While this book presents the results of comprehensive and cooperative international reseirch, this effort would not have been successful without the assistance of various institutions and personalities. Financial support for the conference was received from the Volkswagen Foundation, Germany, and the Deutsche Forschungsgemeinschaft (DFG) which is gratefully acknowledged. The Deutsche Ralffeisenverband kindly contributed to hosting the international group of researchers in Bonn. For their valuable comments we also thank: Uwe Eiteljorge, Johannes Jutting, Amim Kuhn, Witold-Roger Poganietz, Matin Qaim, Alexandra Schleier, Ludwig Striewe, Jllrgen Wandel, Peter Weingarten, Manfred Wiebelt and Susanna Wolf. The editors also acknowledge the help provided by James Creed, Karin Clark, and Ulla Knodt in checking language and style of the articles, most of them written by non-native speakers. Martin Grub, Tina Klebsch, and Andrea Stang have been helpful in providing technical assistance needed to prepare the manuscript. Bonn Peter Wehrheim Eugenia V. Serova Moscow Halle/Saale Klaus Frohberg Bonn Joachim von Braun January 2000 x Russia's Agro-food Sector: Towards Truly Functioning Markets Wehrheim, P., E. V. Serova, K. Frohberg, and J. von Braun (eds.) Kluwer Academic Publishers, pp. 1 - 8 SECTION 1 Introduction and Overview Peter Wehrheim, Eugenia V. Serova, Klaus Frohberg, and Joachim von Braun 1. INTRODUCTION This publication takes a close look at the agro-food economy in Russia.

Agriculture seems to be a difficult sector to manage for most governments. Developing countries face tough dilemmas in deciding on appropriate price poli eies to stimulate food production and maintain stable, preferably low, prices for poor consumers. Governments in developed countries face similar difficult deci sions. They are called upon to give income guarantees to farmers whose incomes are unstable and relatively low when compared to those in the nonagricultural sector. These guarantees often lead to ever-increasing budgetary outlays and unwanted agricultural surpluses. High prices make new investments and the application of new technologies more attractive than world prices warrant, and a process is set in motion where technological innovation attains amomenturn of its own, in turn requiring price policies that maintain their rates of return. Surpluses are disposed of with subsidies in domestic markets or in the international market. Price competition reduces the market share of other exporters, who may be efficient producers, unless they are willing to engage in subsidy competition. This lowers export earnings and farm incomes or depletes the public resources of developing countries that export competing products. Retaliatory measures have led to frictions and further distortions of world prices. Every so orten the major agricultural exporters - the USA, the EC, Aus tralia, or Canada - accuse one another of unfair intervention. Though they have agreed to discuss agricultural trade liberalization under GATT negotiations, if anything, the expenditure on farm support has continued to increase in both the EC and the USA."

While this book presents the results of comprehensive and cooperative international reseirch, this effort would not have been successful without the assistance of various institutions and personalities. Financial support for the conference was received from the Volkswagen Foundation, Germany, and the Deutsche Forschungsgemeinschaft (DFG) which is gratefully acknowledged. The Deutsche Ralffeisenverband kindly contributed to hosting the international group of researchers in Bonn. For their valuable comments we also thank: Uwe Eiteljorge, Johannes Jutting, Amim Kuhn, Witold-Roger Poganietz, Matin Qaim, Alexandra Schleier, Ludwig Striewe, Jllrgen Wandel, Peter Weingarten, Manfred Wiebelt and Susanna Wolf. The editors also acknowledge the help provided by James Creed, Karin Clark, and Ulla Knodt in checking language and style of the articles, most of them written by non-native speakers. Martin Grub, Tina Klebsch, and Andrea Stang have been helpful in providing technical assistance needed to prepare the manuscript. Bonn Peter Wehrheim Eugenia V. Serova Moscow Halle/Saale Klaus Frohberg Bonn Joachim von Braun January 2000 x Russia's Agro-food Sector: Towards Truly Functioning Markets Wehrheim, P., E. V. Serova, K. Frohberg, and J. von Braun (eds.) Kluwer Academic Publishers, pp. 1 - 8 SECTION 1 Introduction and Overview Peter Wehrheim, Eugenia V. Serova, Klaus Frohberg, and Joachim von Braun 1. INTRODUCTION This publication takes a close look at the agro-food economy in Russia.

Against the background of global market liberalization, increasing consumer awareness and concerns and the spreading of complex technology, new ways to produce, distribute and consume food are evolving. The organization of agricultural production and distribution systems need to adapt, including the development and maintenance of sustainable business relationships between farmers, food processors and grocery retailers. While agricultural value chains have been promoted for decades, more attention is needed on how to enable economic agents to develop lasting relationships and trust within value chains. Using qualitative and quantitative empirical results, Agri-food Chain Relationships offers an insight into the sustainability of current agribusiness relationships and discusses how these may be improved. Theoretical foundations for analysing agri-food chain relations are considered alongside case studies of different countries, food chains and chain stages regarding the issues of sustainable relationships and trust.