Commercialization of the farming households as a way of improving the rural incomes

O. Borodina, I. Prokopa, S. Kyryziuk

Economy and Forecasting, 2012, issue 3, 79-91

Abstract: The article reveals the opportunities and key factors of the increase of farming households' incomes by way of their implementation in the market agro food system. Typical households groups have been excreted on the basis of socio-demographic characteristics. It was ascertained that the current socio-economic policy is not able to solve the problem of rural poverty. As a result, more than half of the families with children, who shape the future of the Ukrainian village, belong to the poorest households. Therefore, the authors justify the need of a policy to support the incomes of rural families in order to improve their commercialization. Using the statistical method of grouping and matching, the authors identified various key factors of the commercialization of agricultural activities of selected social groups of rural households and their economic effect, which is increasing the incomes from the sale of agricultural products. It was estimated that the highest effect for improving welfare of the poor rural households can be achieved through increasing land in use (extensive method) or raising technical and technological and innovation support (intensive method) of the households agricultural activity. The calculations confirm the highest income increase is possible with the joint effect of the two factors, which requires the increase in the land area in use up to 2 ha and annual expenditures on agricultural activities, within the technological feasibility, in the amount of UAH 2-3 thousand. The authors suggest to provide the necessary level of expenditures though the implementation of targeted state support for selected household groups over a period of up to 5 years in exchange for their guaranty to improve the level of commercialization.

Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eip:journl:y:2012:i:3:p:79-91

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