RYABOKON V.,

Doctor of Economics,

Corresponding Member of the National Academy of Science of Ukraine,

National Research Center "Institute of Agrarian Economics"

Problems of Social Development in Rural Areas

Over the past two decades Ukrainian village has been significantly changing as a result of structural economic reforms (the restructuring of land and property relations, the establishment of legal and regulatory framework of the market economy through privatization of land, property and use of individual and family and collective work). However, in rural areas there are a number of complex and unresolved issues related to its social development. The reason is that these reformshave been aimed only at development of agricultural production and the relations of production, while problems of formation and development of social sector have been remaining unnoticed or givinga secondary role as a residual. As a result, the social sphere of rural areas wasn’t developed at all, and even more it was dilapidated. The main reasons for this were the reducing of the state's role in solving of social problems in rural areas, the transfer of social services from the state budget tothe balance of local government that hadn’t any funds for its financing, and the lack of proper control over the implementation of laws and regulations of social rural development.

The major role in the development of effective mechanisms to encourage rural development willhave a choosing of the basic approaches and concepts as the base of rural development. In recent years in Ukraine have been gaining more clearer definition of the concept of multifunctionality villages and rural areas, the main purpose of which is to restore the village.It includesa sustainable development of production base, risingof living standards and quality of life, preservation of its social values and adapting of rural lifestyle to the modern requirements.

Agricultural science, expanding the scope of research, focuses on economic and social aspects of rural development. However, generalization of theoretical works of domestic and foreign economists, international and local practices,allowed us to reveal general conceptual approaches to rural development.

Currently, in the domestic practice dominates sector approach implemented particularly in the Concept of Sustainable Development of Rural Areas in Ukraine 2020. It determines the sustainable development of rural areas as a system of institutional, economic, political and legal measures aimed at ensuring of proportionate and simultaneous, irreversible and progressive changes in the industrial, social and environmental spheres that occur simultaneously and proportionally in each component of rural area.

State rural development policy can be effective only with combining efforts of state and local governments, rural communities and public organizations andrural population itself. The focus of public and agrarian policiesmust be shifted to a complex development of rural areas, especially after Ukraine's accession to the WTO and in terms of European integration.

The basis for the stable functioning of rural areas is social infrastructure, high development of which is essential for each villager and the whole country as well.

Social infrastructure is a material base social sphere in rural areas, a set of objects belonging to the service of rural population (housing and communal services, connectivity, trade, catering, consumer services, health care, social security, education, culture, art and sports), the functioning of which is aimed at fulfilling of needs of the population, because it provides optimal conditions for rational activities, especially for the human.

The development of social infrastructure in rural areas is one of the major problems of reforming economic relations in the agricultural sector of Ukraine. Despite taken several measures, including the adoption of laws and regulations and social and economic programs of the problems of social rural development, the potential of social infrastructure in rural areas continues to decline.This situation leads todecreasing in commissioning of objects of housing and communal, social and cultural services, reductionof educational and cultural and social opportunities of rural population, difficulties with medical care in rural areas.

The economic crisis has also caused considerable destruction of cultural and social network institutions in rural social infrastructure, educational facilities, medical and health and sports objects. According to conducted by the State Statistics Service of Ukraine survey of 10.6 thousand settlements, in 2014 compared with 2005, there were decreased a number of almost all existing social institutions of rural areas, including 11.7% of schools (55.6% of villages don’t have schools at all), 29.8% of hospitals, 66% of pre-school institutions, 27% of medical institutions with mobile service (35.5% is situated at a distance of 3 to 10 kmto such institutions), 30.1% of commercial establishments, 42.3% of clubs and houses of culture.

Data of 2014 shows that 18.8% of hospitals, 21.8% of outpatient clinics, 22.2% of health posts and 9.7% of aid stations are required themajor repairs.Rural institutions are not fully staffed with medical personnel, primarily due to poor material and living conditions. Availability of doctorsfor villagers is 1.5-2 times lower than for urban residents. Loadson one doctor are 4-5 thousand peoplein rural areas and 1.5-1.7 thousand people in the city. All this adversely affects the organization of health protection in rural areas.

One of the main factors of improving the living standards of villagers is to create normal living conditions. At the same time, the living conditions of the rural population need the substantial improvement. Only 7.7% of the rural housing has been built in recent years.

An improvement of rural housingis in poor condition now. In the surveyed villages in all apartments there hasn’tthe central heating, 40.4% hasn’t water supply, 43.1% - sewerage, 45.4% - gas, 5.7% of residential buildings (336.7 thousand.) have been used seasonally, and 10.2% (602.6 thousand.) have been empty. Number of buildings compared to 2005 increased by 10.1% and 20.8%.

