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In the last years Ukraine has allocated considerable, with respect to their load on the budget, financial resources for agricultural support. However the significant increases of budgetary support do not substantially influence the effectiveness indices nor agricultural yields. Such information testifies to an imperfect nature of the internal support mechanism of Ukrainian agriculture. As the result, the domestic support did not become an effective stimulus for a production quality increase nor for a rise in the stock breeding production. In 2008 Ukraine gathered the biggest grain harvest. Increased production did not improve the financial results of agriculture and did not produce a stable and dynamic branch development because of the negative influence of world finance crises. Unbalanced supply and demand for agricultural production, low buying ability of inhabitants, lack of branch effective mechanism of domestic support caused complications of price situation in the domestic food market.
Dairy production in Ukraine, as well as worldwide, is an important sector of the economy which ensures the food security of the country. The Ukrainian dairy sector has many unsolved systematic problems, foremost of which is the decrease in cow productivity and the number of cows. This directly influences the decrease of total milk production, and, as a result, a deficit on the food market. Today, the Ukrainian government has to focus on improving dairy sector support in order to ensure its effectiveness in the future. PAM-analysis was used to evaluate the effectiveness of state agricultural policy in the dairy sector. Research results show that the production system of Ukraine can ensure profitable milk production in private and social prices. But, while dairy producers benefit from cheap internal resources, state policy in the dairy sector impacts profitability of milk production by production trade factors.
The continuing process of global integration bears implications for the formation of food markets in the global and regional levels. According to the latest estimates, Ukraine is able to feed more than 200 million people currently. But this production should be effective not only from the standpoint of food security but also from a Growth position. Formation of trade policy is the most important way to achieve this one. This paper assessed the current state of the European trade ties of internal agro-food market based on Trade Density Econometric Models. We provide in this paper a comparative evaluation of alternative approaches to possible development scenario for Ukrainian agricultural market based on the European experience. The research includes theoretical modelling foundations, datasets employed and analytical comparison of previous studies. The results can be used to determine government agricultural policies and large agricultural companies.
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