Economic and mathematical modelling of ecological entrepreneurship as a direction of state agrarian policy

The article considers the approach to environmental entrepreneurship as an enterprise that focuses on compliance with the principles of sustainable development of ecological, economic and social systems in the context of the formation and implementation of state agricultural policy.

International Journal of Management (IJM) Volume 11, Issue 2, February 2020, pp 85–94, Article ID: IJM_11_02_009 Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=11&IType=2 Journal Impact Factor (2020): 10.1471 (Calculated by GISI) www.jifactor.com ISSN Print: 0976-6502 and ISSN Online: 0976-6510 © IAEME Publication Scopus Indexed ECONOMIC AND MATHEMATICAL MODELLING OF ECOLOGICAL ENTREPRENEURSHIP AS A DIRECTION OF STATE AGRARIAN POLICY Antonina Bobkova Department of Commercial Law, Vasyl' Stus Donetsk National University, Vinnitsya, Ukraine Yaroslav Sydorov Department of Administrative and Economic Law, Zaporizhzhia National University, Zaporizhzhya, Ukraine Anatolii Karpuk Department of Forest Taxation and Forest Management, Principal, Separate Division of National University of Life and Environmental Sciences of Ukraine "Boyarka Forest Research Station", Kyiv, Ukraine Yaroslav Oliinyk Department of Economic and Social Geography, Taras Shevchenko National University of Kyiv, Ukraine Viktoriia Samofatova Department of Industrial Economics, Odessa National Academy of Food Technologies, Odessa, Ukraine ABSTRACT The article considers the approach to environmental entrepreneurship as an enterprise that focuses on compliance with the principles of sustainable development of ecological, economic and social systems in the context of the formation and implementation of state agricultural policy A methodology for modelling the fund of environmental entrepreneurship as a tool for implementing agricultural policy is proposed This technique can be used to select the most appropriate option from both an ecological and an economic point of view The possibilities provided by this approach and the nuances of this technique are considered The examples show the options of modelling various industrial complexes for processing agricultural waste http://www.iaeme.com/IJM/index.asp 85 editor@iaeme.com Economic and Mathematical Modelling of Ecological Entrepreneurship as a Direction of State Agrarian Policy Keywords: Agrarian Policy, Agricultural Waste Processing, Environmental Business Fund, Environmental Entrepreneurship Cite this Article: Antonina Bobkova, Yaroslav Sydorov, Anatolii Karpuk, Yaroslav Oliinyk, Viktoriia Samofatova, Economic and Mathematical Modelling of Ecological Entrepreneurship as a Direction of State Agrarian Policy, International Journal of Management (IJM), 11 (2), 2020, pp 85–94 http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=2 INTRODUCTION The state of the environment is increasingly affecting economic development, health and life expectancy A further uncontrolled increase in the anthropogenic load on natural resources can lead to a global violation of the natural balance, which will entail the destruction of the natural balance of human life A growing population and increasing consumption, reduction and depletion of suitable agricultural land, set the government of the countries of the world the task of a thorough approach to the formation of agricultural policy [1-4] Rational use and protection of natural resources is a necessary condition for overcoming the environmental and economic crisis One of the main new opportunities is the formation and development of ecological entrepreneurship and the transition to the production of environmentally friendly products Over the past decade, the global market for eco-products has grown three times [5-6] An expert assessment of the global market for environmental products allows us to talk about an estimated capacity of $ 500 billion) Moreover, this market is also one of the fastest growing, its annual growth is more than 5%, and in some countries, the growth rate is projected even higher Environmental entrepreneurship, in its essence, is an initiative economic activity carried out taking into account ecological requirements and restrictions, aimed at avoiding and reducing negative environmental impacts, as well as improving ecological indicators to maximize profits According to the value approach, the difference between ecological entrepreneurship and more conventional is, in addition to a combination of ecological and economic goals, that is, production, work and services that ensure compliance with environmental requirements established by applicable law The usefulness of ecological and traditional enterprise products can be represented using Fig.1 Traditional utility Traditional Enterprise Product Product in the field of environmentally oriented