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Corresponding author:
1 Mykolayiv National Agrarian University, Ukraine.
E-mail: timofany@ukr.net

DOI: https://doi.org/10.30525/2256-0742/2019-5-1-218-223

SUSTAINABLE DEVELOPMENT OF AGRICULTURAL PRODUCERS 
IS A CONDITION FOR THEIR SUCCESSFUL FUNCTIONING  

IN THE WORLD MARKET
Hanna Fedosieieva1

Abstract. Purpose. Substantiation of a holistic system of goals of steady development of agricultural producers 
on the conditions of their successful functioning in the world market taking into account global and local trends 
in the development of the world economy, peculiarities of agricultural activity in Ukraine, and directions of 
development of the world agricultural market. The methodology of research. The reliability of the study is due to 
the use of an integrated approach and a significant set of research methods, in particular: systematic approach – 
in studying the connections between phenomena and processes in the system of formation of a holistic system 
of steady development of agricultural producers on the conditions of their successful functioning in the world 
market; monographic – for a comprehensive and in-depth study of the peculiarities of the modern manifestation 
of the key factors of sustainable development of agricultural producers, provided that they operate in the world 
market; dialectical and abstract-logical – when conducting theoretical generalizations and forming conclusions; 
the method of scientific abstraction – with a selection of key factors that determine the steady development of 
agricultural producers; etc. Findings. Considered the main goals of sustainable development on the basis of values, 
principles, and key factors of the development of the world economy. Determined the main global tendencies 
of development of the world agricultural market. On the basis of the study, an integrated system of goals for the 
steady development of agricultural producers in the conditions of their functioning in the world market has been 
formed. It is noted that the basis of the sustainable development of any system is a combination of economic 
development with a minimal negative impact on the environment and the socialization of newly created economic 
transformations. Originality. The integrated system of goals of steady development of agricultural producers in the 
world market, which includes three interconnected blocks: economic, social and ecological, for which each priority 
is defined, is substantiated. The main conditions for achieving these goals are presented. Practical implications.  
The obtained results can be used in substantiating directions of the formation of stable competitive advantages of 
agricultural producers in the world market.

Key words: sustainable development of agricultural producers, world market, agricultural productivity, profitability 
of agricultural activity, social development, ecological development, innovative technologies.

JEL Classification: Q17, D92, Q50

1. Introduction
The United Nations Millennium Declaration, adopted 

in 2000 by the 189 countries at the UN Millennium 
Summit, defined the Millennium Development Goals, 
a comprehensive framework of values, principles, and 
key development drivers by 2015. In September 2015, 
in the framework of the 70th session of the UN General 
Assembly in New York, the United Nations Summit 
on Sustainable Development, and the adoption of the 
Agenda for Development after 2015, which approved 
new development benchmarks, took place. The final 
document of the Summit “Transforming our world: 
the 2030 Agenda for Sustainable Development” 

approved 17 Sustainable Development Goals and 
169 Objectives. More than 800 leading experts in the 
thematic areas of sustainable development have been 
involved in adapting identified goals and objectives in 
Ukraine. Representatives of ministries and agencies, 
government agencies, UN agencies in Ukraine, 
international organizations, the business community, 
expert community, public organizations (primarily 
those representing the interests of the most vulnerable 
groups), and civil society represented the proposals 
for sustainable development of Ukraine. This work 
was supported by all UN agencies in Ukraine, the 
United Nations Development Program in Ukraine, 



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the Green Economy Program implemented by the 
German Society for International Cooperation 
on behalf of the Federal Ministry for Economic 
Cooperation and Development of Germany and 
jointly with the Institute of Demography and Social 
Studies named after M. V. Ptukha, National Academy 
of Sciences of Ukraine. As a result of this work, the 
goals of sustainable development of Ukraine in four 
directions were identified: fair social development; 
sustainable economic growth and employment; 
effective management; environmental balance 
and sustainability. The public vision of Ukraine's 
development until 2030 includes such benchmarks for 
achieving as the welfare and health of the population, 
which will be provided by the innovative development 
of the economy, built on the sustainable use of natural 
resources. The structure of exports envisages changes 
aimed at shifting from raw materials and products of 
primary processing to high value-added products 
and services. Economic growth should be based on 
the green economy model. Thanks to energy saving 
measures and the use of energy efficient practices, the 
energy intensity of the gross domestic product should 
be substantially reduced.

