Improvement of Crop Production Planning in Ukraine Using the Cobb-Douglas Production Function

Abstract

The relevance of the study is conditioned by the need to improve the process of planning the crop production by agricultural enterprises of Ukraine through the construction of a functional relationship between the results of production activities of enterprises and the factors that determine these results. The purpose of the study is to improve the process of planning crop production by agricultural enterprises of Ukraine through the development of an econometric model in the form of a Cobb-Douglas production function. To model the processes of crop production, it is proposed to use the Cobb-Douglas production function, which describes the dependence of the crop production index on the indices of agricultural land acreage and labour productivity. Based on statistical information for 1996-2020, unknown parameters of the Cobb-Douglas production function were found by regression analysis. The high quality of the constructed model is substantiated. High predictive properties of the model are proved. To analyse the efficiency of resource use in crop production by agricultural enterprises, the coefficients of average, marginal products of labour and capital are calculated. The sensitivity of crop production to changes in crop areas and labour productivity is investigated. It is determined that if the index of agricultural areas is increased by 1%, the index of crop production will increase by 0.77%; and if the index of labour productivity is increased by 1%, the index of crop production will increase by 0.81%. An increasing return on the scale of resources spent is revealed, which indicates an increase in production volumes with an increase in the volume of resources in the crop production industry.