Post on 03-Jan-2016
Sumy National Agrarian University
invite to a
lecture and discussion
at Marxerg. 2, 1030 Wien
June 20, 2007, 17:00-18:00
Sumy National Agrarian University
Rural Development in Ukraine: Tendencies, Issues, and
Perspectives
bySerhiy Moroz
Candidate of Economic SciencesAssistant Professor
Sumy National Agrarian University
24,823,022,419,6
25,4
20,3 19,7 19,2
4,25,03,68,1
24,0
5,2 4,5 5,4
11,29,4
21,817,0
13,3 11,8 10,6 12,6
19,0
14,916,3 16,3
12,2
14,6
10,89,5
0
10
20
30
40
50
1991 1995 2000 2001 2002 2003 2004 20050
5
10
15
20
Share of agriculture in total employment (the left scale)Share of investment in agriculture in total investment (the left scale)Share of the agro-food export in total exports (the left scale)Share of agriculture in GDP (the right scale)
The Role of the Agricultural Sector in the Economy of Ukraine (%)
Dynamics of the Rural Population in Ukraine
1505215272154761567516760 16529 15972 15883
2861928845 28864 28739 28651 28612 28957 28585
32,632,3
32,7 32,532,8
32,132,2 32,2
0
10000
20000
30000
40000
1991 1995 2000 2001 2002 2003 2004 200524
27
30
33%
The rural population, thousands (the left scale)The number of rural settlements (the left scale)Rural population, % of total (the right scale)
Sumy National Agrarian University
Sumy National Agrarian University
The Birth, Death, and Growth Rates ofthe Population in Ukraine
(per 1000 inhabitants)
1990 1995 2000 2001 2002 2003 2004 20052005 (+,-) to 1990
Number of newborns:
- Urban areas 12,7 8,8 7,2 7,2 7,7 8,3 8,9 8,9 -3,8
- Rural areas 12,7 11,1 9,2 8,7 9,0 9,1 9,3 9,4 -3,3
Number of deceased:
- Urban areas 10,2 13,6 13,8 13,8 14,0 14,3 14,4 14,8 +4,6
- Rural areas 16,1 19,1 18,8 18,6 19,1 19,6 19,6 20,5 +4,4
The overall population growth:
- Urban areas 2,5 -4,8 -6,6 -6,6 -6,3 -6,0 -5,5 -5,9 -8,4
- Rural areas -3,4 -8,0 -9,6 -9,9 -10,1 -10,5 -10,3 -11,1 -7,7
Demographic Information about the Rural ResidentPopulation (thousands)
1991 1995 1999 2002 2005
2005 as %
of 1991
Rural population 16895,0 16537,4 15950,2 15742,6 15127,1 89,5
Rural population by age:
- under working age 3751,6 3625,9 3328,0 3076,2 2753,7 73,4
- at working age* 8305,0 8091,0 7997,7 8210,3 8222,9 99,0
- over working age 4838,4 4820,5 4624,5 4456,1 4150,5 85,8
Rural population structure (%):
- under working age 22,2 21,9 20,9 19,5 18,2 -4,0
- at working age* 49,2 48,9 50,1 52,2 54,4 +5,2
- over working age 28,6 29,1 29,0 28,3 27,4 -1,2
* men: 16-59; women: 16-54.
