Integration of three pillars of sustainable development

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Integration of three pillars of sustainable
development

• Olena Shubravska
• Institute of Economics and Prognostication,
  Ukrainian National Academy of Sciences

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1. Sustainable development of the complex
systems research methodology2. Sustainable
economic development of Ukrainian agro-food
system definition, pillars, indices3.
Regional aspect of the sustainable economic
development of Ukrainian agro-food system
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Sustainable development - is a development
which meets the needs of the present without
compromising the ability of future generations to
meet their own needs- it is a coherent
development of economic, social processes and
environment.
SOCIETY ECONOMY NATURE
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Key provisions

• The economic proportions should be formed with
  the respect of ecological limits.
• The economic growth should be followed by
  adequate social changes and contribute to the
  improvement of environment quality.
• The quality of the social sphere and the
  environment becomes main pillars for the economic
  sustainability achievement.

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System

• It is a tool to achieve objective.
• System main peculiarities
• - integrity,
• structuring,
• relative detachment from the environment,
• subordination of the whole system organization
  to definite objective.

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System development

• It is a process of transfer from one condition to
  another, which is followed by the change of
  quality and quantity characteristics.
• Development (?) growth.

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System sustainability

• It is it ability to level the consequences of its
  impact, by keeping its own integrity and
  structural equilibration.
• When the system keeps the sustainable condition
  it doesnt foresee the quantitative invariance of
  its parameters signification (they can be changed
  in the framework of sustainability domain).
• The higher is the start level of the system
  development (start conditions), the higher power
  it has.
• The development, which is followed by system
  growth, widens the limits of its sustainability
  domain, and vice-versa.
• Quantity comparison of the system conditions
  (which are in the limits of the sustainability
  domain) is done by the detection of these
  conditions sustainability levels with appropriate
  sustainability indices in different time.
• In dynamics the economic system sustainability
  means its sustainable economic development.

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Sustainable economic development it is the
capability of economic systems to keep the stable
balanced growth.It this case the equilibration
concerns the elements of economic system in the
same time it shows up in the interaction of this
system with systems of higher level (macro- and
mega-levels), and with other systems which are in
the contact with it, namely with the ecological
and social systems.
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Sustainable development of the agro-food system

• To respect in its functioning coherence, namely
  between the production volumes of animal and
  plant products between them and processing
  powers, and dimensions of existing and potential
  needs of domestic and world markets.
• To achieve the comparability of income levels and
  the development of social infrastructure in rural
  territories with medium-size indices in the
  country.
• To provide the proper efficiency of environment
  resources use, the sufficient level of their
  renewal and the scientifically justified
  proportions when applying mineral fertilizers,
  plants protection means, genetically modified
  organisms.

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Main stages for the analyses of agro-food system
economic sustainability

• to define main factors of impact on the
  development of three spheres
• to create the sum of appropriate indices and to
  calculate the indicators
• to define the integral index of the
  sustainability
• to justify narrow places in the system and
  directions of the first-priority influence on it.

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The most fundamental factors of influence on the
Ukrainian agro-food system

• General economic
• - volumes of investment resources
• - inflation level
• - correlation level of prices for goods produced
  by the system and used resources
• - level of populations expenditures on food
• - volumes of the state foodstuff reserves.
• Global
• - world markets conjuncture
• - national customs and tariff duties.

• Internal economic
• - in crop production levels of agro-sphere
  technical provision, application of mineral
  fertilizers, use of plant protection means
• - in animal husbandry quantity and productivity
  of herd, provision by feeds (especially by
  concentrated feeds), herd structure
• - in the processing sphere volumes production
  sustainability of agricultural raw materials and
  their conformity to present processing powers
• - at the agro-food market sustainability of
  market resources provision, their conformity to
  consumers demand.

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The most fundamental factors of influence on the
Ukrainian agro-food system (continuation)

• Internal social
• levels of incomes, employment and professional
  training of rural population
• financing volumes of rural social and cultural
  sphere, financing of non-agricultural activity in
  village, etc.

• Internal ecological
• - level and character of the use of natural and
  introduced resources (mineral fertilizers, plant
  protection chemical means and genetically
  modified organisms).

