[On the problem of price parity in [Ukraine's] agro-industrial complex: The discussion paper of the Iowa State University's project Agrarian Policy in Ukraine]
2000
Puhachov, M.
The author's view is expressed as regards to the problem of unprofitability of domestic agricultural enterprises, supporting the incomes of agrarian commodity producers, etc. Prerequisites of the public perception the problem of industrial and agricultural prices parity, the notion of "price parity" are considered. The examples from the history of development of Ukraine' agriculture and changes in price equivalent for industrial and agricultural production are given. In order to confirm the fact that the Ukrainian situation is not exclusive the attention is paid to provisions of the economic theory and some countries' experience. The analysis of economic situation in Ukraine in 1990-2000 reveals the causes of crisis in the agrarian sector and two negative trends among them: a raise in prices and a fall in incomes of the population. For the period of 1990-1998 the consumer price index exceeded the two-time mark (2.17), and the money incomes of the population fell down from 110 bln. rubles to 55 bln. hryvnyas, that is the aggregate solvency decreased by more than 4 times. Over the last years a drop in labour productivity and production effectiveness took place. In order to guarantee the industry's profitability at the expence of subsidies in the conditions of the low level of productivity the sizable funds are needed. The problems of agrarian markets which are aggravated by the correlation of prices in comparison with the countries of market economy, and expences on transport, concluding contracts, etc., are tackled. The conclusion is made that the beginning of 90-s was characterized by full replacement of economic system for Ukraine: limiting the state intervention into the activity of management subjects, suppressing the donating the production of agricultural commoditires, liberalising the foreign economic activity, etc.
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