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12STRATEGIC PRIORITIES OF EFFICIENT MILK PRODUCTION IN UKRAINE
Shupyk S.
postgraduate student of Bila Tserkva National Agrarian University (Ukraine)
Abstract
The article highlights the current trends in the development of the dairy industry in Ukraine and identifies strategic priorities for efficient milk production. It is established that there are different trends in the dairy farming development. They are characterized by the following: with the increase of natural indicators of milk production efficiency there are no preconditions for overcoming the tendencies to reduce the number of dairy cows.
The main directions of the dairy industry effective development in agricultural enterprises are to increase milk production by increasing the productivity of cows, stabilization and increase of livestock, reconstruction of active farms, their modernization and technical equipment, commissioning of new facilities, improvement of feed production, development of selection and breeding work, improving the animal's reproductive qualities.
The strategic priorities of ensuring efficient milk production are substantiated, among which the following measures are highlighted: concentration and specialization of production; introduction of innovative technologies; improving the quality and safety of milk through the introduction of appropriate quality control systems, improving the genetic potential of animals and quality of the nutritive base, compliance with the conditions of keeping and care of cows, improving selection and breeding work.
Keywords: dairy cattle breeding, agricultural enterprises, peasant households, milk production efficiency.
Introduction. The current state of dairy farming is characterized by instability and demonstrate the numerous destabilizing economic factors, which are due to increasing globalization and crisis, increasing consumer demand for quality and safety of dairy products, the impact of scientific and technological progress, the worsening problems of environmental safety and so on. Agricultural enterprises operating in these economic conditions facing many problems related not only to achieving the values of economic indicators that ensure its competitiveness, but also to the ability to survive in market conditions. Most dairy farms today are characterized by a low degree of adaptability to market changes and traditional management approaches, which does not allow businesses to develop effectively. That is why there is a need to substantiate the strategic priorities for the development of dairy farming, which would facilitate the adaptation of dairy enterprises to changing business conditions and ensure their sustainable development.
The need to stimulate economic growth of the dairy industry is due to its important role in ensuring food security of the country to meet the needs of the population in food (Kozak, 2018), an important role is to ensure profitability for industry producers (Radko2018), which would stimulate them to increase the volume of its production, expanded reproduction, greening of production. At the same time, the development of dairy farming contributes to solving a number of social problems in rural areas, in particular, increasing the employment of the rural population, job creation in rural areas, solving the problem of increasing the income of the rural population (Ivanova, 2017). In addition, the role of livestock in soil conservation and reproduction, which degree of plowing in Ukraine is high, is positive. The problem of organic fertilization into the soil is relevant, which allows to preserve and increase their fertility. An important role in the development of livestock in the economy of agricultural producers is reflected in the performance of its stabilizing function for the sustainable development of agricultural producers of milk.
The aim of the study. The main purpose of the study is to study the dynamic processes of change in dairy farming of agricultural enterprises and private farms, vectors of their impact on the efficiency of milk production, argumentation of principles and practical recommendations for the formation of a strategy for efficient milk production.
Materials and methods. In researching the issues of efficient milk production strategic support, systematic, integrated approaches are used, the forces and vectors of internal and external environment factors influence of branch and economic entities functioning are revealed. The study used an appropriate system of research methods: monographic - in formulating the purpose and conclusions of the study. The method of theoretical generalization of foreign and domestic scientists is used in research of approaches to efficient milk production, calculation and constructive, economic and statistical analysis of the current state of the dairy industry and argumentation of strategic prospects for their development.
The information base of the research was the data of statistical reporting of agricultural enterprises on milk production, official data of statistical reporting of the State Statistics Service of Ukraine, as well as the author's own observations and calculations.
Result and discussion. The main features of dairy farming development in Ukraine are, on the one hand, the trends in improving the breeding species of animals, increasing their productivity in farms which produce livestock products, and on the other - a sharp reduction in livestock, industry production, reduction in the number of farms that produce it and insufficient level of its profitability. The intensification of crisis phenomena in the studied industry led to the processes of its collapse.
The data in the table 1 show us changes in the number of cattle, including cows and milk production during 1990-2019, which confirms the general tendency to reduce both the livestock and the volume of its production.
