The impact of state procurement interventions on the income of wheat producers in Russia
Abstract
Subject. Procurement interventions as a tool for ensuring the income of wheat producers in Russia.
Purpose. To determine the impact of procurement interventions on the income of wheat producers in Russia.
Methodology. In our study, we obtained an economic and mathematical regression model based on the official statistics. The model can be used to calculate the income of wheat producers obtained through state interventions. The model was based on several initial parameters, including the size of procurement interventions, average grain procurement costs, and market prices for grain.
Conclusions. Procurement interventions play a significant role in ensuring the income of wheat producers in Russia. The portion of income obtained through procurement interventions was about 9% of the comprehensive income of wheat producers, which compensated for up to 40% of the difference between the income in 2022 and 2021 caused by the unfavourable pricing situation. However, the potential of procurement interventions is almost exhausted today, because the government is not expected to extend the intervention fund. Therefore, it is necessary to solve the problem of limited internal and external demand for wheat, and to enhance the volume and quality of funding allocated to the storage and distribution of grain. Further research should focus on the development of tools for supporting the income of wheat producers that would completely substitute for procurement interventions.
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References
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