Sectoral shifts and a trajectory of transformation of the agrarian sector under the conditions of paradigmization of the concept of sustainable development of the rural economy

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Sectoral shifts and a trajectory of transformation of the agrarian sector under the conditions of paradigmization of the concept of sustainable development of the rural economy

Introduction

agricultural sector economy

In the transition period in all countries of the Middle East and Central Asia (hereinafter, the sub-region), a steady decline in the share of the agrarian sector of the economy and its driving link - agriculture - in GDP is observed. However, a considerable part of the population is employed, as before, in the agrarian sector, especially, in rural regions (territories). Potential benefits from the intra-branch transformation in the agrarian sector of the economy should not be underestimated. A rise in labor productivity, and thus, profitability in this sector against the background of a new economic reality caused by a corona-crises, opens prospects for removing millions of people from a hard economic, social and food situation with the concurrent optimization of the efficiency of using natural resources. This article considers an impact of sectoral transformations in the agrarian sector of the economy on sustainable development of the countries of the Middle East and Central Asia and gives respective comparisons with Ukraine in the context of dynamic directionality of structural-sectoral shifts and their impact on sustainable development of the sub-region, subject to network effects from the inertness of reforms of decentralization, public management and state finances on operation and recovery of the rural economy.

After the collapse of the Soviet Union, the sub-region experienced economic and political changes and showed a positive rise in the first five years only. Sustainable transformation of the rural economy had to be made topical in the whole sub-region. This can be achieved through adaptation of national plans for sustainable transformation of the agrarian sector of the economy, re-estimation of the existing structure of state support (assistance) with prioritization, in its programs, of more efficient methods of agroproduction, attracting private investments for modernization of the structure of agriculture, increasing in water use efficiency in it for combating water scarcity and extending regional cooperation as a primary condition for the provision of security and sustainability of the production-sales value added chain in the agrarian sector of the economy. These efforts to support this sector, in their turn, will promote achievement of the agro-oriented goals of the 2030 Agenda for Sustainable Development [1].

A weighty contribution to the ontogenesis of the theory of the transformation of the agrarian sector of the economy, in general, the mechanisms of its operation under the conditions of forming and developing the circular economy, in particular, penetrating it with the spirit of sustainable development of the rural economy, with further paradigmization of the concept of moving the agrarian reform closer to the progress of the modernization of state finances, subject to the European vector of their development was made by a number of recognized academic economists: I.M. Buzdalov, Yu.V. Barsuk, L.M. Vasylieva, P.I. Haidutskyi, Yu.Ye. Hubeni, O.H. Kartashova, I.I. Lukinov, M.Yo. Malik, A.V. Marushchynets, O.V. Melnykov, P.T. Sabluk, R.P. Smoleniuk, O.V. Shubravska et al.

Methodological aspects of structural shifts in the agrarian sector of the economy, their penetration with the market reform spirit, global sustainable development goals, conceptual aspects of noospheric co-development of the rural economy and land users, subject to “attenuation” of the agrarian reform, are considered in scientific papers of outstanding domestic scholars such as I.K. Bystriakov, V.I. Blahodatnyi, Z.F. Bryndzia, V.M. Budziak, V.H. Viun, A.А. Hordiichuk, H.D. Hutsuliak, M.I. Laveikin, L.H. Melnik, Ye.V. Mishenin, T.S. Nikolaenko, V.V. Tarasova, V.M. Trehobchuk, O.I. Furdychko et all. Among foreign researchers, the papers of T. Balezentis, J. Beddington, Y. Chen, W. Cheng, I. Crute, V. Dabkiene, R. Gaiha, B. Gharleghi, H. Godfray, L. Haddad, K. Imai, N. Jurkenaite, D. Lawrence, Z. Lerman, B. Li, C. Maisonneuve, J. Muir, J. Pretty, V. Popov, S. Robinson, S. Scarpetta, A. Serres, D. Sedik, D. Streimikiene, Y. Shen, S. Thomas, C. Toulmin, M. Zhang should be noted.

Giving credit to the above listed researchers, the issues associated with current COVID coloring sectoral shifts in the agrarian sector of the economy of the sub-region and trajectories of achievement and further adjustment of tasks of the 2030 Sustainable Development Goals caused by a new normality of operation of the rural economy have remained unaddressed.

Presentation of basic material

Authors have not occasionally chosen the sub-region of the Middle East and Central Asia for the comparison with Ukraine, because exactly these countries have the shared past in the Soviet times and, as part of market reforms, they have penetrated their own regulatory space with related goal settings of individual strategies of country development. This sub-region, according to the IMF methodology [2], includes 32 countries: Afghanistan, Algeria, Armenia, Azerbaijan, Bahrein, Djibouti, Egypt, Georgia, Iran, Iraq, Jordan, Kazakhstan, Kuwait, Kyrghyz Republic, Lebanon, Livia, Mauritania, Morocco, Oman, Pakistan, Qatar, Saudi Arabia, Somali, Sudan, Syria, Tajikistan, Tunis, Turkmenistan, United Arab Emirates, Uzbekistan, West Bank and Gaza, Yemen. However, to make a relevant comparison and empiric research, authors selected only those countries (Azerbaijan, Armenia, Georgia, Kazakstan, Kyrgyztan, Tajikistan, Turkmenistan, Uzbekistan), which had common sectoral features with Ukraine and accented historiography of the agrarian development process (Tbl. 1).

