Chapter 491 Franz with a Headache

With the conclusion of the Economic Conference, the power industry is listed as Austria's new pillar industry for the next decade, along with heavy industry.

Today, the industrial scale of Austrian heavy industry is also an astronomical figure. The industries involved are mainly: iron and steel, metallurgy, coal, machinery, chemical industry...

In terms of classification, electricity can also be regarded as a kind of heavy industry, and the relationship between the two sides is very close. It is only because it has just started and its own industry scale is very large that it is listed separately.

The number of pillar industries cannot be large. Since electric power and heavy industry have become new pillar industries, naturally there are also industries that have fallen from the "pillar industries".

There is no doubt that what has been replaced is the "railway". It's not that railways are not important anymore, mainly because after more than 20 years of hard work, most of the railways in Austria have been built.

The railway industry is beginning to become saturated. What is needed in this state is steady development, and there is no need for the government to invest too much resources.

In addition to railways, agricultural development has actually reached its limit. The growth rate of local agriculture has slowed down a long time ago, and the market for agricultural products is so large that it is not necessary to grow more food to earn more.

The current agricultural growth rate is similar to the population growth rate. Austria already accounts for 70% of the international agricultural export market, and it is almost impossible for this share to increase further.

Even before long, it will be hit by the comeback of Russian agricultural products, and it is very difficult to maintain the current market share.

In order to ensure the healthy development of agriculture, Austrian agriculture has been adjusted many times, from the initial direct export of agricultural products to the later export of refined agricultural products.

This period also includes the promotion of raw silk planting in Lombardy and Venice, and the development of the raw silk industry; the promotion of grape cultivation in the Balkans and the establishment of the wine industry.

These practices are all artificially reducing food production in order to ensure food prices. With the outbreak of the Prussian-Russian War, the international market has lost the Russians as a competitor, and life has only gotten better in recent years.

However, this good day will soon come to an end. The tsarist government is negotiating with various countries, preparing to offset the debts it has paid off with food.

This is a forced sale, and if the creditors don't accept it, the debts will never be repaid. Needless to say, Franz also knew that Alexander II's plan would succeed.

Mao Xiong's debt is not easy to collect, even if it is discounted, it is better to recover part of it than to lose everything. Even if the governments of various countries have opinions, capital will let everyone compromise.

What is at stake now is nothing more than a matter of interest, which can be negotiated sooner or later. The diplomatic barriers that prevented Russian grain from entering the international market have now been cleared by Alexander II.

The market is so big, if you sell more, others will naturally sell less. Although there are many places with food shortages in this era, it is a pity that only Europe has the purchasing power.

If it weren't for the strong traffic of the Russian Empire, which directly hindered their grain exports, international grain prices would collapse immediately.

Franz never doubted the grain production capacity of the Russians. In particular, Alexander II made a lot of wasteland, which simply turned the table over.

In recent years, Alexander II suffered more than two dozen assassinations, which can prove how hated his reforms are.

Even the nobility with a weak head also reacted. It is a pity that the general trend has been completed, the land has been reclaimed, and it is too late to want to go back.

Franz had no interest in the infighting of the tsarist government. Including Alexander II's use of grain to offset debts, he is not very optimistic.

No matter how good a policy is, it depends on its implementation, and domestic food is not owned by the tsar. If you want to use it to pay off your debts, you must first collect the food and transport it out.

Putting aside the financial pressure brought on by it, someone has to carry out the purchase of grain alone, right? In the face of interests, who can guarantee that these bureaucrats will not be moved.

You must know that when the wasteland was opened up, Alexander II watched so closely that some people deducted the rations of the peasants, and also caused riots, and it was not just one time.

Collecting grain in the form of tax will result in overcharged by three or five buckets, or a word similar to "fire consumption" will appear, and it will be legally lost.

Buy food directly from the people with money, and bureaucrats will also do it. Buy directly from the peasants at a low price, then sell them to the capitalists for a profit, and finally leave a little bit for the tsar to cross.

Unless the tsarist government sets a high price, higher than the market price, the bureaucrats can benefit more from it, otherwise they will not receive much food.

The tsarist government's plan could not be realized, but the impact of Russian food was not small. As long as it is profitable, the capitalists will still ship out the grain and sell it.

Franz was very suspicious that Alexander II did it on purpose. First, use grain to pay debts to countries and let them open up their markets.

The tsarist government gave a token amount of grain each year to offset the debt, and then let the capitalists ship the grain out and sell it.

Although it seems that the tsarist government did not make any profit in doing so, in fact, as long as the unsalable domestic grain is sold, it is a big profit.

Even if countries knew about the Russians' plans, they would probably go with the flow. For food importing countries, being able to buy cheap food is always a good thing.

