Sumy National Agrarian University invite to a lecture and discussion at Marxerg. 2, 1030 Wien June 20, 2007, 17:00-18:00

Sumy National Agrarian University Rural Development in Ukraine: Tendencies, Issues, and Perspectives by Serhiy Moroz Candidate of Economic Sciences Assistant Professor

Sumy National Agrarian University The Role of the Agricultural Sector in the Economy of Ukraine (%)

Dynamics of the Rural Population in Ukraine Sumy National Agrarian University

The Birth, Death, and Growth Rates of the Population in Ukraine (per 1000 inhabitants) (+,-) to 1990 Number of newborns: - Urban areas12,78,87,2 7,78,38,9 -3,8 - Rural areas12,711,19,28,79,09,19,39,4-3,3 Number of deceased: - Urban areas10,213,613,8 14,014,314,414,8+4,6 - Rural areas16,119,118,818,619,119,6 20,5+4,4 The overall population growth: - Urban areas2,5-4,8-6,6 -6,3-6,0-5,5-5,9-8,4 - Rural areas-3,4-8,0-9,6-9,9-10,1-10,5-10,3-11,1-7,7

Demographic Information about the Rural Resident Population (thousands) as % of 1991 Rural population16895,016537,415950,215742,615127,189,5 Rural population by age: - under working age3751,63625,93328,03076,22753,773,4 - at working age*8305,08091,07997,78210,38222,999,0 - over working age4838,44820,54624,54456,14150,585,8 Rural population structure (%): - under working age22,221,920,919,518,2-4,0 - at working age*49,248,950,152,254,4+5,2 - over working age28,629,129,028,327,4-1,2 * men: 16-59; women: Sumy National Agrarian University

Quantitative Changes in Employment of Rural Residents (at the beginning of the year)

Sumy National Agrarian University The Structure of Rural Population Employed in the Place of Residence, by Type of Economic Activity, 2005 (%)

Sumy National Agrarian University The Level of Unemployment in Ukraine on the Methodology of the International Labor Organization (the age group 15-70, %)

Sumy National Agrarian University Dynamics of Gross Agricultural Output, by Farm Type (in 2000 comparable prices, 1990 = 100%)

Sumy National Agrarian University The Structure of Gross Agricultural Output, by Farm Type

Sumy National Agrarian University The Share of Households with Average per Capita Monthly Expenses below the Living Wage* (%) * the 4th quarter of 2000 – UAH; 2001 – UAH; 2002, 2003, and the 1st quarter of 2004 – UAH; the 2nd quarter – the 4th quarter of 2004 – UAH; 2005 – UAH.

Sumy National Agrarian University Housing Amenities in Urban and Rural Areas in Ukraine (%)

Sumy National Agrarian University The Share of Rural Settlements with Social Infrastructure Objects (%) (+,-) to 1990 Pre-school organizations44,137,831,129,4-14,7 Schools52,452,852,449,2-3,2 Club-houses70,868,561,858,8-12,0 Libraries64,862,454,852,9-11,9 Hospitals5,74,93,12,7-3,0 Outpatient health facilities6,56,28,410,7+4,2 Retail shops209,7167,1104,066,5-143,2 Canteens63,437,835,628,4-35,0 Consumer service establishments5,20,70,31,1-4,1

Sumy National Agrarian University The Share of Social Infrastructure Facilities Needed Capital Repairs, 2005 (%)

Sumy National Agrarian University The Main Directions of the Agricultural Reform Program in Ukraine The Agricultural Reform Program in Ukraine Ensuring the real rights of landowners for land usage The creation of a legal framework for private ownership of agricultural land and assets The improvement of efficiency in the agricultural sector based on the transformation of collective and state farms to market-oriented private agricultural enterprises

Sumy National Agrarian University Structure of Agricultural Land, by Farm Type as % of 1990 mln. ha % % % % Agricultural land, total42,0100,041,9100,041,9100,041,8100,099,5 - agricultural enterprises38,792,135,284,029,971,422,152,957,1 - individuals2,76,45,613,48,520,314,935,6 5,5 times including household plots2,56,03,99,34,310,34,711,2188,0

Sumy National Agrarian University Selected Economic Indicators of Agricultural Enterprises (+,-) to 1995 Profit (million UAH)748,1834,1-330,8-4,62689,33584,8+2836,7 The profitability rate (%): - of all economic activities10,65,0-1,9-0,0312,614,6+4,0 - of crop production55,535,822,341,720,37,9-47,6 - of animal husbandry-16,5-6,6-19,8-18,8-11,35,0+21,5 The share of unprofitable agricultural enterprises (%)30,243,953,850,533,836,2+6,0 Losses into an average statistical unprofitable agricultural enterprise (thousand UAH)77,3228,7303,4382,1308,6356,8+279,5