Sumy National Agrarian University
Sumy National Agrarian University
Quantitative Changes in Employment of Rural Residents(at the beginning of the year)
49,5
86,9
69,482,0
65,7
133,4
66,674,0 70,4
136,3
66,977,2
3,82,6
1,2
11,9
0
30
60
90
120
150
1996 to 1991 2001 to 1996 2005 to 2001 2005 to 1991
%
0
2
4
6
8
10
12
14times
The total rural population employed in rural and urban areas (the left scale)Rural residents employed in urban areas (the left scale)Rural residents employed outside their rural settlements (the left scale)Rural residents employed only in household plots, times (the right scale)
Sumy National Agrarian University
The Structure of Rural Population Employed in the Place of Residence,
by Type of Economic Activity, 2005 (%)
50,6%
15,2%
6,3% 2,6% 4,9%
2,1%
2,9%3,7%
5,0%6,7%
Agriculture ForestryIndustry Wholesale and retail sales, repair servicesTransport and communication State governmentEducation Healthcare and social assistanceCollective, public, and private services Others
Sumy National Agrarian University
The Level of Unemployment in Ukraineon the Methodology of the International Labor
Organization (the age group 15-70, %)
14,3 13,712,6
11,69,9
8,77,8
6,3 6,8 7,1 6,69,1 8,4
5,7
0
4
8
12
16
20
1999 2000 2001 2002 2003 2004 2005
The rural population The urban population
Sumy National Agrarian University
49,4
27,9
33,5 33,0 34,824,8
35,5
138,5129,1125,3
120,0
105,8
126,8136,3
59,558,853,364,9
52,963,4 63,3
0
30
60
90
120
150
1995 2000 2001 2002 2003 2004 2005
%
Agricultural enterprises Household plots All farm types
Dynamics of Gross Agricultural Output, by Farm Type (in 2000 comparable prices, 1990 = 100%)
Sumy National Agrarian University
The Structure of Gross Agricultural Output, by Farm Type
72,5
27,5
55,1
44,9
38,0
62,0
41,3
58,7
40,2
59,8
34,0
66,0
39,8
60,2
40,7
59,3
0%
20%
40%
60%
80%
100%
1990 1995 2000 2001 2002 2003 2004 2005
Agricultural enterprises Household plots
Sumy National Agrarian University
The Share of Households with Average per Capita Monthly Expenses below the Living Wage* (%)
82,6 79,187,0
80,689,2
80,4 84,971,9 75,0
61,065,2
50,4
0
20
40
60
80
100
2000 2001 2002 2003 2004 2005
Rural areas Urban areas
* the 4th quarter of 2000 – 270.1 UAH; 2001 – 311.3 UAH; 2002, 2003, and the 1st quarter of 2004 – 342.0 UAH; the 2nd quarter – the 4th quarter of 2004 – 362.23 UAH; 2005 – 423.0 UAH.
Sumy National Agrarian University
Housing Amenities in Urban and Rural Areas in Ukraine (%)
71,5 75,6 76,1 76,2 76,3 76,6
69,7 74,3 74,7 74,8 75,0 75,4
0
20
40
60
80
100
1995 2001 2002 2003 2004 2005
Urban households
Sewer systems Running water
15,217,9 18,2 18,7 19,1 20,0
9,5 13,2 13,7 14,2 14,7 15,7
0
7
14
21
28
35
1995 2001 2002 2003 2004 2005
Rural households
Sewer systems Running water
80,2 81,8 81,9 81,8 82,0 81,8
69,5 73,4 73,6 73,8 73,9 74,2
0
20
40
60
80
100
1995 2001 2002 2003 2004 2005
Central heating Natural gas
79,4 83,2 83,4 83,5 83,8 84,1
11,219,8 20,5 21,4 22,2 24,4
0
20
40
60
80
100
1995 2001 2002 2003 2004 2005
Central heating Natural gas