entrepreneurship Environmental utility Product environmental entrepreneurship Figure The ratio of traditional and environmental components of a product utility http://www.iaeme.com/IJM/index.asp 86 editor@iaeme.com Antonina Bobkova, Yaroslav Sydorov, Anatolii Karpuk, Yaroslav Oliinyk, Viktoriia Samofatova As an ecological utility, we will consider service generated as a result of meeting ecological and economic needs that increase the sustainability of an environmental system or are neutral concerning its sustainability [7-10] It can be concluded that the criterion for classifying business as one of the forms (traditional entrepreneurship, environmentally oriented entrepreneurship, environmental entrepreneurship) is the share of ecological utility in the total usefulness of the product At the same time, the attributive properties of environmental entrepreneurship are defined by these four features:  the determining share of environmental utility in the total efficiency of the product;  the satisfaction of environmental needs (from the position of consumers);  income from the "sale" of environmental utility (from the position of entrepreneurs);  the resources of the ecological system are considered as priority factors affecting the needs of individuals METHODOLOGY The process of forming an environmental entrepreneurship market as part of the state agrarian policy involves stabilizing the ecological situation and improving ecological measures with economic benefits for the enterprises involved 2.1 Recycling of Agricultural Waste as a Basis for Eco-Friendly Entrepreneurship World experience indicates that the development of production leads to an increase in the anthropogenic load on the environment, while agricultural activity is typical is no exception In the field of agricultural waste management, a situation may arise that could lead to an environmental disaster in the territories of their direct formation, as well as in adjacent storage areas The experience of the agro-industrial complex shows that the most significant number of problems is associated with one of the types of agricultural waste, namely, biological This type of waste, if mishandled, can provoke various epidemics, improper storage of organic waste causes not only environmental but also significant economic damage to agricultural producers and the social consequences are not always measurable Territories where biological waste is stored lead to the degradation of large areas of agricultural land, and also significantly reduce the investment attractiveness of the regions Correct waste recycling should provide for the full use (if possible) of by-products, waste from processing agricultural raw materials, animal and poultry cases, proper handling of land (to prevent humus in the soil, deposits, salinization, acidification of soils, exposure to wind and water erosion), the use in accordance with the approved standards of mineral fertilizers, protective equipment, the collection and disposal of waste oils, containers It should be borne in mind that so far a significant part of the agricultural waste is not used, despite the fact that only a small percentage of this waste needs to be disposed of, this is clearly seen from the diagram in Fig http://www.iaeme.com/IJM/index.asp 87 editor@iaeme.com Economic and Mathematical Modelling of Ecological Entrepreneurship as a Direction of State Agrarian Policy 2% 25% 40% 33% Non-recyclable biohazardous waste Unused waste Recycled waste used as fertilizer Waste used to generate electricity Figure Agro-industrial waste structure It is the provision of services for the processing (recycling) of biological wastes of the agricultural complex that can be taken as an example of environmental entrepreneurship, which will take into account only the economic component, but also the environmental consequences of this type of activity With this approach, the relationship structure and the position of environmental entrepreneurship in the system of public policy and the global economy can be represented as a diagram in Fig World economic system Economic system of the country Agricultural enterprise of regional level State agricultural enterprise Local agricultural enterprise Agricultural enterprise with foreign capital Innovation, Technology, Investment Legal Regulation and Economic Policy Agricultural sector Services and Products Environmental entrepreneurship Figure The system of relationships and the position of environmental entrepreneurship in state agricultural policy http://www.iaeme.com/IJM/index.asp 88 editor@iaeme.com Antonina Bobkova, Yaroslav Sydorov, Anatolii Karpuk, Yaroslav Oliinyk, Viktoriia Samofatova All of the above factors show that environmental entrepreneurship has great potential when used properly in the field of state agrarian policy 2.2 Economic and Mathematical Modelling of