Burkovska Alla, Ph. D (Economics), Associate Professor of the Department of Finance, Banking and Insurance, Mykolayiv National Agrarian University, Mykolayiv, Ukraine

ORCID ID: 0000-0003-4158-1721
e-mail: burkovskaya@mnau.edu.ua

Burkovska Anna, Ph. D (Economics), Associate Professor of the Department of Management and Marketing, Mykolayiv National Agrarian University, Mykolayiv, Ukraine

ORCID ID: 0000-0003-0563-6967
e-mail: anna.burkovskaya12@gmail.com

Financial security of agriculture as a key factor in food security: challenges and prospects

Abstract. Introduction. In the conditions of climate change, geopolitical instability, global economic crises and the growing need of the population for safe, high-quality and affordable food products, the economic stability of the agricultural sector is of crucial importance for the state’s ability to ensure its food security. A necessary condition for ensuring the country’s food security is the financial security of its agriculture.
We have examined the existing challenges to the financial security of agriculture in the context of food security, including: insufficient financing of domestic agricultural enterprises, which are in unequal competitive conditions with international corporations; fluctuations in prices for agricultural products on the world market; dependence of agricultural producers on imported resources; export barriers; climate change and natural disasters. Overcoming these challenges requires coordinated efforts of the state, business and the international community. Promising directions for strengthening the financial security of agriculture in the context of food security are indicated, including: introduction of new technologies and innovative financial instruments and strategies; development of infrastructure and public-private partnerships; activation of investment attraction; stimulation of export operations.

Purpose. The purpose of the article is to study the existing main challenges faced by the financial security of agriculture, identify their features, and develop proposals for promising areas of development of the financial security of agriculture from the point of view of ensuring the country’s food security.

Results. In the coming years, one of the main factors in ensuring the country’s food security will remain the financial security of its agriculture. A review of the aspects of financial support of agricultural producers demonstrated a number of existing challenges in this area, which affect the sustainable development of the industry and, ultimately, the food security of the country.
It was established that the financing of the agricultural sector in the country should be available, timely and stable. Lack of investments, fluctuations in prices for agricultural products, high cost of loans and insurance, non-guaranteed income and return of monetary resources, insufficient level of implementation of modern technologies, competition with international corporations, climate change, export barriers and the war in Ukraine create certain difficulties for the activities of agricultural producers who depend on unpredictable market conditions.
The above strategies to ensure stable food production, which respond to modern challenges and open prospects for development, require coordinated efforts of the state, business and the international community.

Conclusions. A prerequisite for achieving stable food security is overcoming challenges to the financial security of agriculture. However, modern realities, including climate change, geopolitical instability, and rising energy and fertilizer prices, threaten this stability. Small and medium-sized farmers have limited access to credit resources due to high interest rates, insufficient number of government support programs and weak integration into international financial markets.
The financial security of agriculture needs to intensify the implementation of innovative financing mechanisms, such as agricultural insurance, agricultural bonds, and microfinancing. Increased investment in infrastructure development will reduce the costs of production and transportation of agricultural products. The activation of the introduction of new technologies will optimize the management of financial flows, increase the transparency and efficiency of processes.
Strategies for adaptation of agricultural producers to the problems of financial security require coordinated efforts regarding the prompt implementation of technological innovations, resource management, and interaction with the state, business, and international organizations. Only under the conditions of active implementation of modern solutions, it is possible to achieve sustainable development of the agricultural sector and guarantee a stable supply of food both in current conditions and in the future.
These proposals will contribute to the neutralization of challenges to the financial security of agriculture, which will have a significant impact on ensuring food security.

Keywords: financial security, food security, financial instruments, investments, agricultural producers

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