Strategic objectives of the transformation of food systems in Ukraine: methodical principles and practical approaches of adaptation to the EU common agricultural policy

Formulation of the problem

Since 2016, Ukraine has been working on the implementation of the Association Agreement between Ukraine and the EU, including the Agreement on the Deep and Comprehensive Free Trade Area, and is gradually approximating legislation within the framework of certain sections of the Acquis Communautaire, in particular, in the field of the agro-industrial complex and the development of food systems.

Supporting the Ukrainian people in their struggle for freedom and independence and their unwavering desire for EU membership, on June 23, 2022, the European Council granted Ukraine the status of a candidate for EU membership.

To fulfill its membership obligations, Ukraine must implement a number of important reforms. In particular, the modern agrarian policy of European countries since the beginning of the 21st century is increasingly aimed at protecting the climate and the environment, including the biodiversity of ecosystems, the protection of plants, soils, water resources, and animal welfare. The new requirements of the Common Agricultural Policy (CAP) of the EU came into effect in January 2023. Ensuring harmonization and adaptation of agrarian policy measures and tasks to the EU CAP in Ukraine requires the introduction of effective mechanisms of economic policy and strategic planning for the development of priority industries, in particular, the formation of strategic goals of agrarian policy for the transformation of food systems. The growth of production volumes in the agro-industrial complex in recent years is the basis of socio-economic stability in Ukraine, despite the existing political and economic troubles and challenges. Ensuring high sustainable rates of GDP growth requires the formation of an economic policy that would create conditions for unlocking the potential and the most efficient use of available resources. The development of the agro-industrial complex and food systems has a decisive influence on strengthening the state, guaranteeing food security, increasing the level of well-being and quality of life of the population and should be based on development forecasting and meaningful scientific support.

Analysis of scientific sources

Special attention is paid to the formation of theoretical, methodical and applied principles for the development of agrarian policy, the development of the agro-industrial complex and the functioning of food systems in the works of researchers Ya. Gadzalo [1], A. Dibrova [2^4], S. Kvasha [2], O. Kovalenko [7], Yu. Luzan [1, 7], V. Savchuk [5, 6], M. Sychevskyi [7] and others. Along with this, the productivity of agricultural producers in Ukraine is still low, in comparison with European countries, their access to the sales chains of manufactured products is complicated, agricultural raw materials with low added value prevail in the export of agricultural products, the number of employed people in rural areas is decreasing, which requires, in particular, the search for tools to accelerate the modernization of agriculture and food systems, the implementation of measures aimed at the development of rural areas, as well as the protection of environmental systems and countering negative climate changes. Special attention needs to be paid to cleaning (demining) territories contaminated by hostilities, restoring destroyed farms and infrastructure, as well as improving food security and the well-being of citizens.

The purpose of the research is to systematize and generalize the methodical and applied principles of the formation of strategic goals of agrarian policy for the transformation of food systems.

Results and discussion

The UN's agenda for the 2030 Sustainable Development Goals, including those related to development of food systems, is wildly off the mark. If the current trends in the drivers affecting food systems do not change, the sustainability and capacity of food systems will be seriously threatened, and food crises are likely to intensify in the future. Past and recent trends in almost all driving forces are adversely affecting food systems and seriously threatening their sustainability. Trends such as population growth and urbanization, macroeconomic instability, poverty and inequality, geopolitical tensions and wars, intensifying competition for natural resources and climate change are wreaking havoc on socio-economic systems and harming environmental systems. According to the Secretary General of the United Nations, the world is "extremely deviating" from achieving the Sustainable Development Goals, including those related to food security [8].

Unfortunately, today, in Ukraine, problems that pose potential threats to food security are once again on a larger scale: the lack of balance in the diet of Ukrainians and the level of consumption of basic food products below the recommended rational norms. A high level of premature mortality from non-communicable diseases remains an acute social problem, and the life expectancy of citizens lags far behind the indicators of European countries [9].

Decree of the President of Ukraine dated February 7, 2022 № 41/2022 "Issues of national priorities for the transformation of food systems in Ukraine" obliges the Government, taking into account the Sustainable Development Goals of Ukraine for the period until 2030, to approve a plan of measures for the transformation of food systems in Ukraine for the period until 2030 year, foreseeing, in particular, the determination of national priorities for the transformation of food systems in Ukraine for the period until 2030, including in such areas as healthy nutrition, availability of food products for all population groups, resistance to market instability and environmentally friendly production Fig. 1.

