Agricultural Service Cooperatives in Ukraine: Institutional Development Drivers

Abstract

The development of agricultural cooperation in Ukraine is one of the main vectors for rapid recovery of agricultural production after the Russian-Ukrainian war, increasing its competitiveness, ensuring sustainable development of rural areas, increasing employment and welfare of rural population. However, agricultural service cooperatives are not developed in Ukraine. The purpose of this study was to find the main drivers of agricultural service cooperatives’ development in Ukraine, to outline on this basis promising directions for development of agricultural policy in terms of stimulating their development as a counterweight to the dominance of agricultural holdings. It is proven that the main restraining factor in the development of agricultural service cooperatives in Ukraine is institutional memory of a peasant, which was formed during collectivization in Soviet times and which in modern conditions is associated with the concept of “cooperative”. This creates opposition from agricultural producers towards the national policy on the development of agricultural cooperatives, which meet international cooperative principles, and which have proven their advantages in increasing competitiveness of farmers on the example of developed countries of the world. It is emphasized that before changing formal institutions through legislation, it is necessary to form proper informal institutions that will strengthen, and not oppose, the introduction of formal ones. This paper is of practical importance for scientists and representatives of public administration in the field of forming strategic state and regional programs for agricultural development. Compliance of national policy measures according to the identified drivers of agricultural service cooperation’ development, requires further research.