In fact, the social sector in rural areas is in poor condition. The overwhelming majority of the various forms of agriculture, who rent land or have their enterprises, are not interested in funding social services, and local authorities do not have such opportunities.

The circle of villages, whose residents could not even satisfy their minimum necessary requirements and receive basic services in the local community, is expanding and the quality of services is decreasing and doesn’t meet generally accepted standards. Ultimately, the villageshave been emptied and depopulated. Only after 2005, the number of villages has decreased by 204 units, and in 369 villages there isn’t any population, but they have not been removed from the registeryet.

The destruction of the network of institutions and organizations of social infrastructure requires the productive public policies aimed at providing rural areas and its labor force with objects of social infrastructure. Thereby, reform of the agricultural sector at the current stage requires a comprehensive approach that would take into account both production and social sphere of the village.

In addition, rural development includes basic components that aresocial, economic, environmental and institutional and allows each of them to define criteria and indicators needed to assess rural areas and work out organizational and economic measures of development. In reforming processesaimed to improve the functioning of social infrastructure we should take into account the fact that the technical and technological features of social infrastructure often do not allow companies to operate in maximizing mode of profit, which sharply limits the areas in complex market management schemes. In addition, many areas of social infrastructure are the scope of natural monopolies, which leads to the need for special monitoring of their activities by the state.

Reforming particular sphere of housing and communal services, we should consider the fact that its branches are forming the general conditions of the population and entrepreneurship.That’s causesthat housing and communal servicesmust be fullydirected to satisfy the needs of rural population.

In the sphere of housing and communal services the state necessarily has to take responsibility to ensure social protection of needy citizens and guarantee them housing conditions in accordance with the standards established social norms.

In healthcare, the state must take most responsibility, because this social infrastructure sector is specific in terms of motivating of economic agents to adopt decisions and their consequences. In particular, encouraging the market relations, the state should actively intervene and monitor the development of healthcare, while ensuring the implementation of the following measures:

- the minimum requirement ofcurrentreviews of medical services. In implementing of this setup could be possible to redistribute the responsibility partialfor this area of activity (involvement through a variety of methods and tools). In this case, the main results will be an addition of number of man-days, an increasingof life expectancy of general population and particularly of workers and prevention private companies of paying the hospital sheets and creating a positive attitude of the company;

- the ensuring of availability of minimum guaranteed amount of medical services and medicines to all citizens; support of socially disadvantaged groups and individuals with incomes below the subsistence minimum; allocation of budget funds for healthcare in the region should be tailored to the needs of medical care for the required group of people and not depend on the capabilities of a medical facility;

- the support of costly investigations and operations. Due to the low level of life most people cannot afford to use the services of qualified medical personnel and expensive drugs (meaning vital without analogues).

In the education sector, its reform should take into account the interests of all economic agents. In the area of pre-school and secondary education the responsibility for funding should be taken by the statein accordance with constitutional norms. Fundraising from local population in the educational system is ineffective causedby the low incomes of the rural population. In higher education the responsibilities must be shared among all the economic agents, as it implements the interests of both the state and workers and employers.

Fundsof enterprises are directed to the payment of educational programs in which interested enterprises themselves (mainly short programs of additional professional education). An effective demand from enterprises for educational services may increase as the recovery of the real economy. Currently, due to limited demand, there should be ensured a fast growth of budget financing of higher education with a gradual increase in the share of family budgets and funds of enterprises. In the long term conditions due to difficult financial situation the state would have to provide accessibility of education by implementing programs such as targeted social support for students from poor families, orphans and children left without parental care, gifted children and the development of system of long-term lending to people who want to receive an education, but do not have the financial capacity to pay for it.

Preservation of cultural heritage for future generations is a task that should be solved at the state level. Material and technical base of cultural institutions does not meet modern requirements, and a low solvency of the peasantshas caused a loss in their interest to existing forms of entertainment and recreation. Entering into a market economy causes negative developments and trends related to commercial activitiesin culture. Due to the crisis of objects of social and cultural infrastructure, state and local authorities should take the necessary steps to create proper conditions for providing maximum services to rural residents. However, a large number of cultural events, exhibitions, museums fit in a market economy, and therefore the state could move away from excessive financial burns, reserving a general control.

Many unsolved problems are in the field of consumer services. The list of public services nowhas more than 800 types, but among 36 main of themto peasants there’re providing no more than 5-7. The tendency of minimizing of consumer service network of rural life is disturbing. As a result of uncontrolled and spontaneous reforms in consumer services, and transfer of its entities to the scopeof municipal ownership the amount of public services has drastically reduced.

The system of relations in the areas of social infrastructure still has social-dependency nature and conflicts with the laws of market economy. In reformingof social infrastructure it is necessary to balance the principles of social and economic efficiency. Social benefits are provided to households whose average income is below the subsistence level.

