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ECONOMICS
JEL- Q140
Hayrapetyan Hrant Armenian State University of Economics, Aspirant in the department of Finances, Accounting, Yerevan, Republic of Armenia DOI: 10.24411/2520-6990-2020-11903 FORMATION OF THE GROUP OF STATES IN ACCORDANCE WITH THE LEVEL OF AGRICULTURAL DEVELOPMENT OF THE REPUBLIC OF ARMENIA
Abstarct.
There were many examples of agricultural insurance in the world. In order to make correct comparisons with the Republic of Armenia, it was necessary to first compare countries with different levels of development. Each state had its own system of government and its own views on the development of agriculture. Different conditions were needed for the sustainable development of agriculture, one of which was agricultural insurance. Nevertheless, it was necessary to compare the statistics collected over the years, to understand which countries the Republic of Armenia were more close to in terms of the development of its agriculture, from which we could take the example.
Methodological basis of the study based on the analysis have been performed with SPSS software package, analytical, synthesis, systemic, comparative, dialectical methods have been used in the article.
Keywords: climatic conditions, agricultural sector, extremely risky, agricultural production. GDP, cluster, food security.
Due to unfavorable climatic conditions and natural disasters in the Republic of Armenia, huge losses and losses occur in the agricultural sector in every year. Thus, in recent years, due to various natural disasters, an average of 20 billion annually has been caused to the RA agriculture. The amount of damage was 34 billion AMD in the last year. According to statistics, only 45% of crop production in Armeniahas been destroyed annually due to hail. According to the RA Ministry of Emergency Situations, 12% of the territory of the republic was subject to frostbite, 15% to drought, 17% to hail. All these changings made extremely risky and vulnerable for agricultural production in Armenia. On the other hand, the urgent need for food security in the country requires ensuring the stability of agricultural production, continuously expanding agricultural production, reducing the risks of agricultural activities and making farms less vulnerable to climate change due to unpredictable climate change. In this context, the development and operation of effective risk management systems in the field of agricultural production, the introduction of effective agricultural risk insurance mechanisms should be considered as one of the guarantees of sustainable agricultural development in Armenia, as well as the ways to overcome serious social problems, if took under the consideration, that the characteristics of the structure of agricultural output, according to economic entities, how there were working in agriculture, as well as the huge scale of the involvement of labor resources. The data needed for the analysis should be in one format and on the different branches, covered the overall development of the states, emphasizing the level of development of agriculture. The data needed for the analysis can be found on the World Bank's website: data.worldbank.org.
The website data.worldbank.org1 contains data from 20 sections, collected over the years. From these sections, the sets of data that are complete are selected and include the states that we need. From these sections, the sets of data that have been completed and selected from which have been included the states that we should need: Some data for cluster validity have been selected from these sections. They had not only agricultural, but also general economic development. The data, which had been selected are:
1. Total arable land area (percentage compared to the country);
2. Persons living in rural areas (as a percentage of the country's population);
3. The share of agriculture in GDP;
4. Total area of cultivated lands (in comparison with the territory of the country, interest);
5. Export of goods and services (% of GDP);
6. Formation total capital (% of GDP);
7. Grain yield (kg per hectare);
8. Lands involved in grain production (hectare);
9. Fertilizer consumption (kg per hectare of land).
These 9 types of data were collected for 127 countries.
The analysis has been performed using the package of SPSS software 2
Cluster analysis was the multi-dimensional method of socioeconomic research. In the process of classifying objects, it more vividly reflected the lines of polymetry. The main purpose of cluster analysis was the division of a multitude of objects characterized by the consolidation of symbols, the division of homogeneous groups (clusters) in a certain sense. It could be described that the problem of classifying data and revealing the corresponding structure in them has
1 https://data.worldbank. org/indicator/
2 ASUE, Evaluation of socio-economic indicators, p. 40.
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beem solved. In other words, it was supposed to separate the groups of compact, separated objects or to divide them according to the domains of accumulation or density.
A hierarchical analysis was performed to determine the appropriate number of clusters. According to that, an expedient number of clusters was considered 5. Clustering was performed by k-medium method.