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Main indices of Ukrainian agro-food system
development

• Economic block
• Index of the economic sustainability
• Agriculture
• ? provision by resources
• ? number of tractors at agricultural enterprises
  and on small private farms on estimation to 1 ha
  of tilled soil
• ? volumes of mineral fertilizers applying for 1
  ha of sown area
• ? investments to main capital for 1 ha of
  agricultural lands
• ? volumes of gross agricultural production on
  estimation to 1 person
• Food industry
• ? realization volumes of food products on
  estimation to 1 person
• Food market
• ? volumes of food expenditures of the population
  
• ? equilibration level of food rations structure.

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Main indices of Ukrainian agro-food system
development(continuation)

• Ecological block
• Index of the ecological sustainability
• ? percentage of non-tilled land resources (ratio
  of agricultural surfaces and tilled soil)
• ? efficiency of land resources use (volumes of
  gross agricultural production on estimation to 1
  ha of agricultural lands).

• Social block
• Index of the social sustainability
• ? remuneration of labor (ratio of month average
  nominal salary of work-hand in agriculture and in
  state).

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Regional aspect of the sustainable economic
development of Ukrainian agro-food system

• presence of the fundamental regional
  differentiation of system development
• scope reducing for values of sustainability
  integral index of regional subsystems during 2004
  2006
• reducing of the polarization in social and
  economic spheres
• increase of regional differentiation in economic
  sphere
• homogeneity of structural subdivision of the
  agro-food system
• - food market the most,
• - agriculture and processing industry high
  levels of the regional
• polarization
• presence of the significant regional
  differentiation of food prices levels
• sustainable economic development generators of
  the agro-food system Cherkassy and Kyiv regions
  
• the most problematical region Lugansk region.

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State influence directions in order to increase
the sustainability of Ukrainian agro-food system

• National and intra-industry levels
• ? state financial support
• ? assurance of financial parity
• ? development of cooperation, integration
• ? stimulation of food demand, etc.

• Regional level
• ? self-development stimulation of regions joint
  ecologically balanced potential (definition of
  regional priorities in economic and social
  spheres, subject to zonal agricultural
  specialization, choice of their priority and
  possibilities finding for the realization)
• ? consolidation of interregional relations
  (creation and development of market system for
  agricultural production, subject to the specific
  of every region concerning the formation of food
  resources and food consumption in the framework
  of the national agro-food system).

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Main global risks of economic sustainable
development of Ukrainian agro-food system

• Increase of Ukrainian economy transparence
  increase of dependence on agro-food products
  import, agro-sphere resources and perspective
  domestic agro-food exporting fast extension.
• Aggravation of the world energy crisis.
• Unfavorable price and monetary staggers at world
  tradable and financial markets.
• Reinforcing of transnational companies role.
• Rural labor emigration.
• Ecological risks on monoculture highly
  concentrated agricultural production.
• Insufficient diversification of export flows
  (mainly products of food processing branches).

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Picture 1. Dynamics of the export volumes of
Ukrainian agro-food production to EU 27
countries in 2005 - 2007 (USA million dollars).
Picture 2. Dynamics of the import volumes of
Ukrainian agro-food production to EU 27
countries in 2005 - 2007 (USA million dollars).
Picture 3. Balance volumes of foreign trade
overturn of Ukrainian and EU agro-food production
in 2005 - 2007. According to the data of the
Ukrainian state statistic committee.
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General tendencies of foreign trade relations
development between Ukraine and EU 27 in the
agro-food sphere in 2005-2007.

• - dynamic accumulation of foreign trade overturn
  (about 30 every year in real prices)
• - formation since 2006 and gradual increase of
  additional trade balance (to 232 million dollars
  in 2007) and, thereafter, value increase of the
  coefficient of import cover by export (from 0,91
  in 2005 to 1,16 in 2007)
• - overcoming of increase rate of export volumes
  in comparison with import
• - increase of EU countries part in the domestic
  agro-food export (from 21 to 26)
• - decrease of EU countries part in the domestic
  agro-food import (from 43 to 35)
• - gradual extension of agro-food production
  exportation geography.

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Tradable structure of Ukrainian external
commerce of agro-food production in 2003 - 2007.
() (According to the data of Ukrainian state
statistic committee)
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Directions of state aid to the sustainable
development of Ukrainian agro-food system in
order to abate the negative impact of the global
milieu on it

• to guarantee favorable foreign trade conditions
  (WTO, free trade area with E)
• to provide to producers and exporters the full
  complex of informational and consultancy services
  
• to guarantee the support of production quality
  standardization process
• to solve advisedly the problem of VAT
  compensation
• to counteract against illegal import.