Table 1. Dynamics of World Ranking of Researched Countries by Level of Economic Development and Inequality

Source: Calculated by authors [3-4].

Structural transformations took place in the sub-region at various rates. Despite the common feature in the structural transformation for the 1991-2019 period, which consisted in a general shift in the direction from agriculture to the industry and services, the data are indicative of two opposite trends. So, the period from 1991 to 2001, that is, immediately after the collapse of the Soviet Union, was marked by an abrupt transition from the centralized economy to the market economy, which was accompanied by a significant decline in productivity and incomes per capita at high inflation rates. In the recession period, many countries of the Middle East and Central Asia had to look for the ways of recovery of their economies using transition strategies such as privatization, trade activity liberalization and export diversification. In the 2001-2019 period, the sub-region's countries have started to remove negative trends in production and income growth that was promoted by intra-branch evolutionary reforms and, to a lesser extent, by structural changes. Institutional reforms of the decade aimed at developing the market economy, have started to bear their fruit. However, economic growth of the subregion's countries rich in natural resources depends, on a great extent, on mineral resource extraction characterized by high productivity levels but is associated with constraining factors such as limited employment capacities, unacceptable environmental impact and propensity for an impact of global price fluctuations on resources. Diversification and integration of economies with larger regional and global production-sales chains are limited in nature [5].

The collapse of the Soviet Union and loss of this large food market provoked the deindustrialization and collapse of social security systems while a decrease in branch production and productivity accompanied by the closure of state enterprises led to significant unemployment growth. Deindustrialization has also caused shifting accents in economic activity from the processing industry to the agrarian sector and the service industry. Although, since 1991, a share of the employment in it in all countries of the sub-region has decreased, in most of them, it still remains higher than the employment in the processing industry as it is seen from Fig.1. As we see, the same trend is observed in Ukraine: a proportion of jobs significantly reduced in 2019, as compared to 1991, in the agrarian sector from over 25 % (1991) to nearly 14 % (2019). Instead, the number of jobs in the service sector increased.

Fig. 1. Dynamics of Employment Structure by Sub-Region's Countries

Source: Calculated and built by authors according to [3-4; 6-8].

In 2018, nearly 30% of the labor force was employed in the agrarian sector of the countries Middle East and Central Asia that is more than, on the average, in the Asia-Pacific region - nearly 24 %. As for employment in the service sector, regardless of its increasingly larger share in the region, a productivity level in this sector remains low [7; 9]. This can be explained by a nature and structure of the service sector consisting of the types of activity with low value added, being of secondary nature, and informal services not reflected, to the significant extent, in official statistics. After the collapse of the Soviet Union, much of the economically active population had to work in the unofficial sector, especially, in resale of goods not promoting creation of large value added. Although, the service sector has, since then, significantly developed in the Middle East and Central Asia, especially in Kazakhstan and Kyrgyzstan, where over 50 % of the labor force is employed in it, in order to further transform the service sector, it is needed to more efficiently use modern information-communication link channels as well as create a favorable business policy and the conditions promoting a positive attitude of investors to further productivity growth.

The agrarian sector has always played a significant role in developing the Middle East and Central Asia. Although, its share in GDP and total number of the employed in agriculture has reduced with years, value added created by it continues to grow as shown in Fig. 2.

Fig. 2. Comparison of Dynamics of Value Added in Agrarian Sector of Economy in Sub-Region's Countries and Ukraine, in % of GDP

Source: Calculated and built by authors according to [3-6; 8-9].

Regardless of the general trend towards decreasing in value added in the agrarian sector vs GDP, Kazakhstan and Georgia showed, during these years, the growth rates lower than, on the average, in the sub-region. The relationship between GDP per capita and a share of value added in the agrarian sector of the countries of the sub-region is in line, in general, with the trends of other developing countries where a share of value added in the sector reduces as the population income level grows. However, in Tajikistan and Uzbekistan, some fluctuations from the sub-regional norm can be observed. So, in Tajikistan, it fluctuated at the level up to US$790, while in Uzbekistan - up to US$1,700. The Tajik economy is still characterized by a high level of dependency on the agrarian sector and the highest employment proportion in it among researched countries. Such close dependence, combined with accented state support for the rural economy explain increasing in value added in it. Added value changes in the agrarian sector of Uzbekistan reflect a transition of the country from the mono-culture agro-economy, with diversification of state policy for modernization of agro-production towards Agro 4.0. In Ukraine, in contrast with considered countries of the sub-region, an opposite trend is observed, consisting in declining in value added in the agrarian sector vs GDP of the country (see Fig. 2).

