Economic science/12. Agricultural economics

Prof. Shubravska O.V.

Institute for Economics and Forecasting NAS of Ukraine

Ecological restrictions of farm-production growth in Ukraine

Farm-production growth in Ukraine, despite its high present rates, takes place under the conditions of reduction of financial security of landowners, low performance of their usage of the main types of resources, increase of anthropogenous load on the environment, inadequate development of the social sphere of the village. All this leads to the reduction of potential of effective growth of the industry, decrease in level of dynamic stability of production.

Major factors of accumulation of volumes of agro-production are the high level of financial security and innovation of national economy and the industry, favorable and steady environment of the domestic and world agrarian market. It is obvious that the same factors are under certain conditions capable of curbing farm-production growth. Considering that the latter is in many respects interfaced to strengthening of concentration and specialization, factors of the natural and social environment are also the limiters of such growth. Among them one on the most important is the exceeding of threshold load on the natural resources of agro-production.

Agro-food production is one of the main consumers of natural resources in the world. This human activity causes degradation and loss of habitat of live organisms, erosion of soil, formation of saline soils, exhaustion of water resources, agrochemical poisonings of soil, water and air pollution. Growth of population on the planet demands the increase of food production. It increases demand for the soil as the production resource, demands forcing of gain of volumes of agro-food production and at the same time increases load on the environment: level of ploughness of land resources grows, the erosion and degradation of soil (according to the estimates of the UN, by the end of last century about 300 million hectares of lands degraded worldwide), their reconsolidation and pollution by heavy metals amplifies, the layer of humus and so on is reduced. For the last years in the world with the increase of grain crops yield for almost 2,5 times the use of fertilizers has grown more, than ten times, and pesticides - repeatedly. The level of use of fertilizers, proved from the point of view of effective production increase, has to be defined not by financial opportunities of farmers (that in some countries is strengthened by government subsidies), and to be established, proceeding from optimum combination of organic and inorganic substances the demand in which has to be measured by soil exhaustion degree owing to branch it under various crops. Thus the main attention should be paid to the usage of local organic substances, such as plant residues, green manure crops, animal husbandry waste, etc.

Agro-food production has an adverse effect on the water resources as well. It is caused by considerable level of consumption of water for agricultural purposes, and also by the pollution of surface and underground waters due to the usage of chemicals, branch in reservoirs crude or not enough cleared production drains and so on in the production process.

The agriculture of Ukraine demonstrates considerable progress during the recent years: in 2001-2005 the index of production of gross output of agriculture made 1,95%, in 2006-2010 - 2,4%, and in 2011-2014 - 7,5%. The profitability of production was also high: in 2006-2013 it reached nearly 16% on average. However in 2013-2014 the financial condition of the Ukrainian landowners has worsened in connection with strengthening of economic crisis and price volatility on the world food market. It gives the grounds to assume reduction of growth rates of agricultural production and reduction of financial stability of producers, especially small ones, in 2015. Under such conditions the only opportunity to minimize the effects of expansion of the crisis phenomena, pernicious for the industry, is the decrease, by any acceptable means, of cost value of the made products and increase of its demand, as well as on the global market. Limitation of financial resources will demand from producers along with traditional hope for the state support also making decisions on change of the range and production technologies.

In this context first of all it is necessary to remember the agro-innovations allowing not only to provide reduction of expenses of production owing to reduction of losses, complex processing of products and waste, increases of energy efficiency of production but it is also essential to reduce the level of anthropogenous influence on the environment. The latter is very important for Ukraine since the situation in the sphere of farm-production usage of environmental resources is very adverse.

The territory of Ukraine is characterized by an extremely high rate of agricultural development (72%) considerably exceeding ecologically reasonable framework, and also ploughness of the farmland (54%). At the same time in EU countries arable lands make 30-32% of waterless valley, in particular in France and Germany the level of ploughness of lands makes 33%, in Spain - 30%, in the Netherlands - 24%.

In Ukraine the steady tendency of deterioration of qualitative composition of soil is observed: their acidulation, salinity, destructurization, dehumification. Thus, 43% of total area is subject to dehumification, about 39% - to soil preconsolidation.

