Product Segments of the Agri-food Market: Unified Approach or Targeted State Regulation

Abstract

The state policy of protectionism in the agri-food sector yielded ambiguous results, such as success in agriculture and achievement of food security thresholds on the one hand, and a sharp increase in food prices on the other. Sugar market has satisfied domestic demand and therefore needs either export expansion or production restriction. The article analyses the development dynamics of the sugar beet industry and sugar consumer market in 2000-2021. The study aims to assess the effectiveness of existing state support measures in the sugar market, considering changes in import substitution. It is hypothesised that in case of saturation of the market with domestic products, the state should support consumers rather than producers. Statistical data analysis and simulation modelling were used as the main research methods. Nominal Protection Coefficient (NPC) was chosen to indicate changes in state support. Domestic market volume under constant demand was assessed. Given that the average per capita sugar consumption remains at 39 kg/person, domestic consumption is 5.8 million tonnes. Considering current production volumes (7.6 million tonnes), the equilibrium price of sugar is estimated at 37 roubles/kg. Calculated NPC values show the dominance of market price transfers for sugar producers. Thus, it is necessary to switch to unrelated support measures for strengthening the effect of market mechanisms. The results can be adapted to develop specific agricultural policy instruments. Future research may conduct deeper structural analysis of selected segments of food markets in order to identify regional and corporate characteristics of participant interaction and adjustment of state regulation measures.