There is almost destroyed an organizational mechanism of public investment of social infrastructure development in rural areas. Budget allocations for the maintenance of social institutions in rural areashave been decreased significantly and can’t provide their normal functioning. The situation with the transfer of social assets to budget funding to local governments hasn’t changed yet – there’s still lack of the funds. At the same time, the vast majority of new organizational and legal structuresrefused from financing of social sphere of rural areas.

It is important for the implementation of measures for the revival and development of Ukrainian rural areasto achieve balanced intergovernmental relations, a combination of financial resources from the state budget and funds from local budgets. And there must be achieved such amount of allocations, which support all necessity of social infrastructure development in rural areas.

The model of social budgets in recent years has become a model of narrowed reproduction of population that has led to reducing its size, deterioratingquality of life of the main its part with a chronic underfunding of areas of social infrastructure. Due to inflation and constant growth of prices and tariffs for public and social services, the purchasing power of peasants has reduced, there has been also decreased the food consumption, industrial goods and services.Every year the cost of living has become more expensive for the peasants and their standard of living is falling. Most families are not provided with the subsistence minimumand the limit of poverty does not meet the physiological level. Thereby, there is an urgent need for targeted financial assistance, especiallyfor disabled citizens with the lowest income.

Currently, in the state is carried out the modernization of intergovernmental relations concerning primarily the transfer of many government social obligations to the local level. However, under the currentdistribution of revenuesbetween state and local budgets there is a problem of territorial differentiation of availability and quality of social benefits and services. The main task of the government in this situation is to give more initiative and independence for local governments, leaving them the vast majority of earned funds, which undoubtedly will enhance the efficiency of social protection of people.

The main directions of development of social infrastructure at the regional level, in our opinion, should be functioned as a system of interrelated activities aimed at achieving specific goals and objectives, character and setting of which depends on real problems in this area.

The further development of the areas of social and cultural purpose needs a creation of new structures that would provide the rural population with social services in a wider range and quality. A formation and effective use of organizational and economic forms and methods of reproduction of the living conditions of the rural population should be an integral part of agricultural policy.

At present there are two clearly close related issues. On the one hand, in the Ukrainian rural areasis matured a large amount of organizational and economic measures and material and labor-intensive works aimed at creating and developing high-efficiency agriculture on the basis of fundamental social and economic restructuring of the rural development. On the other hand,in rural areasis available large employment potential, not engaged in productive labor. A significant part of it in the search for employment and earning livelihood migrates to other countries.

Given the extremely important role to the peasantry and the agricultural sector in ensuring of human community with high-quality food products, development of determinants of human activity objectively require constant reproduction of appropriate conditions for their effective functioning. Now it is becoming an important part of the strategy of a new state agrarian policy of Ukraine. Its basic nature should be directed to legislative approval and organization of the practical implementation of a deep restructuring of the Ukrainian village.

The basis of the development of long-term development strategy for rural areas should be laid in theoretical foundations for creating a fundamentally new science-based innovation model of restructuring the priorities of economic, social and environmental development of agricultural production in Ukraine. In determining of the priorities of the strategic course on agriculture restructuring becomes an important substantial strengthening of its social orientation, promotion of providing comprehensive terms of intellectual and physical development of human capitalto the forefront. It is not only a radical restructuring of the social and economic content of rural areas, but also the overall development of social and psychological essence of residents, an architectural reconstruction of both external and internal images of villages, and creating new structural settlements.

The essence of the social and economic, technical, technological and architecturalconstructionand the new content of the agglomerative settlements are the desire to achieve the unification into one of settlements connected by intense economic, labor, organizational, technological, cultural and household connectors. Agglomerativeformations reflect the territorial concentration of agricultural and industrial production aimed at the location of production and technology, residential, administrative, cultural, and recreational sectors of public life within the currently existing rural areas.

There can be important an economic experiment, development and implementation of model options of such agglomerations. Structurally, they include territorial sectors of agricultural production, its industrial processing, storage, preparation and organization of the sale of finished products. It is necessary to ensure a close relationship between them aimed at cooperation in their functioning. Engineering and technical and technological content of these sectors should be typical for the architectural buildings, communications, energy and transport security.

The formation and development of new clusters, agglomerations of settlement should be based on the use of advanced material and resource tools and innovative technologies, simultaneously with their social development. This can be the birth of new forms of territorial concentration of agricultural and industrial production combined with the harmonious development of cultural and educational and social achievements of the human community.

Thereby, it is necessary to deepen the theoretical and methodological research and creation of the agricultural and social agglomerations with practical implementation of development projects of production and social reconstruction of the Ukrainian rural areas.

These conceptual positions certainly require a deeper theoretical understanding of strategic prioritization to handle future development of the state program for the life of the Ukrainian nation.