Analysis of the state support of farming houses in Ukraine

Abstract

Today, the productivity of crop production in most farms is much lower in comparison with medium and large enterprises. The main reason for this is the unsatisfactory condition of the material and technical base of farms, the difficulty of access to advanced technologies, the insufficient use of plant protection products, fertilizers, as well as highly productive varieties of seeds, which is primarily due to the constant shortage of own working capital and limited access to credit resources, and in conjunction with this, farming requires significant state support. The purpose of the article is to analyze and identify the main problems of state support of farms in Ukraine. For scientific solution of the tasks set in the work, the following methods were used: the method of comparative analysis - in assessing the expenditures of the state budget and support programs for farms; abstract-logical method - in determining the main problems of state support for farmers in Ukraine. The article analyzes the main directions and problems of state support of farms in Ukraine. State support of farmers in Ukraine from 2018 is carried out in accordance with the CMU resolution from 07.02.2018, #106 in the following areas: - compensation of the cost of seeds; - compensation of the cost of agricultural machinery; - cheaper loans; - compensation of expenses related to the provision of agricultural advisory services. State support can get farmers who own and use no more than 500 hectares of agricultural land and the net income (revenues) from sales of products (goods and services), of which for the last year does not exceed UAH 15 million. UAH. Grants will not receive the following farms: - in respect of which a bankruptcy case has been instituted; - who have been declared bankrupt; - which are in the stage of liquidation; - have arrears overdue for more than 6 months to the state and local budgets (including regional and local programs), PFCs and social insurance funds; - who did not carry out economic activity during the three preceding years (except newly created); - for which facts of illegal receipt and / or not purposeful use of budget funds are detected. The first type of state support involves partial compensation of the value of seeds, purchased in the seed industry, namely - agricultural plants seed of domestic selection, which is basic categories and certified. Under this program the state compensates the farmer 80% of the value of seeds without VAT, but not more than 30 thousand UAH. for one farm. The second type of support was introduced in 2017, in accordance with the Resolution of the Cabinet of Ministers of Ukraine dated 01.03.2017, #130. It is related to the compensation of the cost of agricultural machinery. State assistance in this area is to partially compensate agricultural producers the cost of purchased agricultural machinery and equipment of domestic production. Farms under this program will receive compensation of 40% of agricultural machinery, while the share of agricultural production during the previous 12 months, to the farms must equal or exceed 75% of the production of goods. The purpose of this program is to support not agricultural enterprises but producers of agricultural machinery, as domestic technology is less effective than foreign and agrarian enterprises choose the last, that’s why this program is ineffective. The third area of state provision is provided by partial compensation of interest rates on borrowed local currency loans to state-owned bank Compensate interest accrued and paid in the current year at the amount of 1.5 discount rates of the NBU, but not higher than the amount stipulated by the loan agreement, reduced by 1 percentage point. Compensation is subject to interest rates on a loan borrowed: - up to one year, in volume not more than 500 thousand UAH, to cover production costs; - up to three years, in volume not more than 9 mln. UAH, for the purchase of fixed assets of agricultural production, realization of expenses for construction and reconstruction of agricultural objects of agricultural purpose. The fourth type of state support involves partial compensation of expenses for agricultural advisory services related to the provision of advisory services in specified areas. Compensation costs at the amount of 90% of the cost, but not more than 10 thousand UAH. The main problems of state support for farms in Ukraine are: - low level of knowledge of farms about the possibilities of obtaining state support; - complicated procedural mechanism, receiving state support; - uncertainty about the timing of receiving state aid; - manual management of allocated funds; - insufficient funding for government programs.