Legal Regulation of State Financial Support for Agricultural Producers on the Grain Market of the Russian Federation

Berdnikova Anna Aleksandrovna ORCID: 0000-0003-2812-7030 Assistant/Postgraduate Student of the Department of Legal Regulation of Economic Activities, Faculty of Law, Financial University under the Government of the Russian Federation 125167, Russia, Moscow, Leningradsky Prospekt street, 49 anna_berdnikova1@mail.ru

 Introduction

In modern realities, with the dynamic development of the global and national economy, new effective approaches are required to expand the participation of small agribusiness entities in providing the population with domestic products.

 To ensure the sustainable development of the national economy of the country, active development of the small and medium-sized business sector is required, as well as maintaining a high level of competition. Undoubtedly, small and medium-sized enterprises play a particularly important role in promising developing countries. This development is due to an increase in the volume of production of goods and services, the use of various innovative solutions in work, as well as meeting the demand of the population in smaller industries where big business may be ineffective ^{[1, p. 268]}.

Today, one of the main major sub-sectors of agriculture in the Russian Federation is the agro-industrial complex, the basis of which is grain production. The food security of the whole country depends on the successful development of this complex, as well as the provision of food for the population and, accordingly, its standard of living. The main tasks, as before, are to increase grain production and competitiveness. In this regard, various state support measures, including financial ones, are used to stimulate grain production and ensure the profitability of agricultural producers. The main investor in the growth of the rural economy is still the state. As a rule, small farms are more productive per hectare than much larger farms. Farmers are most interested in protecting the fertility of their soils and the long-term productivity of their lands. They are also more likely than larger farms to grow a wide variety of crops, contributing to agrobiodiversity.

Thus, the high importance of the activities of agricultural producers as subjects of small and medium-sized businesses is noted. In view of this, for the development of the country's grain complex and the welfare of agricultural producers, it is necessary to ensure equal access to financial resources in the form of state financial support, which is an important part of an integrated approach to agriculture. 

Measures of state financial support for agricultural producersDue to the high importance of the development of the domestic grain complex, a Strategy for the development of the country's grain complex for the period up to 2035 was formed.

Thus, the Strategy underlies the creation of programs at the state level of the Russian Federation, its subjects and other strategic planning documents that contain measures for the development of the grain complex^[1].

Special attention is paid to the development of financial support for agricultural producers as small and medium-sized businesses. The Strategy also notes the importance of financing small-scale farming in rural areas. Subjects have legal opportunities to receive subsidies aimed at compensating costs that are associated with the beginning and subsequent development of agricultural activities, obtaining loans and credits, as well as registration of real estate objects in ownership.

Thus, state and non-state bodies provide all the necessary services to support agricultural producers. Such support measures are provided at all levels: federal, regional, municipal.

Due to the high importance of the development of domestic small and medium-sized businesses, the organizational and legal foundations of state financial support for such entities have been formed. Also, in the context of the new sanctions policy, priority areas of state support for subjects were identified ^{[2, p. 30]}, including agricultural producers^[2].

In accordance with Federal Law No. 193-FZ of 08.12.1995 "On Agricultural cooperation"^[3] agricultural producers include individuals or legal entities producing agricultural products, which in value terms is more than 50% of the total volume of products produced. Thus, agricultural commodity producers can conduct entrepreneurial activities in the form of production cooperatives, economic or business partnerships and societies, as well as in the form of state and municipal unitary agricultural enterprises.

In accordance with Federal Law No. 209-FZ of 24.07.2007 "On the development of small and medium-sized businesses in the Russian Federation"^[4], agricultural producers, as subjects of small and medium-sized businesses, are provided with state financial support in the form of budget investments, subsidies, as well as state and municipal guarantees for their obligations at the expense of budget funds subjects of the Russian Federation and local budgets.

In addition, Article 6 of Federal Law No. 264-FZ of 29.12.2006 "On the development of agriculture"^[5] contains some measures of state financial support for agricultural producers. These include: the provision of budgetary funds, the application of special tax regimes, the conduct of public procurement and commodity interventions ^{[3, p. 38]} and others. All these measures are aimed at maintaining the level of profitability of domestic agricultural producers ^{[4, p. 10]}.

