Globalization and regulation of the food market
M.M. Mammedov candidate of economy science
Depth of globalization processes as noted above influences on formation and development of food market.
It is naturally, that at this period the rising of the competition stability of local commodity producers performs as the main term of the rising of specific weight of the local production in food market. From this point of view, under condition of the depth of globalization process the substantiation of the development of concept of food market assumes a vital importance. For a substantiation of the concept of the local food market development the definition of forms and methods of the state intervention in the food market has essential importance. And it, in turn, plays considerable roles in formation of market economy with a social bias and preservation of national food independence of the country.
It is important to note that the depth of the globalization processes are reflected in itself especially the limpidity of the trade of agricultural and food products at food market. Therefore, transition in the WTO demands reduction of the state support to agricultural commodity producers and elimination of any intervention of the state in the food market. From this point of view rational activity of the food market directly depends on formation of the mutual relation between local commodity producers and subjects of the food market. Researches show that at present in the food market mutual relations between subjects has spontaneous character. Moreover, this spontaneity first is closely connected with sharpness of character of an infrastructure of the food market and formation of relations in an agreement context between subjects of the food market and manufacturers. In addition, all of it in finally brings to creation of the spontaneous market, and these markets do not serve strategic interests of the country and preservation of food independence. In a reality, other dealers get the big profit from these markets. Consequently, we wish to offer, that in the food market preferred creation of special forms and methods of mutual cooperation of local commodity producers. For this purpose first cooperation creation between subjects of the market is necessary.
Formation of mutual cooperation between manufacturers reflects in itself creation of mutual relations between economic subjects in sphere of manufacture, processing, storage of production, transportation and realization. At this time individually enterprise organizations, family farm with the status of the physical person, usual joint-stock companies, cooperative societies and other economic subjects can act as subjects of the market.
Secondly, formation of the cooperation between the commodity producers and government bodies;
Thirdly, creation of the cooperation between regions;
Fourthly, it is possible a formation of the cooperation between countries. With this point of view for formation of the food market the creation of the cooperation between commodity producers is necessary.
Apparently, formation of mutual rational cooperation between commodity producers should serve increase of specific weight of local manufacture of the domestic food market and saturation of the local market at the expense of local food products. During this moment interest and benefit as economic categories, act as motive power in formation and development of the food market. Thus, for protection of interests of commodity producers, for integration of their interests and benefits and elimination of aspiration to monopolism it is necessary to place in the forefront importance of interests and benefits on the basis of market conditions in the competitive environment.
It is natural that if interests of commodity producers of the food market act as the main element of rational activity of the market, the solving of existing problems based on joint interests is very important. Thus, creation of cooperation of commodity producers at inevitable cases can play the important role for elimination of the problems, connected with sale, resources and the equipment, and economic problems, which commodity producers are faced.
Moreover, it in turn, can create favourable conditions for increase of special weight of local manufacture in the food market. In a reality, the initial form of co-operation between commodity producers can result to elimination of problems, which commodity producers often face. In the developed countries, those economic establishments are engaged in collective activity, which prefer co-operative, industrial type. Agricultural production cooperatives, consumer cooperative societies and other associations which act as economic subjects may be related to these types. Properties of these subjects belong them and they resolve all problems on the basis of voluntary association and first of all aspire to eliminate difficulties in sale sphere.
It is important to note that for present in our republic, particular during seasonal times the numerous problems connected with sale of production come to light. These problems, in turn, lead to loss of quality of made production, and it, consequently, negatively affect the increase of profit in agriculture. Besides it, during gathering of an agricultural crop for the various reasons there are losses, which make the negative impact on level of profits of agricultural commodity producers, on efficiency level, and on increase of level of a production volume. Thus, creation of integration relations between commodity producers in the form of co-operative associations can play the important role for stabilisation of eiiu?eoo?iuo processes in the food market.
For formation of rational mutual cooperation between commodity producers first of all is necessary creation of economic relations and activity of each commodity producer in system of the economic account. Cooperation between farms, finally, able to create favourable conditions for development of integration and cooperation relations in an agrarian-food complex. It is natural that all it plays very important role in stable development of the agrarian-food market in modern conditions. It is necessary to notice that support of rational mutual cooperation between commodity producers directly depends on strengthening of the state support for this sphere and realisation of conditions of legal settlement.
