Features of Strategic Planning in Agricultural Production in Kazakhstan
2023 年 11 巻 p. 1-19
詳細
2023 年 11 巻 p. 1-19
The relevance of this study is due to the fact that for the effective functioning of the enterprise in the current conditions of a dynamic and rapidly changing business environment in the long term, the requirement to develop new approaches to planning the enterprise's activities is highlighted. The purpose of the article is to analyse and identify trends in the development of agriculture. Basic research methods: analysis, regression analysis, method of forecasting, valuation method. Using the example of the cotton subcomplex, the price structure of raw cotton in the agro-industrial complex system is considered with the use of a paired regression analysis of price-forming factors. Based on the analysis, the reflection of the specific features of the agricultural sector in strategic planning is systematised. The problems of systematisation of the specific features of strategic planning in agricultural production have been investigated, a flowchart of a methodology for assessing the vertical content correspondence of strategies of different levels and problem areas of strategic planning has been drawn up, and a targeted scale was compiled for assessing the coefficient of the possibility of self-sufficiency growth in strategic planning. The features of agro-industrial production have been identified, which significantly impact the strategic planning process. The authors concluded that in order to solve the problematic trends in agricultural development, it is necessary to modernize agricultural production and the strategic planning process for agricultural development, which will reflect its development in the long term. The findings of this study can be used by specialised professionals for further study of the specifics of strategic planning in agricultural production, creating and adjusting of state target programs for the development of the agriculture industry.
The most important aspect of the specifics of strategic planning in the agricultural sector is the special nature of market relations. As is known, the market cannot automatically develop a mechanism for the operational self-regulation of the process of reproduction of food products due to the low elasticity between the dynamics of consumer income, price, and demand for goods. The growth of incomes of the population, as well as the decline in prices, does not cause an adequate increase in the effective demand for food products, even if the entire population has not yet reached the nutritional level corresponding to all components of scientifically grounded medical standards [1]. It is also known that the market itself cannot promptly regulate the supply of food products due to the low elasticity between the price dynamics and the supply dynamics for this group of goods. The reason for this is the relatively long period of time required to increase the supply of food products, and their short shelf life [1].
As is known, the main mechanism of market self-regulation of reproduction is competition [2]. The agri-food market is a market of competition that is close to perfect: there are many sellers and buyers of food products. The first conclusion from the characteristics of competition from the standpoint of strategic planning is that for many agricultural enterprises located in the same natural and climatic zone and having a similar production direction, the external environment will be the same [3]. Thus, a contradiction arises between the similarity of the external environment and the need to find a unique strategy for each enterprise, which is indicated by the classical theory of strategic management [4]. In this regard, agricultural formations need help conducting a strategic analysis of the external environment and special methods for studying the internal environment [5].
According to Sisto et al. [6], advancing new development paths in rural areas requires a strategic planning process. This is characterized by several kinds of uncertainties. The presence of multiple decision-makers complicates the analysis and it is difficult to find a solution acceptable to different stakeholders [6]. The obvious industry specificity of market relations is complemented in the conditions of Kazakhstan by an entire set of other features that are important for strategic planning. Agribusiness enterprises are under serious pressure from the monopoly structures of spheres I and III of the agro-industrial complexes, which produce means of production for agriculture and process agricultural products, as well as carry out intermediary activities [7]. The extreme fragmentation of the supply of agricultural products in the absence of marketing infrastructure, developed marketing cooperation, and associations of producers determine low prices for it [7].
For the Kazakhstani agricultural markets, two more circumstances are characteristics that reduce the supply price. First, it is the supply of cheap products by private households of the population with the use of labor-intensive technologies, exempt from high taxes, and also receiving part of the means of production on a preferential basis at the expense of the state. Secondly, there is a considerable number of small and medium-sized insolvent formations that are ready to sell products at reduced prices in order to pay off their debts. As a result, the share of rural producers in the retail price of the final products of the agro-industrial complex is 15–30% versus approximately 60% in the pre-reform period [8]. In these conditions, competition in Kazakhstan is not an effective mechanism for managing the agri-food market and forces farms to focus primarily on the cost-saving strategy.
Marketing strategy for agricultural formations is also fundamentally different from the classical model developed for industry and services [9]. For example, if the most important element of a marketing strategy for an industrial enterprise is the development of a new product, then in agriculture, marketing efforts are mainly concentrated in the field of promoting the sale of traditional products, to which the theory of the life cycle in its classical sense is not applicable [10].
The serious problems that agricultural production is constantly faced with, as well as its specific features, increase the lag of agricultural enterprises in the field of application of modern management tools. Strategic planning has not yet entered the practice of most agribusiness entities [11]. However, without the development of a scientifically grounded strategy for the development of the industry at all levels of management, it is impossible to overcome the crisis phenomena and lay the foundation for the advanced development of the agricultural sector of the economy [12]. Therefore, the problem of mastering the methods and tools of strategic planning, which allows, along with the general laws, to fully consider the specifics of Kazakhstan’s agricultural production, giving the strategic process in the industry a systemic nature is currently becoming increasingly important [7]. The relevance of this topic is confirmed by the present situation, which has already been mentioned above.