In the countries of the sub-region, because of a relatively low level of generation of value added and capability to reduce in the rural poverty, the agrarian sector was actually keeping out of structural shifts, which ran in the economy having provided a relatively small agro-production's GDP share by a low level of stability of its growth [10--11]. As the population grows in the subregion, the use of the agrarian sector - to transit to higher transformation levels - must be oriented on maximizing the result in the rural economy and creation of conditions for more efficient allocation of resources such as capital and labor force, subject to long-term sustainable effects. For the sub-region's countries and Ukraine, insufficient competitiveness of the agrarian sector is caused mainly by a low productivity level rather than by low agroproduction growth rates [12-13]. Labor productivity growth in the agrarian sector of the sub-region essentially varied during 19912018. So, notwithstanding that a significant productivity increase in the sector was registered in Kazakhstan, it was still nearly three times less than that, on the average, in sub-region countries, having empirically proven agrarian sector-inherent theoretical shortcomings and the potential for intra-branch transformations. In Georgia and in Ukraine, to the contrary, a labor productivity increase was observed in the agrarian sector, with a high employment level concurrently kept in it, rooting the raw-material economy.

A crucial point in the transformation of the agrarian sector of the sub-region's countries was a period following their independence at the beginning of the 1990s, that is, when the countries have ramped up reforms aimed at transiting from the centralized economy to the market economy. A number of reforms promoted a process of development of small peasant holdings in the sub-region's countries [6; 14]. The two most essential of them are caused by the need for additional immediate allocation of land plots to households and re-orientation on a new organizational- institutional form - peasant holdings, which were independent entities outside the established collective management system. In other words, they were larger than plots of land attached to the house and had clear commercial orientation that led to the reduction in land areas cultivated by large agro-enterprises [13; 15].

At the beginning of the 1990s, an agro-landscape was predominantly formed by large agro-enterprises (kolkhozes and sovkhozes), which produced over 70 % of gross product of agriculture and controlled over 90 % of arable lands. There were small plots of land around the houses owned by the rural population, on which subsistence farming was mainly run, while kolkhozes and sovkhozes predominantly produced that portion of products, which came into commercial turnover. Reforming land relationships and restructuring agro-enterprises accompanied by reforms of the price and trade policies led to the occurrence of the extremely unbalanced system, in which small peasant holdings mainly prevail, and which are usually owned by an individual person or family. For example, in Kyrgyzstan, as of 2018, a proportion of small land owners accounts for 31 % of gross value added. In the agrarian sector of the Central Asia, an increase in a share of small agro-producers was also observed. In Ukraine, the agro-institutional structure was, on the contrary, penetrated by large agro-producers, which ousted small ones from the rural economy coordinates, having left them space in niche food groups only.

In the countries with low or zero income from natural resources, a process of recovery of the rural economy is unambiguously associated with reformation of land relations. Starting from 1993, when Armenia and Georgia carried out reforms for the cancellation of the collective agro-production management and distribution of lands between individual holdings, a trend has outlined in these countries towards recovering the rates of its growth. In 1996, Azerbaijan, by using an algorithm of implementation of the similar reform, also provided recovering and increasing in agro-production rates.

In the sub-region's countries and Ukraine, the key agro-task for Governments is to form the leverage for food security by stimulating domestic agro-production, providing a diverse and balanced food ration of the population, promoting diversification of agro-production through refusing from the traditional methods of running agriculture, developing niche export-oriented strategies for development of the agrarian sector of the economy and promoting sustainable development of rural areas, subject to the tasks set by the Global Sustainable Development Goals. The progress of implementing the said goals is predominantly achieved by supporting agro-goods producers in basic agro-production branches by the state, providing access to financial resources for small and medium-sized agro-goods producers aa per reduced tariffs (rates), developing rural construction projects to provide the technological power, water supply for remote rural regions and developing food export support infrastructure. In the last decades, a number of changes has affected the agro-production structure in the sub-region and Ukraine, first of all, it is a negative demographic trend, especially, in rural regions, a hypertrophic food market integration increase and an agro-raw material price decrease. Trends obtained after the collapse of the Soviet Union in the population and income growth of the population stimulated the demand for a healthier and more balanced food ration that, in turn, promoted growth in the consumption of meat, fruits and vegetables. Traditionally, the Russian Federation was a major sales market for this group of countries, however, the last few years indicate an increasing demand for Ukrainian food from China and Europe (vegetable oil, protein feeds and cake [8; 13; 16-17]).

