Tariff regulation on the base of weather and seasonal changes in transportation environment

Abstract

One of the most promising areas for the development of the domestic economy is the agricultural sector which is characterized by a high level of volatility due to a wide range of business risks including weather and seasonal changes. There are significant economic imbalances despite the active processes of automation of the agricultural sector as well as the desire of farmers to reduce the cost of production while simultaneously improving its quality. And it’s largely due to imperfect approaches to price formation. One of these problematic areas is the sphere of cargo transportation of agricultural products. Now the usual ways of supporting entrepreneurs in the form of preferential loans, special tax regimes, and aid grants are no longer fully able to create optimal conditions for agricultural producers. The reason of this is the complex, multi-faceted nature of production and financial and economic relations in the agricultural sector. Above-listed tools are able to harmonize the sphere of agriculture as an economic system, however, a number of issues require the development of effective organizational and economic measures in a rather tight range. So, it is advisable to review the pricing conditions for cargo transportation of agricultural products taking into account both the weather conditions and the factor of seasonality. The authors give reasons for the need to introduce a flexible approach to the application of trade surcharges (tariff schedule) in this area. The rationale for the feasibility of correcting prices for carriers’ services taking into account these factors is presented since the proposed measures reduce the surface damage of agricultural products during transportation. It leads to a longer period of sell-by-date and, that is why, obtaining additional income which more than compensates of the transportation costs increasing.