The process of developing an effective strategic activity of an agricultural enterprise is a multifaceted and complex task that requires consideration of the main theoretical approaches to defining the concept of “development strategy of an agricultural enterprise”. The purpose of the article is to analyse and identify trends in strategic planning in agricultural production in Kazakhstan. Thus, the main tasks for strategic planning in agricultural enterprises include:
In the context of global crisis phenomena and dynamic shifts in the world economy, the issue of effective and sustainable operation of an enterprise takes an important place. For the effective functioning of the enterprise in the current conditions of a dynamic and rapidly changing business environment in the long term, the requirement to develop new approaches to planning the enterprise’s activities is highlighted [6]. At present, in the world practice, effective strategic planning and forecasting is such a tool for ensuring efficiency and competitiveness. The establishment of strategic planning at agricultural enterprises faces several methodological difficulties, one of which is the choice of an effective enterprise development strategy. The process of developing an effective strategic activity of an agricultural enterprise is a multifaceted and complex task that requires consideration of the main theoretical approaches to defining the concept of the “development strategy of an agricultural enterprise” [5].
The generalisation of opinions of foreign and Kazakhstani scientists on the definition of the concept of “strategy” is based on various approaches to the activities of the enterprise. Thus, I. Ansoff [3] considers the analysis of the main opinions of scientists on the concept and types of basic strategies as a set of decision-making rules by which the organisation is guided in its activities. According to Porter [4], it represents the creation – through a variety of actions – of a unique and valuable position. Salloum et al. [10] define strategy as a management plan for a firm aimed at strengthening its position, meeting needs, and achieving goals. Kornelius et al. [11] – the company’s strategy is a systematic approach to solving the problems of its development and functioning, which ensures the balance of the company’s activities. According to Lazhentsev and Ivanov [13], a strategy is a long-term, qualitatively defined direction of an organisation’s development, concerning the sphere, means, and forms of its activity, the system of relationships within the organisation, as well as the position of the organisation in the environment, leading the organisation towards its goals, Zub [14] believes that a strategy is a generalising model of actions necessary to achieve the set long-term goals by coordinating and allocating company resources.
Knott and Thnarudee [15] define strategy as a combination of planned actions and quick decisions to adapt a firm to a new situation, to new opportunities for gaining competitive advantages, and to new threats to weaken its competitive position. Buravlev et al. [9] believe that strategy is the direction and method of action by the company’s management to achieve the set goals, Bryson et al. [16], the strategy is the general direction of the firm’s activity, which should lead to the set goal. Glumakov et al. [2] define strategy as a model of interaction of all resources that allows an organisation to fulfil its mission in the best way and achieve sustainable competitive advantages. Ojha et al. [12] note that the strategy of an enterprise is long-term, the most fundamental, important attitudes, plans, intentions of enterprise management regarding production, income and expenses, investment, prices, social protection.
Also, Kazakh scientists-economists give a definition of the essence of strategic planning. Thus, Satybaldin [8] notes that the priorities for the implementation of the strategy are to ensure the economic growth of the regional economy, to level the conditions for the socio-economic development of the regions based on structural and technological modernisation of the economy and the social sphere; Koshanov [17] defines a strategy as a model of activity designed for a long-term period, which involves movement towards the achievement of specific goals. As he believes, effective work in any area is impossible without it. Sabden [1] defines the strategy by the scenario of our actions, in which we assume their greatest success or the least loss.
Analysis of basic strategies suggests that there are terminological differences in the definition of strategy and different approaches to the signs of classification of strategies, but one should agree with J. Middleton, who notes that “the definition of a strategy is always associated with the choice of direction for the development of the organisation's activities and the route of this movement” [18]. All the variety of definitions of strategies can be reduced to three groups [19]:
Thus, the first group includes the approaches to determining the strategy of Yeniaras and Kaya [20] who note that the strategy is a detailed comprehensive plan assigned to ensure the implementation of the organisation’s mission and achieve its goals. An example of the second group is the definition of the strategy by Chandler [21], as “defining long-term goals and objectives of the enterprise, adjusting activities in this regard and attracting the resources necessary to achieve the set goals”. By this definition, a strategy is a means of coordinating goals and resources, which is most consistent with the concept of strategic management. The Lazhentsev and Ivanov strategy [13] most accurately describes the representatives of the third group. This study, in turn, will interpret the strategy as a set of rules, methods, and development mechanisms necessary for the effective operation of an enterprise, in conditions of limited resources and a dynamically changing external and internal environment.
