Экономические науки/12.Экономика сельского хозяйства

PhD Kateryna Prokopenko

State organization “Institute of the economy and forecasting of the National academy of sciences of Ukraine”

Structural changes in agriculture [1]

Assessment of structural changes in agriculture based on analysis of its major resource potential components in dynamics has been made. Methodical approaches to estimation resource potential take into account main types of farms (agricultural enterprises and households). Developing methodology of assessment of labor force and basic assets in main categories of producers as well as efficiency of land use has been introduced.

During the years of independence considerable structural changes have taken place in agriculture of Ukraine, namely, part of households in gross agricultural production was considerably multiplied. At the beginning of 90th about 30% of production was created by households, in 2005 its part increased to 60% and now their part is about 45%. During this period basic assets were perceptibly extended at households (the area of agricultural lands was multiplied by 5,9 times, there were tractors and harvesters in their property), although mainly such growth of part of households is explained by the lay-off in agricultural enterprises.

Now large enterprises adapted to new conditions of management and already more than 15 years continue to yield positions in production of agricultural goods [2].

To determine the role of households in agricultural production we needed to conduct the analysis of efficiency of their production activity in comparison with agricultural enterprises.

Many scientists devoted their papers to this problem. In particular, recently a number of works on the analysis of efficiency of production in households was published [3]. The noted researches highlight the state of agricultural sector in the period after reforms and the roles of both agricultural enterprises and households in agricultural production.

During the years of independence considerable redistribution of resources between two main production sectors took place. The resources of agricultural producers include the agricultural land, basic assets and labor resources. In our opinion, the recent structural changes in agriculture need be to traced exactly in this cut.

Agriculture of Ukraine from the 90s of the last century suffered considerable changes in relation to a structure, quality and amount of foregoing factors. Especially it concerns their distributing between basic producers. This period is characterized by carrying out land reform, and part of agricultural lands owned by population was considerably multiplied as a result. Calculations show that the use of agricultural lands by the economies of population is more effective than those of agricultural enterprises. Although the reason of such correlation of indexes is first of all the pattern of production and price factor. Households grow mainly labor intensive products which have a high price (garden stuff and berries, vegetables and so on).

During the period from 1990 to 2003 gross crop production per 100 ha agricultural lands, as a basic index of efficiency of their use, in agricultural enterprises increased by 1,7 times, and in households grew short by 2,3 times, here the rate of abbreviation of area of agricultural lands in agricultural enterprises made 1,9 times, and in the households the area grew by 5,9 times (see Table 1). Although it shows that reduction of efficiency of the use of agricultural lands by households is greater than in agricultural enterprises, in our opinion, only due to the transmission of the land resources to the economies of population we managed to decrease reduction of gross production.

If we assume that the structure of distributing of agricultural lands did not change from 1990, under conditions of 2014, agricultural enterprises would get gross products of plant-grower to the amount of UAH 198772,8 mln and households – UAH 12138,6 mln, which makes UAH 210911,4 mln total. In fact, in 2014 gross plant-grower production amounted to UAH 177707,9 mln. Consequently, the difference between the actual volume of gross plant-grower production and expected with leveling of influence of sector structure of agricultural lands is UAH 33203,5 mln which can be considered the influence of the factor of change of structure of land use.

Table 1

Efficiency of the use of agricultural lands by enterprises and households

Indicators	1990		2000		2014
	enterprises	households	enterprises	households	enterprises	households
Area of agricultural lands (on January, 1): - thousand of ha	38705,4	2669,0	29878,0	8543,4	20548,9	15868,7
- %	93,5	6,5	77,8	22,2	56,4	43,6
Gross crop production (in 2010 prices), UAH mln of UAH	117938,0	27564,0	45791,0	47047,9	105529,5	72178,4
Gross crop production per 100  ha agricultural lands, thousand of UAH	304,7	1032,7	153,3	550,7	513,6	454,8

Source: own calculations based on the data provided by the State Statistics Service of Ukraine.

