Land Rent, State Subsidies and Sustainable Agriculture

  • Oleksiy SHKURATOV
  • Andriy POPOVYCH
Keywords: agriculture, rent, subsidy, sustainability


The environmentally sustainable development of agriculture is only possible with a sufficient level of profitability which depends on the mechanism of redistribution of income generated in the process of transforming of natural qualities of land into the cash flows through
a system of legal norms, economic methods and agricultural techniques. Considering agricultural land as natural resource emphasizes the role of environmental factors in the formation of land rent directly linked to the land value maximization which can only be achieved by
continuously investing in land plots dependant on the economic incentives created. Improving the management of land use should be based on the distribution of land rent, as one of the most effective means of stimulating the sustainable development of agriculture. The mechanism of the formation and distribution of land rent consists of a system of economic and legal norms and methods, through which the redistribution of income created in the process of using natural qualities of land. Through optimization of the land rent mechanism, the regulation of social relations in the field of land use, the criteria of sustainability of agriculture are met, the balance of interests of landowners, land users, the state and other subjects of the agro-industrial market and the budgetary system of the country are met.