Considering the concept of enterprise development, Maslennikova [22] points out that, without functioning, an enterprise cannot deal with development issues, and without developing, it will be incapable of functioning, therefore, it is the development that serves as a means of preserving the enterprise. In this case, the main properties of development are irreversible, directed, natural changes in the system based on the implementation of internal mechanisms of self-organisation [23]. Gökçeka and Karakayab [24] define the development of an enterprise as a qualitative and directed change in the structure and nature of the enterprise’s business processes, in which more efficient functioning is achieved. Zapletalová [25], considering development at the enterprise level, interprets it as “a set of changes that lead to the emergence of a new quality and strengthening of the system, its ability to resist the destructive forces of the external environment”. It is also worth noting the definition of “enterprise development” by Villanueva et al. [26], who consider it as a system of planned internal organisational measures aimed at optimising the functioning of the organisation in relation to the existing and expected states of its environment.
All the variety of approaches to the definition of “development of an agricultural enterprise” is primarily conditioned by the variety of methodological approaches to the choice of tools for calculating the efficiency indicator. The general methodology for calculating the efficiency indicator is the ratio of the result (effect) to the costs (resources) that ensured its receipt [27]. According to Eiselen and Pidoux [28], optimal development can occur only under conditions when an absolute increase in the effect is accompanied by an absolute decrease in resource costs, that is, an increase in the level of effect is simultaneously accompanied by a decrease in the level of costs for resources, it is precisely these dynamics of development that corresponds to the term “sustainable socio-economic development”.
Analysing the above definitions of the concepts of “strategy” and “enterprise development”, one can trace a close relationship between these categories. In particular, as noted by Bolatan et al. [29] enterprise development strategy is an iterative process of developing a system of goals and directions of enterprise development distributed in time, taking into account the trends of changes in market conditions and the competitive environment and resources available and possible to attract. Vanhuyse et al. [30] identify the strategy of the enterprise with the strategy of its development, distinguishing three unequal groups: growth strategies; stability strategies; reduction strategies.
The same idea is adhered to by Toguzayev [31], who also identifies the development strategy of the enterprise with the strategy of the enterprise. Kamariotou and Kitsios [32] argue that the establishment of an enterprise development strategy allows for determining the direction of the enterprise’s behaviour in the market, considering the conditions of the external environment; assessing the competitiveness and strategically competitive advantages of the enterprise; formulating the global goal of its activities; identify the resources that need to be attracted to achieve the goals and ensure their most effective use.
A review of foreign literary sources indicates that the issues of strategic planning in farms are given close attention by scientists. David’s work proves that approaches from the standpoint of strategic management are quite acceptable for agriculture [33]. They help structure the complexity of farmers’ decision-making. According to Benson [34], strategic planning allows agricultural businesses to be more proactive than reactive in shaping their future in the face of increasing complexity and uncertainty. A group of Dutch scientists [35], based on the data of the analysis, indicate that learning from one’s own mistakes can be effective, but learning from mistakes in the absence of a strategy can be too expensive. This is confirmed by the studies of Harling [36], according to which farmers who use the concept of strategic management are more successful than those who do not apply it in their activities.
However, considering various aspects of developing a strategy and its implementation, scientists are primarily guided by the fact that a farmer in Europe and the United States is simultaneously an owner, manager, and worker. Onderstein [37, 38] points out that, based on his unique position, the farmer influences both strategic planning (as an entrepreneur or manager), and on the implementation of the selected plan (as a manager or employee), and, as a result, on the results of work (as an employee). Thus, in farms, as a rule, there are no conflicts in the socio-psychological sphere. For small farms, which are mainly households that form the basis of Kazakhstan’s agricultural production, this problem can have serious consequences both in strategic planning and in the implementation of plans, which is discussed in detail in the works of representatives of descriptive schools of strategic planning. Thus, methodological approaches to the strategy for the development of farming enterprises and small households of the population will have several differences related to the size, structure of production, socio-psychological factors, etc. [7].
In Kazakhstan, the farms of the rural population, despite producing the bulk of food and agricultural products, however, are still not legally regulated as “personal subsidiary plots”. In 2005, the Resolution of the Government of the Republic of Kazakhstan of December 31, No. 1331 On the draft Law of the Republic of Kazakhstan “On personal subsidiary plots” [39] was adopted, but the draft Law was withdrawn from the Mazhilis of the Parliament of the Republic of Kazakhstan by the Resolution of the Government of the Republic of Kazakhstan N 964 dated 23.06.2009. Therefore, the main problems of strategic planning of the population economy have not been developed either.
A literature review was carried out using the method of analysis, synthesis, systematization, and generalization of scientific literature on the research problem. The theory and methodology of strategic planning constitute the basis for conducting research in the intended direction. However, the lack of a systematic approach to organising the strategic process at various levels of agricultural production management, insufficient elaboration of methods for substantiating the development strategy of agribusiness enterprises necessitate the improvement of existing and development of new approaches in this area. Using the method of analysis, the specifics of agricultural production were studied. From the standpoint of a problem-oriented approach, the systematization of the features of strategic planning in agricultural production has been carried out. The method of forecasting market conditions predetermines the quality of subsequent strategic planning. The authors carried out a paired regression analysis of pricing factors.
