Author(s): Viktoria Zubchenko
Title: Diversification of Activity of Agricultural Enterprises as an Instrument for Providing their Economic Sustainability
Source: International Scientific Days 2018 :: Towards Productive, Sustainable and Resilient Global Agriculture and Food Systems :: Proceedings
Publisher: Wolters Kluwer ČR, Prague
PY, pages: 2018, 1869-1884
Published on-line: 2018-11-09
Abstract: The main research tasks are: to determine the peculiarities of diversification of agricultural activities of agrarian enterprises and their impact on sustainable development; to specify criteria and indicators characterizing diversification of production activity; to systematize the factors of diversification of agricultural activity of agricultural enterprises and to determine its influence on the formation of indicators of efficiency; to substantiate the strategies of diversification of agricultural activity of agricultural enterprises and to determine its influence on efficiency.
Paper's objective (s). The purpose of the article is to solve the following tasks: to determine the peculiarities of diversification of agricultural activities of agrarian enterprises and their impact on sustainable development; to specify criteria and indicators characterizing diversification of production activity; to systematize the factors of diversification of agricultural activity of agricultural enterprises and to determine its influence on the formation of indicators of efficiency; to substantiate the strategies of diversification of agricultural activity of agricultural enterprises and to determine its influence on efficiency.
Data / Methods. When writing the article, data from official statistics, data from consulting institutes and own researches, scientific works of domestic and foreign authors were used. In carrying out the research, we used the following methods: economic and statistical - in determining the dynamics, structure and performance of the development of production activities; comparative - in assessing the effectiveness of activities and comparing the levels of diversification of production of agrarian products; calculation-constructive - in substantiating the directions of diversification of production for agricultural enterprises. In the article the author calculated the Herfindel-Hirschman coefficient, the entropy index, the indicators of concentration
and diversification of production in agricultural enterprises in Ukraine.
Results In the agricultural sector, there is a process of vertical diversification of
capital through the creation of vertically-integrated structures that combine the production,
processing and marketing of agricultural products to end users. Calculated
values of the entropy and diversification coefficients indicate an increase in trends
in the concentration of production both in certain agricultural enterprises (egg and
poultry, pigs, dairy cattle), and within the product groups (growing of cereals and
industrial crops). The concentration of agrarian enterprises in the production of
a particular group of agricultural products increases the risk of economic activity.
Thus, in 2016 compared to 2005 there is an increase in the number of agricultural
enterprises in 482 farms that specialize in the production of one type of agricultural
product; 2 species - at 1574; In 3 types - 867 farms, which is evidence of a reduction
in multi-sectoral enterprises. Currently, highly specialized enterprises are engaged in
the production of mainly crop production. There is a process of horizontal diversification
in the production of grain crops due to the growth of the concentration of corn
production on grain and reducing the economic attractiveness of barley cultivation.
Constraining factors of the development of unrelated diversification of the enterprises
of the corporate sector through the provision of services are: imperfect tax legislation;
high level of market saturation; high level of agronomy of machine-tractor fleet
of agricultural enterprises, low competitiveness in the price segment, provision of
services in specialized enterprises and individuals.
Conclusion The positive influence of diversification of agricultural activities of
agrarian enterprises on increasing their efficiency with increasing share of livestock
products in the structure of commodity products has been proved. The concentration
of productive resources on the production of mono products in the absence of
a system of strategic and tactical planning of production leads to an increase in production
risk for agricultural enterprises. The study of the processes of diversification
of agricultural enterprises should be carried out taking into account regional peculiarities
of the development of the industry, the level of use of commodity producers'
production potential and risks of production activity.
Keywords: Diversification, agribusiness, production concentration, business risk,
JEL Classification: Q12
Rights:Open Access :: Creative Commons BY-NC-SA 4.0 International Licence
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