Agrarian relations and land rent
CONTENT
INTRODUCTION1.
THEORETICAL FOUNDATIONS OF AGRARIAN RELATIONS IN UKRAINE
.1 The
essence of agrarian relations: economic structure and specificity
.2 The
land rent, land price as a capitalized rent
.3 History
of the formation of agricultural sector of Ukraine, its reforms2. GENERAL
ESTIMATION OF MODERN CONDITION OF AGRARIAN-INDUSTRIAL COMPLEX OF UKRAINE
.1 Assessment
of the investment attractiveness of AIC of Ukraine
.2 The
present state of the agricultural sector of Ukraine3. DIRECTIONS OF IMPROVEMENT
OF AGRICULTURAL DEVELOPMENT IN UKRAINE
.1 Agrarian
reform in Ukraine: the present status and current tendencies
.2 Problem
of improving the investment climate in the agricultural sector of the Ukrainian
economy:
INTRODUCTION
's transition to a market economy
requires in the agro-industrial complex development of new approaches to
agricultural policy aimed at forming food security, priority development of
agriculture, a radical restructuring of economic, social and legal relations in
agriculture, freedom of entrepreneurship and competition.of the main reserves
of growth of agricultural production effectiveness is sustainable use of the
main means of production - land. Therefore, investments in agriculture must
first be used for conservation lands, improving soil fertility, which should
cause agricultural productivity growth and, in particular, the establishment of
sustainable animal fodder base.of theme caused by importance and priority of
agriculture in today's socio-economic development at the global level as well
as in Ukraine and transformation processes in the national economy, the need to
reform the national economy.purpose of the course work is rationalization of
theoretical ambushes of reforming and development of land relations in
agriculture.the course work:
· are considered the
theoretical propositions about the nature of land relations and their development
in agriculture with the selection of effective forms of use and management of
land resources;
· is provided
justification for the principles of economic regulation of property relations
of land in agriculture with the principles of market economy;
· described the main
directions on the improved functioning of land lease relations in the
agricultural land use;
· submitted proposals
for the establishment and development of agricultural land markets with a view
to its effective functioning.
CHAPTER 1. THEORETICAL
FOUNDATIONS OF AGRARIAN RELATIONS IN UKRAINE
1.1 The
essence of agrarian relations: economic structure and specificity
agrarian sector is a specific branch
of production and life. Its foundation is the direct use of the capacity and
resources of nature with its laws and conditions. Agrarian sphere inherent
special agrarian relations, which are in complex interaction with the existing
system of social and economic relations [1, p.9].
There are differences in the content
of the concept "agricultural relations". Different theoretical
schools differently reveal the essence of agrarian relations and patterns of
development. This is due to the complexity of this concept and the fact that
existing practical problems affect the development of determination of the
content of agrarian relations.scientists believe that the essence of agrarian
relations is determined exclusively by the land owning, since this form of the
property is land rent, the agrarian relations are reduced to a rent relations
connected with the land [2].view: agrarian relations - one of the most
important aspects of industrial relations in different socio-economic
formations over the use of land and other natural resources.economists believe
that agrarian relations should be seen in broad and narrow sense. In the first
case, agrarian relations identified with system of land relations in
agriculture and other sectors of agriculture; in the second case, agrarian
relations identified with land relations .is no complete or single definition
of land relations in Ukrainian scientific literature. Mostly the term can be
found in the context of land ownership, land use and land management issues. It
often concerns land fund management, rent relationships, social, economic and
productive relationships, etc. Thus, the context of land relations comprises a
wide range of issues which have both an economic and legislative character. It
is not difficult to notice that the categories of land ownership fall under
land relations. Thus, it is not so strange that most scientists closely connect
changes and developments in land relations with changes and developments in
social and economic formations. In Ukraine, land relations are variously known
as primitive, slave owning, feudalistic, capitalistic, socialistic and
post-socialistic. The socialist period - because of its long duration - and
post-socialistic land relations are the most interesting in this respect.land
relations are characterized by the nationalization of land, which includes
collective land ownership, collective organization of work and, as a rule,
equal division of the results of work. According to the socialist policy, it is
prohibited to trade land plots.formulation of land relations appeared in
Ukrainian economic literature after political pressure had loosened regarding
the implementation of different forms of land ownership (including private
ownership) [3, p.12].socialistic land relations are pre-determined by a number
of features. Among them the following can be emphasized: Privatization of land;
definition of land share borders for each member of the collective farm;
development of a stable economy based on co-operation between collective
organisation of work and private property on land and other means of
production; promotion of private interests in efficient agricultural
production; development of land trade, etc.relations is a special system of
economic relations in the society on land ownership, land use and agriculture,
as well as on the production, distribution, exchange and consumption of
agricultural products [4, p.44].sphere of agrarian relations are not only
social production relations of agricultural enterprises, but also relationships
within them. Therefore, it is important to distinguish agrarian relations into
two types. The first type is limited by agricultural branch, while the second
type is extended to the entire system of economic relations, arising in society
about the appropriation and use of land and other means of production in all
agriculture.manufacturing process, manufacturing operations in the agricultural
sector is closely intersect with the natural processes. The main economic
resources (factors) of agricultural production are:
· people;
· lands, animals,
plants;
· technical means of
production.to these factors, there are two groups of objective laws in
agriculture:
· natural biological;
· socio-economic
laws.to the fact that the economic processes in the agricultural sector is
closely intersect with the natural processes, there are a number of features of
agricultural production:
· climatic
conditions, soil structure, biological factors affect productivity and
determine the riskiness and volatility of agriculture. The same quantity and
quality of expended labor may be represented in different numbers of products
depending on these factors;
· natural and
climatic factors are determine a special rhythm of agricultural production, its
seasonal nature, which creates seasonal fluctuations of workers' employment and
of production;
· there are features
in the use of technology, financing and income generation of farms due to the
seasonal nature of production. To perform agricultural work is necessary to
have a full set of equipment, but it is used for a certain season, and at other
times it is idle;
· the final amount of
incomes in agriculture is generated only at the end of the year after the
realization of production (especially in farming);
· the level of
concentration of production is largely determined by the size of lands, their
productivity and the intensity of using;
· specialization of
production is due primarily to geographic and climatic factors;
· effective use of
land is possible with a rational combination of agricultural industries,
compliance with biologically based crop rotations.
· a large part of
output is consumed within households, without taking the commodity form.