Table 1
Indicators of dairy farming development in Ukraine in 1990-2019
Year ,r es bd ma 1 ^ s, od ca ^ •S £ s ,r S <D ob £ s o g is ê s f , s one "i 2 S e ti n
e d H O U .5 ~ n er le m o lo or > a
1990 24623,4 8378,2 34,0 24508,8
1995 17557,3 7531,3 42,9 17274,3
2000 9423,7 4958,3 52,6 12657,9
2005 6514,1 3635,1 55,8 13714,4
2010 4494,4 2631,2 58,5 11248,5
2011 4425,8 2582,2 58,3 11086,0
2012 4645,9 2554,3 54,9 11377,6
2013 4534,0 2508,8 55,3 11488,2
2014 3884,0 2262,7 58,3 11132,8
2015* 3750,3 2166,6 57,8 10615,4
2016* 3682,3 2108,9 57,3 10381,5
2017* 3530,8 2017,8 57,1 10280,5
2018* 3332,9 1919,4 57,6 10064,0
2019* 3092,0 1788,5 57,8 9663,2
2019 to 1990, +,- -21531,4 -6589,7 23,8 -14845,6
2019 to 1990, % 12,6 21,3 - 39,4
* Data exclude the temporarily occupied territory of the Autonomous Republic of Crimea, the city of Sevastopol and a part of temporarily occupied territories in the Donetsk and Luhansk regions. Source: calculated according to the State Statistics Service of Ukraine.
According to the results of the data in table 1, it was established that during the analyzed period the number of cattle decreased from 24623,4 thsd. heads in 1990 to 3092 thsd. heads in 2019, or by
21531,4 thsd heads, which was equal to 87,4%. The average annual decline in the number of cows was 256,09 thsd. heads with the decrease in the number of cattle, during this period, at the level of 743,46 thsd. heads. (Fig. 1).
Fig. 1. Trend in milk production and cattle and cow populations in Ukraine for the period 1990-2019 Source: built according to the State Statistics Service of Ukraine.
It is determined that milk production in 19902019 decreased by almost 60 % and accounted in 2019 for 9663,2 thsd tonnes (Fig. 2). During 1990-2019, two trends can be identified in the formation of the milk production volume. They were characterized by the fact that, firstly, the average values of milk production were aimed at reducing in 1990-2002 for 16022 thsd. tonnes and for 11 608 thsd. tonnes in the period from 2002 to 2019. Secondly, the value of the coefficient of variation in the period 1990-2002 increased to 18,9%, and then
reduced to 11,3 in 2002-2019. The main reason for the decrease in the number of cows in agricultural enterprises was the adoption of an unreasonable decision to slaughter and export livestock from Ukraine in 19951997, as well as the lack of a proper system of cow reproduction in agricultural enterprises. It is established that with the reduction of the cow number in the corporate sector farms of agricultural economy, during the research period the number of economic entities decreased more than in 4 times.
Fig. 2. Trend in milk production in Ukraine for the period 1990-2019 Source: built according to the State Statistics Service of Ukraine.
The study of the dynamics of cattle number, including cows in Ukraine by categories of dairy agricultural producers revealed that there is a clear tendency to reduce the number of cattle, including cows in agricultural enterprises and its increasing in households. Thus, in 1990 - 85,6% of cattle were kept in agricultural enterprises and in 2019 it was 33,9%. At the same time, proportion of cattle in households in their total population increased from 14,4% in 1990 to 66,1% in 2019, including cows - from 26,1 to 75,5% accordingly. The largest proportion of cattle, including cows, in households was in 2010, exceeding 77% of the livestock number in all categories of farms.
It is established that the state of livestock in households in terms of the division of households with a land area of up to 0,5 ha; 0,51-1,00 ha; 1,01 ha and more and their livestock keeping in the industry is as follows: 17,6% of rural households with up to 0,5 ha are keeping cattle, including 16,3% of them are cows; 37,0% of households with 0,51-1,00 ha are keeping cattle and
35,2 of them are cows; 52% of households with more than 1,01 ha are keeping cattle, including 50,6% - cows. Consequently, the increase of land use area in rural households is accompanied by an increase in the livestock number in the industry, because with over than 1,0 ha of land, half of the households started keeping cattle. Such households (with over than 1,0 ha) keep 48% of the livestock in the industry. The main reasons that explain the dominance of livestock in the households are the importance of the industry in rural life, including self-sufficiency in food production for the family, additional income from sales. Which in terms of reducing jobs and low wages in rural areas stimulate to keep cattle, etc.
An important qualitative characteristic at all levels of management is the production efficiency, because its indicators characterize the return of investment into production. Indicators of the livestock industry effectiveness in Ukraine, in accordance with the topic of our research, are presented in table 2.
