Efficiency of small farms functioning in Ukraine

Abstract

A considerable share of agricultural products in Ukraine is produced by 32.1 thousand farm enterprises, 97.5% of which are small farms. The domestic legislation does not clearly determine the classification of farms by size into large and small ones. Because of this uncertainty, there are often difficulties in choosing the tax system, forms of accounting and reporting, as well as in identifying efficiency indicators of economic activity. The purpose of the article is to determine an approach to the classification of farms by size and analyse economic activity indicators of small farms. The authors’ viewpoint is that the farm enterprises that are reported by the statistical form No.50-agr belong to large farms and those farm enterprises which submit statistical reporting on Form No.2-farm are small ones (with an agricultural area of less than 1 thousand hectares each and a number of employees less than 50 people). Small farm enterprises are an integral part of the domestic agro-industrial complex of Ukraine and play an important role in ensuring food security. It has been found out that small farm enterprises cultivate 55.5% of arable land and produce 52.2% of gross agricultural output in the structure of domestic farming. More than 93% of the revenue of small farms is formed through the sales of crop production. As a result of using the method of grouping we recommend carrying out economic activity for small family farms on covering an area of no less than 100 hectares which will ensure the greatest economic efficiency indicators.