Therefore, in the agricultural sector persist longer natural types of
production and income;
· large dependence of
the results of production on weather conditions require the creation of
insurance funds in substantial holdings for droughts, floods and other natural
disasters to ensure a continuous process of reproduction. The creation of such
insurance funds is not necessary in other sectors of the economy where natural
factor does not affect or hardly affects the results of management [5,
p.62].basis of agrarian relations are relations that arise between people on
the use of agricultural land and other natural resources. The essence of
agrarian relations is to provide a direct link between the employee and the
elements of nature, which are used, especially land.is the main and
nonrenewable mean of production in agriculture. The distribution of land
between classes and social groups in different economic systems determines the
nature of agrarian relations.nature of agrarian relations is determined
primarily by the form of land ownership as the main means of production. This
is due to the special role of land as the main means of production in the
agricultural sector. Ownership of the land as an economic category reveals the
historical form of appropriation of land as means of production and nature.the
nature agrarian relations are:
· relations for the
direct implementation of agricultural activities (production of food, raw
materials and food of plant and animal origin, processing and sales of
products, services of agrochemical, ameliorative, technical, financial and
other character);
· relations
concerning management (including organization) business activities at the level
of individual agricultural enterprise (farm organizational relations) and at
the national level (the relationship between agricultural enterprises and
government agencies that regulate agriculture);
· vertical, in which
one of the participants is the management body, including the property owner or
authorized body.type of agricultural activity agrarian relations are:
· relations in animal
husbandry sector;
· relations in crop
production;
· relations in the
agro-industrial service [5, p.65].presence of different forms of land ownership
and land use is the basis of stratification agriculture. The world practice
shows that the agricultural sector effectively operate various size and
ownership types of enterprises: small, medium and large, based on full
ownership of land, partial ownership and lease; family farms, agricultural
cooperatives and corporations. They all have the same rights in relations with
the state, other agricultural and non-agricultural enterprises and
organizations.of subjects of agrarian relations are the basis of economic
relations in the sector. These subjects come into economic relations not only
between themselves but also with other industries and society as a whole. Thus,
agrarian relations is part of the overall system of economic relations of
society.of economic relations in the agricultural sector are:
· the state;
· agricultural
enterprises, cooperatives, companies, peasant associations;
· individual
manufacturers (farmers, family and individual farms).important component of
agrarian relations in the broadest sense is a farm relationship between land
owners and land users. All agricultural enterprises of different ownership
should operate on the basis of commercial calculation, that correlate their
market prices and production costs, to ensure a sufficiently high level of
profitability to be able to carry out expanded reproduction [6].essence of land
relations, which have developed in our country at the present stage of
development, can not be considered in isolation from the reform of the agricultural
sector, because they form the basis of land ownership and land use.
agrarian relation rent
investment
1.2 The land rent, land price as a capitalized
rent
the emergence of land ownership
arises the corresponding form of revenue. This revenue is land rent. Land rent
is unearned income that gets the landowner. Land rent is an economic form of
implementation of land ownership. Therefore, new forms of rent appear with the
change of ownership relations.is the transfer of income from a farmer to the
owner of land for the use of land. There are 3 main types of land rent. They
are presented in the Figure 1.1.
Figure 1.1. Types of land rent
rent, under capitalism, is
additional profit which arises as the result of the expenditure of labor on the
average and better portions of land or as a result of increasing productivity
of supplementary capital investments and which is appropriated by the
landowner; one of the forms of land rent generated by the monopoly in land as a
factor of the capitalist economy. Its source is the amount by which surplus
value created by the labor of hired agricultural laborers exceeds average
profit; this surplus arises as a result of higher productivity of labor on
comparatively superior plots of land (more fertile land, lands closer to the
place of sale, or lands in which additional capital has been invested).are two
forms of differential rent:
· differential Rent
I;
· differential Rent
II.Differential Rent I is connected to differences in the fertility and
location of plots of land. The individual production price of a unit of
agricultural produce that comes from a better portion of land turns out to be
lower, because with other conditions being equal the labor applied to more
fertile soil is more productive and because expenditures for the delivery of
agricultural goods to the market are lower for lands situated relatively closer
to the market. Agricultural goods are sold, meanwhile, on the basis of the
social price of production, which in agriculture expresses the social value of
these goods and which is determined by the conditions of production on the
poorer plots of land.situation arises because the quantity of land is limited,
and the agricultural produce created only on the comparatively superior lands
is insufficient to meet the social demands for this produce: the market also
demands the produce created on the average and poorer lands. Capitalist farmers
operating on the better and average lands sell their produce at market prices
and receive additional profits, which, on the basis of the rights of property
in land, are appropriated by the landowner (regardless of whether the owner is
a private individual or a capitalist state) in the form of differential rents.
Historically, this form of differential rent arose earlier than the second
form; it grows with the development of extensive agriculture and also as
industrial centers and the system of communications develop.source of the first
form of differential rent is the supplementary net income received as a result
of the higher productivity of labor on land that is superior in terms of
fertility and location. Since comparatively poorer lands must also be brought
into agricultural circulation in order to increase overall production and
satisfy social demand, it is essential that planned pricing take into account
the compensation of expenditures and the receipt of the necessary profits by
farms using such lands; otherwise the profit-based incentives to cultivate
these lands would be undermined. Kolkhozes and sovkhozes utilizing average and
superior lands receive supplementary income in the form of the difference
between the social price and the individual value of a unit of produce. Since the
formation of this income results not from the labor efforts of individual
collectives but rather from the social factors of reproduction, this income is
appropriated by the state in the form of differential rent on the basis of the
right of the national ownership of land. In this regard, the antagonistic
nature of such appropriation is completely eliminated, since differential rent
becomes the property not of the class of landowners but rather is included in
public funds and is used in the interests of the society as a whole, including
the planned improvement of agriculture. This differential rent of the first
category is extracted by the state through purchase prices, the differentiation
of purchase plans, and the income tax [7, p.106].most common reasons for the
formation of differential rent I are benefits that have land in fertility or
location.Rent II is the additional profit that arises as a result of successive
capital investments in the land. It is indissolubly linked with the
intensification of agriculture and is its most important economic result. The
increased quantity and rate of this form of differential rent reflect the
growth in productivity of additional capital investments, a growth which
becomes basic and decisive in times of scientific and technical progress
despite the so-called law of declining fertility of the soil. Until the lease
terminates, the superprofit obtained as a result of additional capital
investments goes to the tenant farmer. But when a new lease is signed, the
landowner, by virtue of the supremacy of the monopoly of private property in
land, appropriates this additional profit by increasing the rental fee; thus,
he obtains a portion of this form of differential rent. This is the basis of
the struggle between tenant capitalists and landowners over the rental period
[7, p.108].rent of the second category arises as a result of the varying
productivity of supplementary investments: its size and rate increase
systematically under conditions of intensification and scientific-technical
progress in agriculture; it remains almost completely with the agricultural
enterprises.rent is a form of capitalist land rent, representing the part of
the surplus value created by agricultural wage laborers and appropriated by
landowners because of the monopoly on private property in land. As
distinguished from differential rent, absolute rent does not depend on
differences in fertility, in the locations of various plots of land, or in the
productivity of additional capital investments in a given plot. Private
landowners who legally own the land allow their land to be used only in return
for compensation, which they receive in the form of rent. The landowner
collects rent from any plot, even the least productive one, if a demand to
utilize it arises. The lessee, the capitalist entrepreneur who rents the land,
must provide not only the average profit but also the superprofit, which is
transmitted in the form of absolute rent to the landowner and constitutes part
of the rent. It is possible to obtain this superprofit in agriculture because
its organic composition of capital is lower than industry’s, and, consequently,
the proportion of human labor creating the surplus value and the aggregate of
surplus value in agriculture are larger than in industry. Thus, agriculture’s
rate of surplus value is higher than industry’s. The cost of the agricultural
produce is higher than the social price of production, which includes
production expenses and the average profit [8].rent is a special form of land
rent in a capitalist economy; it occurs in connection with the sale of goods at
monopoly prices in excess of their value.agriculture, monopoly rent is derived
from lands on which uncommon crops, such as particular varieties of grapes, are
cultivated; in extractive industry, such rents are related to the mining of
rare metals. Because of the limited amount of land specially suited to the
production of rare commodities and because of the high demand for the products,
it becomes possible to market such products at prices above their real value
for a more or less prolonged period. In all such cases, the capitalists renting
such land must make very high payments to the land-owners; the basis of the
payments emerges as monopoly rent. These rental payments take the form of additional
income for the landowner. Thus monopoly rent represents that portion of the
surplus value produced by wage labor that is appropriated by the landowner
through the redistribution of such surplus value [9].rent received in
pre-capitalist systems based on direct personal dependence of manufacturer
(slave, serf) of the owner (slave, feudal lord). In conditions of capitalism
land rent is based on application of capital to land and therefore in total
mass of surplus product is the excess of the average profit.price is
capitalized land rent, which brings income as a percentage. On the basis of
private ownership of land arises purchase and sale of land. Land price differs
from the price of other goods. Land is good nature, and not the product of
labor. However it takes marketability [10, p.308].is devoid of value, but has a
price. Purchase of land means the purchase of rights to land rent and profit;
its price arises on that basis. The more land rent makes, the more money it
will pay for the purchase, therefore, the price of land will be greater.rate of
interest on loans affects the price of land. Buyer compares rent with loan
interest, he would receive if he put money in the bank. Land price is the sum
of money that is being given in a loan, annual generates income, which is equal
to the rent derived from the land.formula for measuring of land price is
presented in the Pic.1.1.