To date, the State Program for the Development of Agriculture and Regulation of Agricultural Products, Raw Materials and Food Markets (hereinafter referred to as the State Program) is of particular importance^[6]. This state program highlights the main goals, objectives, as well as the most important directions of agricultural development and legislative regulation of the agro-food market of the country. The program also contains mechanisms for the implementation of measures for the financial security of agricultural entities and indicators of their effectiveness. The implementation period of the program has been extended until 2025.

The implementation of the above program is based on the Strategy for the Development of the grain complex, the Food Security Doctrine of 2020^[7] and others.

During the implementation of the State Program in 2020, significant results were achieved. Thus, according to the assessment of the Ministry of Agriculture of the Russian Federation, the maximum value of the country's self-sufficiency in grain, which is provided for by the country's Food Security Doctrine, has been reached. Thus, the growth rates of the agro-industrial complex production were higher than in other sectors of the economy^[8].

The main directions of the State Program are the development of small businesses in the agro-industrial complex, increasing the number of employees, investment growth, increasing the profitability of producers, a significant increase in financial support.

Thus, the program provides financing for 2021 — 291.2 billion rubles, for 2022 — 327.3 billion rubles, for 2023 — 328.9 billion rubles from the federal budget.

In accordance with the program, subsidies are provided to agricultural producers for financial support or compensation for part of the costs of performing agrotechnical work, for the development of their own production and processing, for support of seed production and the purchase of seeds.

Also, the program notes the need to provide financial support to the subjects of the Russian Federation that have a low level of socio-economic development. Such subjects include the Republic of Adygea, the Republic of Karelia, the Altai Territory and others.

Undoubtedly, the development of small forms of agricultural production as an important branch of the economy is a prerequisite for the successful economic and social development of the regions and the country as a whole ^{[5, p. 4]}.

In accordance with the Decree of the President of the Russian Federation dated July 21, 2020 No. 474 "On the National Development Goals of the Russian Federation for the period up to 2030" ^[9] the Ministry of Economic Development of the Russian Federation has developed a passport of the national project^[10] "Small and medium-sized entrepreneurship and support for individual entrepreneurial initiative". The structure of the passport includes such federal projects as Support for the self-employed, Creation of a system of support for farmers and development of rural cooperation, Pre-acceleration, Acceleration of small and medium-sized businesses and a digital platform for small and medium-sized businesses.

The main activities of the federal project to support the self-employed are focused on creating favorable conditions for the development of their activities in the form of providing microloans at a preferential rate, providing access to financial support, compensation for rent payments for the operation of private premises.

The federal project Pre-acceleration ("Creating conditions for an easy start and comfortable business") was created to help aspiring entrepreneurs, including agricultural producers. The project includes special events for the category of individuals who want to start an entrepreneurial activity and for those who have already been a registered or active entrepreneur for less than one year. Assistance is expressed in the provision of:

- comprehensive financial and guarantee support;

- the ability to make payments with a commission of up to 1% using the fast payment system (in the field of trade and services with a commission);

- financial support to social entrepreneurs in the form of grants, which are included in the register.

The federal project "Acceleration of small and medium-sized businesses" includes financial and tax instruments to support small and medium-sized businesses, including agricultural producers, as well as infrastructure for comfortable work and development of subjects, access to procurement of the largest customers. Thus, the project offers a set of measures to provide support:

- lending at a preferential rate;

- issue of bonds;

- preferential access to borrowed funds of state microfinance organizations;

- expanding access to financing through crowdinvesting and factoring platforms;

- provision of sureties (guarantees) by regional guarantee organizations;

- preferential leasing support by subsidizing advance payments by leasing organizations;

- a transitional tax regime for a smooth change in the tax burden on developing small and medium-sized businesses;

- in the form of grants in the field of innovative entrepreneurship in order to create and (or) expand the production of innovative products;

- comprehensive (including financial) support to small and medium-sized businesses in the agro-industrial complex with the support of competence centers in the field of agricultural cooperation.

