The paper discusses that in the conditions of domestic economy transformational changes, insufficient financing and economic risks growth; there is a need to increase efficiency level of agricultural business structures activity. Providing of these conditions depends on scientific and practical developments implementation into enterprises production activity with a purpose of its improvement. To achieve a high efficiency level, it's necessary to analyze the agribusiness structures functioning environment which is characterized by market conditions dynamic changes and greatly affects the size, specialization, production structure etc. Most enterprises are on the stage of assets accumulation and production diversification directions search which involves different activities and intensive development. At the same time, banks' lending volume decrease and production costs growth due to devaluation of the national currency as well as economic activity decline leads to agricultural enterprises research of new ways to increase return on investments.
The aim of the article is to develop offers how to optimize production activity of agricultural business structures and increase its efficiency. This task requires resources provision level determination of agricultural enterprises, their rational combination and effective usage. They should be solved by resource-saving production technologies, investments attractiveness increase and responsible attitude to the environment.
A significant contribution to the research of the production activities of the agricultural business structures and definition of production’s optimization belong to such domestic and foreign scientists as M. Ilchuk [1, 2], S. Kvasha [3], N. Reznik [4, 5], U. Lupenko [6], M. Malik [7], B. Paskhaver [8], O. Shubravskaya [9], A. Sen [10], S. Mocherny [11], A. Borisov [12], A. Azryliyan [13] and others [14-16]. In particular O. Shubravskaya claims that production optimization is among the main methods to provide agricultural enterprises effective functioning in the unstable market environment. Because of that, its theoretical and methodological implementation features, the correlation between production resources, and their influence on output as well as parameters and restrictions for the optimization model development under limited resources conditions are extremely important [9]. S. Mocherny considers optimization of production as a process of interaction between people and nature, as well as just between people during creating material and immaterial goods in an optimal (the most perfect) state by choosing optimal criteria with quantitative and qualitative parameters in order to develop productive forces and economic relations [11]. A. Borisov offers that it is – the definition of optimal values of economic indicators in the process of creating different types of economic product in order to achieve the best state [12]. A. Azryliyan interprets the optimization of production as bringing the human-made process of creating products (products, energy and services) into the best (optimal) state [13].
Highly appreciating the contribution of these scientists for the development of the theoretical and methodological foundations in analysis of the production activity of agricultural enterprises and its efficiency, it should be noted that the question about influence of the main factors of agrarian production on its effectiveness remains to be fully investigated and needs offers for improvement of the main economic, social and environmental indicators of agricultural production in conditions of economic risks increasing. 2 2.1
In accordance with the economic theory of social welfare, namely its provisions about efficiency of resource distribution, each enterprise should maximize the effect of the use of productive resources taking into account social interest. It means that in addition to efficient use of resources according an economic point of view, it should be taken into account the possible negative influence on nature and potential social problems due to excessive automation of production and the failure of the enterprise to provide workable people of the countryside with work. An existed interrelation between the interests of business, society and the environment is situated below (fig. 1).
Effective production activity of agricultural business structures requires a rational combination of plant growing and stockbreeding branches, needs to take into account market conditions, as well as providing of economic, social and environmental efficiency of agricultural production. A rational combination of branches involves using secondary production, transferring of seasonal employers to permanent employment during the year at the expense of diversification of production, as well as increasing of economic efficiency of production activities and reducing of financial risks.
Analysis of the cultivated areas and stockbreeding of agricultural enterprises of Ukraine is shown below with the aim to evaluate production activity (fig. 2).
Ukrainian agricultural enterprises, including farms, are concentrated on the production of the four most profitable crops: winter wheat, corn, sunflower and soybeans. More than 50% of the total land area of agricultural enterprises is used for the grain crops. At the same time, the structure of grain cultivation is changing: if in 2011 winter wheat accounted for 43,9%, spring barley – 20,9%, corn – 12,7%, then in 2016 the crop area under wheat was 25% , under barley – 6%, and corn – 20%. One of the reasons for this change is possibility of getting bigger profit from 1 hectare of corn cultivation. An important trend is the reduction of cultivated areas under fodder crops, because of decreasing of livestock and poultry and a reduction of volume of production of certain livestock products. Changing the livestock structure is explained by higher profitability and a lower period of capital turnover when chicken and pork are grown. At the same time, the growth of cattle in most agricultural enterprises is generally unprofitable. However, the reduction in the number of cattle has both negative social (unemployment, income reduction) and negative environmental influence, in particular reduction of organic fertilizers introduction. In addition, the creation of large complexes for the production of pork and poultry meat involves significant risks in the conditions of epidemics, and also has a negative influence on the environment.
Changing structure of cultivated area and livestock have direct influence on the volume and production of agricultural products. Consider changes of gross products in terms of the main types of products of plant growing and stockbreeding sectors, as well as its structure with the aim to research influence of the above changes on the production results of agricultural enterprises (Table 1).
