Directions of state support of the multi-branch production to use the economic potential of farming enterprises

When evaluating the regions of the Republic of Uzbekistan based on the economic potential, farming enterprises have various natural and climatic, social-psychological, technical and technological characteristics. At the moment, these special characteristics are not effectively used by the farming enterprises. It is becoming important to stimulate the development of additional branches for effective use of economic potential of farming enterprises in the regions.

Main goal of the farming enterprises in establishing additional branches is to increase the profit from production. Thus, the profit from the additional branch is the private interest of the farming enterprise.

Yet, there is another group of interests in establishing multi-branch production. The basis of these interests is to solve the economic and social tasks of the society with the help of additional branch of the farming enterprise. What is the economic and social benefit that matches the public interest?

First, new jobs and, therefore, opportunity of additional income for many rural families are created with the help of additional branches established by farming enterprises (Figure 1).

Second, new modern technologies will come to the country due to the operation of additional branch by farming enterprises.

Third, new knowledge and technologies are mastered at the farming enterprises, group of qualified workers are formed, and new knowledge is spread in the region due to the additional branch.

Fourth, additional product is offered on the market due to the additional branch. As a result of the market saturation, the demand of members of society is satisfied at higher level.

Fifth, the markets are saturated, products’ prices fall and members of society can purchase products at lower prices due to the additional branch.

Sixth, as a result of the low prices due to the agricultural market saturation, the entrepreneurs have to decrease the production costs to increase the profit. This stimulates the use of modern resource saving technologies.

Seventh, as a result of saturation of agricultural markets, steady decline of product prices takes place. For some products, it reaches the upper limit of the average production costs. Further, entrepreneur will have to sell its product by improving the product’s quality and giving a marketable appearance to it. This leads to the improvement of quality and members of society will have opportunity to purchase products of relatively higher quality.

New knowledge and modern technologies are mastered, conditions for the development of new qualified labor force are enhanced, and new knowledge is spread across the region due to the additional branch in the farming enterprises.			\
New jobs will be created and, therefore, opportunity for additional income will be created for many rural families due to the additional branches of the farming enterprises.
		System of social-economic benef to the additional branche
Additional product will be offered on the market due to the additional branch. As a result of market saturation, the needs of the society will be satisfied at a higher level.			/
	As a result of decrease of average price of the produc will have to consider decreasing the production cos leads to increased use of modern and resource saving

/	As a result, the entrepreneur will try to improve the quality of the product and give it a marketable appearance, the quality of the marketed product will improve, and the members of society will have opportunity to purchase products of higher quality.
	New modern technology is delivered into the country due to the motivation of farming enterprises that establish and operate the additional branch.
its that is generated by society due s of the farming enterprises
\	As a result of market saturation due to the offer of additional product and price decrease, the members of society will have opportunity to purchase the product at lower prices.
t, saturation of agricultural markets, the entrepreneurs sts in order to increase the profit. Consequently, this technologies.

Figure 1 Solution of economic and social tasks of the society with the help of additional branch, established in farming enterprises1

This, the increase of economic and social benefit of the society due to the development of the additional branches in farming enterprises and profits of the farming enterprises creates necessity for state support for the development of additional branches. It is reasonable to use state mechanisms for stimulation of farming enterprises in the following directions (Figure 2):

¹ Source: developed by the author.            3

enhancement of legal mechanisms to stimulate the activity of multi-branch farming enterprises is important. In this case, it is necessary to develop legal basis for effective ways of technical and technological support as a form of state stimulation of multi-branch farming enterprises;

• -    it is necessary to allocate additional land and supply of material and technical resources for additional branches of farming enterprises. It is necessary that one of the directions of state support includes solution of issues of processing, transport, storage and marketing the agricultural products, produced by farmers.

• -    provision of tax incentives when taxing the profit from the additional branch of multi-branch farming enterprises gives stimulus to the development of the production. In addition, customs privileges when importing the necessary equipment and technology for the farming enterprises together with stimulating the use of modern equipment and technology in the agriculture extends the export potential of the sector;

• -    state measures on soft lending to multi-branch farming enterprises have high importance for the development of entrepreneurship and creation of additional jobs in the rural area;

• -    implementation of organizational and economic measures on technical and technological equipment of farming enterprises is one of the important directions of development of additional branches together with the main branch in the farming enterprises. In this case, expansion of leasing of technical and technological equipment for agricultural production, processing, storage and package;

• -    development of economic mechanisms of long-term loans for mini-equipment and technology to the farming enterprises;

• -    it is reasonable to provide permanent state support for the development of sectors of technological service for the additional branch of farming enterprises.

r	Directions of state support

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	*	Legal confirmation of the definition of multi-branch farming enterprise in the effective legislature.
		Improvement of legal basis of state stimulation of multi-branch farming enterprises.
		Improvement of legal basis of technical and technological support for multi-branch farming enterprises.
		— Improvement of legal basis of development of the system of supply of material and technical resources for multi-branch farming enterprises.

"я я о я я OX) О ч___	^ У •■Н	*	Allocation of additional land for multi-branch farming enterprises. -
		*	Processing, transport, storage and marketing of agricultural products. -
		*	Supply of qualified services to multi-branch farming enterprises. -
и Е о я Ы	Е			*	Tax incentives for multi-branch farming enterprises.
					Customs privileges when importing the necessary equipment and technologies for
					multi-branch farming enterprises.
			>	*	Soft lending system for multi-branch farming enterprises. -
■о я я фО я и 4» Н	из tS я В ф сл +^			*	Leasing of necessary equipment to the multi-branch farming enterprises. -
				*	Long-term loans for mini equipment and technologies to multi-branch farming enterprises.
			1	*	Support for the technological service to multi-branch farming enterprises.

Figure 2. Directions of state support for development of multi-branch farming enterprises2

Maintenance of financial stability of farming enterprises with the help of multibranch production has always been an important task. This is an unquestionable rule of the development of entrepreneurship in the conditions of the free market.

It is necessary allocate certain part of cultivated lands to crops that not only improve the soil fertility and organic content, but also bring an additional income.

Usually unsatisfactory financial results are observed in the farming enterprises with relatively low fertility. Thus, it is necessary to determine the conditions that lead to the improvement of fertility of cultivated lands and conditions that allow allocation of additional profit yielding crops on the cotton and wheat growing farms.