In this study, a methodology has been developed that makes it possible to form a comparative competitive profile of the economy and, in accordance with it, reasonably approach the choice of strategy from a set of acceptable benchmarks. In the first stage, the definition and systematization of the evaluation blocks of indicators characterizing the positions of the compared enterprises are carried out. In the second stage, an interval scale was developed for each indicator, quantitatively characterizing the level of its development (low, medium, high) for the subsequent assignment of the farm to one of these levels. In the third stage, the set of reference strategies that are relevant to this group of districts is refined and the matrix for choosing the basic strategy is formed. Approbation of this technique was carried out on the materials of the Turkestan region and made it possible to propose an appropriate final matrix for them. In the fourth stage, the competitive profile of each agricultural enterprise is built by establishing its position on the scale of each indicator and determining the average position for evaluation blocks characterized by several indicators.
Strategic planning as a separate type of management activity imposes a number of requirements, and assumes the presence of five elements: the ability to simulate a situation; the ability to identify the need for changes in the enterprise; the ability to develop a strategy for change; the ability to use reliable methods in the course of change; the ability to implement a strategy. The strategic planning system comprises three main and four auxiliary subsystems. The main subsystems include decision-making, change management, and strategic control subsystems [15]. The auxiliary ones include information and analytical, organisational and personnel, methodological subsystems, and a subsystem for strategic planning management [15]. It includes strategic forecasts and development scenarios; strategic plans; tactical plans; operational plans. Based on the foregoing, strategic planning as a logical, analytical process for determining the future position of agricultural formations, depending on the weather and external conditions of activity, was developed in agricultural science, which sought to change at the present stage the process of slowing growth and obsolescence of equipment and technologies.
Unlike other sectors of the economy, strategic planning in agriculture is a much more complex process that affects the organisation of production in agriculture, which work directly with living organisms [33]. At the same time, practice shows that at irregularly operating agricultural enterprises, the organisation of planning, as a rule, is at a low level. Consequently, significant reserves associated with economic efficiency should be sought at the level of agricultural enterprises. To implement them, each agricultural enterprise must have a clear strategic planning system [34]. The diversification of the marketing strategy and the reduction of operating costs are key factors in the success of the strategy. The success of the environmentally oriented business strategy is demonstrated by the example of rice cultivation through the application of a multi-methodological design approach [40]. Thus, the process of strategic planning is a tool to justify management decisions in the field of economic activity. Its most important task is to provide innovations and organisational changes necessary for the life of agrarian formations.
The analysis of the specifics of agricultural production indicates that each feature is associated with a number of productions, management, and socio-psychological issues [7, 35, 36, 37, 38]. The possibility of systematising the considered, as well as some other important sectoral features for the development of an appropriate theoretical and methodological framework for strategic planning in the agricultural sector of the economy can give a problem-oriented approach, the results of which are presented in Table 1.
| Features of agricultural production | Issue | Reflection in strategic planning |
|---|---|---|
| Influence of natural factors, increased production risk | Less tight links between costs and results | Increased flexibility of the strategic plan, link to zonal farming systems |
| The extended production cycle, immobility of land and labour resources | The slower reaction rate to any changes in the external and internal environment | Compensating for the lack of economic mobility with a strategy of increasing economic mass |
| Specific patterns of optimal combination of industries | Limited opportunities for concentration and diversification | A specific set of strategic alternatives |
| The presence of producers of different forms of ownership, management, the scale of activity | Differences in production, economic, organisational, and socio-psychological conditions of their functioning | Differentiation of approaches to strategic planning for manufacturers of various types, considering the relationship between various sectors |
| Serial communication of production structures in the agro-industrial complex system | The dependence of each subsequent element of agro-industrial production on the previous | The need to agree on a number of strategic decisions with partners in the product chain |
| The presence of numerous imbalances and their aggravation over the years of reforms | Insufficient investment attractiveness, the need for state support at the state and regional levels | Establishment of a strategic planning system for agro-industrial production as a cluster multi-level phenomenon |
| The lower level of development of productive forces, and their degradation during the years of reforms | The need for rapid recovery and resource capacity building | Priority of the strategy for the development of the material and technical base |
| The relative similarity of the external environment for enterprises of one natural-economic zone | Difficulties in finding unique strategic differences | Special requirements for the analysis of the internal environment of the enterprise, assistance in the analysis of the external environment |
| Specific market relations | High competition, limited opportunities to influence demand, etc. | Prioritising strategy cost advantages, reducing the role of marketing strategy |
| High level of social responsibility towards the local population | Insufficiency of focusing only on economic development indicators | Development of a separate functional strategy for social development, widespread use of social indicators |
| Special social and psychological way of life of the rural population | High threshold of distrust and insufficient readiness to accept new things | The help of consultants, clarification of the prospects of a strategic approach, information, motivation |
The strategy for the development of agricultural production should have a vertical structure and include, first of all, the development strategy of the agro-industrial complex of Kazakhstan, in accordance with which regional strategies should be developed [7]. These, in turn, should guide the development of optimal rural strategies and strategies for each agricultural producer. This approach presupposes a meaningful hierarchical correspondence of strategic documents of various levels, for measuring which this study proposes a methodology for assessing the vertical compliance of strategies based on a combination of content analysis and expert opinions (Figure 1).
