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Financial constraints and output targets in Russian agricultural production

Author

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  • Carlos Arnade

    (MTED|ERS USDA, Washington DC, USA)

  • Munisamy Gopinath

    (Department of Agricultural and Resource Economics, Oregon State University, USA)

Abstract

Since the breakup of the Soviet Union, Russian agricultural production has experienced a significant decline. The rise in input prices relative to output prices and the lack of legal mechanisms to provide land as a collateral for loans suggest the existence of expenditure constraints. We test for expenditure constraints and prevalence of output-targeting as sources of inefficiency in addition to actual inefficiencies in 73 Russian farm regions (oblasts). Only six oblasts are overall efficient and the rest experienced profit losses from all three sources of inefficiency of up to 35.8 per cent. We find that 54 oblasts are subject to expenditure constraints, while output-targeting is still practised by 14 oblasts. Our results suggest that one-seventh of the overall inefficiency, and thus profit losses, is due to both financial constraints and output-targeting. Copyright © 2000 John Wiley & Sons, Ltd.

Suggested Citation

  • Carlos Arnade & Munisamy Gopinath, 2000. "Financial constraints and output targets in Russian agricultural production," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(1), pages 71-84.
    • Handle: RePEc:wly:jintdv:v:12:y:2000:i:1:p:71-84
    DOI: 10.1002/(SICI)1099-1328(200001)12:1<71::AID-JID614>3.0.CO;2-H
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    References listed on IDEAS

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    1. Mehdian, S. & Herr, Wm. McD. & Eberle, Phil & Grabowski, Richard, 1988. "Toward an Appraisal of the FMHA Farm Credit Program: A Case Study of the Efficiency of Borrowers in Southern Illinois," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 20(2), pages 93-100, December.
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    3. Gregory Paul R. & Mokhtari Manouchehr, 1993. "State Grain Purchases, Relative Prices, and the Soviet Grain Procurement Crisis," Explorations in Economic History, Elsevier, vol. 30(2), pages 182-194, April.
    4. Rolf Färe & Shawna Grosskopf & Hyunok Lee, 1990. "A Nonparametric Approach to Expenditure-Constrained Profit Maximization," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 574-581.
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    Cited by:

    1. J.Ph. Boussemart & K. Kerstens & S. Blancard & W. Briec, 2007. "Technology Adoption in French Agriculture and the role of Financial Constraints," Post-Print hal-00287979, HAL.
    2. Arnade, Carlos Anthony & Trueblood, Michael A., 2002. "Estimating A Profit Function In The Presence Of Inefficiency: An Application To Russian Agriculture," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(1), pages 1-20, July.
    3. Xiangming Fang & Rodney Smith, 2008. "Barriers to Efficiency and the Privatisation of Township-Village Enterprises," Journal of Development Studies, Taylor & Francis Journals, vol. 44(3), pages 409-424.
    4. Arnade, Carlos Anthony & Osborne, Stefan, 2001. "Measurement And Testing For Neutrality Of Foreign Price And Cpi Transmission In Russia," 2001 Annual meeting, August 5-8, Chicago, IL 20625, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Bezlepkina, Irina V. & Oude Lansink, Alfons G.J.M., 2003. "Liquidity And Productivity In Russian Agriculture: Farm-Data Evidence," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25824, International Association of Agricultural Economists.
    6. Bezlepkina, Irina V., 2002. "What is Behind the Fall in Russian Agricultural Production?," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24785, European Association of Agricultural Economists.
    7. Jin, Man & Zhao, Shunan & Kumbhakar, Subal C., 2019. "Financial constraints and firm productivity: Evidence from Chinese manufacturing," European Journal of Operational Research, Elsevier, vol. 275(3), pages 1139-1156.
    8. Bezlepkina Irina, 2003. "Production Performance in Russian Regions: Farm Level Analysis," EERC Working Paper Series 01-034e, EERC Research Network, Russia and CIS.
    9. Belyaeva, Maria & Hockmann, Heinrich, 2015. "Impact of regional diversity on production potential: an example of Russia," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 117(2), pages 1-8, August.
    10. Belyaeva, Maria & Hockmann, Heinrich, 2015. "Impact of regional diversity on production potential: An example of Russia," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 117(2), pages 72-79.
    11. Margarita Grazhdaninova & Gregory Brock, 2004. "Grain and sunflower on Russian farms in 2001: how efficient is crop production?," Post-Communist Economies, Taylor & Francis Journals, vol. 16(3), pages 297-305.

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