Development of cooperative and integration relations in pig production industry

Abstract

The article deals with the study of the issue of cooperative and integration relations developmentin pig production industry. It was proved that integration, as well as cooperation, reflect basically the same process - production and economic cooperation of economic entities engaged in different types of production and economic activities. However, they are parts of the technological process aimed to improve the efficiency of final production or worksperformance and servicesprovision. It was found out that setting the conditions for effective development of pig farming in domestic agricultural enterprises requires strengthening the development of integration and cooperation on the basis of long-term partnerships for small, medium and large agricultural enterprises - pig products manufacturers. It is obvious that small farms with a pig population of up to 50 heads must intensify the process of cooperatives establishmentand cooperativesfunctioning improvement in order to increase the efficiency of pig production and ensure product competitiveness, especially in the domestic market. These farms need to be involved in competitive pork supply chains based on the organization of slaughterhouses, transportation process, products preparation for sale, use of local brands, pork processing based on regional traditions, organization of modern forms of wholesale and retail trade. The analysis of tendencies and features of development of cooperation in agriculture based on surveys involving heads and leading experts of the pig meat production as well as generalizations of researchresults of the Ukrainian scientists give the grounds to recommend certain models of production cooperation in pig breeding. These include establishing agricultural production cooperatives (APC) on the basis of highly marketable personal peasant farmsrising three pigs and more and owning over 1 hectare of landarea within one settlement. Cooperation can be used to unite land plots owned by APCs into a single array for the purpose of their mechanized cultivation and growing agricultural crops for pig feed. It also providesestablishing highly concentrated agricultural production cooperatives on the basis of unprofitable farms of the corporate sector of other organizational and legal forms of management with a clear division of specialized structural units operating on the basis of internal settlement. Thus, the development of integration processes has become of strategic importance, primarilydue to the need to stabilize the production process of pig products in agricultural enterprises, to restore broken industrial and economic relationships, parity of all industries and economic entitiesinterests. Pig producers are participants in integration processes and they aim to reduce the productionassociated risk, its dependence on climatic conditions, the spontaneity of the pig and feed productsmarket, the need to increase the productioncompetitiveness. Processing companies also seek to focus on obtaining stable incomes, which requires сreating a reliable raw material base and beingthe marketsparticipants. It was proved that incorporation of a large number of structural units with commodity relationsis the common feature of agricultural production cooperatives and vertically integrated structures. However, the difference between these organizational and legal formsis worth pointing noting - structural units of agricultural holdings are mostly legal entities while agricultural cooperatives do not have such a status. However, both of the above-mentioned organizational and legal forms of settlement use the cost component, i.e.transfer prices, which are similar to domestic onesin their economic nature. Therefore, the proposed approaches to the introduction of transfer pricing can be used both in agricultural production cooperatives and in vertically integrated structures. Key words: integration, cooperation, agricultural cooperatives, agroholdings, pig breeding, production, sales.