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№ 2020/1

Economics of agriculture

SHUBRAVSKA Olena Vasylivna1, PROKOPENKO Kateryna Oleksiivna 2

1Institute for Economics and Forecasting, NAS of Ukraine
2Institute for Economics and Forecasting, NAS of Ukraine

The influence of Ukrainian agricultural corporations on the national trade balance

Economy and forecasting 2020; 1:97-111https://doi.org/10.15407/econforecast2020.01.097


Determined the role of the agricultural corporate sector in the formation of export flows, identified the fundamental trends of agro-food foreign trade, assessed the competitiveness of main agro-food commodity groups and defined, on this basis, the promising guidelines for its expansion via increased share of exports of the most competitive products. The methodological basis of the research is the system of general and special scientific methods. Empirical results, concerning the role of the agrarian corporate sector, have been obtained through retrospective analysis, grouping, benchmarking and generalization. The research of commodity structure and foreign trade flows of agrarian sector was based on economic and statistical methods, in particular the balance method, the determination of the geometrical mean of annual growth rate and so on. The method of assessing the competitiveness of each product group through the Lafay Index, which shows the difference between the normalized trade balance for individual goods and for all goods traded by the country, was used for identifying the comparative advantages of Ukraine in international agro-food trade. The calculations were carried out using world and national statistics. Time series cover the period 2004-2018 and are analyzed from the standpoint of commodity structure. It is determined that that the corporate sector in Ukrainian agriculture is the main producer of export flows of agro-food products. The commodity structure research showed negative changes in value added. The share of unprocessed goods in trade increases due to a decrease in the share of processed products, which allows us to state the raw material orientation of Ukrainian agro-food exports. It was noted that attention should be focused on increasing the share of products with higher value added in agro-food exports. The prospects for increasing exports of organic products were outlined. The comparative advantages of Ukraine in relation to the global economy were analyzed based on the Lafay Index calculation. Received estimates allowed dividing the export commodity structure into competitive and non-competitive products. Products with a high level of competitiveness were identified based on the Lafay Index analysis as well as based on the corresponding balance sheets. The mono-specialization of agro-food exports, which makes itself felt in the predominance of raw materials, has become even stronger due to the orientation of the corporate sector solely to the global food demand and the weakness of the influence of state management structures in Ukraine. This causes instable export earnings and poor predictability of the results of Ukrainian farmers' economic activities, as well as increases significantly the environmental risks of agricultural production. The Ukrainian agro-food foreign trade is characterized by positive features, including an increase in value and volume of exports, improved food self-sufficiency, surplus trade accretion and by negative ones, namely: reduction of the share of processed products and semi-finished products in the agrarian trade structure, low activity of small agricultural traders oriented to exportation products from Ukraine, and weak promotion of Ukrainian agro-food exports by public authorities.

Keywords:agro-food foreign trade, corporate agrarian sector, competitiveness, commodity structure, export flows

JEL: Q13, Q17

Article in English (pp. 97 - 111) DownloadDownloads :32