State support of the dairy industry and prospects for its development in the post-war period

Author:

Kalaitan TetyanaORCID,Stybel VolodymyrORCID,Hrymak OlehORCID,Sarakhman OksanaORCID,Shurpenkova RuslanaORCID

Abstract

Purpose. The article aims – to identify current trends, determine the level of state support and prospects for the development of the dairy industry in Ukraine in the post-war period, taking into account cooperation with the EU. Methodology / approach. The research was conducted using the comparison method with the nearest EU country – Poland. The analysis of indicators of the development of the dairy industry was carried out on the basis of the data of the State Statistics Service of Ukraine, Poland, Eurostat, and Statista company using methods of relative values, a series of dynamics. Results. Analysis of the dynamics of the main dairy industry indicators in Ukraine revealed a long-term trend towards a decrease in milk production volumes. During 1990–2021, the volume of milk production decreased by 3 times, and the number of cows decreased by 5 times. Since 2020, the dairy industry has shifted from being export-oriented to becoming dependent on imports. On the other hand, Poland, which is geographically and climatically close to Ukraine, shows the opposite dynamics of the dairy industry development. Studying the functioning of the dairy sector in Poland revealed a high level of state financial support and fiscal stimulation. The study shows that the financial support of the dairy industry of Ukraine is noticeably insufficient, and the fiscal stimulation provided is inadequate. Moreover, the efficiency of managing budget funds is low. The situation is further complicated by the ongoing military aggression from russia. Considering the constraints of state funding, it is suggested that the array of instruments for supporting animal husbandry should be tailored based on the scale of entrepreneurial entities involved; differentiation in the provision of state support should also apply to agricultural producers in the de-occupied territories. In order to fully and promptly manage the amount of financing, it is necessary to speed up the procedure for distributing funds between areas and approving financial documentation; it is expedient to consider the possibility of payments for the keeping dairy cattle for small business entities without the need for coordination with the main manager of funds. Originality / scientific novelty. The obtained results allow a deeper investigation of the main development issues of the Ukrainian dairy industry in the pre-war period and under martial law in the context of further European integration. Practical value / implications. The study’s findings can be the basis for further scientific research in the direction of developing a comprehensive set of measures to stimulate Ukraine’s dairy industry. This is of particular importance in the post-war period promoting the restoration of food security.

Publisher

Institute of Eastern European Research and Consulting

Subject

Marketing,Agricultural and Biological Sciences (miscellaneous),Business, Management and Accounting (miscellaneous)

Reference72 articles.

1. Accounting Chamber (2019). Report on the results of the audit of the effectiveness of the use of state budget funds allocated to provide state support to the agricultural sector. Available at: https://rp.gov.ua/upload-files/Activity/Collegium/2019/20-6_2019/Zvit_20-6_2019.pdf.

2. Agency for Restructuring and Modernisation of Agriculture Republic of Poland (2023). Direct payments until 2022. Available at: https://www.gov.pl/web/arimr/platnosci-bezposrednie-w-roku-2017.

3. AgroPerspective (2023). The Rada may reduce VAT on milk and dairy products by up to 10 %. Available at: http://www.agroperspectiva.com/ru/news/188507.

4. Association of Milk Production (2022a). Ukrainians consume less milk than in the EU, but pay more taxes for it. Available at: https://avm-ua.org/uk/post/ukrainci-spozivaut-mense-moloka-niz-u-es-ale-pri-comu-splacuut-za-nogo-bilse-podatkiv.

5. Association of Milk Production (2022b). Ministry of Agrarian Policy and Food of Ukraine supports the reduction of the VAT rate to 14 % throughout the food chain. Available at: https://avm-ua.org/en/post/ministry-of-agrarian-policy-and-food-of-ukraine-supports-the-reduction-of-the-vat-rate-to-14-throughout-the-food-chain?milkua.

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