State Aid for Development of Manufacture of Agricultural Machinery: Economic and Statistical Aspect

Keywords: agrarian policy, industrial policy, innovation, state aid, subsidies, partial compensation.

Abstract

The world practice of state support of agricultural machinery is studied. Features of dualistic agro-industrial policy of China are identified. It is substantiated that the subsidy policy for the purchase of agricultural machinery, which has been implemented by the Chinese government since 2004, has also had an extensive impact on the promotion and development of agricultural mechanization, development of agricultural machinery and improvement of economic results,  scaling up of services for agricultural sector; activation of related industries: the development of companies that specialize in construction and road equipment, the production of engineering products for agricultural sector. The evolution of state support is shown: changes in the priorities of industry development and the number of subsidies for the purchase of equipment, the development of which is encouraged. It is established that the support of decision-making on the implementation of state support is provided by scientific institutions, relevant associations, information and analytical agencies. It is shown that the generated statistical databases allow to analyze the scale and structure of sales of machinery to farmers with state subsidies (by categories, manufacturers, regions), calculate China's agricultural machinery market sentiment index (AMI), among the components of which - Agricultural Machinery Subsidy Index.

It is stated that on the initiative of the National Committee for Industrial Development a mechanism of partial compensation of the cost of machinery and equipment for agro-industrial complex, which has a certain level of localization of production in Ukraine, was launched in Ukraine in 2017. Summing up the results of the implementation of this mechanism for the national economy are presented. The necessity of expanding state support is substantiated: introduction of incentives for technological innovations of enterprises and partial compensation of interest on loans for the purchase of Ukrainian made agricultural machinery. Following the example of China, it is proposed to improve the mechanism of partial compensation by adjusting the upper limit of aid intensity in accordance with the cost of machinery and equipment for farmers and its innovation. It is substantiated that the lack of multifaceted monitoring of the implementation of the partial compensation mechanism makes it impossible to assess its consequences for machine builders, farmers and the economy as a whole (primarily in terms of the effects obtained). The introduction of statistical and information-analytical support for the implementation of the state aid mechanism in Ukraine will facilitate both timely control and management decisions-making on future support by the state, and the strategic business planning of farmers and machine builders.

Downloads

Download data is not yet available.

