, includes 10 backbone strategic enterprises, which can produce 897.9 thousand tons of sugar beet. The second group includes 19 enterprises and produces 442.5 thousand tons of sugar beet. The third group, not a priority group, includes 43 enterprises (333.3 thousand tons). A similar classificationt was done for peasant farms.

From the assessment encompassing the strategic potential of sugar beet industry certain scenarios have been considered such as: business-as-usual (72.2%), extensive growth (83.3%), intensive growth (100.0%) and hybrid growth (122.2%).

These scenarios were composed to forecast the production target achievements. Forecasts were made using a model of strategic development of beet sugar sub-complex of the Republic of Bashkortostan, for the period until 2020. The approach developed in this article is recommended to be used as a guideline in developing long-term regional programs for agriculture development. It can be also addressed to adjust some measures that are being taken under the launched programs.