Home  Journals  Economic Analysis: Theory and Practice  35(386) - 2014 September

Diagnostics of regional agriculture's financial stability

Available online: 19 September 2014

Subject Heading: DEVELOPMENT OF AGRICULTURAL SECTOR

JEL Classification: 

Pages: 21-33

The article identifies the priorities of the national agriculture development at the present stage. The dominating priority is manufacturers' financial sustainability increase, which, according to the canons of the agrarian laws, should be characterized by a profitability level, a share of loss-making enterprises and outstanding debt amount. Such a position runs counter to the economic science, in particular, to the parameters of a financial analysis. The authors substantiate the need of introducing financial indicators, which are generally accepted in scientific and applied activities, into the practice of generating forecast figures for the State program of agriculture development. This will enhance the objectivity and transparency of decision-making while implementing the State program and achieving its goals, and contribute to the analytic function and interpretability of results of the State measures' efficiency assessment. The research data summary on the case of the Penza region enables to conclude on poor financial state of farms and their substandard financial indicators. The low level of agriculture's financial capacity indicates that the industry is financially unstable. The problem lies in resources, which are generally in the form of State support provided to financial instruments. This disrupts the structural integrity of measures taken under the State program. Therefore, as a planned course of modernization, it is advisable to analyze the entire range of problems related to creating necessary conditions for sustainable development of agriculture. In the long run, the management bodies of agro-industrial complex may use the analysis findings for developing a sound agricultural policy of the region.

Keywords: diagnostics, analysis, stability, financial state, State program, agriculture

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