Organizational And Economic Mechanism Of Property Relations Transformation In The Field Of Reclaimed Farming Under Conditions Of Private Land Ownership

Leonid Kozhushko and Olga Mandziuk
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Leonid Kozhushko: National University of Water Management and Nature Recourses Use, Rivne
Olga Mandziuk: National University of Water Management and Nature Recourses Use, Rivne

Ukrainian Journal Ekonomist, 2014, issue 1, 23-26

Abstract: Changes of ownership form in agrarian sector were carried out without taking into account peculiarities of the existing land improvement systems which were used for large collective farms on large land areas. Present land users having large land areas are not able to provide the effective functioning and maintenance of meliorative networks. The amount of water-users have increased considerably but responsibility for proper operation of meliorative systems decreased, the structure of the intrafarm meliorative system have changed, actually, these systems were left without manager. It was decided to transfer the interfarm part of the meliorative network to the balances of enterprises which were legal successors of collective and state farms. The part of the network not transferred was given as municipal property to local authorities. It is difficult for agricultural producers to exploit these networks independently because of the lack of the proper qualification; it is also difficult to be engaged in farming effectively in scopes which are not in accord with the scopes of meliorative network. Despite the large number of studies, they justify the feasibility of establishing associations, in order to preserve the integrity of the use of irrigation networks, but haven't yet developed organizational and economic mechanism that will ensure the effective establishment and regulation of associations on reclaimed lands. The aim of article is to develop organizational and economic mechanism of property relations transformation on reclaimed land and instruments its regulation. The organizational and economic mechanism is a system of interrelated organizational, legal and economic instruments that define and regulate the specific activity or function defined system to ensure its effectiveness and achieve their goals. The organizational-economic mechanism consists of the following blocks: ‰- principles of consistency, comprehensiveness, continuity, efficiency; ‰- regulatory framework which create a legal environment for the operation of agricultural producers' associations, to ensure the establishment and functioning institutional framework; ‰- actors (farmers and village council, the main governing bodies: Parliament, Cabinet of Ministers, the State Water Resources Agency of Ukraine, the Ministry of Agrarian Policy and Food of Ukraine, etc.); ‰- objects (interfarm part of the meliorative network); - institutional environment; ‰- associations of enterprises (cooperatives, associations of water users, corporate contractual associations, joint stock companies); ‰- main levers of regulation (creation of new organizational forms, concession and lease agreements, a system of administrative penalties for degradation of irrigation systems and ecological condition of agricultural land, subsidies and grants, partial or full compensation rates on commercial bank loans, tax relief by reducing the amount land tax, insurance against failure of drainage systems). Performance results are economic efficiency (increase investment attractiveness, increase profitability of products grown on the reclaimed lands), social performance (employment in agriculture, food security) environmental efficiency (improving state lands).

Date: 2014
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