Wholesale markets of agricultural products as a form of entrepreneurial activity and their organizational and legal forms and models


  • N.A. Domanska Stepan Gzhytskyi National University of Veterinary Medicine and Biotechnologies Lviv
Keywords: wholesale market of agricultural products, financing, investments, state – private partnership, market models, legislative acts

Abstract

The number of wholesale markets in Ukraine for 10 thousand inhabitants is ten times less than in Western Europe. Wholesale markets for agricultural products (hereinafter referred to as the WMAP) before the transition of Ukraine to market conditions of economic activity were absent and their construction began in the late 90's of the twentieth century. Beginning of the XXI century. Currently, their construction was suspended due to lack of public financial resources. There was a need to attract private capital and investment into the development of WMAP. WMAP as an enterprise of agrarian profile meets all the requirements stipulated by the Commercial Code and Ukrainian legislation. The development and operation of the WMAP should take into account economic and socio-legal conditions. Involving private firms and companies in developing an WMAP network is also appropriate in terms of the quality of market construction. The basis for cooperation between the state and private firms is legislation, in particular, the Law of Ukraine «On public-private partnership». However, it requires some changes and additions concerning the development of the wholesale markets’ network. The article presents the most common models (mechanisms) for developing the WMAP network on the basis of public-private partnership. In particular, these are Build, Operate, Transfer, BOOT (Build, Own, Operate, Transfer), BTO (Build, Operate, Transfer), BOO (Build, Own, Operate), BOMT (Build, Operate, Maintain, Transfer, DBOOT, Design, Build, Finance, Operate, DBFO (Design, Build, Finance, Operate) and provides a brief description of them, which involves the involvement of certain partners and their form, for example through concessions (IOT), authority for use and ownership rights, responsibility of a private partner for maintaining the WMAP created by him, including for ongoing repairs (VOMT), the responsibility of a private partner not only for construction but also for its design (DBOOT). The proposed WMAP business model, which includes key partners (international financial organizations and international technical assistance organizations, local and regional administration, sanitary and epidemiological and veterinary services, service organizations). Key activities include infrastructure management, marketing and advertising activities. The main resources are brand, customer database, software, human, financial and logistics. The value proposition includes European standards for wholesale trade, information and consulting support, and stockpile storage. The business model reflects the principles of customer relationships, as well as customer segments, which include farmers and agribusinesses, agro cooperatives, wholesalers, logistics centers. It is expected that in the structure of incomes 50% will be revenues from the lease of squares in pavilions, 23% for entry into the territory, 23% from the lease of space for sale from cars, and 4% – other services, including advertising.

 

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Published
2017-10-06
How to Cite
Domanska, N. (2017). Wholesale markets of agricultural products as a form of entrepreneurial activity and their organizational and legal forms and models. Scientific Messenger of LNU of Veterinary Medicine and Biotechnologies. Series Economical Sciences, 19(81), 88-92. https://doi.org/10.15421/nvlvet8115
Section
Economic efficiency of production and agricultural products alteration