Clusters and cooperatives as a tool of sustainable food security: a comparative analysis

Abstract

The present model of development of the Russian agriculture, characterized by domination of large agri-food companies, creates threats for sustainable development of small agricultural business (local and family farms). Potential disappearance of these small businesses from the market would undermine the sustainability of the Russian agriculture and the food security of Russian Federation. In order to survive in this unfavorable environment, small business should combine their resources, participate in agri-food value chains and get access to Russian and global food market. The goal of the present paper is to identify potential strategies of development of small agricultural business within different models of cooperation. The paper contains a detailed analysis of key features of clusters and cooperatives. It is demonstrated that clusters as flexible structures have a higher potential of resource accumulation thanks to absence of limitations for potential members. Clusters also ensure trans-border cooperation. All these features are absent in agricultural cooperatives. Due to these facts clusters should be preferred to cooperatives as a tool of strategic development of small agricultural business. However cooperatives can be used as an additional tool. Cooperatives can participate in clusters. These conclusions constitute the contribution of the present paper for practice. In addition to this recommendation for selection of strategies of small business development, the comparative analysis of clusters and cooperatives helped to identify the key distinctive features of clusters as institutional structures. Knowledge of these features may be useful for analysis of cluster development. This result is the theoretical contribution of the present paper.