Sumy National Agrarian University
The Share of Rural Settlementswith Social Infrastructure Objects (%)
1990 1995 2000 20052005 (+,-) to 1990
Pre-school organizations 44,1 37,8 31,1 29,4 -14,7
Schools 52,4 52,8 52,4 49,2 -3,2
Club-houses 70,8 68,5 61,8 58,8 -12,0
Libraries 64,8 62,4 54,8 52,9 -11,9
Hospitals 5,7 4,9 3,1 2,7 -3,0
Outpatient health facilities 6,5 6,2 8,4 10,7 +4,2
Retail shops 209,7 167,1 104,0 66,5 -143,2
Canteens 63,4 37,8 35,6 28,4 -35,0
Consumer service establishments 5,2 0,7 0,3 1,1 -4,1
Sumy National Agrarian University
23,3
21,6
26,9
23,0
42,1
28,5
21,8
0 10 20 30 40 50
Pre-school organizations
Schools
Club-houses
Libraries
Hospitals
Outpatient health facilities
Consumer service establishments
The Share of Social Infrastructure FacilitiesNeeded Capital Repairs, 2005 (%)
Sumy National Agrarian University
The Main Directions of the Agricultural Reform Program in Ukraine
The Agricultural Reform Program in Ukraine
Ensuring the real rights of landowners for land usage
The creation of a legal framework for private
ownership of agricultural land and assets
The improvement of efficiency in the agricultural sector based on the transformation of collective and state farms to market-oriented
private agricultural enterprises
Sumy National Agrarian University
Structure of Agricultural Land, by Farm Type
1990 1995 2000 20052005 as
% of 1990
mln. ha
%mln. ha
%mln. ha
%mln. ha
%
Agricultural land, total 42,0 100,0 41,9 100,0 41,9 100,0 41,8 100,0 99,5
- agricultural enterprises 38,7 92,1 35,2 84,0 29,9 71,4 22,1 52,9 57,1
- individuals 2,7 6,4 5,6 13,4 8,5 20,3 14,9 35,65,5
times
including household plots 2,5 6,0 3,9 9,3 4,3 10,3 4,7 11,2 188,0
Sumy National Agrarian University
Selected Economic Indicators of Agricultural Enterprises
1995 2001 2002 2003 2004 20052005 (+,-) to 1995
Profit (million UAH) 748,1 834,1 -330,8 -4,6 2689,3 3584,8 +2836,7
The profitability rate (%):
- of all economic activities 10,6 5,0 -1,9 -0,03 12,6 14,6 +4,0
- of crop production 55,5 35,8 22,3 41,7 20,3 7,9 -47,6
- of animal husbandry -16,5 -6,6 -19,8 -18,8 -11,3 5,0 +21,5
The share of unprofitable agricultural enterprises (%) 30,2 43,9 53,8 50,5 33,8 36,2 +6,0
Losses into an average statistical unprofitable agricultural enterprise (thousand UAH) 77,3 228,7 303,4 382,1 308,6 356,8 +279,5
Sumy National Agrarian University
2002 2003 2004 20052005 as %
of 2002
Support measures from the "amber box" 352,0 167,4 1070,4 1527,8 4,3 times
including:
- reduction of costs of commercial credit 119,6 13,4 141,5 350,0 292,6
- financial support of small private farms 4,5 39,3 5,1 27,3 6,1 times
- financial support of crop and livestock production 73,9 2,0 421,0 689,5 9,3 times
- support of horticulture, wine grape and hops production 118,1 5,0 109,1 175,0 148,2
- partial compensation of costs of agricultural machinery and fertilizers 35,9 37,8 393,7 270,0 7,5 times
- other expenditures 0,0 69,9 0,0 16,0 -
Source: Institute for Economic Research and Policy Consulting of Ukraine.
