CONSIDERATION OF THE PRICE FLUCTUATIONS IN COMPANIES’ PLANNING AND PUBLIC CONTROL OF THE AGRICULTURAL PRODUCT MARKET

Abstract

The article is devoted to the formation of prices for certain agricultural products and its consideration in planning. The authors note that the food and food raw material market can be regarded as an ordinary commodity market, but with some specific features. One of these features is a significant time lag between the decision-making and economic result gained from it. The authors point out the price as one of the most important factors of risk and instability in agricultural markets. Its instability is regarded by business managers as one of the reasons for their refusal of serious strategic planning of their activities. The authors hypothesized that the price of the products can grow as the result of yield reduction, and, under the effect of unfavorable prices, companies may cut down their production for the next year. However, the analysis of the sample enterprise such dependency has not been confirmed, that is, its management plans operation based on the other factors. At the district level relationship manifested itself quite clearly, it shows that many companies really take into account the price factors in production planning. At the regional level the price fluctuations have been disproportionate to production fluctuations, even in cases where the direction of change was expectable. The authors made the general conclusion, that the activity planning based only on the price dynamics is risky. Prices also cannot be considered in strategic planning as weak signals, as they change in different directions and are unstable. The authors detected significant fluctuations of all the considered indicators at the both district and regional level. It was therefore concluded, that more active intervention of the government and regional authorities in the development of the food and agricultural market and the system of agricultural production is required.