To preserve peasantry as a bearer of Ukrainian identity, culture and spirit of the nation.
Complex development of rural territories and solving social problems of the villages.
Making agriculture highly effective, competitive at internal and external markets sector of Ukrainian economy.
Ensuring food security of the country.
Goals
Tasks
To ensure stable development of the agrarian sector of national economy
To ensure stable development of rural areas and communities
MethodologyState programme “DAR Ukraine”
Human Land Production
Agroindustrial markets
Budget
Socialsphere
Publicadministration
Information
Science
Integration
Quality,Safety
Education
Landrelations
Methodology
HUMAN
EDUCATION, SCIENCE, TECNOLOGIES
MARKETS
FINANCE
PRODUCTION
LANDStandard of living
Land quality
Quality product
BRAND OFAGRICULTURAL
UKRAINE
Methodology Working out success criteria in two main areas:
1 Development of the agro-industrial complex (AIC)
2 Development of rural communities and areas Analysis of factors of influence Exerting influence on 10 main areas – groups of factors Working out requirements for program activities as to their
compliance with requirements of WTO and EAP Elaborating a plan of action within RADU Activities efficiency analysis and their correction by means of
feedback
Tasks – success criteriaSuccess criteria Present
situationDesirable
figures
Profitability in agroindustrial complex 4-6% 18-20 %
Export share of agroindustrial complex commodities
9,8% 20-25 %
Level of direct foreign investments into agroindustrial complex
120 mln USD per
year
1 bln.USD per
year
Ukrainian share at international markets of agroindustrial commodities
2,8% 6-8 %
Level of income per capita employed in agroindustrial complex
50 USD
300USD
Level of employment in rural areas 54,7 85%
Level of income per one household in rural areas
80 USD 480 USD
Level of social infrastructure objects’ availability in rural areas
42.5 % 50 %
Level of youth employment 54,2% 80%
Methodology
Комісія “Аналіз та консолідація”
Stabilization
Raise
Recession
Europe
UkraineMalaysia
Republic of South Africa
Main problemsPublic administration and branch-wise
policy The strategy of agroindustrial complex
development is based upon the criteria of increasing production volumes in all branches
The concept of food security assumes satisfying 95% of own consumption with the help of own production
Outcome Wrong priorities and inconsistent state
policy in rural areas and agroindustrial complex
Main problemsLand relations Social strain and lack of trust between the subjects of
the market Lack of measures and stimuli which could contribute
to joining of land share owners Nonoptimal public administration, lack of effective
state control over quality and the state of land resources
Outcomes Fear to loose land property from the side of peasants
and public opinion based on the fear of agriculture capitalization
Difficulty of practical problem solving in the sphere of rent relations in rural areas
Disastrous decrease in land fertility and increase of soil erosion processes
Main problemsSocial and economic development
of rural areas Nonconsistent policy and state
support of rural areas development
Not identified sources and mechanisms of funding for the realization of the state policy in the sphere of rural areas development
Outcomes Low level of life, unemployment,
decrease birth rate in rural areas, ageing of rural population
Threatening decrease in the number of rural population, village depopulation, loss of national traditions of village life, family values
Rural population lives in a limited informational space, very low level of knowledge about rights, possibilities and innovative technologies from the side of peasants; lack of knowledge how to implement their rights to protect own interests
Валова додана вартість сільського господарства, 1990р.=100%
8374 79
71 67 61 60 53 51 5771 71 70
0
25
50
75
100
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
%Cтруктура валової продукції
67%60%59%62%57%56%53%52%45%
33%40%41%38%43%44%47%48%55%
0
20000
40000
60000
80000
1995 1996 1997 1998 1999 2000 2001 2002 2003
млн
.грн
.