Figure 1: Flowchart of the methodology for assessing the vertical meaningful correspondence of strategies of various levels
The issue of the types of strategies and approaches to their choice has always belonged to the category of discussion in the theory of strategic planning. The analysis of various classifications of strategies suggests that the proposed types of strategies in most cases are not tied to a specific planning object and do not provide for an assessment of the impact on the strategy of an enterprise of parameters that form an industry specific. The study has differentiated the categories of “reference” and “basic” strategies, the last of which determines the general direction of development of the production and marketing activities of the enterprise and is also concretised as the strategy “resources/opportunities” [18]. Within the framework of the basic strategy, several components are developed: the main elements of the general direction of development are specified; strategic areas of activity are determined, how resources will be allocated, and by what methods the set goals will be achieved [18]. Further studies of the conditions for the application of universal strategies in the agricultural sector should be carried out with consideration of the specific features of the Kazakhstani agro-industrial complex based on a strategic analysis of its state and development trends, and identification of specific problems. Achievement of the system of goals in the development of agricultural sustainability should be based on the sequential performance of a number of operations, allowing both to study individual areas of sustainable development based on the assessment of indicators, and to compare options for sustainable development [8]. To achieve sustainable agricultural development based on the implementation of the system of goals, strategies can be used that complement each other, for example, the use of adaptive strategy management.
In relation to strategic planning of agricultural production, forecasting procedures are as follows (Table 2). The diagram clearly illustrates that the presence of a reliable forecast of the market situation predetermines the quality of subsequent strategic planning.
| Problem category | Description of the problem | Improvement direction |
|---|---|---|
| Theoretical and methodological | Replacing strategic planning with long-term | Development of tools and provision of conditions for anticipating changes in the external environment |
| Confusion of the concepts of “plan” and “forecast” | Development and implementation of forecasting techniques at all stages of strategic management | |
| Organisational | Lack of administrative procedures and distribution of responsibility for developing strategies | Development of regulatory support for strategic planning processes at the sectoral and organisational levels |
| Poor provision of experienced and competent specialists in economic services | Implementation of training programmes, creation of specialised units and services | |
| Methodological | Lack of adaptation of classical methods of strategic planning and forecasting to the specific features of agricultural industries and markets | Development of a methodology for analysis and forecasting of multifactor risks |
| Planning production volumes without planning its financial results, lack of an assessment of the economic efficiency of strategic alternatives | Development and implementation of methods for integrating production and financial aspects of the strategy | |
| Psychological | The disbelief of leaders in the need and ability to develop an effective long-term strategy | Training for managers, broadcasting positive experiences in implementing strategies |
The analysis of the current situation in the agro-industrial complex of Kazakhstan demonstrated not only the presence of complex problems of the functioning of the agro-industrial complex, but also allowed to establish the presence of factors and prerequisites for the exit of agro-industrial production from the crisis, stabilisation, and economic growth [41, 42, 43, 44]. Among the stages of strategic planning for the exit of agro-industrial production from the crisis, which is sufficiently covered in the literature, one of the most difficult is the stage of choosing a basic development strategy. To solve this problem, it is advisable to use the methodology developed in this study, which allows to develop a comparative competitive profile of the economy and, in accordance with it, to reasonably approach the choice of a strategy from a set of acceptable benchmarks. The technique includes the following steps. At the first stage, the determination and systematisation of indicators describing the positions of the compared enterprises are carried out according to the evaluation blocks. Based on a preliminary analysis, out of numerous indicators of the competitiveness of production, 5 main criteria indicators were selected, which together describe the economic and production potential, diversification, and efficiency of production, as well as the market positions of the regions of Kazakhstan.
Briefly describing the selected criterion indicators as the definition of basic competitive strategies, they can be summarised as follows:
The advantages of the proposed methodology include the fact that the set of indicators by which the competitive position is determined can be changed and supplemented considering the features and priorities that are relevant in a particular link in the sectoral strategic planning system. At the second stage, for each indicator, an interval scale was developed that quantitatively describes the level of its development (low, medium, high) for the subsequent assignment of the economy to one of these levels. At the third stage, the set of reference strategies relevant for this group of regions is refined and a matrix for choosing a basic strategy is developed. The testing of the methodology carried out using the materials of the Turkestan region allowed to propose an appropriate final matrix for them (Table 3).