(1.1)
- land price; R - land rent; B -
bank interest.price can vary not only from rent and loan interest, but also
from the cost of development and improvement of land, supply and demand for
agricultural products, the policies of state regulation of the agricultural
sector, etc.price of land is influenced by such factors as rising inflation,
lower income of farms and others. Price of land in major cities around the
world is very high and continues to grow.price tends to increase. Especially
noticeable increase in the price of land in urban areas. This is facilitated by
growth of rents and demand for land for construction [11].spreads as a form of
economic conditions in developed market relations in Ukraine, which based on
the lease agreement between landowner and tenant. The lessee is entitled to
possess and use the land for a fee for a certain period.contract provides
compensation in the form of rent for the land, which may include not only
payments for land use (rent), but the amortization structures and buildings
that are posted on this area.agrarian reform provides the transition to full
land and lease relations between landowners (land parcels) and economic
entities and obligatory payment for the use of land between the subjects of
land relations.
1.3 History
of the formation of agricultural sector of Ukraine, its reforms
agricultural sector is one of the
most important fields of material production, where are created a material
goods of plant and animal origin to provide people with food, and industry with
raw materials.establishment of unified complex, which has been producing the
final product of the agricultural raw materials is a new level of interaction
with industrial farming sectors of processing, which means the transition from
intrasectoral relations to intersectoral relations.agricultural sector occupies
a very important place in the economy of society. Normal functioning of the
entire economy and people's welfare depends on its development. The development
of the agricultural sector depends on the proportion of economic relationships
that develops in it.the early 90s of the twentieth century in Ukraine began the
process of reforming the agricultural sector. And it was due to the following
factors.Stolypin agrarian reforms. A series of measures introduced by Petr
Stolypin, the head of the Council of Ministers of the Russian Empire, between 1906
and 1911 in order to restructure the peasant land tenure system.legislation in
which the reforms were introduced included the ukase ‘Concerning the
Fulfillment of Certain Existing Laws on Rural Land Ownership and Land Use’ (22
November 1906) and a law passed by the State Duma on 27 June 1910. Those
removed restrictions on landholding imposed by the peasant commune (obshchina).
All peasants were given the right to leave such communes along with the lands
apportioned to them. Peasants also gained the right to demand that their
allotments be consolidated into an integrated landholding, which could be
farmed as a khutir (if the household were settled on the property) or a vidrub
(if the household remained in a village). The latter right marked a radical
departure from the common practice of farming small, scattered strips of land.
The Peasant Land Bank provided loans for the purchase of land to establish
vidrub or khutir holdings. The last reform was the Statute on Land Organization
of 11 June 1911, which set a definite agenda for the land settlement
commissions (at the gubernia and district volost levels) created by the ukase
of 1906.new system encouraged peasants to show initiative and to improve their
households. Assistance was provided by the Peasant Land Bank, agricultural
organizations, co-operatives, and zemstvo agronomists.intent of Stolypin's
reforms was to improve the position of the wealthier peasants and establish it
as a base of support for the troubled imperial regime. Accordingly, the reforms
benefitted only about 25 percent of the households. Poor and some middle-income
peasants could not buy land because of high prices (400 to 700 rubles per
desiatin in Right-Bank Ukraine) and were not given credit by the Peasant Land
Bank. A substantial number of such peasants finally emigrated beyond the Urals
to Asiatic Russia and the Far East, a practice also encouraged by Stolypin to
reduce rural overpopulation. Ultimately, the reforms gave rise to an even
greater social differentiation among peasants, with the largest peasant
households growing larger and the number of middle-sized holdings shrinking
[12].the October Revolution in Ukraine began the process of collectivization,
which was interrupted by the policy of the NEP. Thus, farmers in Ukraine were
transferred 92% of its land. In 1928 the NEP policy was abolished by Stalin,
then began the forced collectivization, the result of which was the creation of
numerous collective and state farms. Farms were liquidated and the ablest
and able-bodied part of farmers came to the
category of kulaks (i.e.
exploiters) and was repressed.the next decade, the majority of state and
collective farms were unprofitable. In them was implemented extra-economic
coercion to work, were restored some feudal methods of exploitation (by the
Stalinist regime), there was forcible displacement of different forms of
ownership, especially private, artificially were created two forms of
ownership: collective
and state.in the 80s of the twentieth century as a result of compliance with
certain parity of prices for farm products was reduced the number of
unprofitable farms and state farms, their profitability was increased. Thus,
the level of profitability over the years 1980-1990 increased from minus 0.4 to
19 and 36%. Productive assets in collective farms for 10 years increased from
94 to 165 m.krb.this and the disintegration of the USSR required a radical
restructuring of the agricultural sector.reform can be defined as a complex
combination of legislative, economic, technical and organisational actions,
which provide land relations development and transition to the land relations
market. The main target of reform in Ukraine was the establishment of a land
market and competitive business activities in the sphere of land relations [13,
p.76].gaining independence, Ukraine entered a long-term agricultural crisis.
The crisis was caused by the collapse of the centrally planned economy that had
previously bankrolled a system of large and expensive programmes across the
Soviet Union, but more broadly, also by the failure of the sector to adapt to
the new economic reality .land reform began de jure on March 15, 1991, namely,
from the day of publishing The resolution of Supreme Soviet of Ukraine "On
land reform" (№ 563 ХІІ, December, 1990) in which all land of the
Ukrainian SSR was proclaimed the object of land reform.March 1992, the
Parliament adopted a new Resolution "On the acceleration of land reform
and land privatization".reforms were carried out in five directions:
. The economic reform. It
included the transformation of collective and state farms to private-market
structure, preserving the integrity of tracts of land and property complexes of
large enterprises, farmer's free choice of different forms of management.
. The land reform. It was
aimed at implementing the slogan "The land belongs to those who work on
it." It was necessary to fix forever and reliably to protect the property
rights of peasants to land.
. Formation of the
agricultural market instead of the old distribution and planning of marketing.
Millions of workers, professionals and executives of the market should teach
methods of farming, earning incomes not on the state but on the free market,
including foreign.
. Financial stabilization.
Financially improve agricultural sector, take off his crippling debt and tax
burden, open the way, to investments and loans to stop the growth of price
disparities, unemployment and falling incomes of farmers.