Sumy National Agrarian University as % of 2002 Support measures from the "amber box"352,0167,41070,41527,84,3 times including: - reduction of costs of commercial credit119,613,4141,5350,0292,6 - financial support of small private farms4,539,35,127,36,1 times - financial support of crop and livestock production73,92,0421,0689,59,3 times - support of horticulture, wine grape and hops production118,15,0109,1175,0148,2 - partial compensation of costs of agricultural machinery and fertilizers35,937,8393,7270,07,5 times - other expenditures0,069,90,016,0- Source: Institute for Economic Research and Policy Consulting of Ukraine. Continued on the next page Budget Expenditures to Agriculture (million UAH)

Sumy National Agrarian University Budget Expenditures to Agriculture (continued) as % of 2002 Support measures from the "green box"1050,12655,11905,82426,2231,0 including: - research and education146,6295,161,8113,077,1 - pest and disease control37,2140,486,3131,43,5 times - crop selection and livestock breeding25,6238,2152,7224,08,8 times - inspection services related to food quality and safety265,1359,4446,9532,9201,0 - training and qualification improvements385,4458,8603,1881,5228,7 - land reform0,23,61,85,025,0 times - rural infrastructure7,925,415,617,0215,2 - environmental protection8,90,724,426,5297,8 - other expenditures173,21133,5513,2494,9285,7 Total budget expenditures1402,12822,52976,23954,0282,0

Sumy National Agrarian University The Main Directions of Complex Development of Rural Territories The directions of complex development of rural territories The directions of complex development of rural territories The creation by the State of the system to regulate demographic processes in rural regions The reduction of the gap in living conditions between urban and rural areas The reduction of the gap in living conditions between urban and rural areas Ensuring of reliable maintenance of social infrastructure The promotion of rural employment growth on the basis of development of state support for the stimulation of entrepreneurship The creation of conditions for the preservation and development of small, remote, and depression rural settlements Assistance to income growth of the rural population Assistance to income growth of the rural population

Sumy National Agrarian University Acceleration of agrarian reform General Measures for Stabilization of the Agricultural Sector (the 1 st point of view) Resumption of activities of agricultural cooperative institutions Implementation of the state system for the estimation and the control of the quality of agricultural products Solution to the problem of the lack of qualified specialists for agriculture Development of market infrastructure Elaboration and approval of a complex program for support and development of rural areas Improvement of agricultural competitiveness and adaptation of its state support mechanisms under WTO rules Improvement of agricultural taxation Strengthening agricultural budget support Providing of equivalence in economic relations between agriculture and other branches of the Ukrainian economy

Sumy National Agrarian University Comparative Evaluation of Approaches for Development of Rural Areas in Ukraine THE CURRENT APPROACHTHE NEW APPROACH Rural regions can resolve their social and economic problems on the basis of the development of agricultural production Rural territories are multi-functional systems which consist of social, demographic, economic, ecological, and other components. The development of rural territories should be based on state target programs Direct budget transfers and subsidies mainly for support of certain agricultural products Use of limited budget resources for solutions of actual problems of rural territories The primary goal: Increase of the volume and the efficiency of agricultural production The primary goal: Development of rural territories and sustainable agriculture through the improvement of competitiveness and diversification of the rural economy

Sumy National Agrarian University Directions of rural development policy Development of sustainable agriculture in order to protect the natural environment and to preserve the rural landscapes Development of sustainable agriculture in order to protect the natural environment and to preserve the rural landscapes Introduction of measures to improve the quality of rural life and to increase rural incomes Introduction of measures to improve the quality of rural life and to increase rural incomes Main Directions of Rural Development Policy in Ukraine (the 2 nd point of view) Increase of agricultural productivity and competitiveness through the establishment of a favorable investment environment and improvement of the quality of human capital Increase of agricultural productivity and competitiveness through the establishment of a favorable investment environment and improvement of the quality of human capital Implementation of programs for the development of less favored areas Implementation of programs for the development of less favored areas

Sumy National Agrarian University Poverty reduction in rural areas Diversification of the agricultural production Cooperation and economic integration of rural households Improvement of social and physical infrastructure Development of non-farm employment opportunities in rural regions Increase ecological sustainability of production activities in rural territories Preparation of rural areas for integration of Ukraine into the global economy Preservation and protection of rural landscapes Primary Goals of the Rural Development Strategy

Sumy National Agrarian University Human capital Formation of a national extension service Implementation of a program similar to LEADER+ Introduction of measures to improve the education level in rural areas Directions for Development of Rural Human Capital

Sumy National Agrarian University Development of a proper legal framework to establish predictable and transparent rules in the agricultural market Proposed Components of the Agricultural Strategy in Ukraine Introduction of economic mechanisms to complete farm restructuring, to improve the competitiveness of agricultural products, and to attract investments Formation of the agricultural credit system Implementation of other essential components to accelerate economic reforms in agriculture Promotion of cooperation between agricultural producers

Sumy National Agrarian University Thank you for your attention Contact: Serhiy Moroz 160, Kirov St. Sumy, Ukraine