Management of production and sale of grain and products of its processing in the context of maximizing value added

Svitovyi Oleksandr
Doctor of Economics, Professor of chair of marketing and business management, Pavlo Tychyna Uman State Pedagogical University, Ukraine, e-mail: svitovyy@gmail.com, ORCID ID: https://orcid.org/0000-0002-0675-559X

Cite this article:

Svitovyi, O. (2021). Management of production and sale of grain and products of its processing in the context of maximizing value added [Upravlinnia vyrobnytstvom ta zbutom zerna i produktiv yoho pererobky v konteksti maksymizatsii dodanoi vartosti], Socio-economic research bulletin, Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 3-4 (78-79), pp. 66–80.

Abstract

The article analyzes the current state of production of grain and the main products of its processing. It is determined that the production of grain in Ukraine for the period 2000–2020 years has grown in 2.7 times, significantly increased the volume of grain processing for non-food purposes - in 10.4 times. Indicator of profitability of grain production tends to decline, despite the fact that the average selling price has increased by 10.8 times. The main factors influencing the value of production costs and the level of profitability of grain products were determined. The subject of the research is theoretical-methodological and organizational-economic bases of management of production and sale of grain as well as grain products and creation of value added. The purpose of the article is to analyze the market of grain products, study the factors affecting the profitability of their production, and develop practical recommendations for improving the management of production and marketing of grain and its products in the context of maximizing the value added. The main methods of research – comparison, generalization, analysis and synthesis, abstract-logical. It is established that the gross value added in the sectors of production and processing of grain includes the following main elements: wages with accruals, rent (rent), depreciation charges, interest on capital and profit. The volume and structure of grain products exported as raw materials, as well as products with high value added, are also considered. The main factors influencing the profitability of grain production and processing were investigated. It was proved that the most part of value added is created in the branches processing grain and producing ready products. The necessity to increase the production of grain products with high value added was noted. It is indicated that horizontal and vertical integration between grain producers and processing enterprises is important for obtaining maximum profits from the sale of grain and its processed products. Significant role in formation of added value is played by state regulation of this process. To increase the amount of value added, special attention should also be paid to expanding the range of finished grain products and supply more processed products and finished grain products for export. A general scheme of value added management in the production and also grain processing and the added value formation in the export of these products is proposed. Forecast indicators of grain production and some products of its processing are substantiated.

Keywords

grain production management; grain processing; export of grain products; value added; profitability; labor remuneration; profit.

JEL classification: M110; Q130; D410; DOI: https://doi.org/10.33987/vsed.3-4(78-79).2021.66-80

UD classification: 338.43:633.1:330.143

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

References

1. McConnell, C. R., & Brew, S. L. (1997). Analytical economy: principles, problems and policies, Part 1: Macroeconomics. Trans. from Eng. [Analitychna ekonomiia: pryntsypy, problemy i polityka, Ch. 1: Makroekonomika, per. s angl.], Prosvita, Lviv, 671 s. [in Ukrainian]
2. Mankiv, G. N. (2000). Macroeconomics [Makroekonomika; per. s angl., nauk. red. S. Panchyshyna], Osnovy, Kyiv, 588 s. [in Ukrainian]
3. Gulavsky, V. T. (2016). Prospects for creating additional value in the processing of grain crops [Perspektyvy stvorennia dodatkovoi vartosti pry pererobtsi zernovykh kultur], Zernovi produkty i kombikormy, No. 3, s. 10–15. DOI: https://doi.org/10.15673/gpmf.v63i3.214 [in Ukrainian]
4. Kvasha, S. M., Ilchuk, M. М., & Konoval, I. A. (2013). Economic substantiation of the wheat production program in Ukraine [Ekonomichne obhruntuvannia prohramy vyrobnytstva zerna pshenytsi v Ukraini], Ekonomika APK, No. 3, s. 16–24 [in Ukrainian]
5. Nikishyna, O. V. (2017). Scientific and applied principles of redistribution of value added in the integrated commodity market (on the example of the grain market of Ukraine) [Naukovi i prykladni zasady pererozpodilu dodanoi vartosti v intehrovanomu tovarnomu rynku (na prykladi khlibnoho rynku Ukrainy)], Ekonomichni innovatsii, Vyp. 65, s. 118–126 [in Ukrainian]
6. Kolodiychuk, V. A. (2016). Conceptual model of logistics system optimization in grain subcomplex АІС of Ukraine [Kontseptualna model optymizatsii lohistychnoi systemy u zernoproduktovomu pidkompleksi APK Ukrainy], Ekonomika APK, No. 5, s. 60–65 [in Ukrainian]
7. Kolodiychuk, V. A. (2016). Integral assessment of economic efficiency of regional logistics systems of enterprises of grain subcomplex of AIC of Ukraine [Intehralna otsinka ekonomichnoi efektyvnosti rehionalnykh lohistychnykh system pidpryiemstv zernoproduktovoho pidkompleksu APK Ukrainy], Rehionalna ekonomika, No. 2, s. 121–128 [in Ukrainian]
8. Lupenko, Yu. O., & Mesel-Veselyak V. Ya. (ed.) et al. (2012). Strategic directions of agricultural development of Ukraine for the period up to 2020 [Stratehichni napriamy rozvytku silskoho hospodarstva Ukrainy na period do 2020 roku], NNTS «IAE», Kyiv, 182 s. [in Ukrainian]
9. Lypchuk, V. V., & Malakhovsky, D. V. (2015). Organizational and economic problems of seed production of grain crops development [Orhanizactsiino-ekonomichni problemy rozvytku nasinnytstva zernovykh kultur], Ekonomika APK, No. 12, s. 28–35 [in Ukrainian]
10. Pugachov, M. I. (2019). Foreign trade development of agro-food products [Rozvytok zovnishnioi torhivli ahroprodovolchymy tovaramy], Ekonomika APK, No. 3, s. 6–13 [in Ukrainian]
11. Mudrak, R. P. (2014). Export of Ukrainian food: state, tendencies, reasons [Eksport ukrainskoho prodovolstva: stan, tendentsii, prychyny], Ekonomika Ukrainy, No. 5, s. 70–79 [in Ukrainian]
12. Skrypnyk, A., & Zinchuk, T. (2012). Parity principle of export quotas determining for wheat [Parytetnyi pryntsyp vyznachennia eksportnykh kvot na pshenytsiu], Ekonomika Ukrainy, No. 2, s. 26–37 [in Ukrainian]
13. State Statistics Service of Ukraine: website [Derzhavna sluzhba statystyky Ukrainy: sait]. Retrieved from: https://www.ukrstat.gov.ua [in Ukrainian]
14. Guzhva, I. Yu. (2015). WTO agreement on public procurement as a tool for integration of Ukraine’s economy into the world economy [Uhoda SOT pro derzhavni zakupivli yak instrument intehratsii haluzei ekonomiky Ukrainy do svitovoho hospodarstva], Formuvannia rynkovykh vidnosyn v Ukraini, No. 9, s. 7–10 [in Ukrainian]