To breathe life into Fairgrounds culture

To breathe life into Fairgrounds culture

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The Minister Denis Manturov — why fairs have become a major preoccupation of the state in the sphere of trade

Photo: NEWS/Paul Poor

The development of small retail formats — mobile and non-stationary trade, markets and fairs, brick and mortar stores is one of the key objects of attention in the field of trade.

Fair — a traditional element of the culture of many peoples of Europe and Asia, and our country is the guardian of the richest tradition in this type of trading.

But at the present stage to breathe life into the fair culture?

Often from high tribunes we hear: “Let’s include farmers, small producers to large retail chains”. Professionals like theses are only a smile. Imagine a grandmother who is trying to sell vegetables from his infield. It is unlikely to be interested in the proposal on commercial networks, it goes to the next market.

Our objective is to offer each its own distribution channel, your commercial format. For those who are still tolerant to small production, give the figures.

According to Rosstat, in 2014 the share of output produced by household plots and private (peasant) farms (including individual entrepreneurs), from the total production volume in Russia amounted to: potato is 87.9%, vegetables — 83,5%, cattle and poultry for slaughter — 27,6%, milk — 53,3%, eggs — 22,2%, honey — 97,9%. But the product is only a small part of this production — about 15%.

In addition, there is a considerable reserve for increasing production on small farms is critical to ensuring food security of the country.

At the moment the problem lies with the marketing of products.

To radically change the situation with the assortment and prices on food, we should solve the problem on a high legislative level. This will not only involve the turnover of large volume of products produced in small farms, but to increase these volumes. This can be achieved only by creating a guaranteed stable channels of retail distribution. Those that will be adequate for small production. However, this is not enough. Should be created a special link that will join small producers with a small trader.

The fact that the direct producers, including farmers, for objective reasons cannot exercise their own retail sale of their produce. This is because the retail trade, even in their simple forms, such as fair trade, is a rather specific activity, requiring specific approaches, skills and competencies.

In world practice there is a special long-format commercial relationship between small producers and entrepreneurs who professionally sell goods at fairs, markets, through the mobile shops and other small retail formats.

In addition, these small producers often combine in a variety of consumer companies that consolidate their goods and centrally organize fairs. In this case, the professional organizers of the fair are consumer societies and unions of entrepreneurs. This is one of the most effective forms of organization of fairs, widespread before the revolution, which will only be reborn in Russia.

For example, in the period of Stolypin’s reforms, most farms were combined into various cooperative through which farmers consolidated their volumes of products, organize processing and distribution within the country through fairs, stores, and for export. Largely because of this, Russia became the leading exporter products, in particular butter. Domestic cooperation has a long and glorious history that began in the nineteenth century, and today we are going to return to this experience.

Now the Ministry has started close cooperation with the largest Union of consumer cooperatives of Russia, the Centrosoyuz. As a first step, we will propose changes to the law on trade, which greatly facilitate the holding of fairs.

In the triad “producer — organizer of the fair — trading entrepreneur” the key role belongs to the organizer of the fair, which creates it as an event, an organized infrastructure for traders.

In this regard, the Federal law should place a duty of local authorities to provide the organizers of the fair a special area, and if there are disputes about the place and time of the organization of the fair to carry out the negotiation procedure according to the rules established by the legislation of the Russian Federation. The goal of this process should be guaranteed to the organizer of the fair grounds, suitable for the organization of commercially effective event.

In this case, the professional organizers of the fairs, especially the consumer, will be able to create guaranteed channels of distribution, and we’re finally going to get involved in the trade of those vast reserves of food from small farms.

Today the bill fairs is ready for public discussion and agreement on the website regulation.gov.ru. According to our plan, amendments to the law on trade will allow you to develop specialized activities of private organizations and consumer cooperatives for the organization of fairs.

It is also worth noting that in addition to the fairs, our consumer will be a major participant in the mobile Commerce. Now there are about 20 thousand truck, serving primarily remote inaccessible locations. We believe that our bill of mobile and non-stationary trade, which will be submitted to the Duma in the first half of 2017, will provide an additional major boost not only for the development of this kind of trade, but also for our automotive industry and related services.

After all, according to conservative estimates, requires about 50 thousand auto shops, cafe, food trucks. This, of course, will be not only representatives of consumer, but also the producers themselves: a small, regional meat and dairy plants — they will use the opportunity to create direct channels of sales through its distributors.

The author is the head of the Ministry of industry and trade of Russia

See also:

Denis Manturov:”hope for small business”

The Minister Denis Manturov is about how new development and rehabilitation industry drive growth

The opinion of the author may not coincide with the position of the editorial Board