A grain group of agro-production has always been one of the most important both in the sub-region and Ukraine and an integral component of the provision of food security. The average proportion of wheat in grain production is over 60 %. Ukraine and Kazakhstan are among the top ten largest wheal export countries of the world, and, in addition to that, Kazakhstan is also its major exporter to other Central Asian countries regardless of the decline in its production because of moving to the oil crop group. So, over the years of independence, Kazakhstan has increased the production of agricultural oil crops by 4.8 times that was promoted by the demand increase in China and European countries, while the sub-region's countries, except Georgia, have increased the production of roots, tuber crops, fruits and vegetables thanks to favorable weather conditions. Rates of the transformation of the agrarian sector and, as a consequence, of the agro-production in Georgia, were lower than the average sub-regional level because of liberal regulatory policy. But a sustainable increase in the milk production was observed in the country, that was caused by state support for farming and a fast increase in significance of family farm holdings. A similar situation has arisen in Kyrgyzstan, Armenia and Azerbaijan [18], while in Kazakhstan and Ukraine, milk production by small land owners prevail. In January-June 2021, 4.32 mln tons of milk were produced in Ukraine (by 5.6 % less than in the same period of 2020), inter alia, agro-enterprises produced 1.38 mln tons of milk (by 0.5 % less), population holdings - 2.94 mln tons (by 7.8 % less) [8; 19].

Over the recent decades, cotton was one of the key agroproducts in the sub-region, however, developing the cotton industry is associated with high ecological and social risks. In the subregion, growing of cotton as a single crop, without rotation of crops, has led to soil degradation, and a large part of lands experiences desertification of varying degrees. Inefficient water resource management systems and the mass spread of irrigation systems without scientifically grounded planning combined with excessive use of chemical substances in cotton production are associated with desertification of the Aral Sea - one of the most serious ecological disasters, which the mankind had to face. Recognizing the need for efficient management of and assistance to development of this branch, governments took various political measures, as a result of which, after the collapse of the Soviet Union, cotton production volume was reduced by more than 50 %. The Government of Uzbekistan plans to cut down the cotton production in highly-salted and mountain regions and, instead of it, stimulate the production of other crops, in particular, fruits, vegetables, potato and grain forming the features of tectonic shifts in the structure of the agrarian sector. In Tajikistan, regardless of the reduction in the cotton share in the total agro-production volume, it remains on the basic export products that provides a steady source of income and currency receipts.

Structural shifts in the agrarian sector because of its diversification have economic and ecological multi-advantages such as water consumption decrease, soil quality improvement and reduction in risks associated with price volatility and are recognized as one of the most important prerequisites for the provision of sustainable economic growth. This is a dominating factor for transforming the rural economy that enables to re-orient the agrarian sector on meeting the domestic demand, providing global and sub-regional food security, improving the nutrition quality and the employment growth in rural areas. However, existing empirics of the ontogenesis of the agrarian sector in the period of 1992-2019 shows relative statics in diversification of agro-production in the sub-region's countries and Ukraine (Fig. 3). This is conditioned by the lack of weighted strategic policies for transformation and modernization of the agrarian sector, their balancing and determination in respect of modern challenges and threats caused, first of all.

Fig. 3. Agro-Products Structure Dynamics by Country, %

Source: Calculated and built by authors according to [8; 19].

A COVID-19 pandemic has starkly illustrated the vulnerability of both global and sub-regional food goods carrying chains while country restrictions for movement of people and goods have become a real problem for the sub-region's countries in the provision of food security. The specified jeopardizes not only transformational advances in the agrarian sector but also achieving the agro-oriented Sustainable Development Goals by 2030 at all. It is worth taking into account that enough food is produced in Ukraine for the provision of healthy nutrition. However, because of the low purchasing power of the population and a high share of product losses along the whole production-sales chain, a part of the population has limited access to essential food products.

As seen in Fig. 3, in Ukraine, structural modernization of the agrarian sector has caused an increase in maize production proportion from 2.3 % (1992) to 23.2 % (2019) with concurrent reduction in the production of agro-products of animal origin forming a skewness between horticulture and animal husbandry towards the former. So, according to the data [8], in 2016-2020, milk and beef production by all household categories reduced by nearly 10.9 % and 16.8 %, respectively. The main cause of the reduction in its production volume is high prime cost and low profitability that considerably reduces motivation to increase in livestock head and animal husbandry product manufacturing volumes. A considerable expense item of calculation costs of animal husbandry products are direct material costs, namely: feed costs (over 60 % in the prime cost structure), fuel and lubricating materials (2-3 %), other material costs (14-12%). In this case, feed costs were: in 2016 - 61.5 %, in 2017 - 61.6 %, in 2018 - 63.9 % and in 2019 - 60.4 %, in particular, in production of meat, feed costs were: in 2016 - 59.1 %, in 2017 - 66.8 %, in 2018 - 69.1 % and in 2019 - 65.4 %; and of milk: in 2016 - 54.6 %, in 2017 - 52.0 %, in 2018 - 53,7 % and in 2019 - 52,6 %. Such trend has caused reduction in the large cattle head in all household categories, from 3,750.3 thous. head (as of 2016) to 2,899.5 thous. head (in 2021), or reduction by 22.7 % (by 851 thous. head) in 5 years.

