The agricultural sector is of great strategic significance throughout the NIS given its contribution to employment, trade and income. The ability of the sector to meet the main challenges it faces in both domestic and international markets will have a major bearing on the nature of transformation in rural areas, specifically the level of economic growth, standards of living, migration and degree of poverty.
Following the transformation induced by privatization and land reform, the main challenges currently faced by the NIS agricultural sector are to
(a) integrate into European and wider international markets and deal with the greater contestability of local markets,
(b) institute effective contractual relationships and
(c) cope with the needs of international buyers and changing domestic consumer preferences.
These issues form the basis of the research, which will cover three NIS states (Armenia, Moldova and Ukraine), for which the agricultural sector is of critical importance given its contribution to employment, trade and income. The project brings together an appropriate, interdisciplinary team of agricultural economists, business management experts and marketers. For each of the NIS countries covered, the project will deliver reviews of organization change in the agricultural sector, a comprehensive survey of commercial agricultural producers and case study analysis for guiding export led development. The reviews of organizational change will identify the main market drivers and challenges facing agriculture in the NIS. This task will be based on interviews and documentary evidence and will help guide primary survey work. The survey will consider the main problems faced by commercial agricultural producers paying particular attention to the issue of contract enforcement and quality control. Questions to measure the impact that contractual innovations can have on agricultural growth, product quality and investments will be included. A common survey structure across the NIS states will be established to aid international comparison. A formal model of contracting will be tested to identify factors that affect the sustainability and enforcement of contracts and identify determinates of agricultural development. The datasets, by providing a comprehensive picture of the current state of commercially oriented farming will be an important research resource. The data generated will be used to identify superior performers and the case studies will analyze the causal factors behind this superiority in greater depth, with particular attention paid to export led growth. Given the often-low purchasing power of domestic economies in the NIS, trade is an important but often poorly developed route to growth. Understanding the barriers to trade and how these can be overcome will aid both domestic producers and aid European integration. Findings will be disseminated to key stakeholders.
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