ON THE ORGANISATIONAL AND ECONOMIC MECHANISM OF GOVERNMENT SUPPORT FOR THE DEVELOPMENT OF UKRAIN‘S AGRO-INDUSTRIAL COMPLEX

Abstract

With Russia's full-scale war against Ukraine, government support for the agricultural sector is critical and economically viable for the survival of agricultural enterprises. It is also vital for ensuring internal and external food security. An organisational and economic system of government support consists of forms, elements, and economic instruments. An effective combination of all the components of the system allows to support the development of the Ukrainian agricultural sector.
The article systematises information on state policy measures and financial instruments aimed at supporting the agro-industrial complex. Effective instruments include budget subsidies, grants, compensation programmes, tax breaks, loans, and portfolio guarantees. As of 2024, the government has implemented a set of government measures to support agribusiness. These measures partially contribute to the stabilisation and recovery of the agro-industrial sector, which was affected by the war. The government's programmes include financial assistance for small businesses and farmers, compensation for land demining, restoration of land reclamation systems, purchase of agricultural machinery, loan guarantees to reduce collateral, government grants for the development of gardens and greenhouses, starting a business, including for veterans, and tax benefits for businesses whose land is located in the war zone.
Current government programmes still do not address a number of agricultural problems that have been exacerbated by the war, including: lack of human resources, including a shortage of men; expansion of logistics, selection of alternative supply chains for agricultural products; accelerating the demining of agricultural land; restoration of soil fertility by developing the production of biologicals, microbiological and bacterial preparations that activate the reserves of nutrients necessary to increase fertility;  development of organic production and approximation to sustainable development; development of bioenergy by converting part of the harvest into gas; development of the agricultural processing industry; diversification of products, reorientation to more profitable crops: growing cotton, flax, soybeans, legumes, walnuts, garlic, etc, support for Ukrainian farmers through the introduction of targeted grant programmes aimed at restoring livestock and reconstructing livestock farms; expanding the terms of leasing and credit programmes aimed at purchasing domestic agricultural machinery; attracting investors to develop agriculture, including the purchase of new machinery and infrastructure; adaptation of the national agri-food policy to the provisions of the EU's Common Agricultural Policy and harmonisation of the national legislation in this area with the EU requirements.