| Components of a competitive position | Assessment | Designation | Recommended reference strategies | ||||
|---|---|---|---|---|---|---|---|
| Reducing costs | Intense growth | Diversified growth | Patent (niche) | Anti-crisis | |||
| Economic potential | low | E1 | E1, E2 | E2, E3 | E1, E2, E3 | E3 | E1 |
| average | E2 | ||||||
| high | E3 | ||||||
| Production potential | low | P1 | P1, P2, P3 | P2, P3 | P2, P3 | P2, P3 | P1, P2, P3 |
| average | P2 | ||||||
| high | P3 | ||||||
| Production efficiency | low | Ef1 | Ef1, Ef2 | Ef2, Ef3 | Ef1, Ef2, Ef3 | Ef3 | Ef1 |
| average | Ef2 | ||||||
| high | Ef3 | ||||||
| Diversification of production | highly specialised | D1 | D1, D2, D3 | D1, D2 | D1, D2 | D1, D2, D3 | D1, D2, D3 |
| specialized | D2 | ||||||
| diversified | D3 | ||||||
| Market position | weak | M1 | M1, M2 | M1 | M1, M2 | M2, M3 | M1 |
| average | M2 | ||||||
| strong | M3 | ||||||
At the fourth stage, the competitive profile of each agricultural enterprise is built by establishing its position on the scale of each indicator and determining the average position according to the evaluation blocks described by several indicators. In accordance with the competitive profile, the most relevant basic strategies are selected for the farm. The task of the region’s self-sufficiency in agricultural products is one of the key tasks in elaborating a strategy for the development of the region’s agricultural sector. Therefore, a methodology for assessing the strategic positions of the region in increasing self-sufficiency in agricultural products is proposed. It is necessary to assess the strategic positions of the region based on the coefficient of the possibility of growth in self-sufficiency, which is the product of the coefficients of self-sufficiency and concentration. Calculation of the coefficient of the possibility of growth of self-sufficiency will allow to determine the strategic positions of the development of agriculture in the region. Based on the calculations performed according to the coefficient of the possibility of self-sufficiency growth, a scale for assessing the strategic positions of the development of agriculture in the region was proposed (Table 4).
| Cpsg value | Market concentration level (Cc) | Self-sufficiency level (Css) | Possibility ratio | Strategic position |
|---|---|---|---|---|
| Cpsg≥0.45 | the degree of concentration is high, the competitive environment is poorly developed, meat and dairy livestock or crop development of agriculture | a high level of self-sufficiency in food products, fully self-sufficient in agricultural products, there is a possibility of exporting agricultural products | Cpos→Cs→ | Position “Leader in Production” |
| Cpos↑ Cs↓ | Position “Growth Strategy” | |||
| Cpos↓ Cs↑ | Position “Strategy for Strengthening Competitive Positions” | |||
| 0.45< Cpsg≥0.35 | the degree of market concentration and the development of a competitive environment medium, meat, partial dairy livestock or weak crop bias of agricultural development | self-sufficiency for a number of basic food products (bread, potatoes, eggs), provision of agricultural products at the expense of households | Cpos→Cs→ | Position “Leader in Production” |
| Cpos↑ Cs↓ | Position “Proceed with Caution” | |||
| Cpos↓ Cs↑ | Position “Partial Dismantlement Strategy” | |||
| 0.35< Cpsg≥0.012 | The high degree of competition, limited agricultural production | there is a need to import basic food products from other regions, low self-sufficiency, or does not provide itself with agricultural products | Cpos→Cs→ | Position “Proceed with Caution” |
| Cpos↑ Cs↓ | Position “Partial Dismantlement Strategy” | |||
| Cpos↓ Cs↑ | Position “Dismantlement Strategy” |
Each of the presented strategic positions suggests possible development strategies for the region's industry. The position of “Leader in production” (PLiP) assumes the following strategies: a growth strategy in certain areas of economic activity, a strategy for optimising costs for quality, and a strategy for minimising costs. Position “Growth strategy” (PGS): growth strategy in certain areas of economic activity, strategy to minimise costs. Position “Strategy for Strengthening Competitive Positions” (PSfSCP): strategy of cooperation in various forms and directions, the strategy of intensification. Position “Proceed with Caution” (PPwC): cost minimisation strategy. Position “Strategy of partial dismantlement” (PSPD): strategy (dismantlement) of reduction (PSD).
Proceeding from the current macroeconomic situation, which directly affects the indicators and prospects for the development of agriculture, then the forecast could be presented in the form of two stages. The first stage is limited growth in the short term (until 2021) amid declining government support for the industry. The second stage is the transition (mainly from 2022) to accelerated development, if appropriate favourable socio-economic conditions and opportunities for exporting products are created for this. This, in turn, leads to the abandonment of significant rural areas, the cessation of economic activity on them, increases migration flows from the village to the city, in general, reduces the potential for using natural resources for the development of the country’s economy.
