FARM HOUSEHOLDS AND THEIR ROLE IN THE DEVELOPMENT OF THE AGRICULTURAL ECONOMY SECTOR
Authors: AMONS Sergey 
Published: February 2020

Farms (individual and family) are an important component of the agrarian sector of the Ukrainian economy and an effective mechanism that contributes to increasing employment and income growth in rural areas, attracting investment resources in agricultural production.

In recent years, there has been a downward trend in the number of farms in Ukraine. The main reason for this situation is the absence of potential start-up capital from the potential agrarian farmers, on the basis of which efficient agrarian production could be built.

There are also a number of restraining factors in the development of agriculture in our country, including the imperfection of the legislative framework in the areas of the permit system and licensing, the limited participation in government procurement, the lack of an effective system of training for entrepreneurs in the agricultural sector, etc.

Research by domestic and foreign scientists shows that one of the strengths of farms is their resilience. They all operate under conditions of risk and uncertainty that are specific to the agricultural sector, but retain their structure, functions and identity.

At present, they have many socio-economic problems and one of them is the organization of competitive production. In conditions of fierce competition, farms can operate successfully, especially if competitive products are produced.

Among the basic problems of functioning of farms that require a decision in the legal field, scientists distinguish: imperfection of mechanism of the long-term crediting and taxation of farms; insufficiency of sizes of the landed parcels of land for the conduct of effective menage, absence of projects of organization of the use of land in relation to the еколого-економічного ground of crop rotations and organization of lands; plenty of documents necessary for the receipt of state help.

Farming as a form of farming in the countryside is important not only for agriculture, but in general for all areas of material production. Therefore, the development of farming should be explored in the context of the changes taking place in the spheres of public relations.

It should be noted that the characteristic features of farms are mainly small sizes, small in size initial capital and land areas, reliance on own funds, orientation on market conditions, focus on output, commercial calculation, risk, entrepreneurship. The revitalization of farming creates favorable conditions for the development of small rural businesses.

In recent years, domestic farms have begun to play a significant role in meeting the needs of the internal market and shaping the export potential of agricultural products. Among the main problems that hinder the development of the agricultural movement in our country, it is necessary to note the low level of introduction of modern innovative technologies of agricultural production, which, in turn, is caused by limited financial support, lack of working capital to acquire the appropriate production resources for the new production cycle.

Last years, in spite of all problems that are in our state, the amount of farmers in Ukraine grows little by little. On official statistics, by the state on beginning of 2018 for us about 45 thousand farms were counted, for the last year their amount increased on 2%. Certainly, it is a small height, but a general tendency talks that to be a farmer in Ukraine and to engage in an agribusiness becomes a fashionable tendency.

Specific gravity of farming in the general amount of agricultural produce in Ukraine hesitated from 6,1 % to 8,7 %. For comparison in the USA the domestic farms of different types together make 99 % economies on the whole and 90 % productions in an agricultural sector.

Farming has a high degree of adaptability to market signals, flexibly responds to market conditions through changes in production programs, specialization and diversification of economic activity, but not agriculture, but Ukrainian agricultural holdings provide the lion's share of Ukrainian agricultural exports.

Therefore, as soon as possible creating favorable conditions for the functioning of farms in Ukraine is important both to overcome the decline of the village and to streamline the organizational structure of agriculture in accordance with European standards for market conditions through changes in production programs, specialization and diversification of economic activity, but not agriculture, and Ukrainian agricultural holdings provide the lion's share of Ukrainian agricultural exports.

Therefore, the earliest possible creation of favourable conditions for the functioning of farms in Ukraine is important both for overcoming the decline of the village and for streamlining the organizational structure of agriculture in accordance with European standards.

The conducted research shows that the main problems of state support for farms in Ukraine are low level of awareness of farms about the possibilities of obtaining state support; complex procedural mechanism for obtaining state support; lack of clarity on the timing of state aid; manual allocation mechanism; - insufficient funding for government programs.

We believe that a dialogue should be established between the state and FG: a state strategy for the development of the agrarian sector should be clear to producers and communicated through profile associations, sectoral organizations, the agricultural advisory system, while farmers' problems should be a priority for the state.

In order to increase the competitiveness of farms, investment activities should cover the introduction of investments in the modernization of production. For the competitiveness of a farm, its technical re-equipment is necessary.