References

1. Pro Tsili staloho rozvytku Ukrainy na period do 2030 roku: Ukaz Prezydenta Ukrainy № 722/2019 vid 30.09.2019 r. [On the Sustainable Development Goals of Ukraine until 2030: Decree of the President of Ukraine of September 30, 2019 No 722/2019]. president.gov.ua. Retrieved from https://www.president.gov.ua/documents/7222019-29825 [in Ukrainian].
2. Adamchuk, V. V., Bulhakov, V. M., & Ivanyshyn, V. V. (2012). Pro rozrobku i stvorennia v Ukraini silskohospodarskykh mashyn suchasnoho rivnia [On development and creation in Ukraine of agricultural machines of modern level]. Zbirnyk naukovykh. prats Vinnytskoho natsionalnoho ahrarnoho universytetu – Collection of scientific works of Vinnytsia National Agracultural University, 11, 2 (66), 8–13. Retrieved from http://socrates.vsau.edu.ua/repository/getfile.php/6542.pdf [in Ukrainian].
3. Shuqi, S., Jiasheng, W., Dongwei, W. (2019). Development of Agricultural Mechanization in China and Its Current Strategic Focus. Selskokhozyaystvennye mashiny i tekhnologii – Agricultural Machinery and Technologies, 13, 3, 4–7. DOI 10.22314/2073-7599-2019-13-3-4-7 [in English].
4. Xuqin, W., Zongyi, Z., Jihong, G. (2018). The Effects and Efficiency of Agricultural Machinery Purchase Subsidies: From the Perspective of Incentive Effect and Crowding-out Effect. China Rural Survey, 02, 60–74. Retrieved from https://global.cnki.net/kcms/detail/detail.aspx?filename=ZNCG201802005&dbcode=CJFQ&dbname=CJFD2018&v=
5. Zakharchuk, O. V., Navrotskyi, Ya. F. & Vishnevetska, O. V. (2021). Suchasnyi stan ta perspektyvy materialno-tekhnichnoho zabezpechennia silskoho hospodarstva [Current state and prospects of material and technical support of agriculture]. Ekonomika APK, 6, 79–88. Retrieved from https://doi.org/10.32317/2221-1055.202106079 [іn Ukrainian].
6. Bezdushnyі, P. M. (2011). Stan derzhavnoyi finansovoyi pidtrymky silʹsʹkohospodarsʹkoho mashynobuduvannya v Ukrayini. The state of state financial support for agricultural engineering in Ukraine. Accounting and finance of agro-industrial complex. Retrieved from http://magazine.faaf.org.ua/stan-derzhavnoi-finansovoi-pidtrimki-silskogospodarskogo-mashinobuduvannya-v-ukraini.html
7. Ostashko, T. O., Voloshchenko, L. Y., Lіenivova, G. V. (2009). Vnutrishniy ahroprodovolchyi rynok Ukrainy v umovakh SOT [Internal agri-food market in Ukraine under the WTO]. Kyiv: Instytut ekonomiky ta prohnozuvannia NAN Ukrainy.
8. Hirshfeld, A. (2017). Reforma silhospmashu: krok pershyi [Reform of agricultural machinery: the first step]. Uriadovyi kurier – Government courier, 61, 4. Retrieved from https://ukurier.gov.ua/uk/articles/reforma-silgospmashu-krok-pershij/ [in Ukrainian].
9. Hirshfeld, A. (2018). Cui bono? Abo “Komu vyhidno”? [Cui bono? Or “Who benefits”?]. LB.ua. Retrieved from https://lb.ua/economics/2018/07/09/402366_cui_bono_vigodno.html [in Russian].
10. Natskomitet z promyslovoho rozvytku pidbyv pidsumky roku svoiei roboty i zatverdyv priorytety na nastupnyi [The National Committee for Industrial Development summed up the year of its work and approved the priorities for the next one]. (2017). www.kmu.gov.ua. Retrieved from https://www.kmu.gov.ua/news/250341934 [in Ukrainian].
11. Hirshfeld, A. (2019). Pro Prohramu kompensatsii i kroky na shlakhu yii realizatsii [About the Compensation Program and steps towards its implementation]. Propozytsiia – Proposition, 2, 182–187[in Russian].
12. Salikhova, O. B., & Krekhivskyi, O. V. (2021). Adresnyi pidkhid u realizatsii derzhavnoi promyslovoi polityky Ukrainy v umovakh zrostaiuchoi zalezhnosti vid importu [The Targeted Approach in Implementing the Industrial Policy of Ukraine in the Conditions of the Increasing Import Dependence]. Statystyka Ukrainy – Statistics of Ukraine, 2, 46–57. Doi: 10.31767/su.2(93)2021.02.05
13. In 2019, the country’s agricultural machinery production accounted for 30% of the world’s total production. (2020). ddnjzzs.com. Retrieved from http://www.ddnjzzs.com/NewShow_918.html [in Chinese].
14. How the “four modernizations” were proposed and developed. (2020). xinhuanet.com. Retrieved from http://www.xinhuanet.com/politics/2020-05/29/c_1126048256.htm [in Chinese].
15. Notification of the State Council Office on the submission of several conclusions to the State Economic and Trade Commission and other departments on further support for the development of the agricultural machinery industry. (2016). gov.cn. Retrieved from http://www.gov.cn/zhengce/content/2016-10/12/content_5118029.htm [in Chinese].
16. Order of the President of the People's Republic of China (No. 16) Law of the People’s Republic of China on the Promotion of Agricultural Mechanization. (2004). extwprlegs1.fao.org. Retrieved from http://extwprlegs1.fao.org/docs/pdf/chn156297C.pdf [in Chinese].
17. Opinions of the State Council on Promoting the Sound and Rapid Development of Agricultural Mechanization and Agricultural Machinery Industry. Guo Fa [2010] No. 22. (2010). gov.cn. Retrieved from http://www.gov.cn/zhengce/content/2010-07/09/content_3009.htm [in Chinese].
18. The Ministry of Industry and Information Technology recently released the “Agricultural Machinery Industry Development Plan” (2010). gov.cn. Retrieved from http://www.gov.cn/gzdt/2011-04/08/content_1840125.htm [in Chinese].
19. The State Council issued the “Guiding Opinions to Accelerate the Development of Agricultural Mechanization and the Transformation and Modernization of the Agricultural Machinery and Equipment Industry” (2018). gov.cn. Retrieved from http://www.gov.cn/xinwen/2018-12/29/content_5353337.htm [in Chinese].
