Competitiveness of Russian Dairy Sector: Inter-Regional Comparison

In competitive market dairy production will shift to the regions with the best conditions. In the Soviet paradigm dairy production was evenly distributed throughout the country, what was caused by extremely low transportation prices and by differentiated by regions procurement prices. Thus, there was no specialized zones of dairy production. The start of economic liberalization in Russia was followed by the process of disintegration of the country's common economic space. Reforms entailed an increase in transportation costs and regional specialization based on comparative advantages of a certain commodity production. Specialized dairy producing zones started to emerge. This paper attempts to determine these zones in Russia in the nearest future. The analysis is based on an interregional comparison of comparative advantages in milk production. The research involves the study of raw milk production, dairy processing and consumption of dairy commodities in 51 regions of the European part of Russia. A system of indices to estimate specialization and comparative advantages in milk production is constructed.