Fig. 1 National priorities for the transformation of food systems in Ukraine for the period up to 2030

Food security is also expected to be strengthened through the development and implementation of a set of measures in accordance with the provisions of the Decree of the President of Ukraine dated October 9, 2023 № 681/2023 "On the decision of the National Security and Defense Council of Ukraine dated October 9, 2023 "On the state of ensuring food security".

It is important to introduce of new definitions, in particular - the food system into domestic legal acts. In particular, according to the drafts of the developed regulatory documents, it is proposed to define that the food system is all participants in the food production chain (from primary production to the sale of products to the consumer), their interconnected activities to create added value, related to production, mixing, processing, distribution, consumption and utilization of food products. Food systems encompass all food and primary food products, including the products of crop and livestock production, forestry, fisheries and aquaculture, as well as the economic, social and natural conditions in which different production systems interact. The transformation of food systems is a process of their optimization with the aim of ensuring citizens' access to healthy food - one of the goals of food security, that is, one of the main directions of ensuring the country's national security in the long term, a factor in preserving its statehood and sovereignty, the main component of socio-economic policy, and also a necessary condition implementation of a strategic national priority - improving the quality of life of citizens by guaranteeing high standards of life support [10].

The essence of the concept of availability of food products is proposed to be defined as the constant possibility of purchase by all social and demographic groups of the population in local conditions of basic food products and/or organization of food of appropriate quality at established prices, in volumes and assortment that meet the recommended consumption norms. Whereas the concept food security is the protection of a person, which consists in the fact that a person at any time has physical and economic access to a sufficient amount of safe food products that satisfy his nutritional needs for leading an active and healthy lifestyle.

Resilience to market instability is the ability to ensure food security even in the event of a pandemic emergency (for example, due to COVID), war, etc.

The measures taken at the state level make it possible to maintain a relatively stable situation, in particular, in the consumer market. According to the State Statistics Service, inflation in the consumer market in September 2023 compared to August 2023 was 0.5%, since the beginning of the year - 3.0%. Core inflation in September 2023 compared to August 2023 was 0.9%, since the beginning of the year - 4.2%. On the consumer market, prices for food and non-alcoholic beverages decreased by 0.5% in September. Vegetables fell in price the most (by 9.7%). Prices for fruits, processed grain products, rice, sunflower oil, fish and fish products decreased by 5.1-0.4%. At the same time, the price of eggs rose by 12.3%, and the prices of butter, sugar, meat and meat products, lard, bread, and milk rose by 1.3-0.5% [11].

However, the situation with the production and supply of food to the markets is rather unstable. The full-scale military invasion of the russian aggressor had a devastating impact on the development of agriculture and rural areas and the level of food security in Ukraine and world food markets.

The main problems affecting the sustainability of food systems are:

- impossibility of conducting agricultural activities in the temporarily occupied territories;

- difficult conditions for the restoration of agricultural activities in the de-occupied territories, due to mining and contamination of agricultural land with explosive residues, damage to production and storage facilities, equipment and equipment, as well as stolen assets;

- restrictions on the export of agricultural products due to the blockade of Black Sea ports, the destruction of port and other logistics infrastructure, the increase in the cost of logistics costs, storage and transportation of products;

- the destruction of irrigation systems, especially as a result of the destruction of the Kakhovskaya Dam and the Hydroelectric Power Station, the increase in the deficit of natural moisture supply, as a result of climate change;

- decrease in purchase prices for the main types of agricultural products on the domestic market and incomes of agricultural producers;

- rising prices for seeds and plant protection products, as well as for electricity, fuel and other necessary resources, high prices for fertilizers;

- low production productivity and revenues for a significant part of agricultural producers;

- low competitiveness and limited access to the market and sales of products for a large part of agricultural producers;

- decrease in the level of employment, deterioration of the demographic situation in rural areas, ineffectiveness of measures for the development of young and new farmers and promotion of sustainable business development in rural areas;

- ineffectiveness of state agrarian policy measures, due to limited financial resources, low efficiency and a small number of producers of agricultural products covered by state support programs;

- incomplete land reform, ineffective control over the use of land and water resources, plant protection products and agrochemicals;

- loss of biodiversity, increased negative impact on ecosystems, low effectiveness of measures to preserve the natural environment and landscapes;

- the deterioration of the level of food security, due to low incomes of the population, the inadequate level of response of agriculture to public needs for food and health care, including high-quality, safe and nutritious food produced taking into account the principle of sustainable use of natural resources, the need to reduce food waste, as well as improving animal welfare and combating antimicrobial resistance;

- ineffectiveness of the system of knowledge exchange, innovation, training and conducting research aimed at development and modernization, low level of digitization, etc.