As of today, in the sub-region's countries, a share of agro-raw material is substantially higher than a share of the processing industry of the agrarian sector that is indicative of the existing potential to carry out activities with higher value added in it and further use the opportunities for agro-production diversification with concurrent structural modernization of the sector subject to the tasks of the Sustainable Development Goals by 2030.

An interesting point in the sub-region's countries is combining the production of agro-raw material and its primary processing. So, according to the data [21-22], Tajikistan exports cotton not only as raw material but also as yarn and ready-made clothing. However, a share of branches technologically connected with the agrarian sector such as beverages and tobacco, is 7% of GDP, while the textile and garment industry generated only 3.9 % of GDP. In 2018, Armenia, Azerbaijan and Tajikistan were among the countries with a higher share of deep processing of agroproducts in GDP, which was over 6.5 %, in which sunflower oil, alcoholic beverages and tobacco products dominated.

At the beginning of the 2000s, the sub-region's countries diversified food exports, subject to export-oriented strategies for development of the agrarian sector. Such economic orientation stimulated developing a processing link, promoted eliminating barriers for doing agro-business, supported developing small and medium business and provided taking financial and non-financial measures such as lending at reduced rates, tariff and non-tariff barrier elimination, export insurance service development and marketing support. As seen in Tbl. 2, a significant share of innovative types of products added in the period of 2002-2017, falls on the agrarian sector. The countries, which diversified their economy by adding a considerable number of agriculture-related products to it include Armenia, Azerbaijan, Kazakhstan and Ukraine. Among new agro-products, which appeared in the subregion in this period, are oil crops and fish fillet. Export diversification in the sub-region through new types of food enabled to achieve its total value of nearly US$7.5B, and in this case, 42% of the total volume fell on the agriculture-related products. However, although the sub-region's countries diversified exports through a considerable number of new products, the production volume is still too small to ensure the sustainability of income due to world agro-raw material price volatility.

Table 2. Comparison of Food Export Innovative Diversification Dynamics in Sub-Region and Ukraine

Source: Calculated and built according to the data [8; 21].

Global agro-food chains take ever greater importance under the conditions of the new globalization, occurrence of new consumption models, agro-production systems and food distribution channels. Over the last five years, agro-product exports in most subregion's countries, except Tajikistan, Turkmenistan and Uzbekistan, increased, on the average, by 1.5 times. Concurrently, over the last few years, the largest agro-product export share was observed in Uzbekistan and made up 42 % of the total volume of exports. Natural resource-rich countries such as Kazakhstan and Turkmenistan have the smallest share of agriculture-related product exports - just 4 % of the total volume of exports.

If we compare trading in agro-products with their production in the sub-region, then the basic volume of exports consists of cotton, which major exporters are Kyrgyzstan, Turkmenistan and Uzbekistan, as well as of wheat, which major exporters are Kazakhstan and Ukraine. However, the export structure gradually changes because of the branch diversification, except Turkmenistan. Except grain exports, an increase in exports of oil crops and fish products is observed in Kazakhstan, while in Kyrgyzstan and Uzbekistan vegetable exports exceeded cotton exports in the recent years. Despite decreasing in fruit and vegetable production volumes in Azerbaijan, since 1992, fresh tomatoes and strawberries remain the main export items of the country, following crude oil.

The countries of the Middle East and Central Asia carry out trade, predominantly, within the sub-region, whereby the important market is the Russian Federation followed by China and the European Union. Predominance of trade inside the sub-region is explained not only by the geographic proximity but also by the lack of artificial trade barriers. However, the volume of intra-regional trade between the countries of the Middle East and Central Asia remains relatively low as compared to other sub-regions of Asia and Pacific Ocean such as Southeast Asia, East and Northeast Asia, North and Northwest Asia. According to the UN Economic and Social Council Asia-Pacific Trade and Investment Report [23], trade expenses of the Middle East and Central Asia through the prism of time and money are three times higher as compared to East and Northeast Asia.

Although, over the past decade, thanks to the abolishment of tariffs, considerable reduction in trade expenses was achieved, nontariff trade expenses in the sub-region remain relatively high. According to the ranking in trading across borders of 190 countries, in the Ease of Doing Business Report by the World Bank [24], the countries of Central Asia rank relatively low as compared to the countries of the South Caucasus: Kyrgyzstan - 80, Tajikistan - 106 and Uzbekistan - 69, while Armenia and Georgia rank 47 and 7, respectively. In compiling the ranking, the time and expenses (except the tariffs) are measured, which are associated with three sets of procedures within the general process of exports and imports of the consignment of goods: compliance with the requirements to the documentation, customs control and domestic transport.

Main initiatives, which promoted simplification of trade procedures in the sub-region, include establishment of the Eurasian Economic Union, bilateral trade and transport agreements, the Central Asia Regional Economic Cooperation and the Europe - Caucasus - Asia transport corridor.

