ASPECTS OF FORMATION AND DEVELOPMENT OF CLUSTERS IN THE AGRICULTURAL SECTOR OF UKRAINE

Abstract

The article is devoted to the study of modern aspects of the formation and development of clusters in the agricultural sector of Ukraine. The importance of clustering as a tool for ensuring sustainable development of the agricultural sector on an innovative basis is considered. The objective of this article is to identify the main advantages of cluster structures for the Ukrainian agricultural sector, as well as to study the main mechanisms for stimulating their formation and development. The article also examines the current state of the institutional environment and its impact on the possibilities of clustering agriculture and industry. The author emphasizes the expediency of using effective mechanisms to support cluster initiatives by state and local authorities. It is established that state support in the form of grants, subsidies, and tax incentives is an effective mechanism for stimulating clustering in the agricultural sector. Methodologically, the article analyzes the benefits and challenges, especially in the institutional environment, using a comprehensive review of scientific literature, case studies, and the opinions of experts in the field of clustering and the development of highly integrated structures to provide a deep understanding of the subject matter. It is established that cluster initiatives should be supported at the local or domestic level to be able to compete and operate in the global value chain. In general, clustering can be used as a mechanism for local authorities to respond to globalization processes, i.e. to increase the competitiveness of the agricultural sector. The results of the study confirm the feasibility of forming agro-industrial clusters in Ukraine to increase the competitiveness of the sector. A cluster is an effective structure that can function and compete in a globalized market economy, as it encompasses vertical, horizontal and other links. It is established that clustering contributes to the modernization of agricultural production, diffusion of innovations, and attraction of investments in agriculture. It is also noted that consulting support from local authorities helps to establish partnerships between cluster members. Clustering promotes an active dialogue between the private and public sectors, stimulating the development of new agricultural policies at both local and national levels. The scientific novelty of this study is that it proves the influence of the institutional environment on the processes of cluster formation in agriculture. Unfavorable conditions of the institutional environment can slow down clustering processes in agriculture due to high transaction costs associated with regulatory barriers, corruption, and an imperfect tax system. This reduces the motivation of agricultural enterprises to cooperate within clusters. The practical significance of the study is to pay more attention to the existing unresolved institutional problems and minimize their negative impact by not formulating regional development strategies with priorities for the development of the agricultural sector, which can lead to an imbalance in the formation and functioning of the cluster. The low level of trust between potential cluster members due to the lack of traditions of social partnership, which makes it difficult to establish cooperation between them, also has a negative impact Improving institutional conditions, in particular, improving the current land legislation, will have a positive impact on the development of agricultural clusters.