. Social development. Our
country faced a global problem - to transform the village into self-sufficient
and self-governing territorial communities, create in them normal conditions
for life, work and leisure.turning point in the agrarian sector of Ukraine came
when market-oriented economic structures were set up, was launched
privatization, agrarian market began to form. The real shift in agriculture
started from the late 90's. In 2005, the average annual accession of
agricultural production in Ukraine amounted 6% [14].order to provide effective
use of the powerful potential of Land Resources of Ukraine in 2001 was
developed and approved by the Decree of the President of Ukraine 30.05. 2001
"The main directions of land reform in Ukraine for 2001-2005".of land
relations in this period was based on the following principles:
· the inviolability
of private ownership of land;
· inclusion of land
in market turnover;
· social justice in
the conversion of land;
· coordination of the
pace and the main directions of land reform and relations in the agricultural
sector.to the state target program of development of Ukrainian village for the
period until 2015, approved by the Cabinet of Ministers of Ukraine №1158 from
19.09.2007, "the agricultural sector (agriculture, food and processing
industry) ensure food security and food independence, generates 17% gross domestic
product and about 60% of the fund consumer population".2015 most of the
goals and objectives of the named program were not implemented. One reason is
the lack of a clear concept produced changes in the basic areas of a specific
action plan and activities.the present time the reform of the agricultural
sector, unfortunately, is given somewhat less attention than changes in the tax
system or innovation in local government.
CHAPTER 2. GENERAL ESTIMATION
OF MODERN CONDITION OF AGRARIAN-INDUSTRIAL COMPLEX OF UKRAINE
2.1 Assessment
of the investment attractiveness of AIC of Ukraine
is the investment of cash, property
and intellectual property in business and other activities for profit or
achieving social effect.attractiveness - is an integral indicator that
characterizes the internal and external environment of the investee from the
standpoint of efficiency, expediency and reliability investing investment
resources [15].attraction is the most important factor of economic growth,
improving the economic situation in Ukraine and improving the welfare of
population. In the agricultural sector investments attraction also serves as a
means to ensure food security, the guarantor of the development of agriculture
and environmental protection.of investment in Ukraine’s farmlands is the lowest
in Europe while it provides the highest return potential given the high soil
fertility and unrealized agri-ecological potential of Ukraine’s soils. The cost
of investment is composed of the lease rights acquisition cost, annual lease
fees and annual cultivation (actual farming operation) costs.gradual formation
of an investment climate depends on the improvement of investment
attractiveness. It is therefore advisable to evaluate the investment
attractiveness the agricultural sector of Ukraine [16].estimate the investment
attractiveness of the agricultural production using the method of SWOT-analysis
(Table 2.1).of investment attractiveness of the agricultural sector has shown
that it is more or less stable, has a significant number of profitable
producers. Investment in the industry come in small volumes, due to a high risk
of default of funds, but if appropriately behave to the strategic management of
the state and enterprises, it could lead to improvement.
2.1investment attractiveness of the
agricultural production
Strong points
|
Weak points
|
· Moderate climatic conditions for
agricultural production; · the relief of areas and soils; · favorable
geographical location of the region; · significant
work experience; · various
forms of ownership; · free lease of land and property; · land
privatization; · the
competitive labor costs; · development of information
materials concerning economic and investment potential; · holding
seminars on attracting foreign investment; · implementation
of investment projects.
|
Possibilities
|
Threats
|
· Cooperation with new foreign
partners; ·
formation
of positive investment image of the region; · improve
the preparation of investment projects in accordance with requirements of
international investment funds.
|
· difficult predictability of
inflation rate due to the instability of the economy; · inequality
of foreign and domestic investors.
|
enterprises have significant
scientific and technical potential, which is not used in full. However, there
is a more gradual introduction of new technologies and systems.resources and
geographical location - the most favorable for agriculture, namely agricultural
sector requires significant foreign investment. Foreign investors are not
willing to invest in this sector because of high risk of default funds, so we
should pay attention to reduce these risks [17].the period of economic crisis
in the agrarian sector of Ukraine (1991-2000) investments processes were
virtually stopped. The share of investments, made in agricultural sector,
considerably declined from 21.3% in 1990 to 3.7% in 2000. In late 2007, this
figure rose to 4.9%. On the one hand, it shows a sharp decline in investments
in the agricultural sector (investments crisis), on the other hand - it
indicates that there is a great potential for attracting more investments in
the agricultural sector. Investments capacity of the agricultural sector is one
of the important pre-conditions for decisions by investors, especially foreign
ones, to makerelevant investments.assessment of investments needs and
opportunities of the agricultural sector is of great importance. Dynamics of
investments in agricultural sector can be a measure of the scale of the
investments crisis in the agricultural sector. In 2000, investments in the
fixed capital of the sector reduced by 13 times if compared to the investments
volume of 1990. Slowdown of investments in the agricultural sector was the
largest one among other economy sectors. During 1991-2007 unsecured and sought
for agricultural investments needs grew up to 150 billion UAH. This shows the
magnitude of the investments market in the sector and its large investments
capacity.indication of the depth of the investments crisis, and, at the same
time, large investments capacity of the agricultural sector is also the general
structure of financial costs. Budgetary financing of investments in
agricultural production is very low. Investments lending does not exceed 9% of
the financial costs. The share of the own financial investments covers only 5%
of total expenditures. Share of foreign investments is very small - only 1.3%.
This figure, however, demonstrates the great potential of growth of the role of
the attracted investments, especially foreign ones.investment cost in Ukraine’s
agricultural land in 2009 was one of the lowest at USD 600-800 per hectare
compared to Americas’ (USA and Argentina) USD 4,000+, and Western European
level of USD 12,000+. At the same time, the current harvest yields in Ukraine
suggest that the agro-ecological potential of 6.2 metric tons per hectare can
be easily obtained under proper farm management and with the use of optimal
organic technologies.agricultural sector needs serious modernization. The share
of basic agro machinery that has expired service life or its technical resource
is more than 90% for harvesters and 80% - for tractors. A rate with which
machinery is written-off is in 5-10 times higher than the rate of purchase of
the new, replacement machinery. However, the main problem for technical
modernization of the agricultural sector is the availability of funds. The
minimum annual requirement in funds to maintain the technical condition in the
sector at stable level makes up 2-3 billion UAH. For rapid upgrading of the
existing machines and tractor park annual need for funding is estimated at
10-15 billion UAH.real recovery of the potential of agricultural production it
is urgently needed to involve foreign investments to the sector . However, by
the volume of foreign investments into the Ukrainian agricultural sector it is
considerably lags behind the rates enjoyed by national economy as a whole, for
which, in its turn, the level of involvement of foreign capital is also quite
low compared to other countries. Although these volumes are of the record
level, it is still 3 times less than the amount of foreign capital inflow
observed in 2003. The volume of attracted foreign investments per one rural
resident is also very low - less than 13 US dollars and the gap with developed
countries is quite large. In total, the share of investments into agricultural
sector is considerably lower than the investments share attracted by the other
economy sectors especially if we take into account the share of the
agricultural sector in other national macroeconomic indicators.about 500
agricultural enterprises managed to attract foreign capital, representing only
2% of large enterprises of the sector that cultivate more than 1,000 hectares
of agricultural lands. At the same time, it is only 3% of the total number of
enterprises of the country having foreign investments.of the distribution of
foreign investments between the regions gives reason to conclude that it is not
really directed to agricultural sector. The group of regions with the least
amount of investments consists of purely agricultural regions. Agricultural
investment phenomenon of Kyiv can be explained by the fact that registered in
the capital city are many investment companies that successfully invest into
agriculture of other regions of the country.of foreign investments among other
cities and rural areas is also uneven. Most of the investments are concentrated
in cities - 85% of the total volume attracted but in the Chernigov, Poltava and
Odessa regions and the Autonomous Republic of Crimea (all of them are leading agricultural
regions) - practically 100% of foreign investments were in agricultural sector.
