Agro-Ecological Assessment for the Transition of the Agricultural Sector in Ukraine. Part I: Socio-Economic Aspects

Since 1991, Ukraine has been undergoing a transformation of its economic and social system to enable the transition to a market economy. There are a number of positive developments that have already resulted from the changes in the socio-economic environment. However the transformation of farming systems into new forms did not greatly improve the sustainable use of natural resources or strengthen the economic performance, so that the influence of this intervention on sustainability of farming systems in Ukraine has had more negative than positive results. Large-scale farms continue to over-exploit natural resources and new private farmers, lacking in experience, knowledge and financial resources, continue to use obsolete technologies that are economically inefficient and may cause land degradation. All the components of the farming sector such as agricultural enterprises, household plots, and individual private farms, still remain problematic in terms of efficiency and are constrained by policies and inadequate markets. While economic conditions for agriculture have changed considerably since the beginning of the 1990s, agricultural policy in Ukraine was focused on trying to revive the production level, without the comprehensive analysis of agro-ecological conditions, internal and external markets, infrastructure, farmers' incentives etc. Rational agricultural land use is imperative in Ukraine. Existing agricultural systems are not appropriate for changing production, technological, economic or ecological realities. There is an urgent need for major policy changes in Ukraine towards rural welfare growth, sustainable agriculture and efficient land management, and establishment of agricultural market networks supported by adequate legislation. With the additional pressure of transition to a market economy, a new agricultural paradigm is required. This paper is the first in a series of reports on "Agro-ecological Assessment for Transition of the Agricultural Sector in Ukraine". The reports aim at further elaboration of integrated strategies and policies towards maintaining the sustainability of natural resources and the environment while remaining economically viable and internationally competitive. This paper on "Socio-economic analysis" describes the main socio-economic features of the transition processes in the Ukrainian agricultural sector, trends in agricultural production, and changes in its farming systems and land use. The second report "Land Resources and Agricultural Productivity: Methodology and Results" provides the inventory of natural (land, climatic) resources and the evaluation of biophysical limitations and potentials of the crop production in Ukraine at the national and regional levels. The third paper "Climate Change Impacts on Agricultural Productivity: Methodology and Results" investigates impacts of climate change/variability on the crop production and land use change in Ukraine on national and regional scales and indicates possible ways of adaptation over the coming three decades