Rent as a Financial Instrument for Regulating the Development of the Agrarian Sector of Economy

Abstract

The development of the agrarian sector of the economy, as well as of the entire national economy, should be based on a clear and consistent state regulatory policy. Rent is one of the most effective financial instruments for regulating the development of the agrarian sector. As a whole, rent is defined as the income of any resources (production factors) owner that is not related to business activity. Onwards, economic rent is an over-income that the owner receives from using a variety of quality resources, the supply of which is limited in the long run. From the financial point of view, rent is part of the entrepreneur's income, his unearned income. The consequence of excessive and uncontrolled macro-level rent-seeking behavior is the so-called «Dutch disease», which causes concentration of labor and capital in the services sector, its outflow from the real economy and the simultaneous replacement with unproductive inputs. It is determined that the rent saturation of the GDP of Ukraine exceeds the world average values, that designates the national economy as a commodity one, testifies to the developmental, transitive nature of the economy, its direct dependence on the developed countries. Moreover, the dynamics of the annual indices of the physical volume of Ukraine's GDP coincides with the dynamics of its rent withdraw, which shows the direct dependency of goods production and rent, thus defining the economic system as extensive and reindustrialized. It is proved that amid non-renewable natural resources depletion, the economy of Ukraine is losing its potential and without drastic transformations, changes in technological structure and development of vertical integration, the crisis will only deepen. The implementation of the proposed measures will contribute to the return of rental over-income to those who have a constitutional right to get it, will provide additional financial resources to fulfill local budgets, especially rural territorial communities.