Any transformational changes depend on the state, namely: measures that should take into account current trends in the development of the domestic market, cooperation with foreign producers, who consider Ukraine as a potential supplier of agricultural products.
The solution of these problems will contribute to the construction and effective functioning of public administration in various areas of the formation and implementation of socio-economic policies. For the development of the agrarian economy, state support should be balanced and take into account the problems of socio-economic development of the state, by improving the system of public administration and adoption of relevant legislative acts.
The main instruments of state support are interest-free budget loans to agricultural producers, tax exemptions, receipts and debt restructuring, partial compensation of expenses for the purchase of agricultural machinery and equipment.
However, the system of state support and regulation of agriculture in Ukraine is deformed and lagging behind civilization development and from European standards.
Today, the expenditures of the State Budget of Ukraine in support of the agrarian sector make up 5-6% of budget expenditures. At the same time, budget support is almost completely offset by the existing disparity in prices. At 100 UAH budget disbursements are 100 UAH of price costs, when in the EU, on the contrary, 100 euro of budget payments to farmers account for 130 euro of price support.
In addition, state support for prices and production is provided to agricultural enterprises, which produce only 40.7% of the gross output of the industry and employ less than a third of able-bodied rural residents. The farmers and the vast majority of farms do not receive such support.
Therefore, questions arise regarding the improvement of price policy, which would restore parity and ensure positive price support for agricultural producers, helped to select the means of support and implementation of ways to exit the agrarian sector from a protracted crisis through the application of measures of state protectionism. Such an approach will help to reduce the level of inequivalence in the agricultural exchange trade with other sectors of the economy and ensure the efficient functioning of agricultural production.
State support to agriculture in Ukraine covers the budget financing of programs and measures aimed at the development of the industry, preferential tax treatment, partial compensation of interest rates for the use of commercial banks loans, write-off of bad debts to the budget, support for expanded reproduction in agriculture and protection of interests of agricultural consumers products.
Unfortunately, today state support in the form of subsidies, subventions and donations is not being implemented effectively. Because agricultural producers either do not receive financial resources due to lack of funds, or receive them with considerable delay in time. This is due to the fact that the budget support programs developed and implemented are often underfunded, and the rules for allocating budget funds, according to the relevant programs, are approved on an annual basis, and therefore change from year to year (i.e. agricultural producers often do not receive support when it comes to them urgently needed).
Thus, state support is a combination of various levers and instruments of preferential financing of the most vulnerable enterprises and branches of agro-industrial complex.
Therefore, it is advisable for agricultural commodity producers to focus on:
- raising the level of production of agricultural products, which will contribute to the growth of livestock feed and increase export potential of the country;
- increase in the production of milk milk;
- reduction of the level of dependence on imports of agricultural products.
The solution of such problems is possible only with the proper state regulation and support of the agroindustrial complexes.
Another important direction for improving the economic mechanism of state support is increasing the availability of loans aimed at increasing financial sustainability of the industry. Agrarians should create the necessary conditions for expanded reproduction with the help of credit resources. At the same time, the scheme of granting preferential loans should be modified.
Indeed, as convinced by world experience - the basis for creating a rational and sustainable, economic and balanced agricultural production is focused state support
Therefore, in order for agricultural production to develop more effectively and to increase its competitiveness, it is necessary to adjust the process of providing state financial support to agricultural producers, to ensure its increase and effective use, in accordance with the principles of a market economy and approaches to state encouragement of agricultural production in other countries.
The settlement also requires a system of direct state aid to the agrarian sector. Grants and reimbursements from the state budget should primarily be paid to producers of agricultural products, and the main part of the funds should be directed to financial support for programs that are capable of ensuring the sustainable development of the agricultural sector.
EUROINTEGRATION ORIENTATION OF UKRAINE: STATE SUPPORT OF THE AGRARIAN SECTOR OF THE ECONOMY