Eculiarities of capital formation process in agriculture

Abstract

An indicator of balanced and proportional agriculture development is the efficient functioning of capital at the sectoral level. It is established that, unlike other branches of the economy, agricultural production deals with living organisms of the plant and animal world, which encourages the continuity of biological reproduction processes of the fixed capital; the determining factor of production and the main means of production is land, therefore the economic process of capital reproduction is organically interconnected with natural. It is proven that to ensure an effective process of capital formation in agriculture, there is a need for production capital and reliable sources of financing the industry; it is emphasized that long-term sources of financing should be the basis for the development of capital investment policies aimed at solving promising strategic tasks. It is determined that lending as a component of the financial and credit mechanism should be adequate to the specific conditions of agricultural production; the timely involvement of capital in the production process in agriculture eliminates the danger of its suspension and makes it possible to cover the temporary lack of financial resources for the purchase of fixed and circulating assets. A number of factors are established to optimize the process of capital formation in agriculture: the formation of a comprehensive system of state support for agricultural producers, taking into account the experience of leading European countries; to increase the level of capital liquidity, it is necessary to ensure equivalent market pricing for agricultural products; to ensure the effective functioning of capital in agriculture, it is necessary to use scientifically based financial and economic methods that take into account the specific sectoral features of the agricultural sector.