Minimisation of the consequences of the manifestation of these risks should become one of the basic tasks of state target programs for the development of the industry, which will be developed as part of the implementation of this strategy for the forecast period. To date, such government programmes did not fully consider the risks and threats, which led to significant disparities, a decrease in the efficiency of allocated resources, and the need to adjust programmes. Therewith, it is advisable to distinguish, on the one hand, the potential opportunities for increasing the production of agricultural products, which will be determined by the development and mastering of new and “overtaking technologies”, improving the quality of labour and other components of the development of the industry in the context of improving the macroeconomic situation; on the other hand, the ability of the state to promote the renewal of the industry in conditions of limited financial resources, the pace of institutional transformation and social development of rural areas. To identify a set of factors affecting the price environment of the raw cotton market, an econometric study was carried out to identify the most significant price-forming factors. In the course of the study, the dependence of the prices for raw cotton on the prices of competing goods (grain and other oilseeds – soybeans, safflower), yield, acreage, gross harvest in the previous season, world prices, as well as a number of macroeconomic factors (Table 5).
| Final statistics | 2006–2010 | 2011–2015 | 2016–2019 |
|---|---|---|---|
| The relationship between last year's prices for raw cotton and the future sown area for crops | |||
| Determination coefficient R2 | 0.2 | 0.34 | 0.78 |
| Elasticity | 0.37 | 0.40 | 0.61 |
| Dependence between Kazakhstani and world prices | |||
| Determination coefficient R2 | 0.78 | 0.77 | 0.80 |
| Elasticity | 2.63 | 0.67 | 1.53 |
| Relationship between the price of raw cotton and the price of competing crops (cereals) | |||
| Determination coefficient R2 | 0.80 | 0.81 | 0.90 |
| Elasticity | 0.98 | 1.06 | 1.04 |
| The relationship between yield and the price of raw cotton | |||
| Determination coefficient R2 | 0.32 | 0.17 | 0.27 |
| Elasticity | 1.3 | 0.67 | 1.3 |
| The relationship between the price of raw cotton and the dollar exchange rate | |||
| Determination coefficient R2 | 0.30 | 0.72 | 0.53 |
| Elasticity | 2.1 | 0.99 | 1.6 |
Analysis of Table 5 demonstrates:
Thus, in a situation of macroeconomic instability and globalisation of markets, the results of sectoral development are predetermined by macroeconomic factors and prove the disappointing fact that the Kazakhstani raw cotton market as one of the key agricultural markets is a derivative of the dynamics of foreign exchange markets, which means it is described by increased risks.
Nowadays, the cotton market is undergoing many changes. Analysts also draw attention to the speculative nature of the current decline in cotton prices, in which sharp fluctuations are possible both in one direction and in the other direction [45]. In general, experts on the global cotton market continue to note that world prices will rise and that an excess of demand over supply and an increase in the cost of growing cotton will strongly affect the increase in world prices. All this resulted in dramatic changes in the structure of supply and demand, as well as changes in all commodity and stock markets. Since all pricing factors act in a complex, enhancing or neutralising each other’s actions, predicting the resulting price dynamics requires multiple regression estimates. To check the quality of all possible models of price formation in the study, various models were built, including those with excluded factors. The results of comparing the quality of the models are presented in Table 6.
| Model type | Factors | Determination coefficient | Model quality |
|---|---|---|---|
| y=2.05x1+189.3x2+72.74x3–11.6x4–214.5 | x1 – sown area; x2 – yield; x3 – dollar rate; x4 – competing prices | R2=0.58 | low |
| y=46.3x1+5.03x2–281.3x3+80.89x4+204.7 | x1 – sown area; x2 – yield; x3 – dollar rate; x4 – world price | R2=0.53 | low |
| y=65.9x1+4.5x2–4.02x3+8.97x4+109.3x5–1953.2 | x1 – sown area; x2 – yield; x3 – dollar rate; x4 – world price; x5 – competing prices | R2=0.47 | very low |
| y=341.7x1+5.75x2+10.8x3–9363.8 | x1 – sown area; x2 – yield; x3 – dollar rate | R2=0.75 | high |
Thus, for long-term forecasting of raw cotton prices, the best multivariate model is the following: y = 341.7x1 + 5.75x2 + 10.8x3 – 9363.8. Where x1 is the dollar rate; x2 is the yield of raw cotton as a factor of natural and climatic conditions; x3 is the sown area of raw cotton as an indicator of entrepreneurial sentiment. Proceeding from these prerequisites, it is possible to determine the calculations for options using methods of economic and mathematical modelling: optimistic and inertial.
The optimistic option assumes the adjustment of the entire system of relations in the industry (economic, foreign economic, land, organisational, social) to ensure sustainable advanced development. In such conditions, very significant results can be achieved:
Therewith, the implementation of such a development option in the period 2021–2030 assumes an annual growth of investments in the industry within 10–11%, and in general over this period, more than 2.7 times. Development according to the inertial scenario, in which the increase in agricultural production in 2030 by 2016 will be 1.1–1.2 times, will mainly solve the issue of food independence for most food products, but will not create conditions for the socio-economic development of rural areas, the development of competitive production in world markets. Evidently, this option does not correspond to the goals and objectives of the Strategy of the country's socio-economic development.
