Basics of economic security of agricultural sector enterprises at the state level

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Basics of economic security of agricultural sector enterprises at the state level

Кухар Олександр Васильович, кандидат юридичних наук, доцент кафедри права та європейської інтеграції, Державний біотехнологічний університет

Kukhar O. Basics of economic security of agricultural sector enterprises at the state level.

The article delves into the crucial role of the state in substantiating the conceptual foundations of the economic security of agricultural sector enterprises at the state level. It underscores that in a developed market system, the state's role is pivotal in ensuring the institutional and legal structure of the economy and in bridging 'market gaps', which directly influence economic and food security. The article further emphasizes that creating favorable conditions for attracting investments in agriculture is a pressing task to ensure its economic security. It provides a comprehensive set of measures preceding this process, including establishing a mechanism of interaction with investors, continuous improvement of legislation, and application of innovations in agriculture and product processing. The article also highlights the importance of implementing constant monitoring of investment activity as a necessary stage for in-depth analysis and improvement of state influence strategies on the agro-industrial sector's economic security. It substantiates the need to define and implement complex strategies to ensure the state's practical influence on the agro-industrial complex's economic security through creating favorable conditions and investment support. The article concludes by analyzing the internal causes of the economic threat to agricultural enterprises, classifying threats to the economy of the agrarian sector, and studying their manifestation in Ukraine. It underscores that ensuring financial efficiency, technological independence, and effective management of agricultural enterprises should be defined among the main functional goals of state policy in this context. The article summarizes that the primary goal of state policy in this context is to ensure the stability and effective functioning of agricultural sector enterprises, and its main tasks include the support of financial, technological, and managerial stability, as well as the development of the qualification potential of personnel. It further emphasizes that the overall effectiveness of state policy is determined by a comprehensive summary of such aspects as financial efficiency, investment policy, legislative and regulatory, innovative activity, ensuring environmental safety, social aspects, risks, and crisis management; efficiency of land and resource use; personnel qualification, which considers the relationship and mutual influence of various spheres of activity of the agricultural enterprise.

Keywords: security, economic security, state regulation, agrarian sector of the economy, agrarian enterprises.

Abstract

Кухар О.В. Основи економічної безпеки підприємств аграрного сектора на державному рівні.

Ключові слова: сталий розвиток, фінансові інструменти, фінансовий механізм, імпакт-інвестування, стратегія підприємства.

Statement of the problem

financing strategies sustainable development enterprise

The economic security of enterprises in the agrarian sector of the economy is an integral component of the country's overall economic stability. At the state level, it is essential to ensure the stability and efficiency of the functioning of agricultural enterprises since they are a vital chain in the food production system. The economic security of the agricultural sector is determined not only by its financial indicators but also by the impact on social and environmental aspects of development. Ensuring the stability of agricultural enterprises allows for avoiding fluctuations in market conditions and providing a reliable food supply for the population. The state should develop effective strategies for financial support, tax policy, and other tools to ensure the economic stability of the agricultural sector. The economic security of agricultural enterprises is a prerequisite for ensuring the country's food security and preserving sovereignty in food production.

Analysis of recent research and publications. The issues of ensuring the economic security of the state and regions and the study of individual scientific tasks related to this problem are reflected in the scientific works of many foreign and domestic economists: I. Bin'ka, O. Baranovs'koho, Z. Varnaliia, O. Vlasiuka, V. Vorotina, A. Hal'chyns'koho, V. Heietsia, V. Hor- bulina, K. Hudvila, K. Devisa, O. Yemel'ianova, M. Yermoshenka, A. Kachyns'koho, E. Kirieievoi, A. Kozachenko, R. Leonarda, Yu. Lysenka, T. Louri, O. Makara, A. Mokiia, V. Muntiiana, V. Predbors'koho, D. Prejhera, U. Semiuelsa, O. Sky- dana, A. Sukhorukova, O. Cherniaka, L. Shevchenko, V. Shlemko, A. Shtanhreta and others. Among domestic scientists, the works of L. Berezina, O. Bigdana, V. Gerasemchuk, O. Hryvkivska, T. Duyunova, V. Zhmudenko, O. Kyrychenko, M. Luchyk, M. Malik are devoted to the issue of economic security of the agricultural sector of the economy and its state regulation. P. Sabluk, S. Tkachenko, K. Utenkova and others. At the same time, it is worth noting that not all problems related to ensuring the state's economic security and its agrarian sector of the economy have found their theoretical, methodological, and practical solutions.

