A study of state of the arts on the institutional organization of local agricultural systems with limited demand capacity management and development

Introduction. Local agricultural markets with limited demand capacity, such as those in the mountainous regions of the North Caucasus, face seasonal overproduction and inefficient market equilibrium. These problems are caused by high transaction costs, budget constraints and imperfect information. Research objective. To systematize modern research on institutional mechanisms for managing the development of such markets, identify key problems and propose solutions. Research methods and materials. A literature review was conducted, including works on common resource management (e. g., the “tragedy of the commons”), spatial concentration and agent-based modeling. The methods of theoretical analysis and synthesis of existing approaches were used. Research results. It was found that most studies focus on common resource management, but ignore the specifics of markets with limited capacity. Self-government institutions and adaptive strategies have proven their effectiveness in other contexts, but their applicability to local agricultural markets requires further study. Discussion of research results. Despite advances in studying common resources, there are no formal models for analyzing the strategic behavior of producers in markets with limited demand. This limits the possibilities for developing effective institutional solutions. Conclusion. Current research does not sufficiently cover the problem of limited capacity of local markets. Findings. For the sustainable development of such markets, models are needed that take into account the strategic interaction of producers. Suggestions. Practical measures include the creation of cooperatives and information exchange mechanisms. Future research should be aimed at developing formal models and testing institutional innovations in real conditions.