International Journal of Mechanical Engineering and Technology (IJMET)
Volume 10, Issue 04, April 2019, pp. 760–767, Article ID: IJMET_10_04_075
Available online at http://www.iaeme.com/ijmet/issues.asp?JType=IJMET&VType=10&IType=4
ISSN Print: 0976-6340 and ISSN Online: 0976-6359
© IAEME Publication
Scopus Indexed
MODERN PROBLEMS OF PROJECT
MANAGEMENT IN AGRICULTURE OF RUSSIA
Margarita M. Simonova
Department of Personnel Management and Psychology, Finance University under the
Government of the Russian Federation, Moscow, Russia
Stanislava A. Butyrina
Department of Management and Socio-Economic Disciplines of the Moscow State Institute
for Tourism Industry n.a. Yu. Senkevich, Moscow, Russia
Elena V. Kamneva
Department of Personnel Management and Psychology, Finance University under the
Government of the Russian Federation, Moscow, Russia
Grigory N. Butyrin
Department of History and Theory of Politics Faculty of Political Scientists of the
Lomonosov Moscow State University, Moscow, Russia
ABSTRACT
This article examines the possibilities of applying project management in the field
of agriculture from farms to Russia's largest agricultural holdings in order to find new
opportunities to enhance entrepreneurial activity. The proposed measures are aimed
at improving the efficiency of project management at these agricultural enterprises in
the context of the stagnation of the global economy and sanctions.
Key words: agriculture, project, management
Cite this Article: Margarita M. Simonova, Stanislava A. Butyrina,
Elena V. Kamneva, Grigory N. Butyrin, Modern Problems of Project Management in
Agriculture of Russia, International Journal of Mechanical Engineering and
Technology 10(4), 2019, pp. 760–767.
http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=10&IType=4
1. INTRODUCTION
The priority national project “Development of the agro-industrial complex” provides for the
solution of the following main social tasks: investment in a person, in improving the quality
of life of citizens living in rural areas and developing entrepreneurial activity of the
population through the implementation of specific projects. The practice of implementing
these projects has confirmed the high efficiency of the invested funds. Over the past few
years, Russia has occupied top places in the production and sale of wheat on the world
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market, and the country's income from the sale of agricultural products has exceeded the
income from the arms trade. The modern national project « Development of the agroindustrial complex» includes three main areas:

-accelerated livestock development;