The mentioned challenges without proper measures to improve the state agrarian policy will cause an inevitable reduction in production and will limit Ukraine's contribution to global food security.

Mitigation and elimination of challenges require the urgent development of priority measures to restore agricultural potential in the post-war period, to harmonize and adapt to the EU CAP, as well as to increase the level of competitiveness of Ukraine at the global level, and determine the need for the Government to form an appropriate strategy and define specific goals, which must be achieved.

In accordance with the legislation in force, the Government considers and makes decisions on the program documents of the Cabinet of Ministers for the purpose of conducting state policy in the priority areas of state development, coordinating the activities of central executive bodies, determining the sequence of actions, ways and means of solving issues related to public administration in areas assigned to the competence of the Cabinet of Ministers.

The program document of the Cabinet of Ministers describes the ways, methods and resources necessary to solve the identified problems regarding the implementation of state policy, the achievement of the development goals in the relevant field based on the results of the planned interrelated tasks and activities.

The program documents of the Cabinet of Ministers are:

- Program of activities of the Cabinet of Ministers;

- strategies for the development of relevant fields;

- state target programs;

- other documents of a program nature, the requirements for the development and implementation of which are determined by the laws of Ukraine or decrees of the President of Ukraine.

Program documents of the Cabinet of Ministers are developed for the short-term (up to three years), medium-term (from three to seven years) and long-term (over seven years) period, depending on the complexity and duration of the tasks and measures defined in them, unless otherwise provided by the laws of Ukraine.

A competitive economy is the key to Ukraine's sustainable development, which, according to Clause 3 of Article 3 of the Law of Ukraine "On National Security of Ukraine" dated June 21, 2018 № 2469-VIII, is one of the fundamental national interests of Ukraine. Ensuring high sustainable rates of GDP growth as a basis for improving the level of well-being and quality of life of the population, strengthening the state is a strategic priority of economic policy.

The main principles of domestic policy in the economic sphere are defined in Article 7 of the Law of Ukraine "On Principles of Domestic and Foreign Policy" dated July 1, 2010 № 2411VI.

In particular, the main principles of the economic policy regarding the agricultural sector are directly determined by: creation of conditions for the revival of the Ukrainian countryside; effective use of agricultural lands; forming a competitive agro-industrial complex and increasing its export potential; guaranteeing the food security of the state; ensuring a high level of quality of agricultural products and food and forming a transparent market for such products. At the same time, the task of forming a competitive agro-industrial complex must be considered simultaneously with other principles of economic policy defined in this article, which are:

- increasing the efficiency of functioning and improving the mechanisms of state regulation, ensuring the balance of supply and demand in individual markets;

- implementation of a stable, rational and fair tax policy, which provides for a reduction of the tax burden on the economy with the expansion of the tax base;

- implementation of a transparent and balanced budget policy as an effective tool for socioeconomic development, protection of vulnerable sections of the population and investment in the real sector of the economy to support the national producer and preserve jobs;

- ensuring the economic balance of the development of the regions, the alignment of their development directions with national needs;

- creating favorable conditions for the development of entrepreneurship, simplifying the conditions for starting a business and exiting it, reducing state interference in the economic activity of economic entities, simplifying the system of obtaining permits, reducing pressure on business from the control authorities;

- transition to the European model of market supervision, product quality and safety;

- implementation of European approaches in the field of delegation of state functions to business entities;

- the development of competition as the main factor in increasing the efficiency of the economy, ensuring effective regulation of the activities of natural monopolies, prevention of monopolistic manifestations at the state and regional levels;

- intensification of investment and innovation activities, introduction of economic incentives to encourage the modernization of national production, direct investment in the latest technologies, formation of the national innovation infrastructure and state industrial modernization programs;

- development of mechanisms of public-private partnership in order to attract investments in modernization of industry and other principles of economic policy.

The successful socio-economic development of the state, as evidenced by the experience of developed countries, is determined by effective state regulators. The need for state intervention in economic processes depends on the state of development of the country's economy. State intervention usually increases during a crisis situation and deterioration of the socio-economic situation.