In the past twenty years, the trends towards import substitution are observed in the agro-product trade structure, and, in this case, in the countries such as Armenia a level of dependency on agro-product imports is considerably lower. However, in Kyrgyzstan and Turkmenistan, the opposite trends are also observed. Uzbekistan very carefully approached the economic liberalization from the beginning of the 1990s, so, up until recently, the trade has not played a decisive role in its economy. In the recent years, Uzbekistan has started to abide by the liberalized trade regime, which was earlier characterized by a high level of protection for the branches, which competed with imports as well as by restrictions for exports of food among the other goods [25]. Meanwhile, Tajikistan chose a different approach to the economic liberalization. Its economy was ruined by the civil war, which lasted until the end of the 1990's. Due to severe droughts and economic consequences of the civil war, the volume of agro-production considerably reduced and, at the same time, exports of agroproducts also remained at a lower level as compared with the subregion that led to a serious food crisis, which lasted until the beginning of the 2000s [26].

Besides, although it was indicated that the countries with an opener trade regime survive the transformation of the agrarian sector relatively fast, however, the successfulness of the integration of production-sales chains is conditioned not only by the availability of links with global, regional or domestic markets. A vertically integrated structure of production-sales value added chains [13] inside the country itself is also of great importance. It is necessary to combine strategies for the promotion and integration of value added chains with a favorable political situation and marketing environment, for a synergy effect. Integration of small land owners into this system is of special importance for the sub-region. Although the studies [5] showed that the productivity of the agrarian sector has increased after the controlled development and split-up of large agro-enterprises in the countries of the Middle East and Central Asia in the 1990's, there are restrictions on supporting this increase, because small land owners in the agrarian sector are not able to use the advantages of economies of scale. In forming prospect strategies for the promotion of transformation of the agrarian sector, it is appropriate to use existing networks of small agro-producers for their integration into production-sales chains that could eliminate structural disproportions as well as maximize incomes and productivity inside the agrarian sector.

Providing sustainable development of rural construction remains one of the major barriers for many countries of the subregion that is associated with their location-territorial position as landlocked countries and that, in its turn, requires additional logistical costs in transiting commercial cargoes through neighboring countries [27]. Historically, it happened so that developing infrastructure links in the sub-region was concentrated, to a considerable extent, in the north in connection with the significance of the Russian Federation market. In the recent years, more attention is paid to developing relations between the East and West, predominantly, with China through the Belt and Road Initiative and with Europe through the organization of the Europe - Caucasus - Asia Transport Corridor. Communication capabilities in the southward direction for integration with South Asian markets as well as logistics inside the country require further development to simplify movements of goods.

Water resources in the sub-region are of a trans-border nature and are the key production resource for the agrarian sector. And efficient management of them is the basic task considering that the most fertile agro-lands in the sub-region locate in arid and semiarid zones. Water resources in the sub-region consist, mainly, of renewable surface and underground waters with high interdependency between the countries located upstream and downstream. The countries with high dependency on external water resources include Turkmenistan, Uzbekistan and Azerbaijan where over 70 % of the total volume of renewable water resources come from beyond the states. A high level of water stress and destruct in the provision of security of using water resources in the sub-region also place the emphasis on the need for more efficient water resource management to ensure sustainable fresh water intake and supply. All countries of the sub-region, except Georgia and Kazakhstan, registered a water stress level over 50% that may lead to increasing in the number of people suffering from water scarcity. It especially affects Turkmenistan and Uzbekistan where a water stress level exceeds 100 %.

Although, the mining industry and the power sector in the countries of the sub-region require a large volume of water resources, a large share of water intake is sent into the agrarian sector. According to estimates [28], water consumption in the agrarian sector make up nearly 70 % of total water intake in the subregion and over 90 % of total water intake in the countries such as Kyrgyzstan, Turkmenistan and Uzbekistan. In the sub-region's countries being large agro-producers a large share of water intake falls on the production of water-intensive crop such as cotton and maintenance of the animal husbandry branch.

Regardless of importance of water resources for the agrarian sector, the agro-water use productivity remained, in general, unchanged in the whole sub-region. For comparison, trends in providing stable intake and supply of fresh water in China where agrarian reforms were successfully implemented demonstrate decreasing in the water needs for production of food products by means of investments in rural construction, water supply and agro-research, which enabled to improve yields and promoted mastering and developing latest technologies in the direction of transformation of the sector to Agro 4.0.

Agro-water use efficiency is also low in the whole sub-region, and, besides, water losses through ageing and improper maintenance of water supply infrastructure are registered throughout the water lifecycle. Irrigated agriculture in the countries of the sub-region was inherited from the Soviet era when, in order to achieve food security within planned production, large-scale water storage and distribution systems were required. However, after the split up of the agrarian sector into farm holdings, no due attention has been paid to modernization of water-storage reservoirs and irrigation infrastructure, wherefrom irrigated agriculture has become one of the major branches of the agrarian sector making an adverse impact on waste water quality. It is needed to make serious efforts to raise productivity and efficiency of agro-water use in the sub-region in order to accelerate transformation of the agrarian sector. This will enable to additionally unleash limited water resources for other purposes and neutralize a potential climate change impact and a fresh water need. In other words, transformation of the agrarian sector is a dominant part of the sustainable ontogenesis of the rural economy, which has to promote growth in its inclusiveness and comprehensive progress of achieving the Global Sustainable Development Goals by 2030.

