Modern Business in Rural Areas: Opportunities and Prospects
15 February 2018
The session ‘Modern Business in Rural Areas: Opportunities and Prospects’ was held on 14 February as part of the Young Enterprise Day on the sidelines of the Russian Investment Forum in Sochi. The session was organized by the Russian Union of Rural Youth.
The experts spoke about state support measures for rural entrepreneurs, discussed cooperation, shared their business experience and offered new ideas to be brought to the Russian Ministry of Agriculture.
The moderator was Yulia Ogloblina, Chairwoman of the Central Council of the Russian Union of Rural Youth and Member of the Central Council of the All-Russia People’s Front. The Union, called upon to help with employment in rural areas and teach entrepreneurship, has involved over 50,000 people in 75 regions of Russia since its inception ten years ago, according to Ms. Oglobina. “If there are jobs in rural areas, people will live there, infrastructure will appear”, she believes. With increasing government support, more and more individual and farming enterprises are emerging: the Ministry of Agriculture’s programme for improving living conditions in rural areas is being implemented and rural farmers are also actively interested in grant support for those opening up farming businesses. At the request of students of colleges and special secondary educational establishments focusing on agriculture, the Union has developed the intellectual game ‘Beginning Farmer’ for teaching business planning skills. Even so, rural residents still lack information awareness, Ms. Oglobina concluded.
Anatoly Korotaev, Director of Cooperative Systems in the Lipetsk Region and coordinator of the People’s Cooperation project, agrees. He suggests using cooperation to develop small businesses in rural areas. Mr. Korotaev said only 3.4% of beginning entrepreneurs survive the first three years, while “cooperation has proved its effectiveness”: personal household plots are being involved in operations, idle lands are being revived, cooperative shops are opening and housing savings cooperatives are emerging. At the same time, there are problems over proper use of funds allocated for cooperation by the Ministry of Agriculture.
For his part, Andrey Manokhin, CSc (Econ.), Head of the ‘Assistance’ Regional Volunteer Centre for Improving Financial Literacy in the Tambov Region, proposes introducing unified reporting standards for small businesses and drawing rural residents into business by enhancing financial literacy. He stressed that rural residents did not have “quality financial education”. In addition, becoming a farmer is getting more and more difficult as the main pool of farmers has already taken shape.
Alexander Lagutin, Head of the Department for Agroindustrial Development, Natural Resources, the Environment, Horticultural Non-Profit Partnerships and Municipal Monitoring of the Lukhovtsy Urban District in the Moscow Region, believes that a food brand could help involve people in entrepreneurial activity. So the traditional industry of Lukhovtsy cucumbers has been brought back to life there. Today, this idea is attracting investors and tourists and thus helping develop the infrastructure and create new jobs. “The era of glossy packs is gone”, the expert noted. He argues that buyers today want to know the place of origin and the conditions the products were made in. Each Russian village has its own unique product, which must be found and popularized, Mr. Lagutin concluded.
Maria Unitsaeva, a sole trader from the Bezenchuksky District in the Samara Region, presented her effective business case. In 2015, she received a RUB 500,000 grant from the Ministry for Economic Development, Investment and Trade of the Samara Region and opened a barber shop in her village. She pointed to a number of advantages for small businesses in rural areas, such as a complete absence of competition, low rent, low utility costs, and minimal advertising costs. Among the disadvantages she named restricted area, elderly population and low incomes.
The experts spoke about state support measures for rural entrepreneurs, discussed cooperation, shared their business experience and offered new ideas to be brought to the Russian Ministry of Agriculture.
The moderator was Yulia Ogloblina, Chairwoman of the Central Council of the Russian Union of Rural Youth and Member of the Central Council of the All-Russia People’s Front. The Union, called upon to help with employment in rural areas and teach entrepreneurship, has involved over 50,000 people in 75 regions of Russia since its inception ten years ago, according to Ms. Oglobina. “If there are jobs in rural areas, people will live there, infrastructure will appear”, she believes. With increasing government support, more and more individual and farming enterprises are emerging: the Ministry of Agriculture’s programme for improving living conditions in rural areas is being implemented and rural farmers are also actively interested in grant support for those opening up farming businesses. At the request of students of colleges and special secondary educational establishments focusing on agriculture, the Union has developed the intellectual game ‘Beginning Farmer’ for teaching business planning skills. Even so, rural residents still lack information awareness, Ms. Oglobina concluded.
Anatoly Korotaev, Director of Cooperative Systems in the Lipetsk Region and coordinator of the People’s Cooperation project, agrees. He suggests using cooperation to develop small businesses in rural areas. Mr. Korotaev said only 3.4% of beginning entrepreneurs survive the first three years, while “cooperation has proved its effectiveness”: personal household plots are being involved in operations, idle lands are being revived, cooperative shops are opening and housing savings cooperatives are emerging. At the same time, there are problems over proper use of funds allocated for cooperation by the Ministry of Agriculture.
For his part, Andrey Manokhin, CSc (Econ.), Head of the ‘Assistance’ Regional Volunteer Centre for Improving Financial Literacy in the Tambov Region, proposes introducing unified reporting standards for small businesses and drawing rural residents into business by enhancing financial literacy. He stressed that rural residents did not have “quality financial education”. In addition, becoming a farmer is getting more and more difficult as the main pool of farmers has already taken shape.
Alexander Lagutin, Head of the Department for Agroindustrial Development, Natural Resources, the Environment, Horticultural Non-Profit Partnerships and Municipal Monitoring of the Lukhovtsy Urban District in the Moscow Region, believes that a food brand could help involve people in entrepreneurial activity. So the traditional industry of Lukhovtsy cucumbers has been brought back to life there. Today, this idea is attracting investors and tourists and thus helping develop the infrastructure and create new jobs. “The era of glossy packs is gone”, the expert noted. He argues that buyers today want to know the place of origin and the conditions the products were made in. Each Russian village has its own unique product, which must be found and popularized, Mr. Lagutin concluded.
Maria Unitsaeva, a sole trader from the Bezenchuksky District in the Samara Region, presented her effective business case. In 2015, she received a RUB 500,000 grant from the Ministry for Economic Development, Investment and Trade of the Samara Region and opened a barber shop in her village. She pointed to a number of advantages for small businesses in rural areas, such as a complete absence of competition, low rent, low utility costs, and minimal advertising costs. Among the disadvantages she named restricted area, elderly population and low incomes.
