Open AccessJUSTIFICATION OF RISK REDUCTION INSTRUMENTS FOR INVESTMENT ACTIVITIES IN THE AGRICULTURAL SECTOR
Author(s) -
Kateryna Alekseieva,
Anna Mykolaivna Slobodyanik,
Olha Tsokol
Publication year - 2021
Publication title -
včenì zapiski tavrìjsʹkogo nacìonalʹnogo unìversitetu ìmenì v.ì. vernadsʹkogo. serìâ: ekonomìka ì upravlìnnâ
Language(s) - English
Resource type - Journals
eISSN - 2707-1103
pISSN - 2523-4803
DOI - 10.32838/2523-4803/71-3-6
Subject(s) - agrarian society , investment (military) , agriculture , business , position (finance) , agricultural productivity , fixed asset , production (economics) , economics , natural resource economics , economic policy , finance , macroeconomics , geography , archaeology , politics , political science , law
The article examines the tools for reducing risks in investment activities in the agrarian sector. The key role of the agrarian sector in the economy of Ukraine is highlighted and confirmed by the fact that investors are interested in carrying out investment activities. It is the agrarian sector that guarantees food security and has the potential for overall economic growth. It should be mentioned that the share of agrarian products from Ukraine in the world exports is substantial and the position of Ukraine as an exporter of the agrarian products is recognized in the whole world. Considering such dimensions, it should be noted that increasing investment in agriculture is one of the key tasks today, as it is necessary to update and modernize fixed assets for agricultural production. Agricultural enterprises in Ukrainestill possess limited opportunities for development, in particular through the use of new investment projects in the sector to upgrade and modernize assets for agricultural production. Investments always mean certain expenses for future profits. When deciding to launch even a very small investment project in the agricultural sector, one should have maximum confidence that all investments will pay off and provide a certain expected return. In addition, such a decision is usually made in circumstances of uncertainty and, consequently, risk. Activities in the agrarian sector of the economy are always associated with a significant degree of risk and uncertainty. This is due to huge dependence on climatic and weather conditions, as well as significant fluctuations in market prices for performance in the sector. To stimulate and intensify the investment activity in the agrarian sector of Ukraine it is necessary to pursue a balanced public policy in the sector. At the same time, it is necessary to develop mechanisms to provide state guarantees for investors, as well as it is crucial to work on specific tools to reduce the risk of agrarian enterprises. In modern conditions, there are specific tools to save the agrarian production against risks. It is important to ensure more or less stable harvesting results and sell them at optimal costs, as well as to produce qualitative but at the same time affordable products. The use of modern risk reduction tools in particular hedging technologies in the agrarian sector by farmers plays a very important role. Thanks to hedging the agrarian producers ensure stable results of their work and become able to overcome climatic and other risks.