In the countries of the sub-region, nearly half the population, as before, lives in rural areas, and, besides, the largest part of the rural population is fixed in Kyrgyzstan and Tajikistan that is accompanied by high employment in the agrarian sector as compared to the common employment level (Fig. 4). In Ukraine, the least number of the rural population among researched countries is observed, namely 30.5 % of the whole population mass. So, rural areas create opportunities for the inclusivity of rural development and are a dominating driver in its economic, social and ecological advances. In their turn, agrarian reforms and implementation of strategies for sustainable transformation of the rural economy may serve as the foundation for development of other non-agricultural types of economic activity by elaborating new models of agro-production.

Fig. 4. Comparison of Population Structure of Sub-Region and Ukraine in 2019, %

Source: Built by authors according to [3; 8].

These measures may also cover the aspects of the inclusiveness of development of rural areas through increasing in means of subsistence for rural women by providing them access to production resources. A share of women employed in the agrarian sector in еру countries of the sub-region, as of 2019, is approximately 29 % [3]. Scales and quality of official statistics in the sub-region are of limited nature but informal nature of farming activity can indicate that official statistics fails to reflect the actual number of the employed in the agrarian sector, while the highest level of informal employment is observed in it [29] and, especially, it concerns women's employment in family farm holdings. According to the data [30], it is established that, if women had the same access to productive sources as men, the agro-production volume could be increased by 2.5-4 %, that, in its turn, would promote improvement of food security and nutrition as well as stimulate general economic growth.

Inclusive and sustainable economic growth is a part of the 2030 Agenda (Goal 8). Economic growth in the sub-region has not always been elastic: an economic recovery process was disrupted by events such as the collapse of the Soviet Union, the financial crisis of 2008-2009, the drop in oil prices in 2014, and the corona crisis in 2020-2021. Countries of the sub-region chose different reform and transformation ways and are now at different development stages, depending on the income level. In 2019, average GDP growth rates in the sub-region made up 4.7 %, and, in this context, the first place was occupied by Tajikistan (7 %). Average value added growth rates in the agrarian sector made up 1.3 % in the same year, and, in this case, the highest growth rates were fixed in Azerbaijan (7.3 %), and the most negative ones - in Armenia (-4 %). Value added growth in the agrarian sector follows the GDP growth trends in some time lags only, wherefrom it arises that the agrarian sector is not the key driving factor for economic growth in the sub-region's countries. According to forecasts [4; 23], in 2021, GDP growth rates will decrease through the system of the Government measures to overcome the COBID-19 effects on economic activity, and part of the labor force that dismissed in the period of this pandemic will be integrated into the agrarian sector.

The 2030 Agenda is also oriented on ending hunger, achieving food security, improving nutrition and promoting sustainable development of the agrarian sector (goal 2). With an income level rise, a poverty and hidden hunger level is expected to decline. All sub-region's countries, except Tajikistan, since 1990, have fixed negative trends in poverty and malnutrition. According to FAO data [31], the sub-region's countries moved from solving, mainly, malnutrition problems to fighting against health threats arising in connection with the low content of nutritional substances in the food ration. The sub-region's countries moved to the so called triple burden - malnutrition, overnutrition and micronutrient deficiency. This problem can be solved by controlling food product safety and traceability, regulating prices by means of taxes, education in nutrition and food security guaranteeing issues.

Climate change problems affecting, to a decisive extent, the productivity of agro-production, are also inherent to the subregion's countries. So, average temperature rise rates in the Central Asia are higher than on the global scale [32]. Droughts, floods and extremely high temperatures lead to desertification creating unbalances in running agro-production.

Greenhouse gases are another factor causing climate change. As compared to the industry and transport sector, just a small share of total emissions falls on the agrarian sector in most sub-region's countries. However, a share of agro-emissions in their total volume varies from 3.7 % in Azerbaijan to 49.8 % in Tajikistan. In the agrarian sector, the predominant portion of carbon dioxide in the equivalent of greenhouse gas emissions falls on animal husbandry, mainly, because of enteric fermentation gases generated by large and small cattle, and, concurrently, irrational manure use and inefficient land cultivation methods cause water body contamination and soil erosion (Fig. 5).

Fig. 5. Emission Source Structure in Agrarian Sector of Economy of Sub-Region's Countries and Ukraine in 2018

Source: Calculated and built by authors according to [3-4; 20].

Climate change jeopardizes achieving the Sustainable Development Goals. Consequences of climatic changes have an impact, predominantly, on small agro-producers having the least capabilities to adopt themselves to changeable weather conditions. To increase stability and decrease long-term vulnerability factors in this sector in the sub-region, it is necessary to ensure making topical agro-production management methods doing no harm to climate. Measures for combating climate change are also included in the 2030 Agenda (Goal 13).