For widening of rational cooperation and cooperation processes in the food market is necessary to realise below listed actions:
– Increase of consumer ability of agricultural commodity producers and realisation of necessary macroeconomic stabilising actions for elimination price aenia?eoaoa;
– Realisation of necessary actions for development of the financial mechanism of an agrarian-food complex, information system and in whole of a market infrastructure;
– Creation of territorial association and associations of agricultural commodity producers in particular in regional aspects;
– Creation of the necessary normative-legal base connected with creation in regions of voluntary co-operative associations of agricultural subjects, and as co-operative societies for insurance and credits, co-operative societies for sales and auditor co-operative societies;
– Formation of the expedient economic environment for development of consumer co-operative societies in a countryside;
– Support with necessary information technology for increase of efficiency of agricultural commodity producers and development of services of information consultation.
Researches show that support of the stability in the agrarian market directly depends on formation of inter-regional cooperation and conformity to their market character. Development in an equivalent kind of an inter-regional exchange of agricultural raw materials and food products can play the important role in acceleration of economic development of regions, opening of new workplaces in regions and increase of level of incomes. Practice of the developed countries shows that for support of stability of the regional food market or the national food market development of inter-regional cooperation, and creation of holdings and financial institutions is preferred. And it can play the important role for elimination of economic problems against an inter-regional food exchange.
Actually based on practice we can tell that the food market is capable to eliminate created problems. From this point of view, development of cooperation between states and creation of the uniform markets in this sphere is widespread process. In particular, in practice of the countries of the European Union formation of cooperation between states operates in the form of the uniform agrarian market. In addition, it in turn, acts as means, which protects local commodity producers from the unfavourable phenomenon of external rivalry. And it is cause that these countries keep the food independence.
Realisation of the above-listed measure and support of mutual cooperation of agricultural subjects of the food market can play a considerable role for protection of interests of each region, stimulations of local commodity producers and increase of specific weight of local manufacture in the food market.
As it is known, market relations in a society actively operate on all branches of agricultural activity. Development of market relations in agrarian sphere creates favourable conditions for formation of multistructure economy in a countryside and also impact on development of the free competitive environment and formation of numerous commodity producers. Formation of the free competitive environment directly impulses on profitable activity of agricultural subjects. From this point of view, according to Cand.Econ.Sci. A.F.Abbasov, the market actually very insidious being.
This system is very ruthless in relation to weak, and characteristic properties is creation of a social prolayer. Market manufacture with assistance of a market mechanism eliminates economy with ability of irrational existence from the economic point of view and creates wide opportunities for activity of more rational industrial subjects. On a par with it the self-regulating mechanism of free market economy has the lacks. Formation of replaceable market system has been created on the basis of spontaneous activity of economic settlement. The market mechanism does not eliminate at once the disproportions created in economy. Balance restoration is carried out in the basic after the crisis or large disaster.
Besides it, absence of control of market lacks creates favourable conditions for monopolistically structures, and it realises positive functions of a free competition. The market mechanism does not provide stable employment of able-bodied population. And it in turn leads to social stratification of the population and as a result raises social intensity (1, p. 45). Thus, the mechanism of self-regulation of free market economy is not capable to resolve numerous fundamental problems. And from this point of view it is impossible to provide stable development without state intervention.
As it has been specified above, the self-regulating mechanism has negative influence on strategic interests and the economic sovereignty of the country because of inability of elimination of an economic crisis. Peculiar lacks of market relations most of all influences the food market. As, manufacture of agricultural products is the main network of the food market and consequently most of all is subjected to industrial risks. In particular climatic changes lead to destructive tendencies in agriculture. And it is cause of decrease in specific weight of local manufacture in the food market. And consequently, the agricultural commodity producer has no premature sufficient information on quantity of production which will bring to market.
By the I.Buzdalova, G.I.Shmejleva, S.Harina’s opinions settlement of the food market is the considerable factor which serves preservation of social stability of a society. Increase of special weight of local manufacture in the food market, first of all, is cause of settlement according to strategic interests of the country. The conducted researches show that already in the countries of east Europe this practice with sufficient success is applied. In Poland, Hungary, Czechia and Slovakia operate corresponding state structures, which will effectively neutralise unfavourable displays of an external competition in the agricultural food markets.
Practice of Hong Kong shows that in those states operate the state agency of the relative agricultural food market which analyzes a current state of the market of agricultural products, provides with the necessary information of subjects of the market and prepares offers concerning occurring changes. The similar body operates and in Hungary, and this organisation carries out the functions in the form of co-ordinating committee concerning settlement of the agrarian market. In Czechia and Slovakia operate the federal fund concerning the market settlement, which activity is directed on neutralisation of unfavourable displays of an external competition in the market of agricultural and food products and serves for stimulation of local manufacturers.
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Literature
1. Abbasov A.F. Social market economy. Baku, 1998, 320 p.
2. Petrikov V.A. Situation in agrarian sector and problems of food policy. Economist, 2001, N7.