Prerequisites and prospects for sustainable development of grain production in Ukraine

Keywords: production factors, crop production, food security, function of profitability, dispersion, forecasting


Purpose. The aim of the article is to identify the benefits of the chosen strategy of agribusiness (profit maximization, or yield maximization) based on the statistical observations of yields and production factors (fertilizers, plant protection products).

Methodology / approach. To analyze productivity growth in grain production under the influence of innovative technologies the data of long-term observations of winter wheat yield in Germany and the United States were selected. In this paper, to analyze the prerequisites and prospects for stabilizing of the crop production, mineral fertilizers and plant protection products were selected as production factors affecting the yield of wheat. Methods of time series analysis and nonlinear econometric analysis were used to assess the impact of these factors. Long-term trends of growth of wheat yields in Germany, the USA and Ukraine were analyzed using regression models. The general model of agrarian business profitability in grain production is based on non-linear correlations of individual factors of intensification and panel regression. In order to substantiate the conclusions of the calculation, the estimation of climatic risks is used. For this purpose, dispersion methods, nonlinear optimization methodology are used.

Results. Estimates of wheat yield fluctuations due to climate risks show that they will not significantly affect the problem of food security, so there is no need to impose restrictions on the export of wheat. On the choice of optimal strategy, based on analysis using econometric model of decreasing marginal utility of production resources, it is proved that the maximization of yields is achieved at lower costs than profit maximization.

Originality / scientific novelty. The main contribution of the article to the level of application is to analyze the impact of production factors on wheat yield, taking into account climatic risk and reducing the marginal utility of production factors. At the theoretical level of the study, it represents a contribution to the discussion of the vectors of the optimal path of wheat production in Ukraine. Analysis of data on wheat yield variability in Germany and the USA showed correlation of profitability and risk (indicators of expected yield and its variance). However, this means that an increase in wheat yields in Ukraine will also increase its variability and therefore requires the implementation of a long-term strategy that can ensure stable growth.

Practical value / implications. Based on the above calculations, it should be emphasized that the Ukrainian agrarian business (in particular, crop production) is developing its own way, not following the development path of Germany or the USA. However, some peculiarities of the development can be highlighted. After a rather long recession, the agricultural sector has embarked on a path of stable growth with an annual increase in wheat yields of around 1 hundred kg/ha. Furthermore, the extremely low proportion of forested land in Ukraine by European standards significantly increases the impact of weather and climate risks. Therefore, a further intensification of crop production while increasing the share of forested land at the expense of less productive land is probably the way to an ecologically balanced development of agriculture.


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How to Cite
Skrypnyk, A., Klymenko, N., Tuzhyk, K., Galaieva, L., & Rohoza, K. (2021). Prerequisites and prospects for sustainable development of grain production in Ukraine. Agricultural and Resource Economics: International Scientific E-Journal, 7(3), 90-106.

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