Scientific sources and methodologies used for analyzing the relationship between the agro-system and sustainable development of the rural economy show that modern trends in the agrarian sector are inconsistent with achievement of economic, social ecological goals set in the 2030 Agenda 2030 [33-34], making topical an issue of verification of ways of transformation of the agrarian sector under the conditions a new economic reality in order to provide its transition to the concept of sustainable and comprehensive development. Katsushi S. Imai's papers [35-37] on the study of the relationships between the transformation of the agrarian sector and specific goals of the 2030 Agenda show that the progress in this direction promotes reduction in poverty, malnutrition among children with concurrent growth in a food security level and the provision of sub-regional food priority.

New theorization and adaptation of the Katsushi S. Imai's methodology to country features of the sub-region enables to deepen the study of the role of the agrarian sector transformation in achieving the 2030 Agenda goals. Monitoring branch differentiation in strategic documents of the sub-region's Governments shows that structural transformations of the agrarian sector and spatial rural development are the priority directions of financial-budgetary, agrarian, socioeconomic and spatial-cluster policies. Specific measures of the specified policies include: increasing in agro-product competitiveness in domestic and foreign food markets, developing agro-cooperation to support deep agro-raw material processing in Georgia and Kyrgyzstan, attracting direct foreign investments in development of the processing-food industry in Azerbaijan and Kazakhstan, modernizing agro-production in Armenia, Azerbaijan, Georgia, Kazakhstan and Uzbekistan and providing recovery of animal husbandry, irrigation systems and food compliance with HACCP standards and regulations in Ukraine. It is expected that the specified directions will promote implementation of measures provided by the Sustainable Development Goals and will be associated, in particular, with achieving the goal [1]: No 1 (No Poverty), No 2 (Zero Hunger), No 4 (Quality Education), No 8 (Decent Work and Economic Growth), No 9 (Industry, Innovation and Infrastructure), No 15 (Protection and Restoration of Terrestrial Ecosystems), No 16 (Justice and Strong Institutions) and No 17 (Partnership for Sustainable Development).

Recognizing the existence of various factors having an impact on the transformation of the agrarian sector as well as data limitation for identification of all possible consequences, the following conceptual basis for the analysis of transformational shifts in the sub-region's countries and their relationship with the sustainable development tasks is proposed. This process consists of two stages (Fig. 6).

Fig. 6. Methodological Levers of Analysis of Relationship between Transformation of Agrarian Sector and Sustainable Development

Source: Built by authors according to [1; 7; 13; 34-37].

If the agrarian sector is diversified and provides a wide variety of agro-products with relatively stable distribution of money supply between various agro-products, then the value of its diversification x takes a higher value, and vice versa. Food diversification is especially important for identification of processes of transformation of the agrarian sector and achievement of sustainable development indicators in the sub-region because the countries, which are part of it, traditionally produce agro-products with low value added.

Transparency and accountability of the agrarian sector are determined on the basis of trade openness estimation and show to what extent the agrarian sector is integrated in the international agroraw material and food turnover. It is measured by dividing the agroproduct export and import value by the mass of value added generated by the agrarian sector. A higher export and import ratio to value added points at higher involvement of the agrarian sector in international trade. Openness of the agrarian sector is considered as a factor able to have an impact on its transformation because it interprets integration of the sector with other world markets of goods and branches of the economy. Since transparency and accountability of the agrarian sector reflects an export and import share in the total food production volume with the values in the range from 0 to 1, then, if imports and exports constitute, in the sum, a considerable part in the total agro-production volume, then this is indicative of a high level of openness of the food market of the sub-region's countries.

Technological innovations and moving to the Agro 4.0 development model are a dominant of transformation of the agrarian sector. Since the land is a limited factor for the production and is provided to agro-producers in the fixed volume, the only way to provide its productivity growth is to use modern agro-machinery, technologies and methods of running precise (smart) agroproduction. The number of involved agro-machinery in equivalent of 40 horsepower tractors acts as an indicator of penetration of the sector with innovations.

Since the agrarian sector of the sub-region depends, to a considerable extent, on animal husbandry development, it is appropriate to introduce a variable reflecting this dependency into a methodological approach proposed by Katsushi S. Imai. This variable is defined as a ratio of the sum of all agro-products of animal origin to the total production volume in the agrarian sector for the і country of the sub-region in the і year. The higher the indicator the stronger the dependency of indicators of development of the agrarian sector and animal husbandry branch, and vice versa. Taking a proposed variable into account in the methodology and results obtained have to become the basis for reviewing the agrarian policy of the sub-region's countries and Ukraine for coordinated achievement of the Global Sustainable Development Goals, the overcoming of the negative effects of COVID-19 on the rural economy and adaptation of country-prioritized sustainable development tasks to the conditions of a new economic, social, financial and ecological reality.