Rural economy and public finances: the effects of mutual reconstruction
Authors:   Kyiv National University of Construction and Architecture, Petrukha Sergii , Klymenko Kateryna ,   SESE “The Academy of Financial Management”, Petrukha Nina ,   Kyiv National University of Construction and Architecture
Published: December 2024

Introduction. The relevance of the article is due to the need for a critical understanding of mutual influences and interdependencies in the development of the rural economy and public finances, considering the peculiarities of their functioning in various political and economic conditions: pre-war, war and at the stage of the country’s post-war recovery from the consequences russian-Ukrainian war.

Problem Statement. The rural economy together with state finances form the core of Ukraine’s sovereignty. However, available empirical data, including assessments by recognized international institutions of the damage caused to the rural economy as a result of russian aggression, cast doubt on its continued ability to ensure the country’s food sovereignty and the needs of countries that are net importers of Ukrainian food. In addition, there is not only an insufficient balance, but also the presence of signs of asymmetry between the sectoral vision of the post-war recovery of the rural economy (the projects of the Strategy for the Development of Agriculture and Rural Areas until 2030 and the Agrarian Marshall Plan for Ukraine) and the programmed budget strategy for the development of the economy embodied in the Budget Declaration for 2025–2027 and Strategies for reforming the state finance management system for 2022–2025, bringing to the fore the issue of lack of understanding (both theoretically and practically) of the need for collaboration between the rural economy and state finances.

The purpose is to consider the methodological foundations of collaboration between the rural economy and state finances during the periods of martial law and post-war recovery from the consequences of the russian-Ukrainian war.

Methods. The methodological basis of the study is formed by the fundamental provisions of economic theory, theories of state management and state regulation of the rural economy, theories of finance in general and state finance in particular, scientific work on the definition of state finance in sectoral programs of economic development, including rural. To achieve the goal, such methods of scientific research as comparison, analysis, synthesis, abstract-logical, economic-statistical, as well as the method of graphical representation of research results, SWOT analysis were used.

Results. Some aspects of the collaboration of the rural economy and public finances have been studied through the prism of post-war recovery engineering as a transmission channel for targeting sectoral program documents to ensure the inviolability of the wartime rural economy and stability during its post-war recovery. Separate regulatory reflections on the introduction of agrarian notes, expansion of preferential lending programs, support (assistance) programs for subjects of the rural economy are critically studied, with an emphasis on the ability of this regulation to provide conditions for the resumption of activities of agricultural producers in the de-occupied territories.

Conclusions. The need to modernize state finances in the direction of grant support for subjects of the rural economy is substantiated, considering the European vector of the ontogenesis of economic policy and rural development policy. This approach will make it possible to set common values for the paradigm of collaboration between the rural economy and public finance, which are embodied in the Plan for the Ukraine Facility for 2024–2027, as well as to create the “outlines” of a model of mutual exchange of relevant information, experience, knowledge, change management technologies and best practices for the implementation of sectoral and intersectoral reforms.