STATE GUARANTEES, GRANT FINANCING AND PREFERENTIAL LENDING FOR SMALL AND MEDIUM-SIZED AGRICULTURAL ENTERPRISES IN UKRAINE: AN ECONOMIC AND LEGAL ANALYSIS

Abstract

The agricultural sector remains one of the system-forming components of Ukraine’s economy, as it directly affects food security, export revenues, employment and the economic resilience of rural areas. Small and medium-sized agricultural enterprises (SMEs) occupy a particularly important place in its structure, while their financial capacity largely depends on access to external financing, the cost of credit resources, the availability of liquid collateral and the effectiveness of public support instruments. The purpose of the article is to determine the current state, economic and legal nature, advantages, shortcomings and directions for improving the mechanisms of financial support for agricultural SMEs in Ukraine. The study systematises national approaches to defining enterprise categories and analyses the regulatory and legal framework for state support of agriculture and the forms of State aid available to undertakings. Particular attention is paid to the partial credit guarantee mechanism in agriculture, the state “5-7-9” programme, grant financing, compensation measures and preferential instruments. It is established that the current system combines mechanisms of different economic nature: reduction of the cost of borrowed capital, partial coverage of credit risk, direct and indirect reimbursement of expenses, and non-repayable financing of selected investment needs. Its strengths include the availability of specialised instruments for the agricultural sector, support for family farms and the gradual development of guarantee infrastructure. At the same time, fragmented regulation, the dependence of a number of programmes on budget financing, limited access of small producers to bank lending and the insufficient development of long-term investment and insurance mechanisms have been identified. The need to harmonise eligibility criteria, strengthen guarantee mechanisms, develop agricultural insurance, longterm lending and combined financing models in which grants, loans and guarantees complement one another is substantiated. The proposed approach is aimed at improving the effective accessibility of financial support for small and family farms and creating a more predictable framework for financing the recovery and modernisation of agricultural production