Concerning agriculture, the national goals of the 
sustainable development of Ukraine in this direction 
are determined by: increasing the productivity 
of agriculture twice, first of all, due to the use of 
innovative technologies; ensuring the establishment of 
sustainable food production systems that contribute to 
the conservation of ecosystems and gradually improve 
the quality of land and soils, primarily through the 
use of innovative technologies; the restoration of 
degraded lands and soils with the use of innovative 
technologies; reduction of food loss in production 
and supply chains. In addition to the aforementioned, 
the Ministry of Economic Development and Trade 
of Ukraine has developed a number of tasks, which 
should be carried out according to the types of 
economic activity (to create financial and institutional 
systems that will ensure the development of scientific 
research and scientific and technical development).  
In addition, specific tasks relate to the rural population 
(increase the level of employment, provide access to 
vocational education, ensure access to social services), 
infrastructure provision of rural life (to develop 
a high-quality, reliable, sustainable, and accessible 
infrastructure based on the use of innovative 
technologies) and other.

The objective of the work is to substantiate the 
integral system of tasks of sustainable development 
of agricultural producers in the conditions of their 
functioning in the world market taking into account 
global and local trends of world economic development, 
peculiarities of agricultural activity in Ukraine, and 
directions of development of the world market for 
agricultural products.

2. The system of sustainable development  
of agricultural producers

The globalization of the world economy has led 
to the emergence and rapid development of the 
following processes: a violation of the stability of 
metabolic processes in the biosphere due to man-
made and anthropogenic burden; world food problem; 
stimulation of ecologization of agricultural production 
and increase of demand for organic agricultural products 
in the developed countries of the world; increase of 
world volumes of production of genetically modified 
agricultural products; annual reduction of world land 
(including agricultural land) and water resources; rapid 
development of bio- and energy-efficient technologies, 
etc. The identified processes directly affect the trends of 
world trade in agricultural products.

Thus, taking into account the identified goals of 
sustainable development at the international and national 
levels, as well as globalization processes in the world and 
their impact on the development of the world agricultural 
market, we have identified the system of sustainable 
development of agricultural producers in the conditions 
of their functioning in the world market, Figure 1.

Sustainable development of agricultural producers in 
the conditions of their functioning in the world market 
should include three interconnected components: 
economic, ecological, and social one. After all, the 
basis of the sustainable development of any system 
is a combination of economic development with 
a minimal negative impact on the environment and the 
socialization of newly created economic transformations. 
In general, achievement of certain goals can be achieved 
at the expense of innovative development of agricultural 
commodity producers and a balanced state social and 
economic policy in the field of agriculture.

The block of economic goals of the sustainable 
development of agricultural producers in the conditions 
of their functioning in the world market is quite extensive, 
it is determined by the peculiarity of the development 
of certain branches of agriculture, the location of 
agricultural producers, the level of their logistical 
support, the size of certain agricultural enterprises, the 
orientation to a greater extent on internal or external 
market and other factors. In addition, the realization of 
the economic goals of sustainable development directly 
affects the resolution of social and environmental issues 
in rural areas.

3. The economic component  
of ensuring the sustainable development  
of agricultural producers

In general, the basis for solving the problem of 
the sustainability of the development of agricultural 
commodity producers, including, in the conditions of 
their functioning in the world market, is the solving of 
the following tasks:



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1. Improving the productivity of agricultural production. 
At present, in Ukraine, increasing productivity of 
agricultural production is achieved mainly through the 
use of quality seed materials, mineral fertilizers, and plant 
protection products. At the same time, the managerial, 
personnel, and technical components of productivity are 
often not taken into account.

In our opinion, the main components of the 
formation of productivity of agricultural production are 
not only available land resources, used seeds, fertilizers, 
and plant protection products. We believe that the 
greatest influence on the productivity of agricultural 
production is carried out by agronomy management of 
agricultural producers, the expediency of using certain 
agrotechnologies and their level of innovation, the 
presence of related systems in the production process 
(drying systems, cleaning of agricultural products, the 
possibility of delivering them with a minimum level of 
losses and capacity for its storage).

