Agroindustrial complex is an aggregate of the economic sectors bound to the development of agriculture. It is a national economical complex formed as a whole in the mid. 1970.

The objectives of the agroindustrial complex are in the maximal satisfaction of population's demand for foodstaffs and consumer goods.

Agroindustrial complex holds the leading position in the economy of Kalmykia. Kalmykia possesses 2.7% of all the agricultural land in Russia; 0.7% of tillage; 8% of pastures. Irrigated lands make up no more than 1% of the total agricultural areas of Kalmykia, only 6.6% of all the plough lands are irrigated. The early 1990s witnessed a reform of the sector, it lead to a number of essential transformations: privatization of 86% enterprises maintaining agricultural production, 73% enterprises of food and processing industries. Reformed was the property of 53 agroindustrial enterprises, former collective and soviet farms.

The development of the agroindustrial complex in the Republic of Kalmykia greatly depends on natural climatic factors. The republic is constantly exposed to draughts. Every second or third year may be considered infavorable. Natural climatic and other conditions divide the territory of the republic into three zones: Western, Central and Eastern. The first one is the best for grain-crops and cattle-breeding, the second one suits for fine-fleeced sheep breeding and meat cattle breeding, stable crop production, and finally the third zone is the zone for fine-fleeced and caracul sheep breeding combined with meat stock-breeding. Area of Sarpa lowlands is the land for rice-growing.

Agricultural sector of Kalmykia goes through the implementation of new organizational structures based on various forms of property and management.

If in 1996 the specific percentage (61%) of the total number of agricultural enterprises belonged to such organizational form as soviet farm, limited liability partnership and cooperatives, the collective farms made up 8%.

Total of 111 africultural enterprises operated in 1996.

In the first half of 2002 there were 131 agricultural enterprises of various forms of property and management in the republic. In 2002 the dominating percentage (62%) of all the agricultural enterprises belonged to agricultural cooperatives, state enterprises held 24%, federal enterprises made 5.4%, partnerships were 3%.

As the result of fulfilling the Development Program of this sector emerged the tencency of stabilization and growth of production in crop growing. Unline the collection of grain in 2000 (228 thousand tons) in 2001 the collection grew to 406 thousand tons and reached 432 thousand tons in 2002.

Cattle breeding is the principal branch in Kalmykia's agricultural sector. 2000-2002 in the agricultural sector were marked by the positive trends and growth of the sector's outputs. For example during 2002 the agricultural enterprises showed the growth of production by 25% in comparison with 2000.

On may 17-18, 2002 was held the third republican exhibition of pedigree cattle offering an exposition of 41 heads of hotned cattle, 226 heads of sheep, 21 horses, 12 camels and 16 heads of pigs. The six best expositor enterprises took part in the 4th All-Russian exhibition of sheep where the first prise of the Russian Ministry of Agriculture was awarded to the reproductor ram of Ulan Heech Enterprise from Yashkulsky region.

The central focus in the agricultural sector is not only the improvement of breed quality but timely sanitation and veterinary policy, stable provison fodder stocks, technological innovations, etc.

Development of the republic's agriculture and its reform in the intermediate period takes place in the conditions of the economic crisis. The last 10 years exposed negative changes in the sector's production potential. For instance, most of the machinery worsened both in quantity and quality. Much of the machinery ran out of the designed durability life. As its consequence, the repairs are often carried out from disassemply parts of non-operational machinery.

As the result of the considerable disparity of prices for agricultural products some enterprises have no possibility to purchase the required amounts of new machinery, whereas the necessity keeps growing.

It is projected to create a network of technological stations in all the crop-growing regions of Kalmykia. Such stations will finction of the lease basis.

Considerable contribution to the development of agroindustrial complex is made by the individual farmers.

The farmers in Kalmykia began their development in 1991. By the beginning of 1996 the bunber of individual farmers reached 1813. They cultivated 655.5 thousand hectares of agricultural holdings, including 11 thousand hectares of tillage. In 1995 these farmers produced 14274 tons of grain, 1090.4 tons if sunflower, 347.8 tons of vegetables, 495.6 tons of meat, 259.6 tons of milk and 318 tons of wool.

On March 29, 1997, the government of the republic adopted the special resolution 76 "On the conditions of farmers and their future development" and approved the Development Program of Farmers' Enterprises for 1997-2000. The timely taken measures prevented the setback for many such enterprises. However, remains the tendency of lowering of the number of such enterprises. It reduced from 1813 in 1996 to 1640 in 2002.

In 1999 in order to hold up the recession of the agricultural production and resumption of sector's growth the govenment proposed a Concept of medium term development program for the sector of agricultural production of the Republic of Kalmykia in 1999 - 2005, which outlined the main development parameters of the sector. The President has issued a decree 165 "On urgent measures on the secial development of the rural areas of the Republic of Kalmykia", whichfocused on creating favorable living conditions for rural population. The former Ministry of Agriculture and Foodstuffs of the Republic of Kalmykia now has an official nomination of Ministry of Agriculture and Social Development of Rural Areas of the Republic of Kalmykia. A targeted program "Social Development of Rural Areas of the Republic of Kalmykia for 2002 - 2006" has been accepted.

Positive tendencies in the development of Kalmykia's agroindustrial complex have found reflection in all-Russian rating of principal social and economic indicators of agricultural enterprises in 2001 made by the Department of Economy nad Finance.

In the aggregate of 4 indicators Kalmykia took 11th place among 87 regions of Russia engaged in the agricultural production. Kalmykia took the 1st place on such indicators as profitability and percentage of profitable enterprises.