№ 2017/3
Economics of agriculture
MARTYSHEV P. 1
1Institute for Economics and Forecasting, NAS of Ukraine
The influence of modern tools of agrifood policy on prices in Ukraine
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 :672 |
REFERENCES ▼
1. What the new budget prepares for the agrarians. Retrieved from
uteka.ua/ua/publication/CHto-novyj-byudzhet-gotovit-dlya-agrariev [in Ukrainian].
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
3. VAT is back: what is the impact of the taxation changes on the grain market? (2016). Agraveri – Agraveri. Retrieved from
agravery.com/uk/posts/show/pdv-povertaetsa-ak-vplinuli-podatkovi-zmini-na-rinok-zerna [in Ukrainian].
4. Lupenko, Yu., Tulush, L. (2016). Taxation of the agriculture in conditions of the transformation of taxation regimes. Ekonomika APK – Economy of agroindustrial complex, 1 [in Ukrainian].
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].
6. Association Agreement between the European Union and the European Atomic Energy Community and their member states, of the one part, and Ukraine, of the other part. Retrieved from
zakon2.rada.gov.ua/laws/show/984_011 [in Ukrainian].
7. The influence of the creation of the free trade zone with the EU on Ukrainian economy (2013). Kyiv: International Center of Analytical Research [in Ukrainian].
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].
9. Von Kramon-Taubadel, Sh., Demianenko, S., Kun, A. (2004). Ukraine's agriculture: crisis and revival. Kyiv: Harant-Servis [in Ukrainian].
10. Growing sunflowers remains the most profitable. Explanatory note of the Press Service of the Ministry of Agrarian Policy of 10.05.2017. Retrieved from
www.minagro.gov.ua/uk/node/23881 [in Ukrainian].
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].
12. Prodan, I. (2016). Sunflower market 2016/2017, or butter never spoils the porridge. Latifundist – Latifundist. Retrieved from
agroportal.ua/ru/views/blogs/rynok-podsolnechnika-20162017-ili-maslom-kashi-ne-isportish---/ [in Russian].
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].
18. Doing agrarian business in Ukraine 2016. Ukrainian Club of Agrarian Business. Retrieved from
ucab.ua/files/Survey/Doing/Doing2016_rus_web.pdf [in Russian].