How to increase milk production in Russia

The article considers development trends of dairy cattle breeding in the municipal districts of the Vologda Oblast. It shows that over 2000-2015 milk production has increased in areas where the main part of the breeding farms has been working and actively upgrading their engineering and technologies on the basis of modern innovation. This allows them to have significant advantages in terms of labor productivity. Based on the comparison of growth rates of milk production and its sale prices, it is proved that over the last 15 years in all the districts of the Vologda Oblast, and even in high-intensificated households, the industry has been developing according to the scenario with increasing costs. It is grounded that one of the reasons is the investment activity decline, largely caused by problems in lending. It is proved that it is necessary to introduce special measures of government support of investment and innovative activities in agriculture, taking into account sectoral and territorial aspects. Based on the distribution analysis between the regions of Russia in the amount of state subsidies in 2017 provided by authorized banks for concessional lending of dairy cattle breeding development, the conclusion is made that half of the federal money is concentrated in 8 regions. This fact enhances the risk of depressive territories. The article substantiates the expediency to grant tax benefits for agricultural manufactures in industries with increasing costs. Tax benefits should be differentiated according to the capital investment ratio in total sales results. At the regional level it is proposed to organize investment support on the basis of project financing. It is shown that for milk production growth it is expedient to create reasonable economic and institutional climate in the regions, taking into account special character of development of different agricultural manufactures in this economic sector. The conclusions and recommendations of the article may be used by research scientists and public authorities in management decision making.