Identification of small agricultural producers: European experience for Ukraine

Abstract

One of the areas of improvement of state agrarian policy in Ukraine is increasing support for small farms. However, there is still no common position on the division of agricultural producers by economic size. For identifying it, it seems appropriate to take into account the practice of the European Union, where the typology of farms uses the indicator of economic size. It is based on the economic parameter of Standard Output (SO) and describes the possible value of production that the producer is able to get, with the available productive capacity and conducting business in a particular region. The economic size of farms is determined based on their acreage and number of animals using regional SO ratios, which are calculated in the EU by relevant authorities. The farms are classified by economic size in 14 classes ranging from less than 2 thousand Euros to more than 3 mln Euros. Within the system, there are groups of small, medium and large farms. Ukraine needs to adopt the European approach to assessing the size of the farms, in which the group of small sized farms would include individual farms (households), peasant family farms and small sized economically independent farms. It is necessary to immediately start to build a national system of determination of farm size in terms of the economic parameter of Standard Output. During the transition period, it is expedient to temporarily assess the economic value of farms using an indicator as close as possible to the SO.