Honcharuk O. M., Kaliberda N. V., Turochkin R. A., Rojenkov V. N.

Oles Honchar Dnipropetrovsk National University

World food crisis: is there a threat or new possibilities for Ukraine?

Feed is a base necessity for all humanity. Consequently, the demand on food will always be high. By virtue of that the population of our planet is increased, and the amount of land, suitable for agriculture, diminishes from the offensives of the deserts, change of climate, depletion of soil, there is a threat of world food crisis. In addition agriculture which carries the main load in production of food products is a risky activity because the amount of technogenic misfortunes and natural catastrophes is annually increased in the world. The situation formed in the world opens possibilities for countries that have resources of agricultural land. Therefore, this problem is very important nowadays.

As for Ukraine, we must say that any tendency is risk, but on the other hand it is a challenge. Ukraine is an agrarian country which is actively present in the world food market. So in case of providing effective domestic policy, we can get benefits from rising prices in the world. For Ukraine it is a chance to increase exports and improve the position of the Ukrainian agricultural sector. This is facilitated by:

1) The geographical position of Ukraine. Ukraine has a very favorable geographical position: the Black Sea and the closeness in location with the countries of Europe, which enables without difficulty to export food products to different parts of the world.

2) The climatic conditions. Ukraine is located in a temperate climatic zone. Softness of climate allows you to grow the most various types of agricultural plants and home animals.

3) Cheap labor resources.

4) Ukrainian traditions of growing of agricultural products.

5) Resource potential. Fertile soils occupy more than 75% of agricultural lands. The presence of such potential allows us to develop the agricultural sector in Ukraine.

6) Large areas of land intended for agriculture. In agricultural cultivation are 42,844.8 hectares or 71% of territories of the country, on plough land are 32,473.4 ha (53.8% of the total area, or 78% of agricultural land) (French plough land is 63, 4%, Germany - 69.6% UK - 37%, in the EU in average - 60.7%). The potential capacity of native lands to food providing, according to various experts, is in the range of 150 to 500 million people. Taking into account high potential of agricultural land, an agrarian production in Ukraine is among the leading sectors of the economy and is about 8.2% of GDP, which exceeds the average European level almost twice.

Ukraine opens new opportunities and horizons in case of the implementation and effective use of all these advantages. There are some of them:

1) We will have a lower prime price of goods in case of canceling of some state duties.

2) To prove the Ukrainian goods as qualitative and ecologically clean (except the area of Chernobyl and industrial centers). It will attract the new foreign buyers of Ukrainian food and win their trust, which will bring the agrarian sector of Ukraine to the new markets of sale.

3)It will give a chance to increase the export of Ukrainian products significantly.

4) It will provide a possibility to develop the Ukrainian agrarian sector to the world competitive level.

5) The prospect of intensive agricultural development is the transition from extensive (expansion of areas) to the intensive (quality improvement) production.

On the other hand, food crisis also provides a certain threat for all countries like any other crisis. And Ukraine is not an exception. For our country risks can be:

1) Droughts in Ukraine. They can destroy the greater part of the cultural planting of agricultural industry. It will deprive possibilities not only to export food products abroad, but also to provide with them the population of our country.

2) The rising of internal prices (prices on foreign markets affect internal prices). The purchasing power of the Ukrainian population is very low. Therefore sale of food abroad may cause the denial of the population from the certain food products.

3) Imperfection of normatively legal bases in an agrarian sector (such as the moratoriums on land sales, excessive interference of government in the action of food traders (export restrictions)).

4) Treatment of land is often made by obsolete equipment without the use of the latest technologies, which abandons Ukrainian agrarian industry in the last century. Ukraine may suffer from food crisis without providing innovations and modernization.

5) Inadvisable use of resource potential. Very valuable land is used inefficiently (untreated and neglected with shrubs) or destroyed (reservoirs, quarries, etc).

6) Polluted environment by industrial wastes and tailings of radiation, world awareness about Ukraine, as the focus of the Chernobyl disaster can frighten off the potential customers of Ukrainian products.

7) Enchanceable urbanization of the Ukrainian population causes the extinction of the village gradually. Consequently, there is a threat of deprivation of certain parts of labor in agriculture.

8) Excessive "indrawing" of the national economy in the agrarian development model due to extensive expansion of production and export of agrarian products. Therefore, the agrarian vector of development of the national economy must be accompanied by appropriate investment and innovative policy.

9) Growth of speculative demand on agricultural assets by both domestic and foreign investors. A violation of the existent system of crop rotations, soil depletion due to extensive increase of sowing areas for growing of highly profitable export crops (eg, sunflower, canola, etc.) can become credible investigation.

Consequently, the world situation opens possibilities for countries that have the resources of agricultural land. At is found out as a result of detailed research that Ukraine is one of them, because it has not only large areas of land suitable for agriculture activities, but also rich fertile soil. So I consider that the main threats for Ukraine can be overcome through reforms, investment and innovative policy. Then Ukraine will not suffer from the world food crisis, and will be able to use their advantages and potential for development of the agrarian sector, conquer the new markets, change the attitude of Europe both toward the products, and to the people which can be competitive in the modern world.