Agriculture in Ukraine takes place mainly on black soil and soil of such type (60% of the area of arable lands), and potential ability of the Ukrainian lands to food supply is estimated within 150-500 million people [1]. However soil fertility in Ukraine constantly decreases: annually owing to water and wind erosion from 450 to 600 million tons of fertile layer of earth is lost, 30 million hectares of agricultural lands are recognized degraded, and from 14 to 17 - erosion dangerous. In general, soil fertility can be estimated according to the humus it contains and the nutrients necessary for crop formation. According to the results of agrochemical certification of lands during 1986-2010 the humus content in the soil has decreased to 0,5%, and the balance of loss of humus in the last 10 years was extremely scarce (annual losses made 0,4-0,8 t/hectare) [2]. The similar situation was also observed with the nutrients (nitrogen and phosphorus). Their losses after 1990 steadily exceeded the corresponding earnings: in 1996-2000 - for 77 kg/hectare, in 2001-2005 - for 135, and in 2006-2010 - for 118 kg/hectare. Now the area of the soil with the low content of humus makes 15%, average - 28, raised - 34, the high content of humus - 23%. At the same time the negative tendency of reduction of the areas with the high humus content and their redistribution in the raised and average income groups is observed. Level of recovery of soil covering in Ukraine is estimated as critical (2,5 times less than normal).

Besides, agrarian land usage in Ukraine is recognized as ecologically unbalanced. It is considered acceptable when the share of natural forage grasslands in the structure of farmlands makes from 30 to 50%. In Ukraine it is only about 19% whereas this share in EU countries is on average equal to 39%. Pastures in Ukraine make 9% of the territory, whereas in Europe - 23%.

According to the Ministry of Environmental Protection and Natural Resources ecological stability of land usage on the territory of Ukraine remains unstable. Thus in six regions of the country (Dnipropetrovsk, Donetsk, Zaporizhya, Kirovograd, Mykolaiv, Odessa, i.e. in the main regions of grain and oil-seed production) land usage is considered unstable. The tillable land, perennial plantings have a high-scale anthropogenic pressure on the land resources, and natural forage lands have an average degree. Thus, the general level of anthropogenic pressure from farm-production is rather high.

Agriculture of Ukraine is responsible for the formation of 3% of all the waste. And though this figure looks rather insignificant, however recycling of the main production is one of the efficient solutions of nation-wide problem of increase of energy efficiency and reduction of emissions of the carbonic gas that destroy the ozone layer of stratosphere. The latter one is also favored by rationalization of nitric fertilizers and pesticides usage in the industry.

One of factors of ensuring agricultural production growth is the irrigation. According to State Statistics Service of Ukraine productivity of crops on the watered lands for 1,2 - 2,5 times exceeds the indicator on rain crop. However it is impossible to recognize large-scale usage of irrigation as reasonable because Ukraine is considered to be a water-scarce country. In low water years we have 0,67 thousand cubic meters of river drain per capita (whereas water resources supply decreases from the West to the East of the country), and according to the definition of the UN, the country where water resources do not exceed 1,5 thousand cubic meters per capita, is considered to have low level of water supply.

Due to the current and expected climatic changes in Ukraine the problem of rational use of water resources for overcoming the effects of droughts will further aggravate. In order to solve it, it is necessary to expand the usage of moisture saving technologies, to develop selection and to start using seeds of drought-resistant cultures, and also to recover the irrigation system operating earlier in the country. However it is known that irrigation farming consumes from 70 to 80% of global supply of fresh water, from half to 2/3 of which is lost in the process of surface irrigation [3]. Therefore many countries, in particular water-scarce ones (including Ukraine), develop systems of more economical drop irrigation.

In connection with everything mentioned above, such system of agro-managing as CSA (Climate Smart Agriculture) which was created in response to the most powerful modern calls to world farm-production deserves attention, namely: need of ensuring food security, adaptation to climatic changes and restrictions of negative influence on environment [4]. The main CSA directions include organic production, cultivation resistant to droughts and diseases, high-yielding varieties of crops, use of the fertilizers reducing carbon emissions, ensuring decrease in losses in the process of harvesting and waste (in particular, food processing), silvicultural reclamation etc.

Ukraine the territory of which, by estimates, includes up to 8 million hectares of pollution-free black earth, has extremely favorable conditions for the expansion of organic production. This will allow to increase food production and export volumes without performing negative impact on the environment.

References:

1. Rozvytok agrarnogo vyrobnyztva jak peredumova zabezpechennia prodovolchoi bezpeky Ukrainy / [electronic resource]: Access: http://www.niss.gov.ua/content/articles/files/0623_dop-b3314.pdf.

2. Natsionalna dopovid pro stan navkoyshniogo pryrodnogo seredovyscha Ukrainy u 2011 r. / [electronic resource]: Access: http://www.menr.gov.ua/docs/activity-dopovidi/NacDopovid2011.pdf.

3. Global green new deal. Policy brief. March 2009 / [electronic resource]: Access: http://www.unep.org/pdf/A_Global_Green_New_Deal_Policy_Brief.pdf.

4. Climate Smart Agriculture / [electronic resource]: Access: http://www.fao.org/climate-smart-agriculture/en/.