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AGRICULTURAL SECTOR”
International scientific-practical conference on March 25-26, 2021.
Web:
http://conference.sbtsue.uz/uz
MECHANISM OF STATE REGULATION OF FARMING USING
INNOVATIONS
Brychko Alina
1
Annotation.
The article formulates proposals for improving the mechanism of state regulation of
the interests of farming with the use of innovations and identifies their features.
Keywords:
farms, state support, mechanism of state regulation, farming, innovations.
Аннотация.
В статье сформулювано предложения по совершенствованию механизма
государственного регулирования интересов фермерства с использованием инноваций и
определены их особенности.
Ключевые слова:
фермерские хозяйства, государственная поддержка, механизм
государственного регулирования, фермерство, инновации.
1
Associate Professor of Public Management and Administration Department PhD, Associate Professor Sumy
National Agrarian University Sumy, Ukraine
E-mail: alinkabrychko@gmail.com
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“DEVELOPMENT ISSUES OF INNOVATIVE ECONOMY IN T
HE
AGRICULTURAL SECTOR”
International scientific-practical conference on March 25-26, 2021.
Web:
http://conference.sbtsue.uz/uz
Today, the agricultural sector of the state's economy is extremely important for both the economy
and food security. It provides 12% of gross domestic product and about 40% of foreign exchange
earnings from exports. The state must support this industry for its effective functioning, namely, to reveal
the greatest potential for its development, namely in the field of small and medium-sized businesses in
rural areas.
In Ukraine, several measures have been taken to stimulate the activities of farms. The legislative
basis for the business sector in the domestic market, which is developing steadily, has been formed. To
ensure the stability of this process today, it is not enough just to have the appropriate organizational and
legal prerequisites. A necessary component is the revitalization of existing institutions involved in the
formation of "rules of the game" between businesses, reducing costs, ensuring the profitability of the
industry, and more. The legal, economic, administrative, social and information mechanisms of state
regulation of the interests of farming operate simultaneously and in close cooperation. But the analysis
shows the lack of systematic use of tools and mechanisms aimed at solving current problems in the
industry.
There is an advisory program to support farmers, and there are certain associations. It is difficult
to evaluate the effectiveness of the program due to a lack of data.
Previously, the problem was macroeconomic indicators, data on public finances and funds, but
there was no problem for enterprises because it was possible to use the full form № 50, to make inquiries
to the Ministry of Agrarian Policy to analyze the dynamics of enterprise development. Today, the
situation has changed dramatically, because financial reporting is a trade secret of enterprises. The form
№ 50 is not obligatory for all agricultural producers, and this makes it impossible to carry out a detailed
analysis of the economic activity of an agricultural enterprise.
Experts of the SAFPI Project conducted a study for the period 2014-2019, which found that
almost all budget programs of the Ministry of Agrarian Policy contain a large number of performance
indicators that exceed their practical use. Indicators of efficiency, quality of programs are often purely
descriptive, statistical, or financial. In the field of agro-industrial complex in terms of financial support
for the development of farms, according to forecasts, the volume of gross agricultural output should
increase by 2%. In the end, it was reported that this program is effective, but it cannot be traced that it
was thanks to this program to support GDP that it gave such an increase. There is no information for this
program that would indicate a possible analysis of the impact of funds spent on achieving the goal of the
program [1].
Promoting rural development, helping to set up agricultural hubs at universities and research
institutions, rural tourism, export promotion, and training are some of the types of support that do not
distort trade and production, but develop the agricultural sector. The formation of a medium-term sectoral
strategic plan should become a permanent practice of the chief administrator of funds in the agricultural
sector. When preparing documents for subsequent periods, it is necessary to ensure the consistency and
heredity of previous plans. These measures will allow forming of a balanced and predictable sectoral
policy and will promote the efficient use of state budget funds [1].
Financial support for farm development. 380 million UAH is planned to be directed in this
direction in 2020. State support will be provided:
1) farms that have a net income from sales of products (services) for the last year up to UAH 20
million by:
• budget subsidy for keeping cows;
• partial reimbursement of costs associated with the provision of agricultural advisory services;
• budget subsidy per unit of arable land.
2) an agricultural service cooperative, which includes one or more farms, by reimbursing 70% of
the cost of domestic machinery and equipment (up to 3 million UAH per cooperative).
Other types of financial support for farm development are shown in Figure 1.
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