Modeling the Structural Relationships Between the Dynamics of Agricultural Insurance, the Agrarian Sector and the Level of Food Security in Ukraine

Abstract

The article’s goal is to develop the scientific and methodological approach (model) to determine the influence of agricultural insurance on the agrarian sector development as well as the level of food security in Ukraine to implement the appropriate agricultural management decisions.Structural modelling has been chosen as the methodological tool of the article. The process of modelling was performed with the help of structural equations. The Structural Equation Modeling tools in the Statistica 12 program package were used to accomplish this task (Statistics, Advanced linear/nonlinear Models, Structural Equation Modeling).The study found that an increase of 100% in the level of development of agricultural insurance results in a 30.8% increase in the indicators of agricultural production. When the development level of agricultural production increases by 100%, there is a corresponding 45.6% increase in food security. However, if the agricultural insurance development level is increased by 100%, the food security one will be increased by 13.7%. Thus, the hypothesis about the direct influence of agricultural insurance on the development of the agricultural sector and, through it, on the food security of Ukraine is fully confirmed. The authors of the article offer to assess the direction and strength of the relationships between the development levels of agricultural insurance, the agricultural sector and food security by developing a system of single-factor and multifactor regression equations using structural modelling. The impact of the level of agricultural insurance development on the development of the agricultural sector along with the level of food security in Ukraine has been confirmed, and the mechanism of state support for agricultural insurance should consider the results obtained. Simultaneously, the development of agricultural insurance should be implemented on a public-private basis in Ukraine.

Role of government policy in food security: Economic and demographic challenges

“…In food security research, an essential determinant is agriculture, which is considered the world's primary food source. The critical role of investing in agriculture because its financing will expand the capabilities of the agricultural sector, increasing its production to provide for a larger population (Bhowmik, 2022;Thiam & Toure, 2020;Juhászová et al, 2023).…”