Continued on the next page
Budget Expenditures to Agriculture (million UAH)
Sumy National Agrarian University
Budget Expenditures to Agriculture (continued)
2002 2003 2004 20052005 as %
of 2002
Support measures from the "green box" 1050,1 2655,1 1905,8 2426,2 231,0
including:
- research and education 146,6 295,1 61,8 113,0 77,1
- pest and disease control 37,2 140,4 86,3 131,4 3,5 times
- crop selection and livestock breeding 25,6 238,2 152,7 224,0 8,8 times
- inspection services related to food quality and safety 265,1 359,4 446,9 532,9 201,0
- training and qualification improvements 385,4 458,8 603,1 881,5 228,7
- land reform 0,2 3,6 1,8 5,0 25,0 times
- rural infrastructure 7,9 25,4 15,6 17,0 215,2
- environmental protection 8,9 0,7 24,4 26,5 297,8
- other expenditures 173,2 1133,5 513,2 494,9 285,7
Total budget expenditures 1402,1 2822,5 2976,2 3954,0 282,0
Sumy National Agrarian University
The Main Directions of Complex Development of Rural Territories
The directions of complex
developmentof rural territories
The directions of complex
developmentof rural territories
The creation by the State of the system to regulate demographic
processes in rural regions
The creation by the State of the system to regulate demographic
processes in rural regions
The reduction of the gap in living
conditions between urban and rural areas
The reduction of the gap in living
conditions between urban and rural areas
Ensuring of reliable maintenance of social
infrastructure
Ensuring of reliable maintenance of social
infrastructure
The promotion of rural employment growth on the basis of
development of state support for the stimulation of entrepreneurship
The promotion of rural employment growth on the basis of
development of state support for the stimulation of entrepreneurship
The creation of conditions for the preservation and development of
small, remote, and depression rural settlements
The creation of conditions for the preservation and development of
small, remote, and depression rural settlements
Assistanceto income growth of the rural population
Assistanceto income growth of the rural population
Sumy National Agrarian University
• Acceleration of agrarian reform
General Measures for Stabilizationof the Agricultural Sector (the 1st point of view)
• Resumption of activities of agricultural cooperative institutions
• Implementation of the state system for the estimation and the control of the quality of agricultural products
• Solution to the problem of the lack of qualified specialists for agriculture
• Development of market infrastructure
• Elaboration and approval of a complex program for support and development of rural areas
• Improvement of agricultural competitiveness and adaptation of its state support mechanisms under WTO rules
• Improvement of agricultural taxation
• Strengthening agricultural budget support
• Providing of equivalence in economic relations between agriculture and other branches of the Ukrainian economy
Sumy National Agrarian University
Comparative Evaluation of Approaches for Development of Rural Areas in Ukraine
THE CURRENT APPROACH THE NEW APPROACH
Rural regions can resolve their social and economic problems on the basis of the development of agricultural production
Rural territories are multi-functional systems which consist of social, demographic, economic, ecological, and other components. The development of rural territories should be based on state target programs
Direct budget transfers and subsidies mainly for support of certain agricultural products
Use of limited budget resources for solutions of actual problems of rural territories
The primary goal: Increase of the volume and the efficiency of agricultural production
The primary goal: Development of rural territories and sustainable agriculture through the improvement of competitiveness and diversification of the rural economy
Sumy National Agrarian University
Directions of rural development policy
Development of sustainable agriculture in order to protect the natural environment and
to preserve the rural landscapes
Development of sustainable agriculture in order to protect the natural environment and
to preserve the rural landscapes
Introduction of measures to improve
the quality of rural lifeand to increaserural incomes
Introduction of measures to improve
the quality of rural lifeand to increaserural incomes
Main Directions of Rural Development Policy in Ukraine (the 2nd point of view)
Increase of agricultural productivityand competitiveness through
the establishment of a favorable investment environment and improvement
of the quality of human capital
Increase of agricultural productivityand competitiveness through
the establishment of a favorable investment environment and improvement
of the quality of human capital
Implementation of programs for
the development of less favored areas
Implementation of programs for
the development of less favored areas
Sumy National Agrarian University
• Poverty reduction in rural areas
• Diversification of the agricultural production
• Cooperation and economic integration of rural households
• Improvement of social and physical infrastructure
• Development of non-farm employment opportunities in rural regions
• Increase ecological sustainability of production activities in rural territories
• Preparation of rural areas for integration of Ukraine into the global economy
• Preservation and protection of rural landscapes
Primary Goals of the Rural Development Strategy
Sumy National Agrarian University
Humancapital
Formation ofa national extension
service
Implementationof a program
similar to LEADER+
Introduction ofmeasures to improvethe education level
in rural areas
Directions for Development of Rural Human Capital
Sumy National Agrarian University
• Development of a proper legal framework to establish predictable and transparent rules in the agricultural market
Proposed Components of the Agricultural Strategy in Ukraine
• Introduction of economic mechanisms to complete farm restructuring, to improve the competitiveness of agricultural products, and to attract investments
• Formation of the agricultural credit system
• Implementation of other essential components to accelerate economic reforms in agriculture
• Promotion of cooperation between agricultural producers