Economics and Business Management

The aim of this study was to conduct a comprehensive analysis of the system of budgetary instruments for stimulating environmental transformation of the Ukrainian agricultural sector and to develop scientifically sound recommendations for optimising mechanisms of state financing for sustainable development of agricultural production. The methodological basis was formed by the principles of systematicity, objectivity and historicism, and structural-functional analysis, comparative analysis, content analysis and secondary data analysis were used to study the regulatory and legal framework, official reports and statistical materials for the period from 2024 to early 2025. A multi-level system of budgetary incentives was established with a funding volume of over UAH 24 billion in 2025, covering more than 300,000 beneficiaries through mechanisms ranging from direct grants to tax incentives. while a disproportion was identified between traditional subsidy programmes, which account for 70% of the total volume, and targeted environmental initiatives. A key trend has been the integration of environmental standards into financial programmes under the influence of international partners, as evidenced by the introduction of mandatory environmental and social assessments as part of the preferential lending programme, demonstrating an evolution from reactive support to proactive investment climate formation. The systematisation of European experience revealed Ukraine’s strategic dilemma between adapting to the standards of the European Union’s Common Agricultural Policy and maintaining the competitiveness of agricultural exports, while the practical results of implementing precision farming, bioenergy and organic production technologies have demonstrated the potential to reduce resource use by 15-25% while maintaining productivity. The main limitations to effectiveness are the fragmentation of environmental criteria in traditional support programmes, the difficulty of access to grant funding for small producers due to high co-financing requirements, and the lack of a comprehensive system for monitoring the environmental results of budget expenditures. The study has formed a scientific and methodological basis for improving state policy to stimulate the environmental modernisation of the agricultural sector through the creation of coordination platforms, the introduction of digital environmental monitoring systems, and the development of differentiated approaches to financing different categories of producers

state support; financial instruments; grant programmes; subsidies; tax incentives