2. Production of niche and organic agricultural 
products.

Today, at agricultural enterprises of different sizes and 
forms of ownership, cultivating crops is predominantly 
subject to the conditions of the agricultural market, and 
economically attractive crops are grown, the realization 
of which makes it possible to obtain a stable profit.  
The production of monocultures (corn, rape, soybeans, 
grain crops) and saturation of field crop rotation 
with sunflower prevails, which leads to intensive use 
of nutrients from the soil harvesting complex and 
depletion of soils. Such a situation negatively affects 
not only the environment but also depletes the natural 
resources of the region, which in the long run may lead 
to a complete decline of rural areas. In such conditions, 
stimulation of the production of niche agricultural 
products at the regional level will contribute not only 
to solving economic and environmental problems in the 
activities of agricultural producers but also to improving 

Sustainable development of agricultural producers in the conditions of their functioning in the world 
market

Economic component Social component Ecological component

Improving the productivity of 
agricultural production

Development of social 
infrastructure in the countryside

Increase in the wages of 
agricultural workers

Increase in the employment rate 
of the rural population

Increase in profitability of 
agricultural activity

Control over the use of 
genetically modified 

organisms

Application of biological 
means of protection of plants 

and organic fertilizers

Restoration of degraded 
agricultural lands

Production of niche and 
organic agricultural products

Increase in exports of 
agricultural products with 

added value and 
corresponding quality

Development of infrastructure 
provision of agricultural 

production

Development of scientific research and scientific and technical 
developments

Import of innovative technologies
Improvement of the MTB of agricultural commodity producers

Development of the internal market for environmentally friendly 
products

Development of agricultural certification system
Improvement of legal regulation of relations in the agrarian sector

The effective socio-economic policy of rural development

Improvement of the quality of life 
in the countryside

Rational use of land 
resources

Reducing the level of 
pollution of reservoirs

Figure 1. The system of sustainable development of agricultural producers  
in the conditions of their functioning in the world market

Source: the author’s research



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the social component of rural development. In addition, 
the production of niche products is a priority direction 
for the agrarian sector of Ukraine, declared in the State 
Strategies 3 + 5, aimed at strengthening the competitive 
advantages of small and medium-sized agricultural 
producers at the national and international levels. 
At the same time, it should be understood that the 
production of certain types of niche products should be 
directly proportional to the peculiarities of the regional 
conditions of agricultural activity and correspond to 
trends of development of world markets of niche types 
of agricultural products. In this context, in certain 
regions of Ukraine, it is appropriate to stimulate the 
production of organic agricultural products, honey, 
garlic, sorghum, walnuts, flax, mustard, raspberries and 
blackberries, beans, peas, and blueberries.

Organic farming is a sustainable form of agriculture 
that involves cost-effective resource management and has 
great potential for growth around the world. Numerous 
studies confirm that organic farming provides improved 
environmental and resource provision (land, water, 
etc.), protection of animals, climate, income situation 
for people employed in agriculture and, in general, for 
rural areas.

The official statistical surveys of the International 
Federation of Organic Agriculture Movements 
(IFOAM) confirm that in 2002, in Ukraine, there 
were registered 31 farms that received organic status, 
in 2017 there were already 430 certified organic farms, 
and the total area of certified organic agricultural land 
amounted to 423.5 thousand hectares.

Most Ukrainian organic farms are located in Odesa, 
Kherson, Kyiv, Poltava, Vinnytsia, Transcarpathian, 
Lviv, Ternopil, Zhytomyr regions. Ukrainian certified 
organic farms – of varying sizes – range from several 
hectares, as in most European countries, to several 
thousand hectares of arable land.

Studies of the Federation of the Organic Movement 
of Ukraine show that the modern domestic consumer 
market for organic products in Ukraine began to 
develop from the beginning of the 2000s, amounting 
to: 400 thousand Euros in 2006, 500 thousand Euros in 
2007, 600 thousand Euros in 2008, 1.2 million Euros in 
2009, 2.4 million Euros in 2010; this figure increased to 
5.1 million Euros in 2011, to 7.9 million Euros in 2012, 
to 12.2 million Euros in 2013, to 14.5 million Euros in 
2014, to 17.5 million Euros in 2015, and to 21.2 million 
Euros in 2016.

