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Grain industry of the agrarian sphere in the economy of Ukraine: state and development prospects

Category Economics
year 2019 issue Issue 94. Part 2
pages 108-121 index UDK 633:338.439(477)
DOI 10.31395/2415-8240-2019-94-2-108-121 (Link)
Abstract Grain industry is a foundation of the agrarian sphere of economy. It is explained by the importance of its products for the needs of internal food market and domestic agrarian export. The great majority of the country’s food market segments depends on the efficiency of the functioning of grain producing enterprises. Despite substantial scientific achievements in the investigated issues, the level of production in the grain industry of Ukraine, efficiency of distribution of grain products and their use at domestic market are quite far from potential possibilities of the analyzed sector of economy, which determines the relevance of our research. The aim of the article is to analyze retrospective and current state of the grain industry of Ukraine, to find out reserves for increasing production efficiency, distribution, exchange and consumption of grain products. Upon the ending of transformation crisis of 1991-2000 the economy of grain industry of Ukraine stabilized and now it is on the upward trajectory. Over the last four years the record-breaking yields of grains and leguminous plants were obtained on the areas that reduced compared to the previous years. This fact indicates intensive character of the growth. Grain industry of Ukraine is characterized by a high level of instability, which is confirmed by international comparisons. The reason of noticeable fluctuations of yielding capacity of domestic grain and leguminous plants is a failure to observe key principles of their growing technology in the period from 1991 to 2000, critical deficit of current assets of farmers because of the payment crisis caused by economic downturn. Over the last 17 years, the export of grains and leguminous plants increased more than 13 times in terms of value. Ukraine accumulates the export of raw mate-rials while having a considerable lag in the export of half-finished and finished products. Under noticeable increase in the share of grain crops in the structure of export of Ukrainian agricultural products, the share of flour and groats hovers around 1%. To increase the share of Ukrainian flour and groats at the world market Ukrainian producers should increase expenses on marketing tools, namely promotion and communication. Exporting relatively cheap forage grain, the product with the lowest share of additional value, Ukraine subsidizes foreign producers of meat products in order to import relatively expensive meat later, the product with higher additional value. The main reason for the “outflow” of the forage grain from the domestic market is the low demand for it from potential producers of meat products, because the production of meat products requires higher level of expenses of the fixed capital, compared to plant growing, it is more risky and less profitable kind of business activity. Without proper state support of the development of animal breeding in Ukraine, this branch will continue to suffer losses from the export of raw materials and import of half-products and finished products.
Key words grain industry, yielding capacity, intensification, instability, agricultural crop, raw materials, finished products, forage grain, meat shortage.
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