This table confirms that there is a steady tendency to increase the share of production of basic agricultural products in the structure of gross products. At the same time, there is an increase in production of corn for grain and sunflower and a decrease in the production of barley and wheat. In the stockbreeding sector, the decline of production is only for beef; production of other types of products is increasing. At the same time, the change in the structure and size of production in livestock production is much slower than in the field of plant growing. Also, the production of livestock products is much less dependent on the natural and climatic conditions, so there are no such sharp fluctuations in the volume of gross products, as in the field of plant growing.
The size of agricultural enterprises is depend on available agricultural land, the requirements of production specialization, the size of production expenditures, the availability of financial resources, etc. Consider the quantitative changes in agricultural enterprises of Ukraine by size of land (Table 2). Enterprises, which don’t have agrarian land, ha
This grouping makes possibility to argue that transformational changes have led to the consolidation and reduction of agricultural enterprises.
Reasonable consolidation of enterprises contributes for more efficient use of resources. There is a steady tendency to reduce the number of agricultural enterprises with the aim of its consolidation, which has influence on the reduction of the number of employers in agricultural enterprises of Ukraine (Table 3).
Reducing the number of employers in the stockbreeding is faster than in the field of plant growing. One of the reasons for this is a reduction in stockbreeding and a focus on poultry breeding, which has a higher level of profitability, a shorter period of capital turnover, and is less labor-intensive. At the same time, such a decrease in the number of employees may mean a transition to a more efficient system of production activity. 2.2
Providing of effective production activity of agricultural business structures involves accordance to scientifically substantiated level of use of production resources. One of the ways to provide it is to reduce the cost of labor to execute production processes and control of target using of labor time. The implementation of this strategy requires automation of processes and the transition from labor to capital-intensive production. Compare the number of agricultural employers per 1000 hectares of agrarian land and the proportion of the employed population in different countries to determine the optimal number of workers in the agricultural sector of Ukraine (fig. 3). 2015 708,2 180,2 100 % 74,6 25,4 2016 678,8 510,0 168,8 100 % 75,1 24,9 2016 in % to 2012 92,6 99,3 77,0 +5 -5 isn 000 40
1 eey l/s 20 o a lepm iidvu 0 f d o in r e b m u N 25 20 15 10 5 0
Number of employees in agriculture, individuals/1000 ha
Share of employed in agricultural sector of the country, %
These data provide an opportunity to argue that agriculture of Ukraine is labor-intensive in comparison with other considered countries of the world. For example, with the working out of 1,000 hectares of agricultural land in the EU, the number of workers is twice as low as in Ukraine, and in the USA this figure is five times smaller. At the same time, employs about 18% of the Ukrainian workable population are employed in agriculture, compared to 5% in the EU and 2% in the USA. This means possibility to significantly reduce the labor productivity of the agricultural sector, increase its competitiveness if modern technology and the necessary level of investment in Ukraine appear. A system of indicators was used to evaluate the efficiency of agricultural production, including: cost 1 ts, sales volume, price, profit on 1 ts and profitability level (table 4). Beef Milk 2128,4 328,3 1365,1 364,5 −763,3 36,2 −35,9 11,0
Among many instruments which are used for enterprises production efficiency analysis one of the most common is production function. Production function is a technical ratio between amount of resources used by producers and production volume on its basis. It is calculated at the macroeconomic level, where it shows aggregate output dependence in monetary terms, and at microeconomic level. One of the most popular type of production function is Cobb-Douglas function which in general form can be written as [5]:
= , = (1) where: A – coefficient which characterizes production efficiency, α і β – production elasticity coefficients of capital K and labor L, which according to neoclassical theory every production factor role in final output growth (or revenue share of relevant factor in total income unit). In practical calculation the model should be converted into linear-logarithmic:
= + + (2)
The equation of agricultural enterprises production function of the countries calculated for 2005-2014 years and evaluated by least squares method in econometric modelling environment Eviews (table 2 and table 3). Constructed regression models show output (V) dependence from fixed assets value (K) and salary fund (L). Production function calculation based on Ukrainian agricultural enterprises data creates the following model:
= 0.88 ∗ + 0.39 ∗ − 4.12 (3) where determination coefficient is (R2=0,986).
It allows to consider that production volume change caused by fixed assets value and salary fund changes on 98,6%. Factors L=0,88 and K=0,39 together equal 1,27>1, which shows high reproduction level with Labor factor dominant role in it. Calculations indicate that Ukrainian agricultural enterprises production is labor-intensive which means lower competitiveness of their products on global market. It is necessary to optimize agricultural production of Ukrainian enterprises to improve competitiveness of domestic crop and livestock production.
The construction of a relative indicator requires the transformation of absolute data into relative indicators. There may be several ways of such a transformation, let's consider the most popular: relatively average, relatively to norm or standard, relatively to the scale of variation and relatively to the entire array. In addition, it is necessary to define the weighting coefficients that allow following methodical techniques: calculation of the matrix of coefficients for pair correlation, factor’s load and expert estimates. Summarizing the experience of calculating integral indicators, we can offer an algorithm for its construction in the form of the following sequence of steps: the formation of feature’ set, standardization of indicators, justification of weighting functions and aggregate of indicators.