Due to favourable climatic conditions and fertile soils 
of Ukraine, local organic farming has great potential 
in global competition and offers additional prospects 
for the highly effective development of domestic 
agricultural producers. However, currently, Ukrainian 
agricultural producers predominantly produce organic 
raw materials for export. Development of the domestic 
market is still at its beginning, but it is already possible 
to recognize the tendency for positive development. 

Spatial proximity to the EU export market and 
overcoming barriers to trade create an opportunity for 
foreign direct investment and the transfer of services 
and technologies. The modernization of agriculture 
and the improvement of working conditions associated 
with this will have a positive effect on the further 
development of the Ukrainian organic sector.

3. The development of infrastructure provision of 
agricultural production in the conditions of sustainable 
development of Ukrainian agriculture should be 
directed not only to increase of the production of this 
product but also to the creation of a comfortable social 
environment, a favourable psychological climate in 
the labour collective of the agricultural enterprise, the 
social motivation of labour. In addition, the production 
activity of agricultural producers must take into account 
the environmental situation in a particular region and 
be realized in such a way that not worsen the present 
state but improve it.

Currently, it is considered that enterprises producing 
agricultural machinery and equipment, mineral 
fertilizers, chemical ameliorants, seeds, and other 
materials for agriculture, research institutes form the 
production infrastructure of agriculture. At the same 
time, the most important are the research organizations 
and institutes that are developing: the latest technologies 
for the protection, reproduction, and enhancement of 
soil fertility; technical means of ecologically safe use of 
water resources; knowledge intensive technologies of 
organic crop production; resource-saving technologies 
of production of agricultural products, etc. In our 
opinion, the infrastructure support for the production 
of agricultural products, in addition to the above, should 
include the capacity for storing the produced products 
in a qualitative state for the longest period of time and 
at least educational and recreational facilities that will 
contribute to the improvement of the quality of labour 
resources of agricultural producers.

The development of infrastructure support for 
agricultural production at the present stage of 
development of our country is possible only if the efforts 
of the state and private sector with the international 
institutions are combined.

It has been established that almost all funds allocated 
from the public budget, provided by international 
donor countries, international organizations to the state 
or provided by international financial institutions on 
a commercial basis, in the context of the construction 
of infrastructure facilities, are directed mainly to the 
development of a system of elevator capacities, vegetable, 
and fruit storages. At the same time, in our opinion, 
the priority should be given to the development of 
research institutions that are potentially able to provide 
innovative agricultural development, to develop rural 
infrastructure, and to improve the environment. At the 
same time, if private enterprises receiving commercial 
loans themselves decide on the direction of the received 



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funds, then the state must develop, present, and raise 
funds for the outlined projects for the development 
of infrastructure support for agricultural production.  
In the case of their successful realization, domestic 
agricultural producers will be able to improve their 
competitive advantages in the world market. 

4. Increase in exports of agricultural products with 
added value.

The question of formation of added value in 
agriculture is rather controversial; politicians often 
speculate on it, scientists and practitioners argue. So, 
it is quite commonly believed that the added value in 
agriculture is the cost of processing raw materials and 
bringing them to a ready-to-use product. For example, 
grain – raw materials, flour – a product of the added 
value of raw materials “grain,” bakery products – 
a product of the added value of raw materials “flour” etc. 
In this context, the data of the State Statistics Service of 
Ukraine should be considered. The largest share in the 
commodity structure of exports of agricultural products 
and food industry in 2017 was made up of herbal 
products, mainly due to supplies of grain to foreign 
markets – 70.54%. Fats and oils of vegetable or animal 
origin were exported in the amount of 4605.7 million 
UAH, with the basis of exports of sunflower oil – about 
70%. The finished food products accounted for 15.93% 
of the total export value. Based on the data presented 
and the abovementioned approach to the definition 
of added value in agriculture, we can state that, in fact, 
Ukrainian enterprises are predominantly exporters of 
products with no added value.

In addition to this thought, one should pay attention 
to the approach of Adam Smith and his followers, 
including P. Samuelson. Adam Smith, in his work, 
“Inquiry into the Nature and Causes of the Wealth of 
Nations,” argued: “The cost added by the workers to 
the cost of materials is broken down by itself ... into two 
parts, one of which goes to pay their wages and the other 
to pay the profit of their entrepreneur for the entire 
capital, which he advanced in the form of materials 
and wages.” Consequently, the added value consists of 
labour, profits, and taxes minus subsidies. The same 
added value is deducted by subtracting intermediate 
consumption from the total output.