- stimulating the development of small businesses;
 - providing affordable housing for young professionals in the village.
The development of agriculture, as well as the agro-industrial complex as a whole, is
strategically important and one of the priorities for our country, given the protracted global
economic crisis, the unstable political situation, sanctions, which were announced by the
western countries of Russia in 2014 and are still in force. (In the UN report “World Economic
Situation and Prospects 2017. Update as of mid-2017,” sanctions were mentioned among the
three main factors that have a negative impact on the growth potential of total GDP of the CIS
in 2015-2017 [9].
As of July 1, 2016, the number of employees of agricultural organizations was 1.4 million
people, peasant (farmer) farms - 301 thousand people, individual entrepreneurs - 76 thousand
people. According to the results of the 2016 census, the land area in farms of all categories for
10 years decreased by 23% compared with the results of the previous All-Russian
Agricultural Census 2006, and amounted to 348.4 million hectares. At the same time, in
agricultural organizations, the land area decreased by 29%, and in peasant (farmer) farms and
among individual entrepreneurs, as well as in households, they increased by 47% and 30%,
respectively. These data suggest that the farm sector is developing steadily in both the number
of agricultural land and the production of gross agricultural products. In this regard, the need
for technical re-equipment and modernization of the country's agro-industrial complex has
increased. In 2014, this problem became very acute, and the sanctions policy of the United
States and European countries intensified, and there was a danger to a certain extent of a
slowdown in agricultural development in the Russian Federation. Switching to the search for
internal opportunities brought positive results. Following the results of 2018, we can state that
the requirements for the modernization of the agro-industrial complex in our country are
almost limitless, and the implementation of the priority national project for the development
of the agro-industrial complex was achieved even in the context of a deficit of budget funds.
According to the Research Center of the Deloitte Company in the CIS, although there is a
decrease in GDP growth in the agro-industrial complex from 2.9% to 1.1%, according to data
for 2016, but the growth in agricultural output is still taking place [8].
The sanctions of the United States and the EU member states operate in several directions
- both in terms of limiting the supply of various food products to our country, and in terms of
limiting the supply of various types of agricultural equipment, technologies, production, etc.,
which is negative and not a key moment for our country, given the insufficient pace of
modernization of domestic production of equipment and technologies for the agricultural
sector. Agriculture is a consumer of products of many industries and services, ensuring the
employment of millions of people of working age, the food security of the country and the
standard of living of the population directly depend on the state of the agro-industrial
complex.
Despite the difficult economic situation and the reform of the industry, in recent years the
processes of improving management forms, horizontal and vertical integration have been
taking place in the agricultural sector of the economy, large agro-industrial complexes are
being created, industry associations and cooperation of small agribusiness are being formed.
Agricultural holdings produce more than 75% of agricultural products in the country.
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At the same time, the AIC continues to be one of the most problematic areas of the
Russian economy. The most acute issue for the country's agriculture is the general technical
and technological lag behind its main competitors on the world food market, and farms are
significantly less dependent on expensive technologies [5].
However, taking into account quite serious state subsidies for the development of the
Russian agro-industrial complex, which are provided under the State Program for the
Development of Agriculture and Regulation of Agricultural Products, Raw Materials and
Food Markets for 2013-2020, an adequate increase in the output of agricultural products is
also required. This is possible only with the use of modern approaches to the implementation
of various capital investments in the form of the so-called “national project approach”. The
project approach is something other than a more careful selection of projects for
implementation, taking into account their expected feasibility, efficiency, maximum
consideration of the risks of project activities and ways to minimize them. A proper
organization of project management is required in such a way as to get the most out of the
staff and creative staff of the project teams. Farming in economically developed countries
remains a subsidized industry, so when implementing projects in the field of agriculture, you
need to create such project teams (VTK) that would significantly save resources, get the most
return on investment and have the most favorable impact on the development of the
agricultural sector of the Russian Federation.
The topic of project management in the field of agriculture for our country is relatively
new, since the intensive development in the agro-industrial complex of Russia has become a
priority only in a market economy and a sanction regime, although some elements of the
project approach were used in the USSR.
Until recently, in domestic practice the term “project” was usually used primarily in the
technical field, and it was associated with an idea of the totality of documentation for the
creation of any structures or buildings.
In Western management, it is customary to understand a project with a certain initial data
and expected results (goals), which determine the ways to solve this problem in a certain
period of time.
Thus, with the approach of Western experts, the project includes the following main
elements:

- intention (problem);

- means of implementation (decision);

- results (goals) [7].
The project does not necessarily create a “unique product or service”. This approach is
more justified in the field of innovation. But it should be noted that every project is
innovative, since it always has a specific time for implementation, it is carried out in unique
conditions by a unique management team and ITC. Therefore, as the authors of this study
believe, the property of uniqueness and innovation is inherent in any effective project. As
stated in the Guide to the VGG project management knowledge base, the concept of “project”
is interpreted as a task with certain initial data and the required results (goals) determining the
way to solve it. At the same time, the project includes the intention (problem), the means of
its implementation (solving the problem) and the results obtained in the implementation
process [1].
Project management, planning, organization and control of labor, financial and material
and technical resources of the project, aimed at the effective achievement of project
objectives.
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The process of project management activities aimed at the effective achievement of
project objectives with a given quality, in a timely manner, according to the approved budget,
with the existing restrictions and uncertainty, through the use of available resources and
technologies [3].
In the most general form, the project management methodology (project management)
defines and formalizes the procedures, methods and tools for the implementation of five
groups of management processes (according to the PMBOK Guide standard):

- initiation (initialization) of the project;

- project planning;

- organization of performance;

- control of project implementation;

- completion of the project.
Project planning is a process that includes the definition of goals and interaction
parameters between the work and project participants, the allocation of resources and the
selection and adoption of organizational, economic, technological decisions to achieve the
goals of the project [6].
The project life cycle, in accordance with ISO 21500: 2012, is understood to be the
established phase sequence from the beginning to the completion of the project [4].
The project approach in the development of the modern Russian agro-industrial complex
will make it possible not only to specify the responsibility for the expenditure of public funds,
taking into account the specifics of its functioning, and to significantly increase the pace of its
development. The specificity of the agricultural sector in the Russian Federation is
characterized by the following factors:

- not a high level of organization of management;

- low security of computer equipment and access to information resources;

- the outflow of qualified personnel from rural areas;

- the lack of sufficient resources for agricultural enterprises to pay for the services of
consulting organizations;

- poor development of communication.
Thus, with all the universality of project management methodology for all sectors of the
economy, the ideas of a scientific approach to project management are quite difficult to
implement in the field of agriculture. Project management in the agro-industrial complex and,
therefore, an analysis of their implementation has specificity that distinguishes project
management from other industries and activities [2].
First, there is a feature of coordination in the sectoral structure of the agro-industrial
complex:

- the branches providing production of means of production for agriculture;

- direct farming - crop production, agriculture and livestock;

- processing industries.
For example, as part of the first industry, machine-building, chemical, construction,
enterprises of the microbiological and mixed feed industries.
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The second branch consists of agricultural enterprises, as well as forestry enterprises.
These enterprises produce both final and intermediate consumption products for various
groups of consumers.
The third, the most difficult, is focused on processing but agricultural raw materials. Here
there is a significant specificity of raw materials and technological bases. Enterprises
processing agricultural raw materials and related to the food industry, as a rule, have special
requirements for raw materials.
A significant difference in the activities of agricultural enterprises is also in the specifics
of the seasonality of the production and working period. In agriculture, the production period
not only differs by a longer duration compared to that at the enterprises of the first and third
structural groups of the agroindustrial complex, and usually this period is much longer than
the working period over time. At the same time, agriculture is the main link in the structure of
the agro-industrial complex.
Thus, on the one hand, agriculture satisfies its needs at the expense of the first and third
structural groups, that is, is dependent on them.
On the other hand, agriculture provides with orders, raw materials, products, jobs for
enterprises of the first and third structural groups.
Both the entire agro-industrial complex and its constituent industries, in turn, are complex
hierarchical structures. In addition, there is a regional specificity of agriculture, reflecting,
among other things, climatic and natural conditions.
Thus, it is quite convenient to use the ideas of project management when managing
projects implemented in enterprises and organizations of the first and third areas, despite the
fact that the agricultural sector is quite problematic for the implementation of a systematic
approach to project management.
In the field of agriculture, there are both processes that are managed and cannot be fully
controlled by the subject. This is observed, for example, in crop production or animal
husbandry. Moreover, if in plant growing, it is possible, for example, to accelerate the
processes of plant vegetation through the use of modern technologies, then in the second one
it is quite problematic to do so.
The consequence of industry, organizational and technological features of production is
the use of various methods and techniques for cost accounting.
Due to the unevenness, seasonality of production, the discrepancy between production
time and obtaining results in one reporting period (year) and the occurrence of significant
rolling-over residual production proceeds to the next year, they are taken into account for
crops, for the main technological processes, for years.
In agriculture, a significant role in obtaining the desired result from project
implementation is played by various factors that are considered in project management as
inputs to the planning process. These factors are highly likely to affect the results of the
project but they are not always controlled by the project management.
For example, in the field of agriculture weather and climate conditions play a significant
role. If, for example, weather and climatic factors are now minimized even in such sectors as
construction, then in the field of agriculture, weather and climatic factors still remain key.
The factor of seasonal gain of profit plays a significant role, primarily in the farms of the
crop profile. The main period of income in such farms is autumn and winter. Therefore, it is
necessary to find ways to equalize the incomes of the farms by creating inventories of
marketable products, providing a commodity loan to customers, creating additional industries
and strategic business enterprises (CPS).
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Also, environmental factors are no less important for agriculture, for example, land
reclamation costs may not be taken into account, despite the fact that in crop production, land
is a major factor of production and is considered not only as a production resource, an object
of cost accounting, and a key element of functioning capital and main means of production
The factors of urbanization of the population of the Russian Federation are also extremely
difficult to take into account. The rural population in the country continues to decline in favor
of the urban population. At the same time, agricultural production should be provided with
appropriate personnel, which may simply not be close to one or another agricultural
enterprise. The profitability of agricultural enterprises in the Russian Federation remains not
high, therefore, it is not always profitable for such enterprises to bear the cost of transporting
workers from other localities.
However, it should be noted that there are factors that contribute to the successful use of
project management in the field of agriculture. First, it is the organizational and legal structure
of modern agricultural enterprises. Along with the peasant farms in the agricultural sector,
there are large holdings, the structure of which includes not only enterprises producing
agricultural products and processing enterprises, various financial structures. Such
organizational and legal forms of enterprises make it possible to intensify the process of
bringing cities and villages closer together in the areas of organizing management,
introducing new, modern technologies, increasing the financial stability of all enterprises
within a holding company due to the possibilities of redistributing financial resources. This
process should be considered when considering issues of project management in the field of
agriculture.
It is obvious that it is quite difficult to implement the ideas of project management at the
level of a small peasant farm for a variety of reasons, for an average agroholding this task is
quite realizable.
The most important condition for the successful implementation of project management in
agribusiness is quick payback of projects. This is possible subject to the following rules:

- growth in production volumes;
 - reduce material and labor costs per unit of production.
These conditions are most successfully implemented at large agricultural enterprises,
primarily in agroholdings. The presence of a substantial financial "recharge" among holdings
allows them to quickly implement large investment projects, reduces the time needed to build
livestock farms by up to 1 year; contributes to the renewal of the park of agricultural
machinery. However, significant risks in the implementation of project management in the
field of agriculture must be carefully considered both in the pre-investment, investment and
implementation phases of the project.
With all the universality of project management methodology for all sectors of the
economy, the ideas of a scientific approach to project management are not sufficiently
implemented in the field of agriculture. This is because in the field of agriculture, but there
are processes both managed and practically unaffected by the subject of management [3].
A significant role in obtaining the desired result of a project is played by various factors
that are considered by project management as inputs to the planning process. These factors are
likely to affect the results of the project, but they are not always controlled by the project
managers.
According to experts, the use of project management in the field of agriculture, like the
agro-industrial complex as a whole, is quite convenient in managing projects in the field of
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processing agricultural products, as well as in enterprises that provide the technical
functionality of modern farms.
At the same time, directly at agricultural enterprises, along with controlled processes,
there are unmanaged processes.
However, no one will call investment activities, for example, sowing sugar beets or
obtaining marketable milk at the livestock complex. Therefore, the problems of providing
modern approaches in the implementation of investment projects are in a different plane,
namely:

- due to low profitability (or the desire of the management of holdings to save on rural
producers) farms;

- due to the lack of due attention to the issues of modern technological support of
processes in the AIC by the state;

- due to the lack of due trust of the management of agricultural enterprises in modern
management technologies.
Project activity at the level of agricultural enterprises is not much different from the
project activities of other companies in other industries, for example, in the purchase of
equipment or the erection of production facilities.
In agriculture, natural factors play a significant role in obtaining results. At the same time,
in project management, they are considered as important inputs to the planning process, they
should be under scrutiny, but they are practically unaffected by management.
2. CONCLUSION AND RECOMMENDATIONS
Thus, a systematic approach to project management in agricultural enterprises is not only
possible, but also necessary, precisely in order to save money. It is precisely because of the
lack of a qualified, systematic approach in the field of design that agricultural enterprises
often lose significant resources (which are often government subsidies for agricultural
producers). It is possible that the “retreat economy” factor also works in part, when at the
regional level certain suppliers and contractors are recommended, and farm managers, in this
case, are not “concerned” with optimization and logistics.
Currently, in the field of agriculture, factors that promote the use of project management
are increasing. In the agricultural sector there are large holdings, in the structure of which
there are not only enterprises producing agricultural products, but also processing enterprises,
various financial structures. Such organizational and legal forms of enterprises make it
possible to intensify the process of bringing the city and village closer together in the areas of
organizing management, introducing new modern technologies, and improving the financial
stability of all enterprises within the holding company due to the possibilities of redistributing
financial resources. This process should be considered when considering issues of project
management in the field of agriculture.
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