The Influence of the Social and Economic Situation on Agribusiness

Abstract

Ukraine is known for its extremely fertile and high-yielding black soil. This incredible national wealth is also the reason for significant interest on the part of private agribusiness companies and international investors, who today consider Ukraine a strategic partner in addressing global food security. The socio-economic factors determining the state of agribusiness are well known, however, they affect this area in different ways in different countries. The purpose of the academic paper lies in representing the author’s concept of the socio-economic conditions under which the transformation of agribusiness in a developing country takes place, in which the agricultural sector is a priority. Methodology. The authors put forward a hypothesis that the solution to this problem requires the development of agribusiness, a promising tool for which is financial support, including on the part of the state. In the process of conducting the research, in order to test the hypothesis outlined, the authors use methods of modelling socio-economic systems, as well as systemic, problematic analysis, methods of statistical analysis, induction and deduction. Results. As a result of the study, the authors come to the conclusion that the most important problem for the development of agribusiness in Ukraine is the lack and low availability of financial resources, which is caused by the high seasonality of the business, its low profitability and, accordingly, its low investment attractiveness. Integration of agribusiness spheres will help to solve this problem and increase the availability of financial resources for agricultural enterprises, which allows modernizing equipment and production technology, reducing production costs, increasing profitability and competitiveness. The academic paper considers the features of the socio-economic environment in which the agribusiness of Ukraine operates, noting the state of the agricultural market and the largest players on it. It has been determined by trend analysis that while maintaining existing trends, the volume of capital investment in agriculture by 2030 may increase by almost 1,8 times compared to 2020. Along with this, the main negative factors of agribusiness determining its effectiveness have been outlined, namely: significant fluctuations in world food prices and the devaluation of the national currency; import dependence on certain groups of goods and the raw material nature of exports of agricultural products and a significant percentage of production of certain types of agricultural products in households. By the way, the academic paper has also considered the impact of the most significant factor of influence in 2020-2021 - the pandemic, which has significantly changed the ratio of supply and demand in agricultural markets and caused changes in the commodity structure of exports. It is also concluded that agribusiness in this socio-economic situation remains profitable and requires the revival of financial support for this important sector of the national economy.

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“…Implementing mechanisms for cooperation and integration of business entities will help them survive. The specific features of the impact of extreme and socio-economic conditions of life on the processes of transformation of business entities from the perspective of V. Kyfyak et al (2022) deserves attention. Researchers also focus on the implementation of government programmes to support business entities in agriculture, specifically, tax and financial sector programmes, and deregulation mechanisms (all business inspections were cancelled, except for price checks for socially important goods; declarative system of business operation; declarative principle of customs operation) (Nehrey & Trofimtseva, 2022).…”

Development of small businesses producing cereals, legumes, and sunflower seeds in wartime conditions

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The System of Financial Control in the Management of a Small Business Enterprise: Methods and Tools of Implementation

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