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An assessment of import dependence on the domestic food market

V. Olefir

Economy and Forecasting, 2016, issue 4, 91-105

Abstract: In spite on the current economic recession and drop in exchange rate of the hryvnia, imported agri-food productes have not disappeared from supermarkets and grocer's shelves. In scientific publications, integrated assessments of the level of import expansion on domestic agri-food market are practically unavailable, which complicates the efficient policy formation for the protection of domestic market. The article's objective is to investigate the level and dynamics of import expansion on domestic agri-food market during 2004-2015, define its fundamental reasons, and work out proposals to counteract this negative phenomenon. The author proposes an original comprehensive methodology for assessing the extent of import dependence on the food market. On its basis, he investigates the dynamics of imports on the domestic agro-food market during 2004-2015. The import expansion during 2004-2015 has a cyclical nature. It increased within the phases of economic growth and decreased within those of recession. The peak of import expansion was in 2008, when imports of agri-food commodities constituted 13% of domestic agri-food consumption. In 2015, the most import dependent markets were fish, vegetable oil, fruit, alcoholic beverages and tobacco. Among the major causes of the import expansion in 2004-2015 were: low competitiveness of home-produced agri-food products, unproportionally high investments in export oriented activities, and the reduction of tariff and non-tariff barriers in the context of Ukraine's accession to the World Trade Organization. The measures to control the import expansion should include raising price and non-price competitiveness of domestic goods, restraining imports by means of non-tariff barriers, and attracting foreign direct investments to activities oriented to Ukraine's domestic market.

Date: 2016
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Handle: RePEc:eip:journl:y:2016:i:4:p:91-105