Organizational-economic foundations of formation of value added in grain production

Oleksandr Svitovyi, Oleksandr Kirdan and Badri Gechbaia

Agricultural and Resource Economics: International Scientific E-Journal, 2022, vol. 8, issue 3

Abstract: Purpose. The purpose of the study is to assess the current state and substantiate the prospects for the formation of value added in grain production of Ukraine, based on the theoretical and organizational-economic foundations of these processes. Methodology / approach. Among the general scientific methods for research, the authors applied the following: comparison – to compare the amount and structure of value added; generalization – when determining the total amount of value added; analysis and synthesis – in the process of studying the formation of value added as one whole, after analyzing the components of this indicator; modeling (Box-Jenkins method) – in the process of creating a model of the optimal value added and gross grain harvesting. The following interdisciplinary and special methods were also used: calculation-and-design – when determining the optimal option for the formation and distribution of value added; calculation – for calculating the components of value added. Results. The theoretical aspects of the formation of value added are summarized and the authors’ own view on problematic issues is formulated. As a result of the analysis of the current state of grain production, it was established that over the past two decades, the growth of the gross collection of grain crops (by 2.6 times) occurred only due to increased productivity, and the production of grain processing products during the specified period has significantly decreased. Calculations performed on intensive resource-saving technologies for growing grain crops indicate that their use can increase value added due to a decrease in the unit cost of production. The presented author’s calculations of the formation of value added in the “wheat-flour-bread” chain showed that most of the value added is created in the process of grain processing. Forecast indicators of the production of the main agricultural crops, the amount of value added and profit indicate significant prospects for their growth. Originality / scientific novelty. The classification of the main factors that influence the formation of value added in grain production has been improved, and their structural-and-logical scheme has been constructed. Practical approaches to determining the interrelationship of structural elements of value added in the industry have gained further development. The improved variants of intensive resource-saving technologies for the cultivation of the main agricultural crops are calculated and proposed for implementation and their characteristics are given. For the first time, there were modeled the forecast indicators of the production of corn for grain and wheat for the period up to 2027, as well as the amount of value added and profit at different levels of profitability. Practical value / implications. The use of the proposed intensive resource-saving technologies for growing major agricultural crops, compliance with the progressive provisions of the organization of the use of material and human resources will significantly improve the efficiency of grain production. In order to significantly increase the value added in grain production, the need to significantly increase the production of processed products and finished products from grain has been proved. This will have a positive impact on the growth of national income and gross domestic product.

Keywords: Agribusiness; Crop Production/Industries (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ags:areint:330346

DOI: 10.22004/ag.econ.330346

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