As to such components of production potential as labor, it underwent both quantitative and structural changes during this period, and efficiency of its use in households decreased.

Table 2

Efficiency of the use of labor resources by main production sectors

Indicators	1990		2014		2014 to 1990
	enterprises	households	enterprises	households	enterprises	households
Gross agricultural production (in compared prices), mln of UAH	199161,3	83612,9	139058,4	112380,2	0,698	1,344
Employment, thousand of persons	4344,4	680,8	607,5	2483,9	0,1398	3,6485
Labor productivity per 1 working person, thousand of UAH	45,8	122,8	228,9	45,2	4,9978	0,3681

Source: own calculations based on the data provided by the State Statistics Service of Ukraine.

During the analysis of the use of labor resources it is necessary to have in mind, that for explored period the method of determination of employment in agricultural enterprises practically did not change and decrease of employment in this sector by 7 times can be considered reliable. At the same time the method of determination of employment in households changed a few times and growth of this index by 3,6 times is doubtful.

For this period in agricultural enterprises the productivity increased by 5 times that is explained by increase of gross production, reduction of labor resources and growth efficiency of production process. Higher rates of decrease of productivity in households (more than by 3 times) are explained yet, in our opinion by the inadequate dynamics of employment in this sector, as significant changes were not observed during this period.

Calculations demonstrate that keeping of old structure and amount of employment, in 2014 we would get gross agricultural products by 773767  mln of UAH less, than actually. Thus in agricultural enterprises gross production would increase 5 times while in households – 2,7 times less. Assuming that the dynamics of employment in households and enterprises is faithful, it is possible to do a conclusion that even under condition of rapid decrease of productivity in households, growth of employment exactly in sector of enterprises would make it possible to get the greater volumes of production.

Although till 2005 all calculations demonstrate higher efficiency of the use of resources in households, now agricultural enterprises are more efficient producers. Redistribution of resources in behalf of sector of households gave possibility to hold back from the critical falling of production during the 90s of the last century. But advantages of efficiency of production in households are conditioned structure of gross products. The most labor intensive and expensive products are produced here (vegetables, potato, fruits and others like that). For this reason, definitely, gross agricultural production in households is multiplied due to a structural factor.

As for the sector of agricultural enterprises, its ineffectiveness is conditioned by active involvement of support, both material and intellectual, advisory, technology does not matter the risk to invest in this sector during the economic crisis.

Factor analysis of the availability and use of resources, namely land and labor of the agricultural sector was conducted. Only through the redistribution of land resources for the benefit of families it was managed to reduce the rate of decline in gross agricultural production during the first 15 years of independence. Even on condition of more rapid decline of labor productivity in the households, growth of amount of employment exactly in this sector gave possibility to obtain significant production and mitigate the sharp decline in employment in enterprises.

Coming from tendencies taking place in the modern economy of Ukraine, it is possible to assert that during a certain period the output of agricultural production by households will remain considerable, and this producer will remain important for the agrarian market of Ukraine. However only agricultural enterprises can accumulate basic and circulating facilities necessary for the intensive production with a prospect of providing competitive agricultural production.

References:

1. Исследование выполнено при поддержке НАН Украины в рамках ведомственной темы "Ресурсные возможности развития аграрного сектора экономики Украины" (номер государственной регистрации 0114U001638.)

2. LERMAN, Z., CSAKI, C. (1999): Ukraine: Review of Farm Restructuring Experiences, The World Bank, Washington D.C.

3. SHPYTCHAK, O.M. (2001): Osobysti pidsobni gospodarstva Ukrainy – analiz vytrat ta efektyvnosti vyrobnytstva vydiv sil’s’kogospodars’koi produktsii, IAE, Kyiv.

4. PASKHAVER, B. (2002): Dynamika fondovoi najavnosti, Ekonomika Ukrainy, 7, pp. 23-31.

5. STATE STATISTIC COMMITTEE OF UKRAINE: Agriculture of Ukraine, Statistical Yearbook, Kyiv, several editions.