Only in the Kyiv, Rivne, Sumy and Ternopil regions rural districts managed to
attract more foreign investments than regional centers. Thus, the agrarian
sector of Ukraine, which during the 90-ties of the twentieth century had
experienced difficult investments crisis, became quite weak from the point of
view of its ability to attract foreign investments. Large capital requirements,
especially for technical modernization, so far can not be provided through the
use of the funds in possession of enterprises, bank loans and from the budget.
Therefore, an important source of investment market for the agricultural sector
is attraction of the foreign capital into the agricultural sector., the volume
of foreign investments to agricultural sector of Ukraine lags very much behind
the national economy in general. Providing on average 14% of GDP, the
agricultural sector in 2004 received only 1.3% of the total volume of foreign investments
raised by Ukraine. The process of attraction of foreign investments into
national agricultural sector has intensified only after radical acceleration of
reform of this sector. During 2000-2003, the volume of raised investments
increased by more than 8 times basically only due to rapid implementation of
measures aimed at the market-oriented transformation of the sector and
macroeconomic support from the state. But due to significant loss of investors
in 2003 because of adverse weather conditions, the volume of investments
attracted in 2004 again declined. This shows instability of the provision of
foreign investments to agricultural sector., the optimal level of foreign
investments attraction into the Ukrainian agriculture is much higher. It should
be compatible with specific share of the sector in the GDP structure of the
country, i.e. to in the range of 13-14% of the total. This figure has been
reached by Portugal and Greece. The maximum annual level of foreign investments
into agricultural sector, which can be selected as a target one could be about
USD 50-70 dollars per capita of rural population, on a short-term basis. This
level was achieved by Estonia, Finland, and Kazakhstan. Investments
attractiveness of the Ukrainian agriculture is in no way inferior to the
investment attractiveness of the above countries. Therefore, this is the figure
which should be used as a target and the investment climate and image presented
by the agricultural sector of Ukraine should be aimed to. Organizational work with
foreign investors and state investments attraction policy should also be
oriented to the achievement of the above mentioned figure [18].
.2 The
present state of the agricultural sector of Ukraine
has huge agricultural potential due
to its rich natural resources (soil, climate, and water) and a key geographical
position, with access to the Black Sea and the key markets in the EU, CIS, the
Middle East and North Africa.role of agriculture in the Ukrainian economy is
quite remarkable. Even though the share of agriculture in total GDP in Ukraine
decreased considerably since 1991, agriculture still accounted for about 8.2%
in 2010.addition, with a share of 15% the Ukrainian agricultural sector still
contributes significantly to national employment. Agriculture also has a core
role in Ukrainian foreign trade, with agri-food exports accounting for about
20% of total Ukrainian exports in 2010.recent years, Ukraine’s agriculture has
been consistently improving and has been the only part of the country’s economy
to buck the recession.to preliminary estimates, in 2013 agricultural production
increased by 13.7% - in contrast to a 4.7% decline in the industrial sector.
According to official statistics, Ukraine’s industrial production was up 40% in
the final months of 2013 when compared to the same period of 2012. This
translated into an unexpected gain in fourth-quarter GDP growth (+3.7%) and
prevented an annual drop in GDP. Crop production, and particularly the production
of grain, hit a record high: in 2013, Ukraine produced 63 million tonnes of
grain, outperforming its best ever harvest of 2011 (56.7 million tonnes). The
value of Ukraine’s agricultural and food exports increased from US$4.3 billion
in 2005 to US$17.9 billion in 2012, and currently accounts for a quarter of
Ukraine’s total exports. Economic forecasts suggest that in the current
marketing year (July 2013 - June 2014) Ukraine will sell more than 30 million
tonnes of grain to foreign markets, making it the world's second biggest grain
exporter, after the United States.accounts for about 8% of Ukraine’s gross
domestic product - a rate several times higher than among Europe’s major
agricultural producers. Its significance to the economy stems mainly from crop
production, which accounted for nearly 67% of all domestic agricultural
production in 2012. Despite showing signs of recovery from a severe crisis in
the 1990s, animal production in Ukraine remains tied to small farms and is used
largely for the personal consumption of the producers.is one of Europe’s
leading grain producers: it is the continent’s largest producer and exporter of
corn, the second largest producer of sunflower seeds and sunflower oil (and the
world's largest exporter), as well as being a leading producer and exporter of
wheat and barley (Appendix 1).2005-2012, the export of food and agricultural
products increased by 315% (in 2013, Ukraine’s agricultural exports were worth
an estimated US$17-18 billion). This makes agriculture Ukraine’s second most
important export sector, after the country’s traditional export leader - the
steel industry.farm structure in Ukraine is characterized by corporate farms or
so-called agricultural enterprises and individual farms, with the latter
comprising peasant farms and household plots. In 2010, agricultural enterprises
produced about 76% of total grains, 92% of sugar beets and 83% of sunflowers in
Ukraine. On the other hand, Ukrainian household farms produced about 97% of
total potatoes, 88% of vegetables and 84% of fruits and berries. The majority
of all types of livestock (excluding only poultry) is kept by household farms,
and regarding production output, households have produced 80% of total milk
production in Ukraine, whereas 55% of all meat has been produced by
agricultural enterprises.privatisation of farmland without the concomitant
right to freely sell it, has contributed to the emergence of an agriculture
based on land lease, which has been facilitated by the statutory authorisation
to use pais as the subject of lease contracts. According to data from late
2012, half of all domestic agricultural land in Ukraine (49.8%) is under the
management of about 50,000 businesses, operating mainly on leased land.2010,
the average annual cost of leasing 1 hectare of agricultural land did not
exceed the equivalent of US$40. But later, however, lease fees have increased
to around US$70 - this was caused by the government’s decision to raise the
arbitrarily determined normative value of 1 hectare of farmland, and to
increase the minimum land lease fee (to 3% of the land’s normative value). The
low cost of land leasing (a fraction of the rates charged in the EU), coupled
with the possibility to use goods and services (often at inflated prices) in
lease settlements, have facilitated the emergence of private and, most
importantly, very large agricultural companies.comprises 25 regions.
Agricultural area, comprising 41.6 million hectares which is about 69% of the
total territory of Ukraine, is distributed quite equally across the country.