Number of states in each group
Cluster 1 1,000
2 20,000
3 3,000
4 101,000
5 2,000
available 127,000
omission ,000
The Republic of Armenia was in the 4th group. There were101 countries in this group, and to our delight, this group was the largest. In future analyzes, we would include only the countries, which were already in this group, and we would be able to make comparisons with the group of more developed countries.
They were in the same group with Armenia.
1. Georgia
2. India
3. Lebanon
4. Kyrgyzstan
5. Latvia
6. Moldova
7. Russia
8. Tajikistan
9. Turkey
10. Thailand, etc.
India was the utmost importance to us from these countries, which, despiteed its high level of
development, still had a fairly high level of agriculture and a stable and functioning mechanism of already developed agricultural insurance. We can get the necessary information for the introduction of agricultural insurance in the Republic of Armenia from the Russian Federation, which, hading a low level of development and high technology, had about 20 years of practical experience in the field of agricultural insurance.
Since the 4th group was very large and included 101 countries, we considered, that it was expedient to perform the same analysis once, but already including only the statistical data of the 101 countries included in the analysis.
Thus, through the Dendogram, which shows the intergroup connection between states, we understood that they were also different from the general group: Australia, Nigeria, Indonesia, Brazil, and the United States and India.
Number of states in each group
Cluster
available omission
1,000 96,000 2,000 5,000 14,000 118,000 ,000
Thus, Armenia was in the second group. Which was also the majority.
The distance between the intergroup centers from each other
Cluster 1 2 3 4 5
1 97495649,941 40433240,666 81159977,400 90362724,073
2 97495649,941 57062409,510 16335672,547 7132925,876
3 40433240,666 57062409,510 40726737,044 49929483,675
4 81159977,400 16335672,547 40726737,044 9202746,674
5 90362724,073 7132925,876 49929483,675 9202746,674
This graph showed the distance between the endpoints of the clusters. The intergroup distances were quite far from each other, in any case we had been found the multitude of states with which Armenia was comparable.
Both of these indicators have equal levels of sustainability:
1. Rural population (in % of the general population);
2. Agriculture, forestry mpdtpp value added (% of GDP).
ECONOMICS / Anova
^jmustp error
Medium square CT.CB. Medium square CT.CB. F significance
The total area of arable land 4,144 4 18,846 113 ,220 ,927
Persons living in rural areas 567,457 4 487,458 113 1,164 ,330
The share of agriculture in GDP 150,903 4 99,584 113 1,515 ,202
Total area of arable land 509,124 4 198,697 113 2,562 ,042
Export of goods and services 1770,437 4 689,109 113 2,569 ,042
Formation of total 41,614 4 82,329 113 ,505 ,732
capital (% of GDP)
Grain yield (kg per hectare) Lands involved in 5060906,858 4 6663845,555 113 ,759 ,554
grain production 4188564072358212,500 4 1518213444246,867 113 2758,877 ,000
(ha)
Fertilizer consump-
tion (kg per hectare 95181,762 4 553121,268 113 ,172 ,952
of land)
Our task was to find a group of states that would be relatively close to the Republic of Armenia in terms of its economic, agricultural and developmental level, to find countries with which to make comparisons, and to use their years of experience in creating and developing the agricultural insurance sector. Then it was necessary to offer the certain product, which would minimize the existence of risks in the field of agriculture, especially in the cultivation of crops and orchards.
As the result of this analysis, we came to the solution of our problem, as the result of which the group of 96 states had been formed, many of which could be
compared with Armenia. And we could separate Armenia from the countries that had the higher and lower level of agricultural development. By comparing it with the higher level of agriculture of the countries, we would find appropriate ways of development.
References:
1. Excerpt from the protocol adopted from the session of the Government of the Republic of Armenia. On approving the concept of damage prevention to agriculture from April 15, 2017 n-15 climate disasters
2. https://data.worldbank.org/indicator/
3. ASUE, Evaluation of socio-economic indicators, p. 40.