Table 2
Efficiency indicators of breeding dairy cattle development in Ukraine for the period 1990-2019
Indicator Years 2019* to 1990
1990 2000 2005 2010 2015* 2019* +, - %
Production of milk, thsd. tonnes 24508,3 12657,1 13714,4 11248,5 10615,4 9663,2 -14845,1 39,4
Number of animals, thsd. heads: cattle including cows 24623,4 8378,2 9423,7 4958,3 6514,1 3635,1 4494,4 2631,2 3750,3 2166,6 3092,0 1788,5 -21531,4 -6589,7 12,6 21,3
Livestock units per 100 hectares of agricultural land, heads: cattle including cows 58,8 20,0 22,5 11,9 15,6 8,7 10,8 6,3 9,0 5,2 7,5 4,3 -51,3 -15,7 12,8 21,5
Milk production per 100 hectares of agricultural land, centner 584,9 302,6 328,7 270,6 255,7 233,9 -351,0 40,0
Average milk yield per cow, kg 2863 2359 3773 4082 4644 4976 2113 173,8
Use of fodders per centner, centners of fodder units: of milk production including concentrated 1,47 0,34 1,63 0,20 1,31 0,30 1,18 0,37 1,00 0,41 0,89 0,49 -0,58 0,15 60,5 144,1
Profitability of milk production, % 32,2 -6,0 12,2 17,9 12,7 20,1 -12,1 -
* Data exclude the temporarily occupied territory of the Autonomous Republic of Crimea, the city of Sevastopol and a part of temporarily occupied territories in the Donetsk and Luhansk regions. Source: calculated according to the State Statistics Service of Ukraine.
An analyzing of the data in Table 2 shows, that with a decrease in milk production in Ukraine during the analyzed period there is a decrease in dairy production per 100 ha of agricultural land (milk production -233,9 centner in 2019 compared to 584,9 centner in 1990), the decrease in industry production was primarily due to the reduction of livestock: cattle - by 21531,4 thsd. heads, including cows - by 6589,7 thsd. heads, or 87,5 and 78,1%, accordingly 2019 compared to 1990. The value of the average annual milk yield per cow gradually increased. From 1990 to 2019, it increased from 2863 kg to 4976 kg, or for73,8%. Increasing of cow's productivity level is positive, because it is considered as a factor of increasing milk production. It should be noted that in some of the enterprises of Ukraine the productivity level of cows reaches 80009000 kg per year. However, the level of profitability of milk production decreased during the analysis period in 12,1%, which indicates different vector trends in the industry development. This is primarily due to the decline in investment attractiveness of dairy farming as a result of the following factors: long payback period; low efficiency of state support; significant variability in the milk and dairy products market.
Under such conditions, the strategic priorities for ensuring efficient milk production and integration of the country into the world milk market are, firstly, the need to harmonize the existing legislative and regulatory support of the industry to international standards, optimization of dairy production systems, animal health and their genetic composition, secondly, address the declining trend in livestock numbers and production
volumes, which requires the development of some activities aimed at increasing the number of livestock and production volumes. Therefore, the relevant issue in the further functioning of the industry is the creation of conditions for reproduction and development of the industry, which would be accompanied by an increase in the number of highly productive dairy breeds and production of quality and safe products.
Reduction of milk production and low quality established, because more than 70% of milk produced in Ukraine does not meet the requirements of European standards, neither in composition nor in bacterial safety indicators. This situation requires the voluntary implementation of product certification by business entities in accordance with the accepted and harmonized in Ukraine state standards, which will ensure the effectiveness of the control system in the supply chain. At the present stage of solving the issues of harmonization of legal and regulatory livestock framework is reflected in their adaptation to the requirements of ISO 9000 (quality management standard) and 14000 (environmental safety management standard), in particular by implementing the following standards DSTU: DSTU ISO 9001: 2015 (ISO 9001: 2015, IDT) (DSTU ISO 9001: 2015, 2016). Quality management systems. Requirements "; DSTU 3662: 2018 "Raw cow's milk. Specifications"; DSTU ISO 14001: 2015. Environmental management systems. Requirements and guidelines for use "(DSTU ISO 14001: 2015, 2016).
The issues of product quality in terms of harmonization of livestock regulations to international agreements, regulated by the National Standard of Ukraine DSTU 3662: 2018 "Raw cow's milk. Specifications".
The standard defines the requirements for milk delivered to processing enterprises with the definition of its quality indicators: extra, first and second grade milk. It is defined the set of requirements for the keeping and raising of farm animals, particularly calves, in producing the product of agrarian industry. These issues are relevant for consideration for a number of reasons. One of them is that it is impossible to get high-quality products from low-quality raw materials and export them [Avercheva, 2019]. So, one of the priorities of efficient milk production is the transition to wholesale specialized milk production.