The purpose of the research. This article aims to substantiate the conceptual foundations of the economic security of agricultural sector enterprises at the state level.

Presentation of the primary research material

With the onset of the second phase of the Russian Federation's aggression (from February 24, 2022) - the overt use of armed force, the global security landscape is undergoing significant changes. The security environment is becoming highly dynamic: the proliferation of unstable regions, the ignition of new military conflicts, and the complexity of world geopolitical processes are all contributing to the turbulence of international relations. Consequently, there is a heightened focus on formulating a modern concept of national and economic security [5], and the issue of the country's food security has also escalated.

The state's food security problem directly depends on the development of the agrarian sector of the economy, as it provides the necessary minimum needs of society in the relevant agricultural products, raw materials for other areas, including the needs of social and food security, and the formation of insurance reserves in case of force majeure situations and during actions of internal and external threats. The rhythm, flow, and mass production of agricultural products and the final product depend on the activity of this industry. In this context, agricultural production is the subject of a more profound analysis of its development trends; there is a pressing need to research the problem of ensuring the state's food security. The study of the problems of economic security of enterprises in the agricultural sector and the analysis of the state and trends of its development is especially relevant at present since this will provide an opportunity to identify prospects and threats to the safe development of the sector and, on this basis, to propose a comprehensive concept and mechanism for ensuring economic security through the development and optimization of its management.

S. Herasymchuk highlights that the agricultural sector in Ukraine is under the influence of potential challenges and threats caused by the war and conflict in the east of the country. This urgent situation should invoke a sense of immediate action in the audience:

1) Lack of access to land plots. During the war years in the east of Ukraine, many plots of land became unavailable for agricultural production. This can reduce the area under sowing, decrease the volume of production, and affect the development of the agricultural sector.

2) Loss of access to water resources. In the conflict zone in the east of Ukraine, many water structures and networks that provide water supply for agricultural enterprises were destroyed. This can lead to a decrease in production volume and negatively affect the development of the agricultural sector.

3) Increase in production costs. The conflict and war in the east of Ukraine may increase the costs of producing agricultural products. This is due to the increase in the prices of fuel, mineral fertilizers, and other resources necessary for agricultural production.

4) Increasing the risk to the safety of agriculture. In the conflict zone in eastern Ukraine, the risk of attacks on agricultural enterprises and theft of property is increasing. This can negatively affect the state of the agricultural sector and its ability to develop [1].

The scientist mentioned above also notes that in addition to internal challenges, the agricultural sector of Ukraine also faces threats from the external environment. One of the main threats is the threat to the export potential. The war conditions can significantly reduce the volume of agricultural product exports, which can affect the income of agricultural enterprises and the general economic situation in the country. Challenges and threats to the agricultural sector in Ukraine. Lack of access to land plots. Loss of access to water resources. Increase in production costs. An increase in the risk to the safety of agriculture [2].

In many scenarios, it is impossible to exclude threats arising in the development of agricultural enterprises since they represent objective phenomena caused by the cyclical nature of socio-technical systems. However, the level of aggravation of these threats can and should be reduced by focusing on their specific features and responding to their approach promptly. Implementing effective governance to achieve this goal is essential, and the state plays a vital role in this process. The general goal of managing the economic security of the agricultural sector is to understand its activities in such a way as to avoid or mitigate possible threats, as well as to ensure the functioning of the sector in survival mode during the onset of a threat and exit from it with minimal losses.

In a developed market system, the state must ensure the institutional and legal structure of the economy, close "market gaps," and, ultimately, guarantee economic and food security. These general theoretical provisions serve as a conceptual basis for further analysis of the impact and optimization of the state's influence on the economic security of the research object.

In this context, creating favorable conditions for attracting agricultural investment is the most urgent task to ensure its economic security. There is a need to implement a set of measures before attracting investments in agriculture. First, it is important to consider establishing an effective mechanism for interacting between investors, tenants, executive authorities, and non-governmental organizations. Secondly, constant improvement of the national legislation and legal framework is necessary to create favorable conditions for investments in the agro-industrial sector and increase the responsibility of land plot lessees. Thirdly, it is also important to apply modern innovations in agriculture and product processing, develop typical investment business projects, and improve support mechanisms for producers and investors. Fourthly, it is essential to implement constant monitoring of investment activities in the agro-industrial complex and conduct a deep analysis of statistical information on the attraction and use of foreign investments.

In summary, it is essential to define and implement comprehensive strategies to ensure the state's practical influence on the economic security of the agro-industrial sector through the creation of favorable conditions and investment support.

