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Economic and socio-humanitarian foundations of the development of cooperative forms of economic management in Ukraine

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  • L. Moldavan

Abstract

Assimilation of regularities of the development of cooperative movement becomes particularly relevant in the conditions of the globalization of economic processes, and concentration of economic power in the hands of large capitalist companies, which compete with small and medium-sized commodity producers only due to their unification on cooperative principles. In the world of practice, there are about 750 thousand cooperative structures, whose members and users of the services are more than 800 million people. Most of them account for Asia (63%), the EU - 22%, and North and South America - 13%. Cooperatives occupy a significant part of the product markets of milk and finished dairy products, livestock and meat, grain, fruit and vegetable and other types of agricultural products. In China, 60% of all agricultural products are sold through cooperatives on domestic and foreign markets. A significant place is occupied by cooperatives in the markets of material, technical, financial resources, and technological, information and other services. Stability and longevity of cooperatives are due to their peculiarities: they provide the agricultural producers with cheaper, compared with commercial structures, services, which increases their competitiveness; the principles of the cooperatives' operation open to their members the same conditions for access to goods and services and the same benefits, which is one of the most important social aspects; the presence on the market of nonprofit cooperatives prevents the monopolistic rise in prices for goods by large capitalist trading companies, which broadens the access to consumer goods for low-income population and confirms the socio-humanistic nature of cooperatives. The multi-functional importance of cooperatives for small and medium-sized businesses is recognized by the international community. In Ukraine, such units produce from 65 to 95% of labor-intensive types of food, ensuring the formation of almost 2/3 of the nomenclature of the consumer food basket. However, the development of agricultural co-operation has not become an integral part in the reform program of the agrarian sector. There is no strategy for the development of cooperatives and their associations. Only over half of the registered more than a thousand cooperatives are really functioning. And even these figures are not quite accurate, since official statistics do not keep a record of service cooperatives and their activities. The constraining factors for the development of cooperatives are the imperfect cooperative legislation, which greatly complicates, and in many cases makes it impossible to form agricultural cooperative units; the lack of economic mechanisms for their support at the stage of formation and in the process of functioning, such as the transfer of realty facilities from state and communal property to cooperatives on the principles of preferential rent with further buy-out or free-of-charge, which is common practice in many countries; granting cooperatives the right to participate in preferential lending programs; re-orientation of NJSC "Ukragroleasing" to servicing cooperatives and their members; and promoting the development of the national network of rural credit unions and cooperative agricultural cooperatives. In order to provide the rural population and specialists with knowledge, the organization of cooperative universal education is necessary, and the system of agricultural education should include programs for the transfer of systemic cooperative knowledge to specialists. Research on the development of agricultural servicing cooperatives in the context of globalization processes should be expanded. The bodies of state administration of agriculture need to include units that would deal with the development of agricultural co-operation. Thus Ukraine needs to implement a large scientific and methodological, legislative, organizational and managerial work to implement the world practice of promoting the development of agricultural co-operation in the context of growing competitive challenges for small and medium-sized agricultural producers as a factor in their preservation and successful functioning in the context of deepening globalization.

Suggested Citation

  • L. Moldavan, 2017. "Economic and socio-humanitarian foundations of the development of cooperative forms of economic management in Ukraine," Economy and Forecasting, Valeriy Heyets, issue 3, pages 85-96.
  • Handle: RePEc:eip:journl:y:2017:i:3:p:85-96
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