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№ 3/2017
1Institute for Economics and Forecasting, NAS of Ukraine
The influence of modern tools of agrifood policy on prices in Ukraine
Ekon. prognozuvannâ 2017; 3:111-123 | https://doi.org/10.15407/eip2017.03.111 |
ABSTRACT ▼
The influence of main agriculture policy tools on the dynamics of crop prices has been investigated. In particular, the impact of the preferential VAT regime (and its abolition), sunflower export duty, preferential loans and the Memorandum of Understanding with grain exporters on the level of farm-gate prices and incomes of agricultural producers were determined. Recommendations regarding each policy tool were provided.
In particular, the main effect of reforming the preferential VAT regime for agricultural producers, which provides the return of the tax on grain exports, is the growth of domestic prices for the value of "non-returned VAT", as well as increased specialization of production, which is harmful to the formation of sustainable agriculture.
The author believes that the establishment of export duty on sunflower seeds contributed to the growth of oil-processing complex capacities, which resulted in high demand and excessively high prices for raw materials inside the country. In addition, given the absence of legislative regulation of crop rotation norms, an increase of planted areas under sunflower leads to the depletion of fertile soils and reduction of the national agricultural potential.
The annual signing of the Memorandum of Understanding with grain exporters increases the opacity of the market because the document regulates export volumes for each marketing year. However, the Memorandum is a more progressive instrument for market regulationth and, for exam-ple, export quotas; so market participants have time to adapt to changing market conditions.
Also in the publication was analyzed the effect of programs to reduce the cost of loans for agricultural producers. In our opinion, the compensation of interest rates is an extremely important tool because cheap loans increase the liquidity of agricultural enterprises. Thus, farmers can sell their products throughout the marketing year, avoiding mass sales after harvesting, which leads to the drop of domestic prices.
Keywords: agricultural policy, prices, volatility, VAT, exports, loans, agricultural enterprises
JEL: Q 11, Q 13, Q 17, Q 18
Article in Ukrainian (pp. 111 - 123) | Download | Downloads :677 |
REFERENCES ▼
2. Kulyk, I., Herzfeld, T., Nivievskyi O. (2014). Comparative assessment of Ukrainian grain export poli-cies. Agriculture Policy Report. German-Ukrainian Agricultural Policy Dialogue. Retrieved from apd-ukraine.de/images/APD_APR_01-20134_Getreidehandelspolitik_eng.pdf
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5. The Law of Ukraine "On the rates of export duty on seed of certain oilseed crops" of 10.09.1999 No 1033-XIV (1999). Vidomosti Verkhovnoi Rady Ukrainy – Bulletin of the Verkhovna Rada of Ukraine, 44, 389 [in Ukrainian].
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8. Kapshuk, S. (2016). Exports is rapidly fatting up. (in Ukrainian). Latifundist – Latifundist. Retrieved from latifundist.com/blog/read/1641-eksport-zhireet-na-glazah [in Russian].
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11. Schtrubenhoff, H.W., Lissitsa, A., Lapa, V.. (2010). Assessment of the impact of the cancellation of export duty on sunflower seeds on Ukraine's economy. Kyiv: Ukrainian Club of Agrarian Business [in Ukrainian].
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13. Memorandum of the Ministry of Agrarian Policy with grain exporters is a cartel conspiracy: a point of view (2016). Agropolit – Agropolit. Retrieved from agropolit.com/news/1742-memorandum-minagropolitiki-iz-eksporterami-zerna--kartelna-zmova--tochka-zoru [in Ukrainian].
14. Tsybok, V. (2005). Budget support of the development of agro-industrial complex with the use of the mechanism of credit cheapening. Naukovi pratsi NDFI – NDFI research works, 3 (32), 64-70 [in Ukrainian].
15. Decree of the Cabinet of Ministers of Ukraine "On approval of the regime for using the funds provided in the state budget for financial support of measures in the agro-industrial complex by re-ducing credit rates" of April 29, 2015 No 300. Retrieved from zakon2.rada.gov.ua/laws/show/300-2015-%D0%BF [in Ukrainian].
16. Davydenko, V. (2016). Uniformity of the distribution of land in domestic and European agricultural practice. Young Scientist – Young Scientist, 4. Retrieved from molodyvcheny.in.ua/files/journal/2016/4/14.pdf [in Ukrainian].
17. Kernasyuk, Yu. (May, 2016). The sizes of agrarian production in Ukraine. Ahrobiznes s'ohodni – Agribusiness today, 10 (329). Retrieved from www.agro-business.com.ua/ekonomichnyi-gektar/5450-rozmiry-agrarnogo-vyrobnytstva-v-ukraiini.html [in Ukrainian].
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№ 4/2018
1Institute for Economics and Forecasting, NAS of Ukraine
Development of Ukrainian livestock sector and its support in conditions of growing global grain prices
Ekon. prognozuvannâ 2018; 4:93-105 | https://doi.org/10.15407/eip2018.04.093 |
ABSTRACT ▼
The article proposes support tools for Ukraine's livestock sector in the face of rising world prices for feed grain. The importance of the subject is based on the existing disproportions in the agro-food sector, reflected in the high profitability of grain production and low profits for livestock producers. Analysis of the relevant papers shows that the economic analysis of "meat and feed" price ratio is absent in Ukrainian literature.