господарства населення сільськогосподарські підприємства
C
Main problemsAgroindustrial markets Products and branches of international competitiveness are not
identified No branch priorities outlined No balance between demand and supply, unorganized market
with low level of infrastructure development and elements of command and administration system
Lack of organized sales channels with transparent pricing mechanisms and mechanisms stimulating production
Outcomes Predominating unprofitableness of agricultural production Lack of structural balance in the export of agricultural commodities
with prevailing export of raw materials Failure of agricultural commodities to meet international standards
of quality and safety Increase of expenses on consumption of non-recoverable resources
and decrease of competitiveness of agricultural enterprises Deficit of food consumption in comparison with the level of rational
consumption norms Decrease in the value added production
Lack or weakness of market infrastructure – wholesale markets of agricultural commodities
85% 14%
Result: lack of pricing transparency, unorganized markets, unsatisfactory quality level
SMALL FARMSFARMS
1%
AGRICULTURAL ENTERPRISES
Retail buyer – final consumer
RETAIL MARKETS SHOPSUNORGANIZED TRADING
CATERING
CLOSED INSTITUTIONS
PROCESSING ENTERPRISES
UNORGANIZED INTERMEDIATE PARTIES
Main problems – markets of agroindustrial complex
Agroindustrial markets
Main problemsAgrarian science Ukrainian agrarian science has a low level of
integration into contemporary European and international science
Low level of scientific base in some of the scientific investigation institutions of agroindustrial complex
Lack of implementation mechanism between fundamental science and practice
Outcomes Potential of scientific investigations is not
implemented in the practice of agricultural production
Brain drain of scientists to other countries or other branches of national economy
Main directions of the programme
Defining priorities of agroindustrial development of the country with the concentration of all the main efforts in competitive branches
Intensive development of rural areas and local self-government, introduction of the participation strategy, which would help to consolidate efforts of the State and local communities
To adopt the Concept of the country’s food security on the level of legislation;
To decentralize management in agroindustrial complex and to introduce operational standards of taking state decisions, controlling the implementation of these decisions and assessing the results;
To start structural reorganization of state institutions in order to proceed from paternalistic principles of agroindustrial complex development to complex system of state support given to competitive branches;
To ensure the development of state system of special training and education of specialists to be employed in agroindustrial complex and Ukrainian rural areas
Planned actions – in the sphere of public
administration
Planned actions – in the sphere of land relations
Improvement of land legislative base and management system in the sphere of land relations (budget expenditures - 0,75 mln. UAH, effect – value added increase by 53,0 mln. UAH. )
Rationalization of the land tenure by way of organization of the land usage (budget expenditures - 516,5 mln. UAH., effect - value added increase by 1624,0 mln UAH)
Recovery of soil quality and ensuring soil protection (budget expenditures – 174,5 mln. UAH, effect - value added increase by 555 mln. UAH)
Creation of conditions for agricultural lands market and the improvement of investment climate (budget expenditures - 225 mln. UAH, effect - value added increase by 365 mln. UAH )
АБ
ВLev
el o
f co
mp
etit
iven
ess
Production volumes
HighAverageLow
- Average; - Low- High;Value added:
High
Average
Low
Poultry
Seeds
Forage wheat, barley
PotatoesCorn
Beef
Pork
Sugar
Fruits
Grapes
Eggs
Ріпак
Honey
Leguminous plants
Milk products
Oil
Bakery, confectionery
Soy
Bread-grain
Vegetables
Milk
Sunflower
Flax
Planned actionsin the sphere of agroindustrial markets’
development
АБ
ВLev
el o
f co
mp
etit
iven
ess
Production volumes
HighAverageLow
- Average; - Low- High;Value added:
High
Average
Low
М’ясо птиці
Насіння
Фуражні пшениця,ячмінь
КартопляКукурудза
Яловичина
Свинина
Цукор
Фрукти
Віноград
Яйце
Ріпак
Мед
Зернобобові
Молоко-продукти
Олія
Хлібобулочні, кондитерські вироби
Соя
Зернопродовольче
Овочі
Молоко
Соняшник
Льон
Attraction of strategic investments,
branch restructuring
Attraction of investments,
sufficient state support,
creation of market infrastructure
Intensification of production,
deepening the level of processing,
strategic export
Planned actionsin the sphere of agroindustrial markets’
development Priority development of production of sunflower,
cereals and products of its processing. It is planned to increase production volume of sunflower from 3 mln. tones in 2004 to 4,5 mln. tones in 2010; cereals - from 38 mln. tones in 2005 to 65 mln. tones in 2010;
It is planned to increase production volumes of poultry from 0,58 mln. tones in 2004 to 1,2 mln tones in 2010, pork from 0,46 mln. tones to 1,1 mln. tones, milk products – from 13,9 mln. tones to 18 mln. tones, eggs from 11,8 bln. eggs to 15 bln. eggs, accordingly.