However, the main agricultural regions are located in the Eastern part of
Ukraine where land productivity is higher. 7.1% of agricultural land is
drained, and 5.2% is irrigated. In 2010 Vinnytsya, Dnipropetrovsk, Donetsk,
Kyiv, Poltava and Cherkasy regions produced 36% of the gross agricultural
production value. Kirovograd (in Central Ukraine) is also an important crop
producing region, whereas Lviv (in Western Ukraine) is important with regard to
livestock production (Appendix 2). With only few specific exceptions (e.g.
poultry production in Crimea), Southern Oblasts (low precipitation) and most
Northern and Western Oblasts (less suited soils) are less important for
Ukraine’s agricultural production.period of economic growth from 2000 to 2008
(averaging about 7% of GDP per year) and low land lease rates and cheap labor
(wages in agriculture are among the lowest in the economy) have improved the
business conditions in the sector and the possibility of state support for
Ukrainian agriculture. The most significant changes included: the introduction
by parliament of the so-called “fixed agricultural tax” in December 1998, VAT
rebates, and state subsidies for agricultural production, which mainly
benefitted the largest players. The development of large-scale farms, however,
was most directly facilitated by the increasingly appealing export
opportunities. Since 2005, global markets have seen a systematic increase in
the price of food and agricultural products; this has translated into higher
prices for the main grains produced in Ukraine: wheat, barley and corn. Even
after taking into account the interim (although admittedly, painful) price
falls (2008-2009 crisis), by 2013 the price of the three main grains mentioned
earlier had increased significantly: two-fold for wheat, two and a half times
for barley, and three-fold for corn. Importantly, the global increase in grain
prices was accompanied by growing demand generated mostly by developing
countries [12].Ukraine agriculture output is distributed through various market
channels, including sales to processing enterprises, organizations of consumer
co-operation, at market, to the population as wages, to the shareholders as a
rent payment, on commodity exchanges and auctions, etc. Data on sales are available
from statistics on agricultural enterprises (excluding small enterprises) as
well as on purchases of the processing industry (including amounts sold by
households). Shares of market sales in the Ukraine vary considerably between
77% for oilseeds, 75% for sugar beet, 60% for grains, 7% of vegetables and a
negligible amount of only 2% for potatoes. From livestock production shares of
82% for meat and 40% of total milk production are sold (Figure 2.1).
2.1and sale of
agricultural products in Ukraine, 2010
today, the Ukrainian economy is
characterized by a certain loss degree of all sectors of the economy, and
agriculture in particular (Figure 2.2). The reason is unstable economic
environment and a large number of destabilizing factors that directly affect on
the agricultural sector of Ukraine and the composition and structure of
resources in particular.
Agricultural sector suffers losses
from depreciation of receivables. It is necessary to raise the issue of
establishing a system of accounts receivable management, which would have
provided the tools and schemes of timely repayment. Prolong of funds in
accounts receivable was due to financial difficulties of buyers. Research of
resources turnover indicates that the resource efficiency of the individual
enterprise of agricultural sector depends on the sector and the economy as a
whole.
The agriculture industry is now
forced to continue its current model of development, in which competitiveness
is determined by low production costs (including lease fees and wages) instead
of seeing the modernisation and efficiency improvements. Furthermore, Ukraine’s
low output per hectare will be compensated through economies of scale and
extensive production; for example, of crops with a high rate of return, whose
cultivation - coupled with short lease terms - will lead to a further
degradation of soil.
2.2of value losses
of the agricultural sector of Ukraine, mln. grn.
CHAPTER 3. DIRECTIONS OF IMPROVEMENT
OF AGRICULTURAL DEVELOPMENT IN UKRAINE
3.1 Agrarian
reform in Ukraine: the present status and current tendencies
main purpose of agrarian reform is
to create conditions for the development of efficient, highly productive and
competitive agricultural sector, which generally contribute to economic growth
and the welfare of the population.all goals and nature of changes that were
made in the agricultural sector Ukraine most scientists divided into two
stages, namely: phase of reform and post-reform phase. Each is characterized by
the features of structural reform, domestic agricultural and trade policies
[19].reform in Ukraine is characterized by a certain sequence and phasing of
implementation, the main ones are:
· land reform and the
reform of property relations in agriculture;
· providing the
post-reorganization support of reformed and newly forming households and
formation of market infrastructure in agriculture;
· modernization of
production, creation of competitive (at the domestic and foreign markets)
farms;
· improving the
mechanisms of state regulation of the agricultural sector.process of private
ownership establishment in the country objectively requires a radical change in
the forms and methods of state regulation in the agro-industrial complex. The
strategic direction of these changes should envisage termination of direct
administrative interference by state bodies at all levels into economic
activity, the setting and guaranteeing of stable rules for all actors in the
agrarian sector and state regulation through market levers.main unsolved task
of agrarian reform is uncertain relations of land ownership, disparity in
prices for agricultural and industrial products and the lack of funding
mechanism that would provide expanded reproduction of production in
agriculture.the years of reform in the agricultural sector have been
substantial changes in property relations and management. Agrarian reform
included the denationalization and privatization of land and the creation of
legal forms of market type. The result was the privatization of land with
transfer of it to the ownership of collective farms and formation of private
ownership of land.the post-reform phase of agrarian reform the main task was
the transition to the market economy, to improve the efficiency of agricultural
production. However, in the agricultural sector during the years of market
relations, the socio-economic impact was negative comparing to other sectors.
Resource potential is substantially destroyed, that applies to the entire
economy.reason for the decline of agriculture was that agrarian reform is not
regulated by the state and was not comprehensive, and has been stretched in
time. This was due to the fact that it was carried out in conditions of general
economic crisis.the present stage of land reform, in the absence of relevant
legislation, it is advisable to introduce temporarily as subject of pledge not
the land, but only the right to use it, the lease; transfer land to private
ownership individually.number of negative factors, including the violation of
interbranch equivalent of exchange, inflation, low purchasing power of
population, poor material and technical base of production, lack of adequate
market infrastructure did not allow for such a short time most of the newly
privatized agricultural enterprises of food industry fully adapt to the
stringent requirements of the market economy [20, p.5].the longer term,
development of the land market should be gradual, in the way to increase the
number of land owners and the establishment of appropriate infrastructure. In
order to avoid buying of land share certificates for a pittance expedient to
temporarily prohibit their sale and donation. Such prohibitions must be
implemented, including through the introduction of temporary prohibition of the
right to land share in authorized funds of societies.improve land relations, it
is necessary to streamline the system of registration of individuals and legal
entities on land, creation of a mechanism of state acts on the land, that means
the inclusion of land in the economic cycle, protection of rights and interests
of landowners, the formation of market infrastructure, including the
organization of land auctions and land bank. The process of economic
self-determination of farmers continues and for its acceleration we need
comprehensive help from state authorities.strategic direction of development of
farms should be strengthening of their role in the agricultural sector and
improving the efficiency of their operation. This requires, first of all, to
solve the following problems:
· expand the land use
area, increasing them by preferential land lease of state reserves to rational;
· increase the volume
of state support for farmers;
· develop a national
program of financial support for young farmers;
· provide an
opportunity for farmers to include land in the economic cycle to obtain
long-term loans;
· ensure preferential
insurance of crops;
· encourage the economic
interest of farmers in the development of industries that are unprofitable
today, including stockbreeding [22].should be noted that in modern conditions
agricultural sector extends volumes of agricultural production and food,
financial results are improved, gradually emerging market environment for the
effective functioning of the agricultural market of Ukraine.measures taken by
the State have given the opportunity to stabilize and gradually increase
production main types of products of the sector.main goals in implementing new
mechanisms of state regulation in the agro-industrial complex should be:
· provision of a
stable regulatory-legal base for the creation of predictable conditions for
business development in the agro-industrial complex;
· non-interference by
state executive bodies in the day to day activity of business entities, with
the exception of cases provided by law;
· support for
reformed enterprises, encouragement of the agriculture market infrastructure,
production of critical agricultural produce ensuring Ukraine's food security;
· formation of
pricing, tax and credit mechanisms with account of the specificity of the
agro-industrial complex as a sector with a slow capital turnover and a low rate
of profit;
· promotion of a
national network of advisory agricultural services and agricultural
monitoring.in the state's regulatory functions within the agro-industrial
complex are manifesting themselves in the establishment of new functional
divisions within the Ministry of Agrarian Policy of Ukraine, namely: the
Department of Agrarian Economy Development Strategy; the Department of
International Integration, Investment Policy and Agricultural Business
Development; the Department of Agriculture Reform; the Department for the
Development of Entrepreneurship and Agricultural Market Infrastructure; the
Department of Cattle Breeding Produce Markets; the Department of Crop
Production Markets and Seedage Development. Within the newly established
Department of Agriculture Reform, the Division of Strategy and Methodology of
Agrarian Reform, the Division of Agricultural Enterprise Reform and
Restructuring and the Division of Advisory Agricultural Service Co-ordination
have all stepped into action.Government of Ukraine has charted a course towards
increased responsibility of agricultural enterprises for the results of their
work by banning further write-offs or restructuring of tax and duty arrears,
budget loans, credits under governmental guarantees, and termination of
moratoria on bankruptcy of agricultural enterprises. At the same time, the
present regulatory role of the state with respect to the agro-industrial
complex is still of a transitional nature (from the administrative-command
system to the market economy). Hence, it is based on many temporary and
transitional levers. This is confirmed by the substance of the Law of Ukraine
"On Encouragement of Agricultural Production in the Period of
2001-2004", adopted by the Verkhovna Rada of Ukraine on January 18, 2001,
which laid down the fundamentals of state regulation of the agro-industrial
complex in the conditions of emerging market relations38.of market relations in
the agroindustrial complex is being accompanied with a change of the functions
of state bodies: from direct control to establishment of favourable conditions
for business in rural areas. However, the state's regulatory role is still
undergoing transformation. During the introduction of changes, mistakes could
not be avoided. In particular, agrarian reform was undertaken in the absence of
any significant success in administrative reform. Despite the great number of
adopted regulatorylegal acts, they failed to resolve many key issues of the
agro-industrial complex. Some steps were not backed with organizational, human
and financial resources [23, p.12-13].general, evaluating the results of
reforms in the agrarian sector of Ukraine should be emphasized that the role of
government in the implementation of this process is not economically reasonable
and justified, resulting in failures in implementation of policy reform have
not given the hoped improvement of agricultural economy.
