Ukraine: additional costs for agricultural production to justify itself – study




During the recent five years, the profitability of grains and oilseeds production in Ukraine, in particular wheat and soybeans growing, decreased in 1.8 times and 12%, respectively, reported Anna Burka, analyst of APK-Inform Agency, at the conference "AgroResurcy – 2012” on February 9.

While presenting the results of the study, the expert stressed that direct material costs form the main share in the structure of prime cost of grains and oilseeds, namely costs for purchasing of fertilizers, petroleum products, seeds and other material costs, the general share of such costs forms 65-72% of the structure, depending on the crop variety.

According to these calculations, for example, in order to increase the yield of winter wheat from the level of 20 c/ha to 40 c/ha, it is necessary to increase the costs for major items of expenditure by 29%. In particular, the costs of fertilizers are increased by 58%, fuel costs - up 28%, as a result, the prime cost of the grain is reduced by 36%.

Thus, A.Burka noted that the additional production costs can be considered as quite justified, since they will not only reduce the prime cost, but also increase the production volumes of agricultural products subject to the observation of agricultural technologies realization.