All these aspects will contribute to establishing constructive cooperation with investors, improving the legal framework for attracting investments, expanding the use of innovative technologies, and improving land lease relations. Also, it will contribute to the creation of conditions for more efficient use of agricultural lands, protection of the rights of landlords and tenants, and reduction of social tension regarding land leases. Considering these factors, it will be possible to intensify the attraction of domestic and foreign investments in the agro-industrial complex, to support the development of large-scale production in animal husbandry and crop production, and to introduce innovative technologies in agriculture and product processing.

The factors that can cause an economic threat to the enterprise can be divided into external factors, over which it has limited or no control, and internal factors, which arise from the enterprise itself. Solving the problems of economic security of the agrarian sector involves a detailed analysis of all internal and external factors of economic security of the agrarian sector, based on which it is possible to form a state policy on ensuring economic security. Internal and external factors collectively represent various economic processes and phenomena that shape the economic security of agricultural sector enterprises at different levels, influencing the structural proportions of the country's national economic complex.

Evaluation of the effectiveness of state economic policy in ensuring the economic security of an agricultural enterprise can be carried out using a comprehensive approach, considering various aspects and indicators. The main stages of assessment may include: financial efficiency - analysis of financial indicators of an agricultural enterprise, such as profit, costs, profitability and liquidity, allows to assess its financial stability and efficiency of resource management; investment policy - evaluation of the effectiveness of measures aimed at attracting investments, including the development and implementation of investment projects; legislative and regulatory environment - analysis of the agricultural enterprise's compliance with the laws and regulations governing its industry; innovative activity - assessment of the level of implementation of modern technologies and innovations in production; ensuring environmental safety - analysis of the environmental impact of agricultural enterprise activities and compliance with nature conservation standards; social aspects - evaluation of the company's interaction with the local community, job creation and other social aspects; risks and crisis management - analysis, assessment of possible threats and determination of effective crisis management strategies; efficiency of land and resource use - assessment of land resource management, including rational use and soil protection; personnel qualification - analysis of the system of training and professional development of employees.

A comprehensive summary of these aspects determines the overall effectiveness of state policy, considering the interrelationship and mutual influence of various spheres of activity of an agricultural enterprise. We believe that among the main functional goals of the state policy in the field of economic security of the agrarian sector at the level of agricultural formation should be determined the provision of financial efficiency, stability and independence of agricultural formation, technological independence, and the achievement of competitiveness of the technical potential of the business entity, effective management and organizational structure of the management of the agricultural enterprise, as well as a high level of staff qualification and intellectual potential.

The relationship between threats at the microlevel, within the industry, and at the inter-industry level, which belongs to the sphere of influence of state mechanisms, can be explained by the interdependence of the value of critical types of agricultural products and costs on the one hand and the number of resources used on the other. Therefore, the main goal of the state policy regarding the economic security of agricultural sector enterprises is to ensure their stability and maximum effective functioning in modern conditions, as well as the development of potential for the future. The main functional goals of state policy in this context include ensuring high financial efficiency, financial stability, and independence of agricultural entities; guaranteeing technological independence and achieving high competitiveness of the technical potential of the business entity; achieving high efficiency of management activities and optimization of the organizational structure of the agricultural enterprise; ensuring a high level of staff qualification and development of their intellectual potential; minimization of the negative impact of the results of production and economic activity on the environment.

Conclusions and prospects for further research

Food security of the state is directly related to the development of the agricultural sector, which plays a decisive role in providing society with the necessary agricultural products and raw materials for other industries. The importance of effective management of financial resources of agricultural enterprises and stimulation of investments in the agro-industrial complex is becoming critical for ensuring the country's economic security. Promoting the development of innovative technologies, improving legislation, and creating favorable conditions for attracting investments are critical tasks to ensure the agricultural sector's sustainable development and the state's economic security. It is also essential to constantly monitor investment activities and systematically analyze the attraction and use of foreign investments to optimize strategies and policies in this area.

State economic policy regarding the agricultural sector's economic security is crucial for the industry's stable and efficient functioning. Assessment of the level of provision of food products compared with the general need determines the degree of action of destabilizing factors. Functional goals of state policy include financial efficiency, technological independence, effective management, and minimization of adverse environmental impacts. The interconnection of threats at different levels and the need to use state levers of influence testify to the importance of a purposeful and comprehensive state policy to ensure the economic security of the agricultural sector in Ukraine.

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