Effective Import Substitution in the Agro-industrial Complex: Competition or Monopoly?

Abstract

The purpose of this article is to determine the preferential market structure in the agro-industrial complex for provision of higher effectiveness of its import substitution and to develop practical recommendations for formation and support for optimal structure of this market. The methodology is based on the method of comparative analysis, which is used for comparing competition and monopoly as the variants of the market structure of the Russian agro-industrial complex. The authors use the method of analysis of statistical information for studying the state of the Russian agro-industrial complex. The authors have developed the method of evaluating the effectiveness of import substitution, which is also used in this research. The article studies the key factors that restrain the development of the process of import substitution of the Russian agro-industrial complex in 2016 and proves that oligopoly provides a very high quality of products with acceptable prices, as the market is presented by large companies that are easy to control, including the price control. In addition to this, they possess large resources, which, with the right management, allows achieving their high innovative activity and sustainability. Due to this, the market structure of oligopoly is the most effective as to import substitutions in the agro-industrial complex. As a result, the authors recommend application of flexible and preferential tools for stimulating the development of the process of import substitution in the agro-industrial complex, which should be based on the agro-industrial special economic areas.