DETERMINANTS OF UKRAINE'S ECONOMIC SECURITY AND THEIR IMPACT ON THE DEVELOPMENT OF THE AGRICULTURAL SECTOR IN THE CONTEXT OF INSTITUTIONAL TRANSFORMATIONS

Abstract

The paper is devoted to defining the main determinants of economic security, as well as analysing their impact on the development of the agricultural sector in the context of institutional reforms. It has been determined that the agricultural sector occupies a special place in the state's economic security system, as it ensures food independence, accounts for a significant share of exports, and serves as the foundation for social stability in rural areas. It has been found that an important component of economic security is state support for the agricultural sector, which provides a compensatory effect in periods of geopolitical crises. It was identified that the agricultural sector occupies a special place in the economic security system, as it is a fundamental element of the national economy and a source of food security and rural development. At the same time, institutional reforms, integration into the European market, changes in regulatory policy and structural modernisation of agricultural production create both new opportunities and risks for economic stability. Banks and resource providers provided half of the total financing, while retained earnings/farmers' profits accounted for 40%. It is noteworthy that 20-30% of the harvest was sold before harvesting, which provided farmers with the cash needed to repay loans and purchase resources, thereby reducing their dependence on external financing. On the other hand, the fact that so many farmers sold their crops from the field may indicate difficulties in raising cash through borrowing. About 90% of the funding was directed towards working capital. A comparison of the financing volumes with government expenditure for 2019–2021 indicates the sector's low dependence on public funds. The small share of capital expenditures points to problems with long-term planning in Ukraine and a lack of collateral to secure long-term financing, such as land mortgages. It has also been determined that the financial and economic determinants of economic security are key drivers of the development of agriculture in Ukraine. Access to credit determines investment dynamics, state support determines the level of farmers' resilience to crises, and macroeconomic stability determines the overall environment for long-term growth.