What are the organizational and economic principles of organic farming in the context of sustainable development? Case of Ukraine

Abstract

The development of organic agriculture is a long-term global trend; with different local factors that affect the development rate. Ukraine is one of the largest food suppliers in the world and this also applies to organic production. The evaluation of organic production at Skvyra Organic Research Station was conducted in 2015-2020 on 40 ha land; focusing on the economic performance of the enterprise and the specialization of production. The systematic approach and dialectical method of cognition were used to identify the key factors in the development of organic farming. The purpose of the study is an organizational and economic analysis of a state enterprise that is making a gradual transition from intensive to organic production, in order to determine the main principles that stimulate the development of organic production, and to overcome the challenges faced by the enterprise on the way to the introduction of organic production. The results indicate that the enterprise is profitable but does not operate up to its potential. The key issues were identified in the lack of focus on marketable crops, efficiency of labour, crop production, and management. The enterprise is negatively affected by the current legal framework and insufficient financial stability. The enterprises income consists of selling crops (i.e. cereals, legumes) and service-to-business (i.e. laboratory testing), with no state funding. Further results show the relation of the production and specialization with climatic, natural, biological and socio-economic factors. To improve the organisational and economic framework for the development of organic production, Ukrainian enterprises should focus on cost-effective products. Furthermore, competition between agricultural enterprises should support deeper specialization and production of competitive products, contributing to the profitability and economic stability of producers