Economy, finances, management: topical issues of science and practical activity

FURMAN Irina  –  Candidate of Economic Sciences, Associate Professor of the Administrative Management and Alternative Energy Sources Department, Vinnytsia National Agrarian University (21008, 3, Sonyachna Str., Vinnytsia, e-mail: irina_furman@ukr.net).

MAXIMENKO Natalia  –  Candidate of Law, Associate Professor, Department of Management, Economics, Law and Tourism, Flight Academy of National Aviation University (25005, Kropyvnytskyi, 1 Dobrovolskogo Str., e-mail: natasha_bs@ukr.net)

HMYRYA Victoria – Candidate of Sciences (Economics), Associate Professor of the Department of Finance and Banking, Cherkasy Educational and Scientific Institute of the DVNZ of the University of Banking (Chornovola str., 18028, Cherkasy, e-mail: viktoryagmirya@ukr.net)

The article describes the problems associated with the financial support of agricultural production in Ukraine, on the basis of which ways to improve the financial and credit support of agricultural production in Ukraine are highlighted. The economic and legal mechanism for regulating agrarian entrepreneurship in Ukraine is considered with the determination of the directions of its development based on the optimization of production and social infrastructure, increasing the competitiveness of agricultural production, increasing its volume, improving the quality and safety of agricultural products, environmental protection and reproduction of natural resources, increasing the level of rural employment population.

Over the last four years the Cherkasy region has attracted preferential loans to agriculture in the amount of more than 145.2 million UAH. On average, about 4.9 million UAH was attracted to one production, while other industries received less than 1.5 million UAH or did not receive any at all.

Preferential credits were used to purchase fuel and lubricants (74%), purchase of plant protection (45%), purchase of seeds (20%), and other goals related to agriculture (16%).

Commercial banks of Cherkasy region in the period 2014-2018 were granted loans worth 87.9 million UAH. The interest rate for the granted loan was 21%, the repayment rate was 65.2% for loans to banks, and the interest rate compensation for commercial banks from the State Budget for the period 2014 - 2018 was 6.5%.

As of the end of September 2018, bank loans attracted 1,928 enterprises in the Ukrainian industry, which is 276 less than in 2018. The total volume of loans in 2014 amounted to UAH 8.1 billion. In total, bank loans to agricultural enterprises amount to over UAH 103.9 billion.

Considering the above mentioned problems related to the financial support of the agricultural production of Ukraine, we can distinguish the following ways to improve the financial and credit support of agricultural production:

1)       the creation of favorable economic conditions for the effective functioning of domestic agricultural production involves the use of a rigid system of pricing for agricultural products, taking into account the interests of producers and consumers, preferential taxation, subsidizing 100% interest rate on credit and bank control over the pricing of loans in the market;

2)       equalization of economic conditions of Ukrainian agrarian producers with respect to foreign partners. This direction of support implies direct state support of agricultural production by price mechanisms in those positions, in which the domestic producer is far behind the foreign agricultural producers;

3)       the economic justification for increasing the supply of equipment for leasing helps to increase the efficiency of agricultural production and improve the use of agricultural machinery;

4)       stimulation of instruments of financial and credit support of agricultural production by creating zones of economic development that will provide favorable conditions for growth of agricultural production. Preferential taxation programs should be developed for financial institutions providing loans to residents of these economic zones. Yes, banks and insurance companies that conduct lending to agricultural producers should be partially exempt from taxation;

5)       credit institutions should develop special credit products that would meet and meet the needs of agricultural producers for additional financial resources;

6)       the innovative mechanism and system of crediting of agricultural production should correspond to the peculiarities of the cycle of not only individual producers, but also the whole system of agricultural production. Agrarian production should be credited as a coherent system, since the repayment of the loan occurs after the sale of products to the end consumer;

7)       it is necessary to introduce a system of interrelated economic and credit planning, state guarantees for the sale of quality agricultural products at stable state prices. On this basis, banks can be issued state guarantees for loans, which must meet, in the context of anti-crisis measures, the main form of ensuring the repayment of the loan, even in the absence or absence of producers of their working capital.

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