Abstract

The dynamics of prices for agricultural products, the factors that affect the pricing policy in modern conditions are considered in the article. Price is the most important element of the economic mechanism of the modern agrarian system, and in a market economy inefficient use of the price mechanism or complete rejection of price regulation results in large-scale negative consequences for the development of agricultural production of the country. Price disproportions arising in the system of agro-industrial complex between its separate links cause necessity of the state regulation of pricing. Agricultural producers cannot control the production of their products to the same extent as non-agricultural firms because the total output is determined by the work of many relatively small producers operating independently, and secondly, production results depend largely on weather conditions and biological systems. The end result in most cases depends on many uncontrolled factors that affect the yield or animal productivity – weather, natural disasters. The abilities of agricultural producers to respond to changing market conditions are quite limited - it is impossible to quickly stop or change agricultural production. Conversely, processing enterprises and consumers can adapt to changes in the supply of agricultural products in a shorter time than farms to changes in factors of production. The existing pricing mechanism for agricultural products is still imperfect and a system of measures to improve its functioning at all levels of state and legislative power is needed. An important place in agrarian transformations is occupied by the issues of a reasonable combination of free pricing with state price regulation. Public policy should continue to play the role of the main regulator in agriculture on the basis of investments in science, resource and energy-saving production technologies, lending, insurance, marketing, etc. The state must compensate deviations from the market price to agricultural producers in the amounts necessary for their activities at a given level of profitability.

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