INSTITUTIONALIZATION OF THE DEVELOPMENT OF STATE REGULATION SYSTEM FOR ENTREPRENEURIAL ACTIVITY IN THE AGRICULTURAL SECTOR OF UKRAINE: CONTRADICTIONS AND WAYS TO NEUTRALIZE THEM

Abstract

The paper substantiates the objective, related to the specifics of agriculture necessity of state regulation of entrepreneurial activity in the agricultural sector, which should be aimed at limiting the action of market mechanisms in order to balance the economic, environmental and social functions of the industry. The three stages of market transformations in the agricultural sector are identified, and the processes of forming the entrepreneurial environment in market conditions are analyzed. The authors systematize the inconsistencies, contradictions, and gaps in the state agrarian regulatory policy and analyze their negative impacts on ensuring food security and food sovereignty of Ukraine, preserving the productivity of agrarian sector’s natural resources for the needs of current and future generations, the rural population’s sedentism, and rural areas development.

Based on the analysis of entrepreneurship development under market transformations in the agrarian sector, the differences between these three stages are determined. The emphasis is on the gradual reduction of state influence on the formation of financial, credit, tax, and infrastructure environment favorable for the expansion of entrepreneurial activity; the absence of a systemic long-term regulatory policy aimed at the formation of individual and corporate farming in the country and the development of the cooperative movement. The lack of a policy of influence on the diversification of food production and support for the narrow specialization of large enterprises with signs of monoculture has led to the curtailment of livestock production and other labor-intensive industries, the impoverishment of the range of food products, a catastrophic decline in employment and increased migration of the rural population, and the depopulation of rural settlements.

Based on the results of the study, the authors have formulated the principles of improving the state regulatory policy to support the entrepreneurial activity development aimed at the economically, socially, and environmentally balanced agricultural sector development, taking into account its real state and the requirements for its approximation to the EU Common agricultural policy in the European integration process.