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Problems of financial and lending support for the agricultural sector of the economy

Author(s) Колотуха С. М., , ,
Melnyk К. М., , ,
Пономаренко О. В., , ,
Category Economics
year 2021 issue Issue number 98. Part 2
pages 123-134 index UDK 338.433
DOI 10.31395/2415-8240-2021-98-2-123-134 (Link)
Abstract The article is devoted to the relevant issues of determining factors and ways to intensify financial and lending support for the agricultural sector of the economy. In the wider sense, financial and lending support for agricultural enterprises is necessary for financing, growth and development of the state economy. National and foreign experiences demonstrate that the finances of agricultural enterprises have certain specific nature and require permanent crediting. Due to the length of production cycle, seasonality, nature of cost formation and supplies of agricultural enterprises, its own permanent funding source is impossible. Consequently, the attraction and usage of borrowed financial resources is the key aspect of the financial activity of the agricultural sector of the economy aimed at the achieving successful final results. The research shows that in all developed countries the agricultural sector of the economy enjoys the benefits of state support as it directly affects the country’s food safety. It is revealed that the introduced system of funding state support of the agricultural complex does not provide legally determined promotion of agricultural enterprises, their competitiveness, food safety, improvement of the level of social protection for rural population mainly due to imperfect financial system. The issues that impede development for lending to agricultural enterprises and the development of agricultural insurance have been determined which make obstacles to improve their financial security and effective risk management in the agricultural sector in order to enhance the potential of their rapid development. It has been proved that the efficiency of financial and credit arrangement of ensuring the development of the agricultural sector depends on the effective financial policy of the industry and the state as a whole which can help to combine economic interests of agricultural enterprises and the state
Key words agricultural sector, financial and lending support, state support, credit mechanism, budget funds, land mortgage, warehouse certificates, partnership forms of loans
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