3.2 Problem
of improving the investment climate in the agricultural sector of the Ukrainian
economy
land in Ukraine is one of the best
mid and long-term investment opportunities in the world. While many arable land
plots worldwide get deteriorated by intensive conventional (chemical) farming
practices, Ukraine’s black soils, aka Chernozem, have managed to stay much less
harmed by humanity’s most dangerous and delusive “inventions”: toxic pesticides
and synthetic chemical fertilizers.’s diverse farming climatic zones provide an
exceptional opportunity for fully-diversified, complete-cycle farming ventures
with their own livestock, seed production and premium field crops and row crops
production of export-scale harvest volumes.of agrarian sphere as the investment
processes in other industries is versatile and complex phenomenon. By its
economic nature investment activity is the process of realization of additional
investments of the most effective means to increase production and create
conditions for economic growth.development and economic growth in the
agricultural sector is a priority task of economic policy. The intensive type
of development helps to improve economic indicators; the main ones are labor,
land, capital, entrepreneurial skills, science and information. Exceptional
value for the expansion of agricultural production is the problem of providing
agricultural investment both regionally and at the macro level [24]., by its
investment attractiveness, is characterized as the country with negative
investment image and, at the same time, with a high investment potential.main
factors, which form a negative image of Ukraine in the global investment and
credit markets, are:
· an imperfect
legislative base;
· unstable political
situation;
· imperfect tax
legislation;
· underdevelopment of
financial markets;
· the slow pace of
privatization;
· deceleration of
market reforms;
· imperfections of
market mechanism;
· lack of investment
insurance system.most attractive investment sector of agriculture is crop
production (grain production, potato and sugar beet).worse situation in the
fields of dairy farming and fruit growing.the middle zone of investment attractiveness
are the production of eggs, vegetables and beef cattle.lowest rates of
investment attractiveness fixed in pig farming and viticulture, sheep farming
and poultry meat production.increase the investment attractiveness of the
agricultural sector of Ukraine should to realize a system of measures at the
national, regional and sectoral levels, the main of which are:
· the improvement and
aligning of legislation, which govern investment activities;
· to ensure stability
and transparency of tax laws;
· improvement of land
legislation;
· stabilization of
the national currency;
· improvement of the
amortization policy;
· creation of
conditions for revitalization of investments of individuals and legal entities;
· development of the
stock and insurance markets and strengthening their investment direction;
· improvement of
pricing system in agriculture;
· completion of the
restructuring of agricultural enterprises and improvement of organizational
forms of management;
· improving
agricultural cooperation and creation of new integrated forms of management;
· extension services
in agriculture.the investment attractiveness of agricultural production is
possible providing that we use both external and internal reserves. However,
the low level of attractiveness of sectors of the agricultural sector for
investors does not allow the full use of environmental factors.attractiveness
of an enterprise in the agricultural sector of Ukraine represents a level of
satisfaction with financial, production, institutional and other requirements
or interests of the investor in respect to specific agricultural enterprise
(private/ large farm), which may be expressed or measured by values of relevant
indicators.Objectives:
• to improve the investment
attractiveness of Ukrainian agricultural sector;
• to increase inflow of foreign
investments into agricultural sector;
• to enhance the rates of the
agricultural sector development;
• to increase presence of the
Ukrainian agricultural products in the worldmarkets.objectives can be achieved
through implementation of a number of specific auxiliary objectives:term
sub-objectives (1-2 years):
• to make changes in the Land Code
of Ukraine, which would stipulate that the land may be the subject of trade
that is to be bought and sold;
• to create a legislative framework
in the sector of agro business insurance so that it will envisage procedures,
conditions, presence or absence of preferences for agro business enterprises
when concluding insurance contracts;
• to amend the Law of Ukraine “On
the regime of foreign investment activity”, which would obligatorily include a
provision for simplified system of registration of foreign direct investments;
• to secure appropriate coordination
of actions of all governmental regulation authorities and to improve their
norms and regulations so that the current legal framework for regulation of
foreign investments in Ukraine will provide a clear mechanism for
implementation of safeguards and guarantees granted by the state to investors as
it is required by the Law of Ukraine “On the regime of foreign investment
activity”;
• to amend Article 7 of the Law of
Ukraine “On taxation of profits of enterprises“, and, in particular, its
section on “Peculiarities of profit taxation of enterprises with foreign
investments”, as well as clearly define the conditions and procedure for
repatriation of profits by the enterprises with foreign investments;
• to develop Land Cadastre
(regulating assessment of the land value, availability of land, its quality,
types of lands), the data of which should be obligatorily used in the process
of conclusion of contracts for the sale or purchase of land which would
encourage and stimulate formation of the land market [24];
• to create “investment portrait” of
the regions, which would give detailed information about the state of
agriculture in each region, including quantitative and qualitative data,
capacity of the investment market in the region and future trends of its
development as well, etc.term sub-objectives (4-7 years):
• to improve investments
attractiveness of the agricultural sector;
• to increase inflow of foreign
investments in the agricultural sector by 5-7%;
• to raise the level of
mechanization (to increase the quantity and quality of the park of agricultural
machinery and mechanisms) in agriculture using investments made by foreign
investors.term sub-objectives (7-10 years):
• to increase foreign investments in
the Ukrainian agriculture to the level of contribution of the agricultural
sector to national GDP, that is to 14% (nowadays, only 2% of the total
investments volume are invested into the agricultural sector, but the
contribution of the agricultural sector to national GDP makes up 14%);
• to improve the level of production
in the agricultural sector as a whole and in its individual branches [14];main
attention in finding ways to improve the investment attractiveness of the
agricultural sectors should focus on internal resources to improve the system
of agriculture, which contributed to the growth of production and reducing of
costs and increasing of profitability of certain products [25, p.83].reasons
for relatively small amounts investment in enterprises of agrarian sphere is
not optimal structure, low overall level of economic services in agricultural
enterprises, the lack of an enabling environment and reasonable concept of
economic development, in particular the concept of investment strategy for the
future, taking into account regional differences. Growing influence and such
factors as lack of an established system of marketing agricultural products.