According to the Public Council under the Ministry 
of Agrarian Policy and Food of Ukraine, the share of 
added value in the total output of agricultural products 
in 2016 amounted to 42.4%, while in general in the 
Ukrainian economy the same indicator was only 37.6%.

Consequently, Ukrainian enterprises mainly export 
agricultural products as raw materials, although they 
receive a higher share of added value in the production 
of agricultural products than in the overall economy of 
Ukraine. Therefore, it is partly possible to agree with 
the opinion that spacecrafts, rocket space complexes, 
and carrier rockets are the finished products for 
enterprises of the space industry of Ukraine, as well as 

bulls, dairy raw materials, grain of wheat or sunflower 
seeds are finished products for farm enterprises.  
At the same time, we believe that the urgent issues of 
the present in the activities of agricultural producers 
are the increase in production and sales (including the 
external market) of processed products. At the same 
time, it is not necessary to mix up the degree of depth of 
processing of agricultural products with its added value. 
Indeed, even deep sub-farm processing or production 
of food is equated and counted (added) to agricultural 
production, provided that the products are produced 
within the limits of one economic entity from their own 
agricultural raw materials.

It should be noted that the direction of activity of 
agricultural producers in the world market is formed, 
including, under the influence of demand and supply of 
certain types of agricultural products. Global demand 
for grain is much higher than world demand for flour, 
while global demand for sunflower oil is higher than 
global demand for sunflower seeds. Of course, it should 
be kept in mind that processed products are more 
expensive, and the process of processing is accompanied 
by the creation of new jobs; social development of 
territories where processing takes place; increase in 
revenues to budgets of different levels, etc. From this, 
when increasing exports, it is necessary to focus on 
increasing the level of the so-called added value, first of 
all, for those types of products that have a corresponding 
demand on the world market, can be produced and sold 
by small and medium-sized agricultural enterprises 
(products of vegetable growing, beekeeping, livestock 
farming, fruit and berry farming, etc.), create conditions 
for the socio-economic development of rural areas and 
minimize (or do not) pollute the environment. All 
this can be realized only with the support of the state 
(financial, regulatory), the influence of international 
and Ukrainian public organizations, raising the level of 
consciousness of agrarian business, the efforts of local 
settlement district and regional councils.

Thus, in order to increase the volume of agricultural 
production and its exports, a general improvement of 
the investment climate in the state and the investment 
attractiveness of agricultural enterprises is necessary; 
well-considered real support of the state is aimed at 
finding additional sources of financing for existing 
projects on the construction of processing facilities 
in rural areas with the input of raw materials of local 
agricultural enterprises and creation of favourable 
conditions for the search of markets for newly created 
products taking into account the state of food security 
of the country; effective cooperation of all stakeholders 
(state, public and business) to implement the most 
promising projects for the creation of added value of 
agricultural products in the conditions of sustainable 
development of agriculture in Ukraine.

5. Increase in profitability of agricultural activity in 
the conditions of sustainable development is possible 



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due to increase in volumes of production and sales of 
manufactured products, diversification of agricultural 
activities with an orientation towards organic and 
niche agricultural products, reduction of the cost of 
production of agricultural products, restoration of 
parity pricing in the agro-industrial complex of Ukraine.

4. Conclusions
Sustainable development of agricultural producers in 

the conditions of their functioning in the world market 
can be achieved at the expense of: constant development 
of scientific research and scientific and technical 
developments in domestic agriculture, creation of 

favourable conditions for the implementation of foreign 
economic activity by agricultural commodity producers, 
including for the import of innovative agricultural 
technologies; improvement of the material and 
technical base of agricultural producers; development 
of the internal market for environmentally friendly 
products; improvement of the system of certification of 
agricultural production; improvement of legal regulation 
of relations in the agrarian sector; realization of effective 
socio-economic policy of rural development. It is the 
effective fulfilment of the set tasks that will enable the 
formation of sustainable competitive advantages of 
agricultural producers in the world market and poses 
problems for further research by the author.

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