The formation of supply chains for milk and dairy products with high added value is considered as one of the important components of effective development of the industry. The formation of a high value-added chain in dairy farming should be seen as a process of structural transformation in the industry, based on the transition from traditional industry to the industry with modern technologies, approaches to production organization, management and more. Orientation of the industry to increase the sustainability of production, economic, social and environmental orientation of its development is very important in its formation (Varchenko, 2020). Important attention is paid to the coherence of relations between industries, areas of activity that are directly involved in the production (production of fixed assets, equipment, feed, veterinary drugs, etc.) with subsequent delivery to processing facilities and finished products - to the consumer.
Livestock intensification remains a strategic direction of the industry (Svynous, 2019), which will increase milk production and further increase its production efficiency (Petrichenko, 2018). The main factors of dairy farming intensification are full mechanization and automation of production processes, compliance with technological requirements, transition to resource-saving technologies and others. At the same time, no less important aspect in increasing the production intensity level of the dairy industry should be paid to the selection of zoned livestock breeds in accordance with the enterprise direction, level of its specialization and production concentration.
Concentration and specialization of milk production are important factors in improving efficiency. Their impact on the final indicators of enterprises performance is significant, as evidenced by the research results of many scientists (Hutsul, 2008). We believe that the development of specialized enterprises with rational indicators of milk production concentration will create conditions for the formation of conditions for the effective dairy farming development.
Among the factors that determine the peculiarities of livestock development in Ukraine is the ratio of milk production in agricultural enterprises and households, which changed significantly during 1990-2019. If in 1990 agricultural enterprises produced 76% of total amount of milk, in 2019 it decreased to 27,4%. It should be noted that some scholars believe that the use of land,
labor and material resources is more efficient in households compared to their use in agricultural enterprises. Therefore, the amount of profit per unit of land area could be higher (Makarenko, 2013).
Most scholars believe, the livestock development in households cannot be considered a strategic direction of industry development, because households, despite the possibility of producing more products per 1 hectare of land, have lower indicators of agricultural output per worker and per unit of capital (Demchak, 2019). In addition, the technologies used by households in production of livestock products are mainly based on manual labor and cannot be considered as economic structures that can provide future sustainable development of the industry. We believe that households have increased the production of dairy products only because, unlike large enterprises, they are more flexible and adapted to changes in the environment.
In addition, the analysis of global trends in dairy production development shows that the priority factors for improving efficiency are state support for the dairy industry, use of highly productive breeds of animals, introduction of science-based technologies in production and processing processes, creation of state systems to stimulate milk consumption, high quality of manufactured products and its safety, training of progressive personnel for the dairy industry. We believe that agricultural enterprises and households are interested in updating the technical base of the industry. If for agricultural enterprises the increase of technological upgrading improves its performance indicator, then the households with increasing technological efficiency create conditions for their transition to farms.
It is established that the state support of milk producers of all agricultural holdings should be focused on expanding their production base and ensuring efficient milk production, which requires budget funding, especially under the programs of 50% reimbursement of purchased breeding heifers and livestock facilities, as well as compensation interest rates on bank loans.
Conclusions. Common trends in the dairy farming development in Ukraine during 1990-2019 are the livestock reduction and decline in production volumes. Thus, there was a decrease in cattle number from 24623,4 thsd. heads in 1990 to 3092,0 thsd. heads in 2019, or by 87,4%, and the number of cows - from 8378,2 thsd. heads in 1990 to 1788,5 thsd. heads in 2019, or by 78,7%. As a result, milk production during 1990-2019 decreased by almost 60 %, reaching 9663,3 thsd. tonnes in 2019.
It is proved that the cattle number in the dairy industry has been declining rapidly in agricultural enterprises, and in households it has increased until 2010, followed by a decrease in both cattle and cows. Percentage of cattle, including cows in households in their total number increased from 14,4% in 1990 to 66,1% in 2019 and from 26,1 to 75,5%, accordingly.
It was revealed that during the analyzed period the volumes of milk production significantly decreased from 18634,1 to 2728,6 thsd. tonnes, or by 85,4%. At the same time, the growth of milk production in households could not compensate decline in production in agricultural enterprises.
It is determined that in difficult situation in livestock development of Ukraine, some of the efficiency indicators have changed positively. The average annual milk yield per cow increased from 2863 kg in 1990 to 4976 kg in 2019, or by 73,8%. Fodders use per centner of milk decreased from 1,47 to 0,89 centner of feed units, which is positive, and profitability level of milk production in 2019 was 20,1%. Strategic priorities for overcoming the crisis situation to stabilize and effectively develop the dairy industry is possible only with increasing innovation and investment activities, effective use of innovative technologies, development of specialized milk production, improving quality and safety of product, promoting the development of dairy products with high added value.
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