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The Choice of Technology in Russian Agriculture: An Application of the Induced Innovation Hypothesis

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  • Hockmann, Heinrich
  • Kopsidis, Michael

Abstract

Even after more then ten years after the beginning of the transition process, Russian agriculture shows only limited sign of a recovery. Production has not reached the level of the pre-transition period and investment is still on a very low level. In this paper we use the "Theory of Induced Innovation" in order to access the development of production structures in Russia and to identify the major obstacles for restructuring. We argue that due to multiple market failure (capital, labour) and inappropriate institutional arrangements inherited from Soviet times hinder the development of Russian agriculture. Both reasons causes that agricultural enterprises have difficulties with regard to an adjustment of factor input and production corresponding to the real scarcities of production factors. Agricultural policies based on subsidizing factor use or minimum prices will be an inefficient approach to solve the problems. A promising approach instead would be encouraging market transactions and fostering the integration of agricultural enterprises in the regional and domestic factor and product markets.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark with number 24652.

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Date of creation: 2005
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Handle: RePEc:ags:eaae05:24652

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Keywords: technical change; efficiency; Russia; agriculture; induced innovation theory; Agribusiness; Q11; Q16;

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  1. Michael Kopsidis, 2000. "Disintegration of Russian Grain Markets in Transition: Political and Economic Dimensions," Post-Communist Economies, Taylor & Francis Journals, vol. 12(1), pages 47-60.
  2. Ulrich Koester, 2005. "A revival of large farms in Eastern Europe-how important are institutions?," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 103-113, 01.
  3. Seeth, Harm Tho & Chachnov, Sergei & Surinov, Alexander & Von Braun, Joachim, 1998. "Russian poverty: Muddling through economic transition with garden plots," World Development, Elsevier, vol. 26(9), pages 1611-1624, September.
  4. Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1993. "Power, distortions, revolt, and reform in agricultural land relations," Policy Research Working Paper Series 1164, The World Bank.
  5. Hayami, Yujiro & Kawagoe, Toshihiko, 1989. "Farm mechanization, scale economies and polarization : The Japanese experience," Journal of Development Economics, Elsevier, vol. 31(2), pages 221-239, October.
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