Peculiarities of economic efficiency formation of domestic organic producers’ activities

Authors:
D.S. Kropyvko
Pages:
222 - 229
Language:
Ukrainian
Cite as:


Annotation

The aim of the article. The aim of the article is to analyze peculiarities of economic efficiency formation of domestic organic producers’ activities. Grouping of organic producers is made in the article. Special attention to peculiarities of organic production is paid. Comparison of prices on organic and traditional agricultural products is done. The analysis of the organic production profitability is suggested.

The results of the analysis. In order to identify regions, where organic farming is better developed, grouping of domestic organic producers is done. They were placed by regions in order of decreasing.

107 organic producers operate in Ukraine. Regions with the biggest amount of organic producers are Kyiv region (15,1% from general amount of organic producers), Lviv region (9,4%), Zhytomyr region (8,5%), Kharkiv region (7,5%), Vinnytsia (7,5%) and ARC (7,5%). It is caused by the presence of a large urban population and remoteness from the capital and borders. There are no organic producers in Ivano-Frankivsk, Luhansk, Cherkasy and Dnipropetrovsk regions. But in Dnipropetrovsk region there are two organic operators which are engaged in processing, export and import operations, in Cherkasy and Ivano-Frankivsk regions – one operator.

It is known, that the price of organic products is much higher than the price of traditional. This is due to the cost of organic certification, complexities in the sales processes, losses from denying use of fertilizers and other crop protectors, which are used by traditional producers. Therefore it is advisable to compare prices of organic and traditional products in Ukraine and in the target company “Galeks-Agro” for 2010-2013. Organic products price on average of about 108% is higher than traditional products price. The biggest difference in price is observed for such crops as millet and buckwheat. But it is important to take into account the fact that the company is engaged in exporting of organic products to EU countries, where organic products are in high demand and therefore price is higher than in Ukraine. On the other hand, there are difficulties in transporting of such products. This service is quite costly, because organic agricultural products must be transported in special conditions.

Economic efficiency of domestic organic producers’ activities can be better seen by studying of such indicator as profitability. The dynamics of organic farming profitability for winter wheat, rye, buckwheat, corn, barley, oats and millet is characterized. Let’s compare economic efficiency of organic and traditional products. In Ukraine, the profitability of wheat is about 11,7%, corn – 38,6%. The profitability of organic wheat is higher on 179,63%, corn – on 257,77%. It shows that the demand for organic products is growing rapidly, despite the fact that its price is much higher than the traditional agricultural products price.

Conclusions and directions of further researches. As a result of organic producers grouping by regions in Ukraine was found that their location depends on the number of urban population and remoteness from the capital and the borders of the EU, where the demand for organic products is very high. The price analysis showed that the organic products price is on 108% higher than the traditional products price. Analysis of the direct costs structure on organic products shows, that in organic crop production the biggest are fuel costs. In organic animal breeding the biggest are feed costs. Thus, the way to reduce these costs should be found in future research.


Keywords
organic products, production profitability, organic producers, price comparison, productivity


Links
  1. Artysh, V.I. (2009). Orhanizatsiino-ekonomichni peredumovy formuvannia rynku ekolohichno chystoi productsii v Ukraini [Organizational and economic prerequisites ecological market formation in Ukraine]. Ekonomika APK – Economics of agribusiness, 2, 117-120 [in Ukrainian].
  2. Zinovchuk, N.V., Zinovchuk, V.V., & Skydan O.V. (2011). Orhanichne silske hospodarstvo ta yoho rozvytok v umovakh kooperatsii [Organic agriculture and its development in the conditions of cooperation]. Zhytomyr: Ruta [in Ukrainian].
  3. Palamarchuk, M.M. (2013). Efektyvnist vyrobnytstva zernovykh kultur u silskohospodarskykh pidpryemstvakh Kyivskoi oblasti [The efficiency of crop production in agricultural enterprises of Kyiv region]. Ekonomika APK – Economics of agribusiness, 8, 110-115 [in Ukrainian].
  4. Prokopchuk N., Zihh T., & Vlasiuk Y. Orhanic biznes-dovidnyk Ukrainy (vypysk 2) [Organic business-guide in Ukraine (issue 2)]. Swiss-Ukrainian project «Organic Market Development in Ukraine» (2012-2016). Kyiv [in Ukrainian].
  5. Rudnytska, O.V. (2007). Orhanizatsia marketynhovoi diialnosti na rynku orhanichnoi ahroprodovolchoi prodyktsii [Organization of marketing activities on the organic market]. Naukovyi visnyk NAU – Science Bulletin of NAU, 110, 339-342 [in Ukrainian].
  6. Sedikova, I.O., & Korenman, Y.M. (2012). Orhanіchne zernovyrobnytstvo: mozhlyvostі ta perspektyvy rozvytku [Organic grain production: Opportunities and development prospects]. Ekonomika kharchovoi promyslovosti – Economics of Food Industry, 4, 80-83 [in Ukrainian]. 
  7. Vlasenko, N.S. (n.d.). Silske hospodarstvo Ukrainy za 2012 rik [Agriculture of Ukraine for 2012]. ukrstat.gov.ua. Retrieved from http://www.ukrstat.gov.ua [in Ukrainian]. 
  8. Skrypchuk, P.M. (2010). Ecolohichna sertyfikatsia v sferi pryrodokorystuvannia: ekoloho-ekonomichni zasady rozvytky [Ecological certification in environmental management: ecological and economic foundations: monograph]. Rivne: NUVMNRU [in Ukrainian].
  9. Chaika, T.O. (2011). Peredumovy rozvytku rynku organichnoi prodyktsii v Ukraini [Prerequisites for the organic market development in Ukraine]. Marketynh i menedzhment innovatsii – Marketing and Management of Innovations, 4(1), 233-240 [in Ukrainian].
  10. Shevchuk, H.M. (2011). Ecoloho-ekonomichne obhruntuvannia orhanichnoho silskohospodarskoho vyrobnytstva (na prykladi Rivnenskoi oblasti) [Ecological and economic assessment of organic agricultural production (in Rivne region)]. Marketynh i menedzhment innovatsii – Marketing and Management of Innovations, 4(1), 241-251 [in Ukrainian].