CONCLUSIONS
instability of agricultural
production, inconsistency and indecisiveness of executive bodies in the process
of agricultural reforms led to a deep crisis in national agriculture.conditions
of social andeconomic restructuring of agriculture of Ukraine, integration to
various political, social, economic, technical and other associations and
organizations significantly important improvement of state management of some
of its subcomplexes, directed to their establishment, functioning and economic
development.main goals of restructuring of agriculture are: implementation of
agrarian reform, the development of various forms of ownership and management,
improvement of the sectoral structure of agriculture, the priority development
of processing industry of agricultural raw materials, creation of small
businesses in rural areas to solve the problem of rural employment.main
foundation of reforms in the agricultural sector is the implementation of land
reform. Land reform aims to create conditions for equal development of
different forms of management, rational use and protection of land.the national
economy of Ukraine is in a difficult situation. On the one hand, we must
transform our economy from command to market, on the other. On the other,
external factors influence us, such as integration into the world global
economy, which is life-saving for us.this difficult period of stabilization
raises the task to stabilize the national economy, including agriculture. This
requires, first of all, to stabilize agricultural production, creation of a
modern base for processing and storage of agricultural products.
APPENDIXES
’s agriculture in Europe and
globally - selected produce
Type of produce
|
Production volume
|
Rank in Europe/globally
|
Export volume
|
Rank in Europe/globally
|
Corn
|
22.8 million tonnes
|
Europe:1 Globally:7
|
7.8
|
Europe:1 Globally:4
|
Wheat
|
22.38 million tonnes
|
Europe:4 Globally:11
|
4.1
|
Europe:4 Globally:8
|
Barley
|
9.18 million tonnes
|
Europe:3 Globally:5
|
2.1
|
Europe:3 Globally:5
|
Rye
|
0.68 million tonnes
|
Europe:4 Globally:4
|
-
|
-
|
Rapeseed
|
1.48 million tonnes
|
Europe:4 Globally:9
|
1.0
|
Europe:2 Globally:4
|
Sunflower seeds
|
8.78 million tonnes
|
Europe:2 Globally:2
|
0.4
|
Europe:3 Globally:3
|
Sunflower oil
|
-
|
Europe:2
|
2.7
|
Europe:1 Globally:1
|
Potatoes
|
24.28 million tonnes
|
Europe:2 Globally:2
|
-
|
-
|
Sugar beets
|
18.78 million tonnes
|
Europe:4 Globally:5
|
-
|
-
|
Appendix 2
agricultural production by regions
in Ukraine, 2010
REFERENCES
1. Мамалуй
О.О.Основи економічної теорії. Підручник. Київ.2006
2. Оніщенко
Д., Юрчишин В. Про форми власності в аграрній сфері Украї-ни.//ЕУ. - 1997. - №
4. - С. 50-61.
3. Discussion
Paper No. 80, Halle (Saale): IAMO. Melnychuk, Volodymyr; Parkhomenko, Sergiy;
Lissitsa, Alexej (2005).
4. Економічна
теорія
/ Під
ред.
Є.М.
Воробйова
- X., 2003.
5. Економіка
аграрних підприємств: Підручник. - 2-ге вид., доп. і перероблене. / В. Г.
Андрійчук. - К.: КНЕУ, 2002. - 624 с.
. Гаршина
О. К. Політична економія: Курс лекцій / Донбаська держ. машинобудівна академія.
- Краматорськ : ДДМА, 2006. - 79с. - Бібліогр.: с. 78-79.
7. Buzdalov
I.N. Economic mechanism in the agro-industrial sphere of the countries of SEV. M:
Science, 2010. 360 р.
8. Ekonomicheskaya
reforma v sel'skom khozyaistve sotsialisticheskikh stran / E.V. Rudakov, S.A.
Mellin, V.I. Storozhev, 1968.
. The
Great Soviet Encyclopedia / 1979.
10. Економічна
теорія: Підручник/ В. М. Тарасевич, В. В. Білоцерківець, С. П. Горобець, О. В.
Давидов та ін.; За ред. В. М. Тарасевича; М-во освіти і науки України, Нац.
металургійна акад. України . - К.: Центр навчальної літератури, 2006. - 779 с.
. http://uk.wikipedia.org/wiki/Земельна_ділянка
12. RAZUMKOV
CENTRE // NATIONAL SECURITY & DEFENCE // NO.5, 2001 // AGRARIAN REFORM IN.
UKRAINE: THE PRESENT. STATUS AND CURRENT TRENDS.
13. Перевидання
в Україні. - Львів, 1994. - с.805-1200 / Енциклопедія українознавства:
Словникова частина. - Париж - Нью-Йорк: Молоде життя, 1959. - Т. 3. - С.
805-1200.
14. Novakovsky,
L.Y.; Tretiak, A.M.; Dob-ryak, D.S. 2001/ Land reform and land management in
Ukraine / Kyiv, 2001. 138 p.
15. http://www.osw.waw.pl/en/publikacje/osw-commentary/2014-02-07/transformation-agriculture-ukraine-collective-farms-to#_ftn4
<http://www.osw.waw.pl/en/publikacje/osw-commentary/2014-02-07/transformation-agriculture-ukraine-collective-farms-to>
. Малік
М.Й. Реформування власності і реструктуризація підприємств АПК // Економіка
АПК. - 2007. - №11. - С. 9-13.
18. Пеструха
СВ. Наукові підходи до побудовисистеми стимулювання інвестування економіки
України /С.В.Пеструха, М.М. Колотуша // Актуальні проблеми економіки, -2008. -
№10(65). - С.39-48.
19. Consultations
on improving the investment climate in the agricultural sector of the ukrainian
economy // Center of Social Expertise and Prognosis at the National Institute
of Sociology of Ukraine // Kyiv-2009.
20. Баланюк
І.Ф. Реформування в аграрному секторі регіону. - К.: ІАЕ УААН. - 1999. - 270с.
. Лузан
Ю.Я. Реформування аграрного сектора України: стан і перспективи // Економіка
АПК. - 2002. - №4. - С. 3-7.
. МІНІСТЕРСТВО
АГРАРНОЇ ПОЛІТИКИ ТА. ПРОДОВОЛЬСТВА УКРАЇНИ / Проект. Стратегія розвитку
аграрного сектору економіки. (на період до 2020 року) / Київ - 2013
23. Петкова
Л., Проскурін В. / Муніципальні інвестиції та кредити / Навчальний посібник /
Київ, 2006.- 158 c.
24. Янушевич
В.М., Шовкун І.А. Стан перспективи розвитку малого підприємництва в аграрному секторі
України.//Реформування економіки України. - Київ, 1997. - С. 82-88.
. Рубан
Ю. Методологічні та методичні питання створення концепції розвитку сільського
господарства .//ЕУ. - 1994. -№1.