In addition to the designated types of state financial support, other inter-budgetary transfers to the subjects of the Russian Federation are also being developed to support agricultural producers and the creation of rural cooperation, which are expressed in grant support. The grant measure of state support is regional and is intended for small and medium-sized businesses at all levels of their development. The most popular and needy areas of this support are such areas as agriculture, farming, tourism.

So, for example, grants "Agrostartap", "Agroprogress" and other grants aimed at the development of a family farm and rural tourism were developed for farmers. The received state support funds can be directed to the development of the production base, storage, processing and sale of products, construction of new production facilities, etc.

In addition, the Ministry of Agriculture of the Russian Federation actively provides various measures of state financial support for agricultural producers. In turn, commodity producers of products can count on a short-term or investment loan at a preferential interest rate. Subsidies are also provided to increase productivity in various fields of activity.

A special tax regime is also provided for farmers – a single agricultural tax, which is also a stimulating benefit. The enforcement of this tax is regulated by Chapter 26.1 of the Tax Code of the Russian Federation.

Thus, organizations and individual entrepreneurs who embody activities in the field of agriculture and are registered in the form of peasant (farm) farms have the right to voluntarily switch to this system. The advantage is that taxpayers are exempt from the obligation to pay income tax and partially property tax. Nevertheless, the obligation to pay a single tax on the difference between income and expenses remains. Also, one of the conditions for using the special tax regime is the restriction of income from other activities. Thus, the amount of revenue from the production, processing and sale of agricultural products should be equal to more than 70% of the total amount of receipts. This amount can also include income from the provision of services to agricultural producers^[11].

In 2022, the Single Agricultural Tax rate, as a general rule, is standard – at the rate of 6%. But at the same time, since 2019, the subjects of the country have been given the authority to change it. Thus, the rate range in the subjects can be from 0 to 6%. Usually, the amount of the rate may depend on the place of activity, the number of employees, the type of agricultural products and the amount of income from doing business.

Despite the active creation of various types of programs that are aimed at financing the agro-industrial, in particular, the grain complex of the country, a number of problems remain.

Thus, the domestic grain market is characterized by high transaction costs, which are primarily associated with transportation between the regions of the country ^{[6, p. 3]}.

In addition, most of the measures of state financial support are implemented in order to maintain the operational efficiency of the agricultural sector. In turn, these measures should be more aimed at stimulating investment and innovation activity of agricultural producers ^{[7, p. 123]}.

Thus, there is a decrease in investments in agriculture, a weakening of the financial support of state support measures for the development of agriculture, an unsatisfactory level of profitability and a high degree of debt burden on agricultural producers, a high level of depreciation of fixed assets in agriculture, inadequate provision of agricultural machinery and equipment to enterprises of the agro-industrial complex, insignificant amounts of agricultural insurance carried out with the support of the state, insufficient level of development of the infrastructure of the agro-food market.

ConclusionSumming up the above, we can conclude that the modernization of the domestic economy is inextricably linked with the need to increase the number of small and medium-sized businesses, in particular agricultural producers, and their contribution to the development of the country's economy.

Undoubtedly, it is worth noting that the future of domestic small and medium-sized enterprises in the Russian Federation directly depends on the state policy of supporting the development of entrepreneurial activity, which consists in measures of state support of subjects and protection of their interests. Thus, the measures of state financial support provided make it possible to support and increase the level of profitability of agricultural producers, as well as increase grain production.

The issues of increasing the availability of financing for agricultural producers are especially relevant in the regions and remote areas of the country. The factors hindering the development of farms in the regions are precisely the unavailability of credit resources ^{[8, p. 84]}. It can be assumed that with financial support, small agricultural producers will be able to quickly invest and expand their entrepreneurial activities, in the face of falling demand for agricultural products caused by a decrease in consumer purchasing power ^{[9, p. 87]}. Undoubtedly, the state benefits from prosperous and productive small agricultural enterprises, as they create new jobs ^{[10, p. 93]}, contribute to the well-being of the whole society and the creation of a more stable society.

