Actual problems of price formation for agricultural products


Keywords: price, market price generation, agrarian market infrastructure, market monopolization, auction bidding.

Abstract

The problems of prices formation for agricultural products are analyzed. In Ukraine, prices have been liberalized without market environment, unlike economically developed countries, where the market environment has evolved over a long period of time. This has led to high price volatility, which is very difficult for manufacturers to adapt. They cannot develop business plans and marketing programs. Due to high risk, bank loans cannot be attracted. The effectiveness of direct financial support programs is decreasing. They did not ensure the overcoming of monopoly tendencies in the field of product purchases and stabilization of the prices of efforts of state agricultural management and public organizations aimed at establishing marketing cooperatives. The cooperative products are sold to the processing plants at the same prices at which they would be harvested and sold without setting up a cooperative. Such cooperatives only simplify the activities of processing enterprises for the procurement of raw materials. Cooperatives, which carry out the processing of products, are viable ones that influence the level of prices and stabilize them. This forms a self-regulatory vertical marketing system of the cooperative type. Without government intervention, prices are acceptable that are acceptable both, for the production and promotion and sale of products to the end consumer. Prices are promptly revised in the light of market conditions and problems that arise at individual levels of the supply chain. Auction results have a significant impact on the overall level and dynamic price changes. The information on the results of the bidding affects the price level, which is formed by all other alternative sales channels. Monopolistic tendencies by individual market participants in the field of agricultural purchases are often only possible due to the lack of information on market conditions from individual producers and possible price in alternative distribution channels. All wholesale agricultural markets established in Ukraine are of a supply nature. They operate in large cities and create the conditions for manufacturers to produce manufactured products, but require trading operations throughout the day. Such markets are more appropriate for intermediary structures that operate on a permanent basis. For the manufacturers of products, wholesale wholesale markets that are created in the areas of production of raw materials are more acceptable. The founders of such markets are usually sales cooperatives. Large cooperative lots of homogeneous products can be offered in such markets by cooperatives in such markets. Auctions may be organized and conducted for such products.

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Published
2019-11-16
How to Cite
Salamin, O. (2019). Actual problems of price formation for agricultural products. Scientific Messenger of LNU of Veterinary Medicine and Biotechnologies. Series Economical Sciences, 21(93), 17-22. https://doi.org/10.32718/nvlvet-e9304