FINANCING OF BUSINESS DEVELOPMENT IN FARMS

Abstract

In the current conditions of agricultural development and amidst economic and sociocultural shifts, financing the development of entrepreneurship in small farms becomes a strategically important task. Ensuring necessary financial resources determines the efficiency, competitiveness, and stability of this sector. In the context of new challenges such as military aggression and pandemics, there is a need to develop and justify new approaches to financing the development of small farms aimed at ensuring sustainability and innovation. Hypothesis: it is anticipated that optimal financing of entrepreneurship development in small farms will contribute to enhancing their competitiveness and operational efficiency. Objective: the research is focused on analyzing financial mechanisms and resources necessary to stimulate innovation and sustainable development in small farms. The methods of economic indicators analysis and synthesis, statistical analysis, as well as a literature review to summarize known theoretical approaches, were employed in the study. The analysis of financial sources over the years revealed that self-financing is the main source of funding for small farms, increasing during the period of 2018-2022. It is noteworthy that in 2022, when the war began, this indicator not only did not decrease but remained stable. Lending and state funding indicate a less significant contribution, but their fluctuations also occurred amid geopolitical and economic turbulence. Capital investments, while showing overall growth, did not increase as rapidly as self-financing. Self-financing remained stable, indicating internal stability of the farms. Although not the dominant source of funding, capital investments point to a strategic approach to farm development. The increase in this indicator reflects farmers' aspirations for innovation, equipment modernization, and increased production efficiency. Therefore, the research results indicate that small farms, despite geopolitical and economic challenges, demonstrated stability in financing their activities. Based on the obtained results, possible directions for further research include developing recommendations for optimizing financial strategies of small farms, studying mechanisms of state support, and improving financial regulation to enhance the sustainability and innovative development of the agricultural sector.