Strategic focus on dairy farming with constant beef production on the level of 2005 based on a principle of derivative product. At the same time the demand for beef will also be present due to import.
Planned actions in the sphere of agroindustrial complex branch-wise policy
To work out development strategies for branches of international competitiveness – cereals, sunflower , confectionery, organic products, poultry
To work out programmes aimed at competitiveness creation in potentially competitive branches – pig-breeding, dairy farming, milk processing, eggs production
To implement corporatization of the sugar branch To work out model investment projects for competitive
branches To work out regional policies for agroindustrial complex
based upon cluster models To form branch-wise investment proposals fro branches with
capital payback over 20%
Planned actions – social and economic development of Ukrainian village
Creating favorable conditions for the development of private initiative and entrepreneurship in rural areas as basic mechanisms for the increase of life level in villages.
Creating conditions and possibilities for rural communities to solve social and economic problems of rural settlements.
Working out mechanisms of supporting social and economic development of rural areas.
Planned actions – agricultural science
Increase in the gross value added in agriculture by 30% due to more effective usage of plants’ and animals’ genetic potential ( increase from 50% to 70%) and complex implementation of Ukrainian technologies in production (from 20% to 50%) and in processing from 60% to 80%
Bringing the share of GDP spent for scientific investigations from 0,16 to 0,5 percent
Creating national banks of genetic resources of plants, animals and microorganisms
Creating national fund of science intensive products
Planned actions – Budget regulation
Directions of budget usage and usage of international
funding
2005 2006 2007 2008 2009 2010 Total
Support and restructuring
of agriculture and
agroindustrial complex
2435,4 5186 5760 5348 6976 7449 33 154,4
Including the “yellow basket”
1061,7 2280 2534 2351 3068 3277 14 571,7
“green basket” 1373,7 2906 3226 2997 3908 4172 18 582,7
Management and upkeep of
budget institutions
562,2 570 580 580 580 590 3 430,2
Science and education
618,5 1053 1520,6 1761 1692 1902 8 547,1
Social sphere in rural areas
721,9 2900,46 3036,56 2865,86 2957,46 3079,6 15 561,84
TOTAL 4 338,05 9 709,46 10 897,16 10 554,86 12 205,46 12 520 ,66 60 225,65
Planned actions – finance and investments
To ensure attraction of funds amounting to16 bln. UAH per year into agroindustrial complex on the basis of short-term creditsTo ensure attraction of funds amounting to 10-12 bln. UAH per year into agroindustrial complex on the basis of long-term creditsTo ensure attraction of funds amounting to 5 bln. UAH per year due to introduction of leasing
Receiving the status of the country with market economy;
Becoming a member WTO Creating a free trade area between
Ukraine and the EU Defining perspectives and realization
of measures aimed at regional integration
Realization of an Agreement about free trade within the CIS
Planned actions – International integration
Forming a unified state policy in the sphere of quality and competitiveness of agricultural commodities;
Bringing National normative and legislation system in the sphere of agroindustrial products’ quality and safety in accordance with the requirements of WTO and EU;
Entering external markets with Ukrainian agricultural commodities being of the high quality and ecologically clean
Planned actions – products’ qualityand safety
Finalizing the development of automated system of land cadastre of Ukraine containing new data about the quality of soils
Creation of the automated system of agro-market monitoring
Creating the system of agricultural knowledge management and distance learning
Planned actions – Information and monitoring
Development and implementation of the effective system of personnel management and personnel development for agroindustrial enterprises
Reforming the system of agrarian education Introduction of the system of business
education as the basic factor of entrepreneurship development in rural areas