Modern economic systems in developed countries function on the principles of an organic combination of the market mechanism with state regulation. Moreover, regulatory mechanisms do not operate separately, but there is an interpenetration of market functions and state regulation.

Especially in conditions of aggravation of crisis processes, fundamental problems cannot be effectively solved with the help of exclusively market mechanisms. Since gaining statehood, Ukraine has gradually acquired its own experience in state regulation of economic development. For this reason, it is now necessary to go through the stages of national economic policy formation at an accelerated speed. Foreign and already acquired domestic experience shows that mechanisms of macroeconomic regulation must adapt to local characteristics and the level of economic, political and cultural development.

Economic policy should be based on such principles to take into account, on the one hand, the multifaceted nature of theories about the place of the state in the economy, and on the other hand, to be based on a careful analysis of the factors and reasons that led to the change of scientific positions accepted in different countries at various stages the basis for the implementation of economic policy and determining the location of the state.

Therefore, in the theory and practice of state economic policy, it is necessary to take into account the available world experience and decide in what way and within what limits state intervention can be used with maximum effectiveness for the country.

Recently, a number of scientific publications have appeared in Ukraine devoted to the problems of the development of the theory and methodology of economic policy and state regulation of the agro-industrial complex, which is explained by the socio-economic importance of the industry.

State regulation of agricultural production is considered as an economic-normative influence on the processes of its development with the aim of adapting business entities to changes in the macroeconomic parameters of the country, eliminating the destabilizing effect of conjuncture and seasonal price fluctuations of the agricultural market, mitigating naturalclimatic, ecological and other industry-specific risks [12]. At the same time, it is the direct influence of state authorities on the activities of agricultural market subjects, aimed at creating conditions for food and economic security of the state, promoting the effective functioning and sustainable development of agricultural formations, and increasing public well-being [13]. Thus, state regulation of the agro-industrial complex must be considered as a system of economic policy measures to influence it in order to create optimal conditions for development.

The legal, economic and organizational principles of the formation of a complete system of forecasting and program documents of the economic and social development of Ukraine, individual branches of the economy and individual administrative and territorial units as a component of the general system of state regulation of the economic and social development of the state are determined by the Law of Ukraine "On State Forecasting and Development of Programs of economic and social development of Ukraine" dated March 23, 2000, N 1602-III (with changes and additions).

The law establishes the general procedure for the development, approval and execution of the specified forecasting and program documents of economic and social development, as well as the rights and responsibilities of participants in state forecasting and development of economic and social development programs.

According to Article 1 of the Law, state forecasting of economic and social development is a scientifically based prediction of the directions of development of the country, individual branches of the economy or individual administrative-territorial units, the possible state of the economy and the social sphere in the future, as well as alternative ways and deadlines for achieving the parameters of economic and social development. The forecast of economic and social development is a means of justifying the choice of one or another strategy and the adoption of specific decisions by state bodies and local self-government bodies regarding the regulation of socio-economic processes.

The current difficult economic situation in the country and the unsatisfactory rate of development of the national economy make it necessary to carry out reforms in many areas, in particular in the agrarian sector of the economy. Such reforms should be balanced and not harm the development of priority areas of the economy, which include all components of the food system [7].

The formation of a competitive agricultural sector requires an economic policy and effective regulatory mechanisms, primarily focused on ensuring economic efficiency, as a financial basis for solving the entire set of problems of sustainable socio-economic development.

Systematicity and effectiveness of the state agrarian policy depends, first of all, on the legislative basis for its implementation. Currently, there is no normative legal act in Ukraine that would determine the strategic principles and priorities of the development of agro-industrial complex or the food system in general, because the Law of Ukraine "On the basic principles of state agrarian policy for the period until 2015" was in effect during the specified period. It is worth noting that most of the principles are relevant even at the current stage of development of the national economy.

The implementation of the economic part of the "Association Agreement between Ukraine and the European Union" creates unique opportunities for the domestic agro-industrial complex and requires the restructuring of existing approaches to ensuring the effectiveness of the functioning of food systems. European integration processes increase competition on the market and objectively increase the need for innovative modernization of the agro-industrial complex and food systems. The demands of consumers for the level of safety and quality of food are increasing, which requires the approximation of domestic standards to European ones. Therefore, the problem of identifying modern challenges to Ukraine's food security and substantiating the effective tools of state policy to strengthen it in the conditions of European integration and globalization processes is becoming actualized.