The economic mechanism for the formation of land rent at agricultural enterprises

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The current stage of land relations in the agrarian sector is characterized by significant development of lease relations. Today, these relationships are heavily influenced by competition for land tenure, leading to increased land payments. Considering this, as well as the prospects for the agricultural land market formation, the task was to assess the dependence of agricultural land rent on the intensity and economic efficiency of wheat, corn for grain, sunflower production. The research was carried out on the example of agricultural enterprises of Kharkiv region. Grouping, a graphical method was chosen as research methods. The subject of the study was also the rent dynamics for agricultural land in Kharkiv region and Iowa, the USA. The obtained results made it possible to establish the fact that the rent value depends on the total amount of expenses, and the expenses on the articles «wages», «depreciation». It is concluded that the reasons for this may be related to the investment of these enterprises in human capital and the fixed assets that make them lease on more favorable terms for share owners. No dependence was found between the rent value on the value of the yield and the financial result on the selected crops. At the same time, there is a clear tendency that with the increase in the value of the rent, there is an increase in the ratio of its value to the value of costs and income from the crop sector. It is concluded that this can lead to a decrease in investment opportunities for the enterprises with the highest level of lease payments for agricultural land.

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    • Figure 1. The dynamics of rent in Iowa in 1999–2018, USD / acre
    • Figure 2. Dynamics of rent per a hectare of arable land in Kharkiv region in 2010–2018, USD / ha
    • Figure 3. Relationship between the wage costs per 1 ha of wheat and corn for grain and rent for 1 ha of arable land in agricultural enterprises of Kharkiv region in 2018 (data grouped)
    • Figure 4. Dependence between the amount of depreciation per 1 ha of sown wheat and corn for grain and the amount of rent per 1 ha of arable land in agricultural enterprises of Kharkiv region in 2018 (data grouped)
    • Figure 5. Relationship between profit value per 1 sowing area and rent for 1ha of arable land at the agricultural enterprises of Kharkiv region in 2018 (data grouped)
    • Table 1. Impact of individual crops production costs on the value of rent per 1 ha of arable land in agricultural enterprises of Kharkiv region in 2018
    • Table 2. Influence of the production efficiency level of individual crops on the amount of rent per 1 ha of arable land at the agricultural enterprises of Kharkiv region in 2018
    • Table 3. Dependence of rent on expenses, income and size of enterprises in Kharkiv region in 2018