Formation of a set of features involves defining the initial list of selected criteria of the synthetic category that is being analyzed, as well as selecting methodology from the list of individual criteria and statistical indicators that play a key role in the formation of the integral indicator. The validity of the calculation process and the value of the obtained data depend on the correctness of the hypothesis, on the basis of which the criteria for the integral indicator is selected.
The evaluation criterion of production structure optimization was accepted integral index of aggregate enterprise production efficiency (Іп), which was considered in their works by such scientists as S. Shumskaya [14, 15] and U. Sayenko [16]. Methodical approach of aggregate production efficiency determination on the test enterprise A data was constructed on three indicators that characterize economic, social and environmental performance. According to investigation purpose, economic efficiency most adequately described by profit value, social efficiency by average annual employees number and ecological by used organic fertilizers amount. Integral index value of aggregate test enterprise A efficiency was determined by formula: !" = # $ + # $ + # $ (4) where а1, а2, а3 – weight performance indicators coefficients which characterize the influence of this partial indicators. The weight coefficients determined on the basis of experts evaluations based on agricultural economy transformational changes in 2000-2016 years.
х1, х2, х3 – graduated economic (profit), social (average annual employees number) and environmental (organic fertilizers usage) performance indexes. The graduation of the indicators calculated in relation to their average value (table 5). These coefficients change annually, since technological efficiency is closely linked to natural conditions, productive potential of land, technological characteristics of land, which is an important part of the cost of production and has influence on the profitability of an enterprise, and economic efficiency depends, for example, on market prices and tax policy.
thsd UAH Average annual employees number, person Organic fertilizers usage, tons 0,03 2 1,21 8 1,18 4 0,60 4 0,26 5 0,13 1 0,82 0 0,91 0 1,13 3 0,60 3 0,24 9 0,14 8 1,36 5 1,02 9 0,91 8 0,52 4 0,29 4 0,18 2
Methodical approach of total efficiency integral index in test enterprise A production was built on three main factors, which characterize economic, social and environmental efficiency. In the research it was found that economic efficiency most appropriate reflected by profit, social efficiency – by average annual number of employers and environmental efficiency characterized by organic fertilizers amount (fig. 4). 1,5 E U L A V
1 0,5 0 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 2 0
YEARS
Fig 4. Aggregate efficiency integral index of test agricultural enterprise A production
Calculated integral index of aggregate enterprise production efficiency of test agricultural enterprise A is increasing from 0,82 in 2015 year to 1,53 units in 2020 year despite the fact that profit growth occurs at a lower rate from 0,83 to 1,15 units accordingly. Growth is caused by livestock increase and, as a result, new jobs creation as well as organic fertilizers higher usage.
Integral indexes usage for production optimization effectiveness determination of agricultural enterprises can become an important method of companies’ conditions assessment in agricultural economy sphere because it allows to take under account at the same time indicators which are expressed in different measuring units. Further investigations should be performed towards database expanding for integral index calculation and improvement of factors weight coefficients justification.
Offered calculations of the production function of Cobb-Douglas and the overall integral indicator of total production efficiency make possibility to argue that the agricultural business structures in Ukraine have opportunity to provide expanded reproduction. At the same time, the factor of labor on the volume of production is 0.88 and is much higher than the influence of the factor of capital (0.39) that confirms about labor-intensive reproduction process. This trend is confirmed by the forecast of the integrated indicator by 2020 at the level of 1.53 units, which is explained by the creation of new jobs and an increase of organic fertilizers. A rational combination of economic, social and environmental efficiency will achieve a socially oriented economy based on sustainable development of the agrarian sector.
The efficiency of agricultural businesses depends on the effective use of fixed assets: land, labor and capital. A rational combination of these factors in the production process contributes to the food security of Ukraine, in particular: ensuring the physical and economic availability of food products, as well as the safety of its consumption. At the same time, the formation of the optimal size and production structure of agricultural enterprises is essential for ensuring food security of the country. The optimal size of agricultural enterprises depends on the specialization of the enterprise, available production resources, etc. The optimized production structure should be formed taking into account market conditions. Optimization of the structure and size of agricultural enterprises must be carried out taking into account the criteria of optimality.
The criteria for the optimal production structure and size should include economic, technological, social and environmental aspects of production efficiency. Economic efficiency is the main because it generates resources for social and environmental efficiency. The main indicators of economic efficiency are: the volume of gross output, cost, the amount of gross and net income and profit, the rate of profit, the level of profitability and others. Economic efficiency is closely linked to technological efficiency, the main indicators of which are: yield of crops, livestock productivity, productivity of employees, productivity of agricultural machinery, etc. 11. 12. 14. 16. 17.
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