Structural modeling of the financial support for the Ukrainian agrarian sector

  • Received June 22, 2018;
    Accepted August 13, 2018;
    Published September 6, 2018
  • Author(s)
    Lyudmyla Katan ,
    Olena Dobrovolska
    ORCID Researcher ID , José Manuel Recio Espejo
  • DOI
    http://dx.doi.org/10.21511/imfi.15(3).2018.17
  • Article Info
    Volume 15 2018, Issue #3, pp. 199-211
  • TO CITE АНОТАЦІЯ
  • Cited by
    5 articles
  • 1065 Views
  • 142 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Financial support for the agrarian sector is the priority of economic policy in many countries of the world, as it plays a key role in achieving the goals of sustainable development, in particular poverty reduction, food security, environmental improvement, including reducing CO2 emissions, reducing water pollution, etc. In the main, the financial support for the agrarian sector of the various countries is multi-channel and combines budget financing and financial market opportunities. At the same time, for many countries, including Ukraine, the issue of the ratio of these sources of financing and their influence on the development of agricultural production remains unresolved. The analysis of budget financing has shown a lack of stability in the implementation of financial support programs for the agrarian sector of Ukraine, which affects the financial sustainability of enterprises and their ability to attract market financing. In the article, using the structural modeling, the necessary amount of financing for the agrarian sector was determined through budget financing, bank lending and agro-insurance. The results of the calculations showed that the actual size of bank lending to agrarian enterprises is significantly lower than the simulated values. At the same time, budget financing creates conditions for ensuring financial sustainability of agrarian enterprises and encourages them to use bank lending, while increasing budget financing reduces the need for agro-insurance operations, which is a negative consequence of its use.

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    • Figure 1. The structural modeling formation
    • Figure 2. Regression relationships between latent variables for the first model, where ZETA1 and ZETA2 are the residuals
    • Figure 3. Regression relationships between latent variables for the second model, where ZETA2 and ZETA3 are the residuals
    • Figure 4. Overall view of the structural equations model for both cases
    • Figure 5. Dynamics of changes in the real and simulated levels of lending to agriculture as to public sector financing
    • Figure 6. Dynamics of changes in the real and simulated levels of agricultural insurance as to public financing of the sector
    • Table 1. Funding allocation for agriculture in Ukraine during 2009–2017
    • Table 2. Results of structural modeling of the indices relationship for the overall situation in agriculture, state and non-state financing, i.e., lending
    • Table 3. Results of structural modeling of the indices relationship for the overall situation in agriculture, state and non-state financing, i.e., agro-insurance
    • Table 4. Simulated values of non-state financing of Ukrainian agriculture in terms of sector lending and agro-insurance
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Investment Management and Financial Innovations