PECULIARITIES OF PRODUCTION CONCENTRATION AND ITS IMPACT ON EFFICIENCY OF AGRICULTURAL ENTERPRISE OPERATION

Visnyk LNAU: Economics of AIC 2018 №25: 5-13

PECULIARITIES OF PRODUCTION CONCENTRATION AND ITS IMPACT ON EFFICIENCY OF AGRICULTURAL ENTERPRISE OPERATION

Yatsiv I., Doctor of Economic Sciences
Lviv National Agrarian University

https://doi.org/10.31734/economics2018.25.005

Annotation

The article examines peculiarities of the process of production concentration at agricultural enterprises of Ukraine and describes essence of two kinds of agricultural production concentration, particularly economic and product one. The work demonstrates that the process of production concentration, having caused establishment of large and particularly large agricultural enterprises in Ukraine, has been slowed down in the recent years.

The article presents results of the research concerning impact of production concentration on efficiency of agricultural enterprises operation in Lviv region. Applying analytical grouping and correlation-regression analysis, the work determines a set of important dependences between the volume of revenue from sale of agricultural products and services relating to the size of enterprises and serving as the criterion of economic concentration, and indicators of economic, technological and social efficiency of agrarian production. It is confirmed that raise of prices for sale of products is an essential reveal of economic effect from production concentration. However, the expected tendencies to reduction of products costs is not observed. Some growth of enterprise sizes forces increase of overheads payback. Nevertheless, at large and particularly large business entities the effect is not observed. It is argued that a high degree of economic concentration of production does not obligatory give higher indicators of economic efficiency of operation of enterprises in the branch.

It is argued that in Lviv region, a positive effect from production concentration in 2016 was the best revealed in the group of agricultural enterprises with approximately 1000–1200 ha of the average area of land use. Results of the research confirm the doubts concerning economic and social reasonability of formation of particularly large enterprises in the system of agrarian production of Ukraine.

Key words

agricultural enterprises, production concentration, size of an enterprise, efficiency, labor payment, profitability

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