Total Factor Productivity in Agriculture in Russian Regions

Abstract

The agricultural sector of Russia faces the need to improve production technologies. The need to reduce costs per unit of production deserves special consideration. In this connection the work offers to consider development of agricultural sector by means of the indicator which to a greater degree displays level of competitiveness – total factor productivity (TFP).

The aim of the study is to find out the nature of differentiation of Russian regions by TFP level on the basis of the author's methodology of its assessment.

On the basis of the analysis of TFP dynamics, the study shows that some regions have achieved indicators exceeding the national average, as well as highlights leading and lagging regions. Among the Russian regions the leading places by cumulative TFP growth in 2011–2020 belong to the Pskov, Penza, Oryol, Ryazan regions, Kamchatka Krai, and others. The average Russian value is characteristic of the Sverdlovsk and Astrakhan regions. The Tyumen and Sakhalin regions, the Primorsky and Stavropol Krais, the Republic of Karelia, the Chelyabinsk region, the Jewish Autonomous region, the Chukotka Autonomous Okrug, and the Republic of Ingushetia are in the group of less successful regions.

Russia's achievement of long-term growth in agriculture is facilitated by such factors as effective allocation of investments, technological progress, and increasing TFP rates. The driver of innovative development can be the growth of farmers' demand for advanced technologies needed to gain market share and survive. However, with weak implementation of major innovations, TFP growth will be difficult to maintain at a high level, and its growth rate will gradually decline, as the quality of innovation and innovation activities decline.