Economics and Business Management

Developing an institutional environment to stimulate long-term investment in dairy farming

M. Klymenko
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Abstract

The aim of this study was to justify mechanisms for increasing the investment attractiveness of dairy farming in Ukraine by improving institutional support and introducing effective economic incentives. The study analysed the regulatory environment, assessed the dynamics of the industry’s development in 2022 – May 2025, and examined examples of investment projects implemented by agricultural holdings, cooperatives and international programmes. As a result, it was established that in 2024, milk production in Ukraine amounted to 7.2 million tonnes, and the profitability of the industry increased from 23% in 2022 to 26% in 2023, with a projected increase to 40% in 2025. Within the framework of the “Family Dairy Farms” project, 240 farms are in operation, and the number of new and modernised commercial dairy farms has reached 125. At the same time, there has been a reduction in the number of cows from 1.58 million in 2022 to 1.155 million in May 2025, due to losses from the war and low attractiveness for investors in the eastern regions. The study identified the main barriers, including difficulty in accessing finance, regional inequality and regulatory instability. A comprehensive analysis of the strengths, weaknesses, opportunities and threats of the institutional environment was conducted, based on which practical recommendations were developed for the implementation of a single investment register, a unified online support platform, expanded cooperation and tax incentives. The proposed solutions are expected to increase the investment attractiveness of agricultural enterprises by 30-35% and the profitability of the dairy business to 25-28% by 2026. The practical significance of the study lies in the development of applied tools for improving institutional support that can be used by public authorities, communities and agricultural enterprises to stimulate long-term investment in dairy farming

Keywords

farms; taxation; mechanism; risk; state programme

Suggested citation
Klymenko, M. (2025). Developing an institutional environment to stimulate long-term investment in dairy farming. Economics and Business Management, 16(3), 50-68. https://doi.org/10.31548/economics/3.2025.50
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