Economic Principles of Development of Integration of Agricultural Production Enterprises

Abstract

The aim of the study is to analyze the theoretical and applied aspects of the development of integration processes in agro-industrial production. The essence of integrated formations of horizontal and vertical types as directions of capital consolidation in the agro-industrial sector is revealed. A retrospective analysis of the development of integration processes in agricultural production is presented, focusing on the dominant trends in terms of aspects of “concentration – deconcentration”. The directions of diversification of activity of agroholdings in Ukraine are investigated. The effectiveness of the strategy of consolidation and consolidation of agricultural production based on increasing the length of the domestic value chain by implementing the strategy of forming vertically integrated structures is proved. The positive effect of the latter is realized in the elimination of price disparities between the spheres of bringing agricultural products to the final consumer; harmonization of the movement of material flow within the logistics processes – from providing production with objects and means of labor to optimizing sales channels of finished products as a result of the inclusion of relevant components in the structure of the production process. The negative (economic, ecological, social) consequences of overconcentration of production in the agro-industrial sphere are highlighted. The economic results of agricultural holdings are considered in terms of legal components – a strategic decision to register agricultural holdings in offshore areas leads to a significant reduction in tax revenues, reducing the state’s ability to pursue public interests. The ecological consequences of the integration associations are due to the dominance of commercially attractive products in the product structure of agricultural holdings, which results in reduced areas of the most valuable soils, reduced fertility of the entire soil, significant reduction of soil functions, reduced biodiversity. The social effect of the concentration of production in the agro-industrial sector has a negative color due to the impact on employment and the deepening of infrastructural problems in rural areas. The directions of corrective actions on the part of the state concerning harmonization of structural parameters of achievement of effective use of resource potential of agro-industrial sphere are offered. Keywords: agro–industrial production, integration, concentration, vertically integrated structures, value chain, agroholdings.