JUSTIFICATION OF PRIORITY AGRICULTURAL POLICY DIRECTIONS BASED ON THE PRODUCTION FUNCTION

DOI 10.32651/267-119

Issue № 7, 2026, article № 15, pages 119-128

Section: Problems of agroeconomic researches

Language: Russian

Original language title: ОБОСНОВАНИЕ ПРИОРИТЕТНЫХ НАПРАВЛЕНИЙ АГРАРНОЙ ПОЛИТИКИ НА ОСНОВЕ ПРОИЗВОДСТВЕННОЙ ФУНКЦИИ

Keywords: AGRICULTURE, PRODUCTION FUNCTION, LABOUR FACTOR, CAPITAL FACTOR, INTENSIVE PRODUCTION

Abstract: The objective of this study is to develop tools for substantiating the directions of state agricultural policy. For this purpose, production function models of the agricultural sector in the Kursk region were constructed. A production function is an economic and mathematical model that allows for the comparison of input factors and production resources with the results of activity. The classical Cobb-Douglas model was used as the production function model. The production functions were constructed based on microeconomic data from agricultural enterprises in the region. The study covered the period from 2016 to 2024. The obtained data were compared with the results of a 2012 study. The authors identified a significant increase in the importance of capital and a gradual decrease in the significance of labour. Research has shown that the role of the investment factor is quite significant throughout the analysis (an average elasticity coefficient of 0.47 over 9 years) and increases over the analysed period. The average elasticity coefficient for the labour factor decreases but remains quite high (0.62). Although the model has significantly changed (compared to the classical 20th-century model), the importance of the labour factor remains higher than that of the capital factor. The sum of the coefficients for the factors (α + β) consistently exceeds unity over the analysed period and reaches 1.1 in 2024. This indicates a consistently intensive production function, positive returns to scale, and growth in the resulting indicator (in the form of sales revenue) of more than 1% with a 1% increase in the capital and labour factors. The calculated dynamic production functions allow us to assess general development trends and determine the "cost" of substituting one factor for another. Such models provide the basis for forecasting industry development, substantiating priority agricultural policy directions, developing a strategy for financing resource growth, assessing the impact on the industry of potential employment reductions, etc.

Authors: Zaretskaia Vera Grigorevna, Petrushina Olga Viacheslavovna, ZHiliakov Dmitrii Ivanovich