One of the main features of the agricultural sector is that the activities of agricultural enterprises are associated with a significantly higher level of social responsibility than in any other industry [13]. This situation developed back in the pre-reform period, but even now it has changed little. The prospects for the development of many rural areas directly depend on the success of agribusiness, and when developing a strategy for their development, enterprises cannot ignore the social problems of not only their employees, but also other socially unprotected residents of this territory [46]. And as one of the ways to solve the efficiency of agriculture in the regions or at the level of an agricultural enterprise, it is most often called increasing the competitiveness of agricultural production [27]. This study considers this approach to be fully explainable and justified. Admittedly, it is competitiveness, as a complex feature, that best demonstrates the economic capacity of an enterprise and the level of its success in the market. Modern competitive strategies can and should be the key to achieving this goal [12]. At first glance, this issue does not pose any problem for practical application.
Indeed, there is currently a considerable amount of scientific literature, which covers the issues of competitiveness, including the development of competitive strategies [12, 29, 32]. As Nzewi and Moneme [47] argue, competitive advantage is created in a changing and unpredictable environment by detecting and quickly responding to changes that come from both changes in competing companies and changes in customer requirements. However, the overwhelming majority of them are focused on industrial production or trade. Agriculture, by virtue of its specificity due to various reasons, requires an adapted approach to the development of competitive strategies. In light of this, it is relevant to consider the development of competitive strategies at agricultural enterprises [29, 48]. Therewith, the elaboration of an enterprise development strategy should be based on the following principles of strategic planning:
The consideration of the content of the concept’s “strategy” and “enterprise development” suggests that these categories are closely related. On the one hand, development is considered as a result of the implementation of the strategy, and on the other hand, the strategy is defined as a tool for ensuring the development of an enterprise. Therefore, the development strategy should be considered as a metastrategy of a business entity, the essence of which is to describe its behaviour at the level of a dynamic process of changing strategies and which allows ensuring the efficiency of the enterprise, in conditions of limited resources and rapidly changing environmental conditions. The specific features of agricultural production leave their mark on both the implementation of economic activities in general and the process of strategic planning in particular [34]. As is known, the key feature of agriculture is the use of natural means of production: land, plant and animal organisms, etc., which have their own natural laws of development. This feature is reflected in the development of special zonal systems of agriculture, which determine the way to combine the main factors of the functioning of agricultural production – land, labour, and capital. With the help of such systems, types of agricultural enterprises are substantiated with common essential features of the economy, organisation, technology, the principles of combining individual industries, and the best for the natural and economic conditions of a particular zone [7, 51].
At present, the existing systems of farming have largely exhausted themselves, so scientists are raising the issue of the need to develop their promising options. Naturally, in the process of strategic planning, it is necessary to predict changes in production systems, as well as to consider the patterns and principles that are reflected in them when choosing the directions of enterprise development [52]. The use of the main means of production – land – is associated with its several features, which include irreplaceability, the need to maintain fertility, spatial limitation, and the constancy of location. These factors largely determine the immobility of agricultural production, which, in conflict with the growing degree of turbulence in the external environment, presupposes the definition of specific strategies that are characteristic only of the agricultural sector [36]. Another aspect of the influence of natural factors is the irregularity of the functioning of agriculture under the influence of natural and climatic conditions of production [53]. In the system of agribusiness risks, a special role is played by natural and meteorological risks, which pose a potential threat of loss of assets, profits, income, etc [27, 54]. In this regard, strategic planning in agricultural organizations is a key function of strategic risk management, which allows to negate, prevent, and reduce the level of adverse impact on the process and production results.
The next feature of the agrarian sector that requires serious attention is that it is distinguished by a complex, very heterogeneous, and flexible institutional structure. It includes not only large and medium-sized agricultural organisations of various legal forms, but also a small sector [34]. The households of the population (personal subsidiary plots), which do not have the status of enterprises, still make a significant contribution to the production of agricultural products [34, 55]. The contribution of farmer households is much more modest, but this sector has been demonstrating stable growth rates in recent years, while the results of production of large and medium-sized agricultural organisations are unstable. The specified producers of different forms of ownership and management, and different scales of activity are connected by close technological, socio-economic, and other relationships that cannot be ignored. This refers to the special structure of Kazakhstani agricultural production. Collectivist thinking, together with the existing balance of the use of labour resources and consumption, lead to a unique situation of the intersection of three systems: market, community, and household.
Analysis of the development of agriculture in Kazakhstan for the future allowed to identify the following trends in the development of agriculture: low technical and technological level of agricultural production, low land productivity, lack of qualified personnel and low incomes of agricultural producers, low profitability of production (unprofitable enterprises), high cost associated with an increase in prices for material and technical resources and services of third parties. To solve these problems, it is necessary to modernise agricultural production and the process of strategic planning of agricultural development, which will reflect its development in the long term.
Thus, in the process of strategic planning, it is necessary to consider the systemic nature of agricultural production in a separate territory as a complex formation of independent, self-governing parts of it based on the coordination of the interests of all its subjects, the equality of all forms of management. For example, when elaborating a strategy for the development of a large agricultural enterprise, one should also consider its policy in relation to households and personal subsidiary farms, which may be focused on strengthening or reducing support, cooperation in certain areas, etc.
