1.1.            DUCTION AND CONSUMPTION OF FOODSTUFFS

Production of foodstuffs is the  most important among all types of production. This production is called not only to meet the need of the population in foodstuffs, provide jobs for the most able-bodied population, but it also influences life expectancy and health of all citizens and gene pool of the nation.

Agrarian sector is the major sector of the Ukrainian economy and has the following features:

-          it ensures economic use of 69 % of the territory of Ukraine and relative stability of the settlement network in rural areas

-          it is a source of incomes for more than 50 % of all the work force of Ukraine

-          it is characterised by the stable demand of the population for the output and nomenclature of foodstuffs

-          it is able to ensure big earnings from the export of food and is potentially attractive for foreign investors (exports of agricultural and food products from Ukraine in 1996 amounted to $ 3 milliard, in 1997 – $ 1,8 milliard

-          food industry is the most attractive among all industries for direct foreign investments concentrating 22,9 % of their total value in Ukraine)

-          it is very sensitive to the changes in international markets.

Meat production in 1998 in comparison to 1991 reduced 2,9 times and became 2,9 times lower (66% down) against rational level and by 60% lower against critical level. Livestock numbers reduction in the state sector since 1997 till 1998 constituted: for cattle - 13,2 %, sheep and goats - 32,3%. Within this period pigs numbers increased by 6,2%. Realisation of animals’ and poultry meat in 1998 in comparison to 1997 declined by 26,9%. Production decline in 1997 in comparison to 1990 constituted 57,7% that is by 45,8% lower against critical level; the loss ratio in 1997 estimated 55,3%. Since 1991 till 1997 sales volume of cattle (live weight) declined 2,7 times, pigs – 6,7 times, poultry – 1,5 times.

 Dynamic of potato prices growth

Egg production since 1991 till 1998 reduced nearly twice the previous volume, that is by 59% lower against critical level; the loss of production estimated - 49,4%.

Realisation of breeding stock and horses to Ukrainian farms within the period 1991-1997 was reduced: cattle – 5,6 times; pigs – in 9,5; sheep – in 49,5; horses – 9,1 times.

It should be noted that the amount of capital investments in agriculture was reduced since 1995 till 1997 by 37,8%, and since 1991 till 1997 per 1Ha of agricultural lands it was reduced 14,5 times, whereas direct foreign investments into Ukrainian agriculture in 1997 estimated only 2,2% of total foreign investments.

Further in comparative analysis 1997 indicators are used because many information and statistical sources contain detailed data for that year. Tendencies identified during the analysis of 1990-1997 period have not been changing up to the present day. The latest analytical information from available for us sources is also presented.

Average prices (hr.) and average price levels (average ranks) formed

on markets and in oblasts trade systems for the period of 24 months (1997-1998)

Energy value of the average daily diet per capita for 1991-1997 in Ukraine decreased from 3445 kcal to 2535 kcal or by 26,4 %, the ratio of animal products being decreased from 27,7 % to 21 %.

The main reasons for dramatic aggravation of nutrition are:

-          reduction of incomes of the population

-          drop in production of agricultural products and foodstuffs

-          rise of prices for foodstuffs.

Examinations of household budgets revealed that in 1990 32,8 % of family incomes was used for food, while in 1997  - 56,6 % which indicates poverty of the population by world standards. Demand is depressed because income level does not ensure satisfaction of basic living people needs. In 1997 the average income of families living in urban settlements ranged from 2681 hryvnias in Lvov oblast to 4443 hryvnias in Kiev which is approximately USD 1340 – 2222. According to statistical data in 1997  the population of Ukraine bought food to the total amount of minimum 15240,1 million hryvnias or 7,6 million  US dollars.

Indices of family incomes for rural areas ranged from 2394 hryvnias in Ternopol oblast to 5353 hryvnias in Lvov oblast (USD 1197 – 2677). And what is more, the proportion of money income in family incomes decreases; wages are imputed but not paid in time; unemployment increases; arrears of wages, scholarships and social welfare are high. As a result, the population of Ukraine has to turn to subsistence farming i.e. self-provision of foodstuffs denying purchase of foodstuffs for cash. This is especially distinctive for the dwellers of villages, urban villages and little towns. Cash expenditures for food made up in average per 100 families for the whole population (urban and rural) in 1997 99,186 hr, per one family – 991 hr 86 kop. The average family composition making up 2,88 members, cash expenditures for food per capita were equal to 344 hr 40 kop. Multiplying this figure by the available population of Ukraine we get 17,459,9 million hr or USD 8,7 thousand million, i.e. capacity of the national money food market.

This index is higher for the urban population, and it is considerably lower for the rural population. Only 12 % of the national turnover is formed in rural areas though proportion of the rural population in the total population of Ukraine is equal to 32,1 %. Small plot holdings are the main source of income generation for rural families and satisfy almost all needs of the population in foodstuffs.

State of food market depends also on the national volume of production of agricultural products and foodstuffs of industrial production. Now it is national production that predefines demand in spite of the quickly growing value of foodstuffs import. Total value of the imported products of agriculture and food industry made up $ 326 million in 1994 and $ 898 million in 1997, i.e. it increased 2,75 times.

Share of the public sector (agricultural enterprises) in gross output was decreased from 70,6 % to 44,3 % for the period from 1990 to 1997 and is still decreasing.

                                                1995 – 2000                  2000 – 2010                  minimum consumer

(optimum I)                   (optimum II)                       goods basket

Bread and bread products                   104                                 101                                 93,8

Potato                                               123                                 124                                 90,1

Vegetables and melon                        154                                 161                                 106,7

Fruits and berries                               84                                  90                                  61,3

Meat and meat products                     80                                  83                                  45,4

Milk and dairy products                      380                                 395                                 353,3

Eggs                                                  280                                 291                                 246,2

Sugar                                                38                                  38                                  26,8

Oil                                                     12,6                                13,4                                7,1

Fish and sea products                         20,1                                20,1                                14,1

The actual staple food consumption in 1990s came down up to the level endangering health of the population (Table 2).

Table 2

Staple food consumption by the population of Ukraine (year’s consumption per capita; kg)*

Special surveys carried out by the Nutrition Research Institute of the Ministry of Health of Ukraine show extremely unsatisfactory nutrition of schoolchildren:

1.       30 % do not take fresh fruits and juices

2.       38 % do not take dairy products

3.       68 % do not take fish and sea products

4.       68 % do not take any animal products

5.       43,3 % do not bring to school sandwiches

6.       In September 1996 one free meal for pupils of 1-4 grades was cancelled, as a result only 5 % of schoolchildren is provided with hot meals.