DIVERSIFICATION AS A FACTOR FOR LEVELING THE RISKS OF PRODUCTION AND ECONOMIC ACTIVITY OF AGRICULTURAL ENTERPRISES
Keywords:
Key words, agricultural enterprise, diversification, monoculture, uncertainty, economic benefits.Abstract
Svynous I.V., Rudych O.O., Zubchenko V.V. DIVERSIFICATION AS A FACTOR FOR LEVELING THE RISKS OF PRODUCTION AND ECONOMIC ACTIVITY OF AGRICULTURAL ENTERPRISES
Purpose. The aim of the article is the development of theoretical, provisions and practical recommendations for development of measures for diversification, as a factor of leveling the production and economic activity of agricultural enterprises.
Methodology of research. Modern general scientific and special methods of economic research are used in the article, in particular: a systematic approach – when studying the connections between phenomena and processes in the system of ensuring diversified development; economic and statistical methods – in determining the dynamics, structure and performance of the development of production activities; comparative – in assessing the effectiveness of activities and comparing the levels of diversification of production of agrarian products; calculation and constructive method – in substantiating the directions of diversification of production.
Findings. It is proved that the economic expediency of diversification of production activity is determined by its impact on the economic and financial state of the enterprise, as the result of any diversification should be the reduction of risk and the emergence of synergistic effects, especially in the field of finance, due to the possibility of free internal firm transfer of funds in the sphere of activity that develop most dynamically. The estimation of the level of efficiency of agricultural enterprises functioning and the problems identified, which lead to a decrease in the efficiency of their functioning.
It is established that the most optimum in terms of efficiency are farms producing 2-3 types of agricultural products, which are part of the branches of livestock and plant production in order to minimize production risks.
Originality. The strategy of economic diversification is substantiated based on ensuring an acceptable ratio between profitability and the level of overall risk, which consists of two components: firstly, unsystematic (diversified) risk; it is inherent in a particular enterprise and is subject to a reduction as a result of diversification; and secondly, systematic (not diversified, market) risk; it cannot be reduced by further diversification, since it is generated by external factors of the environment of the functioning of agrarian enterprises.
Practical value. The obtained results of the research will help to optimize the structure of production at the enterprise (a rational combination of crop and livestock industries) and ensure the growth of management efficiency on this basis.
Key words: agricultural enterprise; diversification; monoculture; uncertainty; economic benefits.
References
Svynous, I.V. and Satyr, L.M. (2015), “Organizational and economic aspects of production diversification of agricultural enterprises”, Visnyk ahrarnoi nauky, no. 8, pp. 66-70.
Bohuslavskyi, Ye.I. and Horianyk, O.V. (2016), “Diversification of agricultural production”, Ahrosvit, no. 8, pp. 40-47
Dobrianska, N.A. and Nikiforchuk, A.A. (2013), “Impact of the economic and institutional environment for the activities of diversified corporate groups”, Visnyk KhNAU, Kharkiv, no. 6, pp. 117–122.
Garazha, O.P. (2016), “Types and indicators of agricultural land using efficiency in land resources management of Ukraine”, Ekonomika i suspilstvo, iss. 3, pp. 52-60.
Riasnianska, A.M. (2016), “The efficiency estimation of land use at agricultural enterprises”, Naukovyi visnyk Uzhhorodskoho natsionalnoho universytetu: Seriia: Mizhnarodni ekonomichni vidnosyny ta svitove hospodarstvo, iss. 8, pp. 65-69.
Dankevych, Ye. and Dankevych, V. (2016), “Benefits and risks overconcentration agro-industrial production and land resources, economic, environmental and social aspects”, Agricultural and Resource Economics: International Scientific E-Journal, Vol. 2, no. 3, pp. 60–74.
Zinchuk, T.O. and Dankevych, V.Ye. (2016), “European experience of forming agricultural land market”, Ekonomika APK, no. 12, pp. 84–92.
Cabinet of Ministers of Ukraine (2011), Resolution of the Cabinet of Ministers of Ukraine "On approval of the Procedure for the development of land management projects that provide ecological and economic justification for crop rotation and landscaping" from November 2, 2011 № 1134, available at: http://zakon4.rada.gov.ua/laws/show/1134-2011-%D0%BF (access date March 18, 2018).
Downloads
Published
Issue
Section
License
Open-access articles (open-access journals)
Authors whose articles are published in open-access retain all rights to the content of the articles.
Open access articles are committed to be published under Creative Commons Attribution (CC BY) 4.0. This license allows others to distribute, edit, correct and build upon your work, even commercially, as long as they indicate your authorship. Detailed information at Creative Commons site: https://creativecommons.org/licenses/by/4.0/
Permissions for open-access journals
If the article is published in open-access under CC BY 4.0 or CC BY-NC 4.0 (which was possible till the 15th of December, 2018) licenses, users may reproduce it in accordance with their terms.
Additionally, if the article had been published under CC BY-NC 4.0 (this license authorizes others to download your works and share them with others as long as they indicate your authorship, but they can’t use them commercially in any case.), the use for the following commercial purposes requires permission:
– reproduction of content in a work or product intended for sale;
– reproduction in presentations, brochures or other marketing materials used for commercial purposes;
– distribution of the content to promote or market a person, product, course, service or organization;
– text and data mining for the purpose of creating a saleable product or product which benefits from promotional or advertising revenue;
– use of the content by a commercial entity or individual for the purposes of remuneration, directly or indirectly through sale, licensing, promotion or advertising;
– linking to the content (in an email, webpage, portable electronic device or otherwise) for the specific purpose of marketing or advertising a person, product, course, service or organization for commercial benefit.
For further details and permission requests, please contact.