Agricultural finance and agricultural insurance are of strategic importance for improving the welfare of all. Accordingly, it is necessary to increase the financial stability of agricultural producers by developing indirect measures of state support. It is necessary to work on a point – to provide tax holidays, tax benefits to agricultural producers who implement promising investment projects for the regions, as well as to increase the demand for food among the population with low incomes. Thus, it is necessary to strive to increase the income growth of farmers and agricultural small and medium-sized enterprises through commercialization and access to more advanced technologies, increase sustainability through climate-optimized production, diversify risks and access to financial instruments, and promote the consolidation of farms, assets and production (financing structural changes).

For more effective development of the agricultural sector, it is proposed to conduct diagnostic studies of the state of agricultural financing, in particular grain markets, in client countries and develop specific action plans for reforming state policies and regulations in order to create favorable conditions for mobilizing financing for agriculture in the country.

Having analyzed the presented measures of state financial support for agricultural producers as small and medium-sized businesses, it should be emphasized that financial support is one of the most important areas of state support programs, due to the existing difficulties in accessing financial services for agricultural entrepreneurs.

^[1] Decree of the Government of the Russian Federation dated 10.08.2019 N 1796-r "On approval of the Long-term strategy for the development of the grain complex of the Russian Federation until 2035". [Electronic resource] URL: https://docs.cntd.ru/document/560974985 (accessed: 07/20/2022).

^[2] Business support under sanctions restrictions: benefits for IT, a moratorium on inspections of SMEs and credit holidays. [Electronic resource] URL: http://duma.gov.ru/news/53640 / (date of appeal: 28.07.2022). ^[3] Federal Law "On Agricultural cooperation" dated 08.12.1995 N 193-FZ (latest edition) // "Collection of Legislation of the Russian Federation". - 11.12.1995. - ¹ 50. - V. 4870. ^[4] Federal Law "On the development of small and medium-sized enterprises in the Russian Federation" dated 24.07.2007 N 209-FZ (latest edition) // Rossiyskaya Gazeta. – 31.07.2007. - ¹ 164.

^[5] Federal Law "On the development of agriculture" dated 29.12.2006 N 264-FZ (latest edition) // Collection of Legislation of the Russian Federation. - 01.01.2007. - No. 1 (1 hour).

^[6] Decree of the Government of the Russian Federation No. 717 of July 14, 2012 "On the State Program for the development of agriculture and regulation of agricultural products, raw materials and food markets" // Collection of Legislation of the Russian Federation. – 06.08.2012. - No. 32 of article 4549.

^[7] Decree of the President of the Russian Federation of January 21, 2020 N 20 "On the approval of the Doctrine of food security of the Russian Federation" // Collection of Legislation of the Russian Federation. – 27.01.2020. - No. 4 of article 345.

^[8] Resolution of the Federal Assembly of the Russian Federation No. 139-SF dated April 14, 2021 "On the implementation of the State Program for the Development of Agriculture and Regulation of Agricultural Products, Raw materials and Food markets". [Electronic resource] URL: http://council.gov.ru/activity/documents/126085 / (accessed: 30.07.2022).

^[9] Decree of the President of the Russian Federation No. 474 of July 21, 2020 "On national development goals of the Russian Federation for the period up to 2030" // Collection of Legislation of the Russian Federation. – 27.07.2020. - No. 30 of article 4884.

^[10] Passport of the national project "Small and medium-sized entrepreneurship and support of individual entrepreneurial initiative". [electronic resource]. - Access mode: https://www.economy.gov.ru/material/file/65c7e743dffadf1f3f3a8207e31a0d99/Passport_NP_MSP.pdf (accessed: 01.08.2022).

^[11] The Unified Agricultural Tax (UST) in 2022. [electronic resource]. - Access mode: https://kontur.ru/extern/spravka/371-eshn (accessed: 05.08.2022).