At the same time, a lot of works by Western economists provide important conclusions. First, grain prices are more volatile than prices for meat and dairy products due to a number of factors, the main of which is low demand elasticity. Second, individual livestock sub-sectors respond differently to changes in grain prices. Poultry prices integrate grain market changes very rapidly due to the short production cycle. Hog and cattle occupy the second and third places respectively. Third, meat prices have a cyclicality because of the difference between the producers' expectations and the actual balance of demand and supply. In this case, feed prices can indirectly affect these cycles. In general, for the livestock sector, higher risk means a sudden increase in feed prices rather than a drop of prices for meat and dairy products. Thus, the index of profitability for livestock industries is currently low due to the growth of prices for fodder denominated in hryvnias.
An analysis of foreign trade dynamics in Ukraine shows that meat exports have increased in re-cent years due to increased supply of poultry while the supply of beef and pork has declined. As for imports, after a fall in 2015, its volume began to increase through a large supply of low-quality products, which indicates poor competitiveness of the domestic producer. After a detailed analysis of the literature and current situation in the Ukrainian market, the author presents a number of tools for solving these problems. In particular, it is proposed to use "flexible" subsidies, to subsidize feed crops production, and to grant food consumption subsidies to the population. In addition, a series of decisions are offered to encourage exports and modernize the infrastructure.
Keywords: agricultural policy, prices, volatility, livestock production, feed, export, import, subsidies
JEL: Q11, Q17, Q18
Article in Ukrainian (pp. 93 - 105) | Download | Downloads :486 |
REFERENCES ▼
2. Putstenteylo, P.R. (2013). Strategic directions of livestock production development in Ukraine. Innovation Economy, 8 [in Ukrainian].
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4. Suprun, O.M. (2016). State regulation of the livestock sector. Agrosvit – Agroworld, 13 [in Ukrainian].
5. Kishchak, I.T. (2015). Ukrainian livestock production in the world sectoral development. Visnyk ahrarnoi nauky Prychornomoria – Bulletin of Agrarian Science of the Black Sea Region, 3 [in Ukrainian].
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7. Tegle, A. (2013). An Explorative Study of Grain and Meat Price Relationships. Master thesis in Norwegian University of Life Sciences. Retrieved from brage.bibsys.no/xmlui/bitstream/handle/11250/187510/Tegle%202013.pdf
8. Barilovich, O.M. (2013). Features of agricultural products price formation. Naukovyj visnyk Natsionalnoho universytetu bioresursiv i pryrodokorystuvannia Ukrainy. Ser.: Ekonomika, ahrarnyj menedzhment, biznes – Scientific Bulletin of the National University of Bioresources and Nature Management of Ukraine. Series: economics, agrarian management, business, 181(4) [in Ukrainian].
9. Lawrence, J., Mintert, J., Anderson, J. (2008). Feed Grains and Livestock: Impacts on Meat Supplies and Prices. American Agricultural Economics Association. Retrieved from www.farmdoc.illinois.edu/policy/choices/20082/theme1/2008-2-03.pdf
10. Hanau, A. (1927). Die Prognose der Schweinepreise. Vierteljahreshefte zur Konjunkturforschung, 2. Retrieved from katalog.ub.uni-heidelberg.de/cgi-bin/titel.cgi?katkey=65476058 [in German].
11. Stearns, L., Petry, T. (1996). Hog Market Cycles. North Dakota State University Extension. Retrieved from ndsuext.nodak.edu/extpubs/ansci/swine/ec1101w.html
12. Von Cramon-Taubadel, S., Holst, C. (2011). International Synchronization of the Pork Cycle. Paper prepared for presentation at the EAAE 2011 Congress in Zurich, Switzerland. Retrieved from core.ac.uk/download/pdf/6699166.pdf
13. Futrell, G., Mueller A. (2015). Understanding the Hog Production and Price Cycles. Extension. Retrieved from articles.extension.org/pages/27216/understanding-hog-production-and-price-cycles
14. Gale, F., Marti, D., Hu, D. (2012). China's Volatile Pork Industry. U.S. Department of Agriculture (USDA). Retrieved from www.ers.usda.gov/publications/pub-details/?pubid=37434
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17. Nivievsky, O. (2018). About the reduced VAT rate for certain types of agricultural products. Agroportal. Retrieved from agroportal.ua/views/blogs/-snizhennoi-stavke-nds-dlya-otdelnykh-vidov-agroprodovolstvennoi-produktsii/ [in Russian].
18. Law of Ukraine "On export (export) duty on live cattle and leather raw materials". Retrieved from zakon0.rada.gov.ua/laws/show/180/96-%D0%B2%D1%80 [in Ukrainian].
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22. The Ukrainian Stock Breeders Association introduced effective mechanisms of state support for livestock farmers at an open meeting in the Ministry of Agrarian Policy. Retrieved from usba.com.ua/asociacia-tvarinnikiv-ukraini-predstavila-dievi-mehanizmi-derzpidtrimki-tvarinnikiv-na-vikritomu [in Ukrainian].
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