Development and implementation of the system designed to stimulate the desire to learn and receive education
Planned actions – education in agriculture
Creating institutions and mechanisms of social protection of rural population at the level of standards typical for highly-developed European countries
Creating developed and secure internal agrarian market
Creating agroindustrial production with high profitability
Creating the image of Ukraine a s a country with highly developed agroindustrial sector
Forming ecological brand of Ukraine Creating internal stock market Sufficient increase in the incomes to the state budget
Expected results
Increase in value added gained as a result of the planned actions implementation will amount to :
- in the sphere of land relations and land preservation - 2 529,0 mln. UAH
- in the sphere of education and management of human resource - 1 500 mln. UAH
- in the sphere of science – 13 760,0 mln. UAH - in the sphere of branch-wise and regional
development of agroindustrial complex - 11 200 mln. UAH
- in the sphere of investments – up to 100 bln. UAH
Expected effects
Expected effects
0
2000
4000
6000
8000
10000
12000
14000
16000
2005 2006 2007 2008 2009 2010
years
mln
UA
H
budget expenditures expected effect
SummaryThe success of all changes in rural areas depend by 80% upon the Успіх перетворень на селі та АПК на 80% залежить від трьох основних складових:
побудови стратегічних пріоритетів галузевого розвитку АПК з перерозподілом державних ресурсів за основними пріоритетами
комплексного розвитку територій з визначенням галузевих спеціалізації, побудовою регіональних кластерів, розробкою програм розвитку територіальних громад та підприємництва на селі
розвиток інфраструктури ринку землі та умов для залучення великого та середнього капіталу в с\г виробництво, створення системи моніторингу, охорони та відтворення земельних ресурсів
Action plan1. To approve the complex development programme for rural areas and agroindustrial complex – till 01.07.05.2. To develop branch-wise policies and strategies for agroindustrial complex. To identify as top-priority the following branches: cereals, sunflower, poultry, pig-breeding, cattle-breeding, dairy farming and sugar production – to develop policies and strategies till 01.08.05.3. To implement restructuring of state expenditures for agroindustrial complex in 2005 and to develop the budget for 2006 with redistribution of expenditures aimed at the development of branch-wise priorities and attraction of investments into processing and intensive production of cereals, sunflower, pig-breeding, milk farming, dairy production and processing, sugar branch restructuring. To declare changes in the concept of food security and refuse from the subsidy policy in agroindustrial sector – till 01.09.05.5. To develop investment proposals and the programme of investments’ attraction and improvement of funding conditions for agroindustrial complex until the end of 2005 – till 01.09.05. To start purposeful negotiation process with investors from 01.07.05.
Action plan6. To declare political will of the government to improve the investment climate in the form of addressing to World Bank and European Commission for technical help and international credits – till 01.07.05. To use funds in the form of international credits and technical help in 2005 for the development of programmes, agroindustrial complex restructuring and for the participation of model branch-wise and cluster regional projects році на розробку програм, реструктуризацію АПК та участь у інвестиційному капіталі модельних галузевих та кластерних регіональних проектів.7. Прийняти закон про проведення державного експерименту та провести експеримент по галузевих модельних інвестиційних проектах та кластерах розвитку територій у Дережнянському районі Хмельницької області, Харківській області та одному з депресивних регіонів. Розпочати експерименти з 01.07.05. 8. Створити оперативний орган державної виконавчої влади щодо термінових дій по розвитку села та АПК, наділити його необхідними владними повноваженнями та надати ресурсне забезпечення для реалізації заходів за пунктами 1 -7 – до 15.06.05. Необхідний обсяг ресурсів для реалізації перелічених дій до 01.10.05 складає близько 5 млн. грн.
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