It is only the current grain exporting countries that suffer the real interests, and Austria is the biggest victim. Politically there is no confrontation yet, but economically Russia and Austria are facing each other first.

Now there is not much choice left for Austria. Either use the advantages of transportation and agricultural technology to directly drive down the price of grain, making it unprofitable for the Russians to export grain.

But if you do this, you will kill eight hundred enemies and lose one thousand. You must know that Austria is now the hegemon in the international agricultural export market, and can get a lot of benefits every year.

Even if we win the price war and occupy a larger market, the decline in food prices will lead to a drop in profits. In the end, not only will we not be able to obtain greater benefits, but we will have to pay a considerable price.

The Russians are just barefoot challengers. If they fail, the big deal is still the same. If they succeed, they can get a lot of benefits.

In the original time and space, the Americans played price wars, defeated all competitors, and established the hegemony of grain exports, which was for strategic purposes.

Now Austria can't follow suit, not to mention the consumption of a lot of financial resources, the key is the era of colonial empires, Britain and France have a large number of colonies.

The lack of native food can also be made up from the colonies. Relying on the control of international grain exports will not scare them at all.

Otherwise, Franz would have fiddled with the grain export alliance long ago, wooing several grain exporting countries to manipulate the international grain market for greater benefits.

Unable to achieve the strategic purpose, and to face the challenges of many competitors, it can be said that after the basic accumulation of capital is completed, the importance of agriculture will be reduced.

Declining importance does not mean giving up, in fact agriculture is still one of the most important industries in Austria. The industrial chain formed around agricultural production accounts for 38.6% of Austria's gross national product.

Although this proportion is decreasing year by year, it still loses its importance. Faced with the challenges of the Russians, industrial adjustment has become imperative.

Austria's agricultural industry system has been perfected. From the production of primary agricultural products to the final sales of agricultural products, the added value of products has been played to the limit.

For example: from wheat - flour, biscuits, from fruits, vegetables - canned, from grapes - wine, raisins, from potatoes - chips...

This era is all about ecological agriculture, there is no chemical fertilizer, pesticide additives, and there is no such thing as green food. The people are too poor, and there is not much market for branded agriculture.

A complete industrial chain increases the ability to resist risks, and when it is hit, it will have a greater impact on the economy.

The technical content of these industries is very low, and European countries are not completely without agriculture. These industries also exist, but they are limited by raw materials.

Capitalists certainly don't mind expanding production once a lot of cheap raw materials are available. Even Austria is the largest buyer of Russian grain, and the capitalists have always had a low morale in the face of interests.

The low tariff system of Russia and Austria has created opportunities for Austria's industrial and commercial product exports, but also brought challenges.

In the face of cheap foreign food, these agricultural product processing companies will definitely make choices that are in line with their own interests. In this regard, the government cannot force them, after all, enterprises also have to survive.

Today, the profits of agricultural product processing enterprises have also dropped significantly, from the initial 30 to 40 percent to the current 10 percent.

This is still gross profit, and net profit will be even lower. Under the brutal market competition, agricultural product processing enterprises have entered the era of meager profits, making money entirely by taking volume.

Those with relatively high profits are all snack processing companies. However, the competition among these companies is more brutal. Almost all snacks on the market have dozens or even hundreds of similar products.

The profit per piece is good, but the problem is that the sales volume is not large. There are not many companies that can make brands and make huge profits.

Now Austrian agricultural industry technology has risen to the top of the times and has become an existence in the ring.

Fortunately, the agricultural products of the Russians are relatively simple, nothing more than potatoes, wheat, and corn. Unless they are processed into cans, fruits and vegetables will rot before they are shipped out.

Obviously, the Russian industry has not kept up. The development of these industries is not very good, and the products produced cannot be sold locally, let alone the international market.

At this stage, it is imperative for Austria to adjust the agricultural industry, for example: cutting the output of agricultural products that will obviously be affected, and switching to other cash crops that are in short supply in the market.

easy to say, hard to do. With so many farmers in Austria, changing their planting habits is not something that can be done in one sentence.

Because market information is not transparent, even Franz cannot accurately judge what agricultural products will be lacking in the market in the future.

No one knows what is lacking in the market, which makes the government guide the cultivation of agricultural products and become an empty talk.

Unless it is a planned economy, otherwise, there will be chaos in the cultivation of agricultural products for a long time in the future.

This is an unsolvable problem. The agricultural products that are in short supply this year may rot in the ground next year, and no one cares.

Farmers are also adjusting the direction of planting of agricultural products according to their own judgments. There are too many people involved, and it is impossible to coordinate at all.

Franz had a headache.