Scientific Center of Innovative Research, International Conference on Corporation Management-2022

Font Size: 
IMPROVEMENT OF THE REPRODUCTION PROCESS IN THE AGRICULTURAL SECTOR OF THE ECONOMY IN THE CONDITIONS OF WAR
Serhiy Petrukha


Abstract


The modern Ukrainian economy is going through one of the most difficult stages of its development, when the cross-influence of the war from the northern neighbour (the Russian Federation invaded the territory of Ukraine on February 24, 2022, denouncing the “special military operation” with questions of the mythical “denazification” and “demilitarization”, as fundamental and only understandable "Russian culture" of Russia's security factors), increased volatility of food prices and infrastructural opportunities for the export of agricultural raw materials, as well as the fight against the global COVID-19 pandemic, the global food problem, and the energy crisis, justified the stagnation of all sectors of the national economy, pushing certain industries back to the 1990s of the last century (at least in terms of decline in GDP,  accompanied by a surge in inflation, a decrease in investment, an increase in social disproportions, inequality, a decrease in incomes of the population, and an immigration crisis that is only getting worse [1–3]). In such conditions, the priority of state policy requires the activation of actions on the part of state and local regulatory institutions to address not only current problems, but also the formation of real strategic plans for the development of the economy in general and the agricultural sector in particular in terms of multi-vector and multi-scenario, the passage of the war in Ukraine. At the same time, the main emphasis should be placed on the transition from the “needle” of world-donor money to the mobilization of internal sources of potential development of territories, and, first of all, to increasing the efficiency of reproduction processes in wartime conditions.

The agrarian sector of the economy is one of the main drivers of the development of the Ukrainian economy, since the food security of the country, the standard of living of the population in rural areas, as well as the development of related industries, the financial autonomy of local budgets [4], which is basical for realization of reforms of decentralization and realization of the European "green" course [5]. That is why, in wartime conditions, the key areas for the development of the sector are [6–7]: increasing the physical volume of production (perhaps even with more loyal environmental requirements), increasing its efficiency and competitiveness, both in the domestic and global markets, which will allow using trade preferences provided by Western countries, as well as laying the groundwork for the development of the livestock industry, deepening the processing of agricultural raw materials (primarily of plant origin). This requires significant, no, not development, but primarily the restoration of the material and technical base as a result of hostilities, which is possible only by attracting large-scale investments in the reproduction process. The Marshall Plan for Ukraine in the context of the reproduction strategy involves, first of all, the activation of the investment mechanism aimed at meeting the needs of agricultural producers and obtaining economic and social benefits from invested resources, both public and private origin. Traditionally, the agrarian sector of the economy is characterized by a very low investment attractiveness, and wartime only deepened the disproportions between the food trade and the cultivation of agricultural raw materials, giving rise to a new look of "price scissors" which, we recall, became the root cause of a protracted crisis in the 1920s in Soviet Ukraine. At the same time, agriculture is a strategic sector for the state, which determines the need to develop both the reproductive sphere and improving of state support for investment and innovation processes taking place in its midst, contributing to the development of production, logistics and social infrastructure by enhancing the interaction of all participants in the process, which is under examination. The depth, scale, effeciency and social orientation of this process can be easily traced through the agri-food value chain, adjusted for the institutional “memory” of the pre-war period of rural economic development. So we can see, that, in fact, the reproduction process in the agrarian sector of the economy is a systematic representation of the interaction of the participants in the reproduction process, taking into account the peculiarities of the functioning of the industry in wartime.

In turn, theoretically, the reproduction process in the agricultural sector of the economy is a constant renovation of production resources (including the final ones in terms of improving their quality characteristics) in the context of close interaction of economic, social and natural factors at all stages of the production process and various public-private tools to maintain favorable economic conditions for its expanded development, adjusted for the behavioral model of agricultural producers (including households) and consumers (both private and industrial) in wartime conditions.

The environment for the development of the reproduction process should be considered, systematizing them into constraining (price disparity, unprofitable agricultural producers, incompleteness of land reform, inadequate administrative-legal and financial-credit regulation of ongoing processes within the sector) and stimulating (state support, development of farms, level of organization of production, information environment and market conditions in agriculture).

The current level of economic efficiency of the reproduction of agricultural products and resources allows us to determine the application of the direction of improving the reproduction process, including the lack of financial resources and difficulties in replenishing working capital, the lack of organizational, production and financial planning at enterprises, high growth rates of costs, low level of labor reproduction resources, lack of labor motivation, high level of depreciation of fixed assets, low increase in capital productivity and profitability of fixed assets, and due to military operations, the mining of fields, the destruction of logistical ties, the loss of production capacity, the destruction of social infrastructure and the impossibility of relocation of the processes of growing agricultural raw materials. These directions should be dominant during the formation of methodological aspects of improving the reproduction process in wartime conditions.


Keywords


economy; agricultural raw materials; financial resources; war

References


1. Petrukha, S. (2017), “Market transformation of agricultural sector of Ukraine's economy: from agricultural crisis to formation the basis for achievement the global sustainable development goals”, Agrosvit, 18, 3–46.

2. Petrukha, S. (2017), “Evolution of methodological approaches to the agrarian crises research”, Agrosvit, 4, 16–34.

3. Petrukha, S. V. (2022). Militaryzatsiia svitovoi ekonomiky ta nova ahrarna stratehiia [Militarization of the World Economy and a new Agricultural Strategy], Suchasnyi menedzhment orhanizatsii: vytoky, realii ta perspektyvy rozvytku 2022, materialy naukovoi konferentsii [Modern management of the organization: origins, realities and prospects of 2022, materials of the scientific conference]. Kyiv. URL: https://conf.krok.edu.ua/MMO/MMO-2022/paper/view/1162

4.  Petrukha, S., Paliichuk, T. & Petrukha, N. (2020). Mistsevi finansy v umovakh koronakryzy: nova biudzhetna arkhitektonika ta finansova spromozhnist rehuliatsii sektoralnykh i sotsialno-ekonomichnykh protsesiv [Local finances in the context of the corona crisis: new budget architecture and financial capacity to regulate sectoral and socio-economic processes]. Finance of Ukraine, 12, 83–105. doi: https://doi.org/10.33763/finukr2020.12.083

5. Petrukha, S. V. & Korolenko, M. V. (2020). Financial stability of the banking sector and security of the backbone bank activites in the exchange market in the context of national ability to implement the European green deal. In Integration of traditional and innovation processes of development of modern science (pp. 84–137). Riga, Latvia : Baltija Publishing. doi: https://doi.org/10.30525/978-9934-26-021-6-19 [in English].

6. Petrukha, S. and Stakhov, B. (2020), “Current challenges to sustainable development of the agrarian sector of Ukraine economy: theoretical-conceptual aspects”, Agrosvit, 8, 49–71. doi: 10.32702/2306-6792.2020.8.49

7. Petrukha, N. M. (2020). Bioekonomika ta silskyi rozvytok: nova realnist proiektnoho upravlinnia [Bioeconomics and Rural Development: a new Reality of Project Management], Suchasnyi menedzhment orhanizatsii: vytoky, realii ta perspektyvy rozvytku 2022, materialy naukovoi konferentsii [Modern management of the organization: origins, realities and prospects of 2022, materials of the scientific conference]. Kyiv. URL: https://conf.krok.edu.ua/MMO/MMO-2022/paper/view/1163