20. The Ministry of Agriculture and Rural Areas and the Ministry of Finance answer questions from journalists on the implementation of the policy of subsidizing the purchase of agricultural machinery from 2021 to 2023. (2021). gov.cn. Retrieved from http://www.gov.cn/zhengce/2021-04/07/content_5598135.htm [in Chinese].
21. China Agricultural Mechanization Development Analysis Brief Report 2021. (2021). yunduijie.com. Retrieved from https://www.yunduijie.com/upload/article/ppt/6084df7e35424fcTt20geLW6033.pdf [in Chinese].
22. In addition to YTO, Lovol and China United, Country Garden, XCMG and Sany joined them. Big changes in China’s agricultural machinery market? (2021). nongji1688.com. Retrieved from https://www.nongji1688.com/news/show-5538467.html [in Chinese].
23. Notice on Printing and Distributing the “Guiding Opinions on the Implementation of Agricultural Machinery Purchase Subsidies in 2018–2020”. (2018). gov.cn. Retrieved from http://www.gov.cn/zhengce/zhengceku/2018-12/31/content_5440951.htm [in Chinese].
24. Notice of Printing and Distribution of the “Guidelines for the Implementation of the Subsidy for the Purchase of Agricultural Machinery from 2021 to 2023”. (2021). gov.cn. Retrieved from http://www.gov.cn/zhengce/zhengceku/2021-04/07/content_5598134.htm [in Chinese].
25. A new round of agricultural machinery purchase subsidy policy was introduced. There is a new impetus for the upgrading of agricultural mechanization (policy interpretation). (2021). paper.people.com.cn. Retrieved from http://paper.people.com.cn/rmrb/html/2021-06/19/nw.D110000renmrb_20210619_2-02.htm [in Chinese].
26. Report of Analytical on Indepth Research and Strategic Investment Planning on China Agricultural Machinery Industry2022–2027. (2022). bg.qianzhan.com. Retrieved from https://bg.qianzhan.com/report/detail/2105201617368519.html?v=title [in Chinese].
27. Combine Subsidy Data Analysis Report Released, 2020. (2021). caamm.org.cn. Retrieved from http://www.caamm.org.cn/%E7%BB%9F%E8%AE%A1%E6%95%B0%E6%8D%AE/2797.htm [in Chinese].
28. Wheel Tractor Subsidy Data Analysis Report Released, 2020. (2021). caamm.org.cn. Retrieved from http://www.caamm.org.cn/%E7%BB%9F%E8%AE%A1%E6%95%B0%E6%8D%AE/2798.htm[in Chinese].
29. The barometer of the agricultural machinery market – China’s agricultural machinery market prosperity index AMI released. (2016). camda.cn. Retrieved from http://www.camda.cn/inform/informdetails/?id=306&columnId=5 [in Chinese].
30. An increase of 6.5 percentage points year-on-year, the Agricultural Machinery Circulation Association released the Agricultural Machinery Market Prosperity Index for January 2022 URL: https://www.nongjitong.com/news/2022/499544.html
31. Agricultural Machinery Subsidy Equipment Analysis Report, 2020. (2021). m.nongji360.com. Retrieved from https://m.nongji360.com/view/121725 [in Chinese].
32. Zavdiaky derzhpidtrymtsi ahrarii prydbaly na 30% bilshe ukrainskoi tekhniky [Thanks to state support, farmers bought 30% more Ukrainian machinery]. (2020). www.epravda.com.ua. Retrieved from https://www.epravda.com.ua/news/2020/01/2/655488/ [in Ukrainian].
33. Minekonomiky rozshyrylo perelik ukrainskoi silhosptekhniky, 25% vartosti yakoi kompensuie derzhava [The Ministry of Economy has expanded the list of Ukrainian agricultural machinery, 25% of the cost of which is compensated by the state]. (2021). www.me.gov.ua. Retrieved from https://www.me.gov.ua/News/Detail?lang=uk-UA&id=2bf3b8f6-8046-4b8f-85e1-c4a50ebfe95d&title=MinekonomikiRozshiriloPerelikUkrainskoiSilgosptekhniki-25-VartostiYakoiKompensuDerzhava [in Ukrainian].
34. Stan finansuvannia kompensatsii silskohospodarskoi tekhniky [The state of financing the compensation of agricultural machinery]. (2021). minagro.gov.ua. Retrieved from https://minagro.gov.ua/pidtrimka/kompensaciya-sg-tehniki/stan-finansuvannya-kompensaciyi-s [in Ukrainian].
35. Salikhova, O. B., & Krekhivsky, O. V. (2018). Novyi mekhanizm derzhavnoi pidtrymky tekhnolohichnykh innovatsii dlia rozvytku promyslovosti [A New Mechanism for State Support to Technological Innovation for Industrial Development]. Statystyka Ukrainy – Statistics of Ukraine, 2, 30–35 [in Ukrainian].
36. Rishennia Antymonopolnoho komitetu Ukrainy pro dopustymist derzhavnoi dopomohy dlia konkurentsii vid 19.10.2018 r. № 572-r [Decision of the Antimonopoly Committee of Ukraine on the admissibility of state aid for competition of October 19, 2018 No. 572-r]. amcu.gov.ua. Retrieved from https://amcu.gov.ua/npas/rishennya-572-r-vid-19102018 [in Ukrainian].
37. Zvit Antymonopolnoho Komitetu Ukrainy za 2017 rik [Report of the Antimonopoly Committee of Ukraine for 2017]. amcu.gov.ua. Retrieved from https://amcu.gov.ua/storage/app/sites/1/Docs/zvity/2017/AMCU_2017.pdf [in Ukrainian].
38. Hirshfeld, A. (2020). Yamy na shliakhu vitchyznіanoi silhosptekhniky [Pits on the way of domestic agricultural machinery]. ukurier.gov.ua. Retrieved from https://ukurier.gov.ua/uk/articles/yami-na-shlyahu-vitchiznyanoyi-silgosptehniki/ [in Ukrainian].

Abstract views: 15
PDF Downloads: 4
Published
2022-07-12
How to Cite
Krekhivskyi, O. V. (2022). State Aid for Development of Manufacture of Agricultural Machinery: Economic and Statistical Aspect. Statistics of Ukraine, 96(1), 67-81. Retrieved from https://su-journal.com.ua/index.php/journal/article/view/365