the Ecological Enterprise The possibility of using this or that waste as a raw material for the production of products demanded by the market is determined by some factors: the amount of waste generated, the availability of innovative and environmentally friendly technologies for waste processing, the demand for products made from recycled materials All these factors will determine the economic, environmental and social efficiency of waste management Since the activities associated with the processing of waste are aimed at both obtaining an economic and an environmental result, there is a need to evaluate the indicators of economic profitability (R economy) and environmental profitability (R ecology) of this production The value of the economic profitability of R economy can be defined as the ratio of the size of the profit of the enterprise engaged in waste processing to its revenue: where I is the size of the benefit of the enterprise whose activity is associated with waste processing; G - the revenue of the enterprise whose activities are associated with waste processing The value of functional dependence: will depend on factors: V, E, C, T and can be represented as a where V is the volume (availability) of secondary raw materials (waste); E - waste processing costs; C - cost of recycled materials; T - development costs or technology acquisition costs The value of environmental profitability R ecology is defined as the ratio of the amount of prevented damage to the environment to the size of the revenue of the enterprise whose activity is associated with waste processing: where P is the size of the prevented damage to the environment; G - the revenue of the enterprise whose activities are associated with waste processing This indicator can be represented as a functional dependence, where the variables are T and P: where T is the development costs or technology acquisition cost; P - the size of the prevented damage to the environment Such differentiation will allow us to form a positioning matrix according to a criterion that takes into account both economic and environmental feasibility and simulates the process of a profitable enterprise for processing agricultural waste, presented in Fig http://www.iaeme.com/IJM/index.asp 89 editor@iaeme.com Economic and Mathematical Modelling of Ecological Entrepreneurship as a Direction of State Agrarian Policy Economic profitability 100% Hj - Si Hj - Mi Hj - Hi Mj - Si Mj - Mi Mj - Hi Sj - Si Sj - Mi Sj - Hi 60% 30% 30% 60% 100% Environmental profitability Figure Profitability Positioning Matrix Using the criterion of environmental and economic profitability, we distinguish three groups of industrial complexes: profitable - {Hj - Mi}; {Hj - Hi}; {Mj - Hi}; mid-income - {Hj - Si}; {Mj - Mi}; {Sj - Hi}; low-yield - {Mj - Si}; {Sj - Si}; {Sj - Mi} Each of the identified groups is characterized by a specific set of parameters that make it possible to make informed decisions regarding the possibility and environmental and economic feasibility of investing in the production process of an ecological enterprise for processing agricultural waste The constructed economic and mathematical model will be able to serve as the basis for policy formation and determining the possibility of conducting activities in the agricultural sector, taking into account the capabilities of the environmental enterprise 2.3 Mechanism for the Creation of Public Policy in the Field of Stimulating Environmental Entrepreneurship The mechanism for the development of entrepreneurship is a set of tools, methods and forms of implementing system goals through the organization and management of the reproduction process The organizational and economic mechanism of environmental entrepreneurship is defined as a combination of organizational, socio-social and financial-economic instruments The state as a critical player in the market of environmental goods and services has its own regulatory and incentive mechanisms, as part of the country's overall agricultural policy Among them, the following financial and economic instruments can be distinguished: preferential taxation, environmental pricing, subsidies, guarantee funds, subsidies, microcredit, etc The purpose of these tools is not to directly set goals that are significant for individual enterprises or society as a whole and to strictly enforce them, but to use incentives related to the functioning of markets to influence the economic interests and economic behaviour of business entities in an environmentally relevant direction To determine a specific set of tools, apply the following essential criteria:  efficiency (the ability to achieve economic and environmental goals, realize the mission and switch to sustainable development in the most rational way minimizing costs); http://www.iaeme.com/IJM/index.asp 90 editor@iaeme.com Antonina Bobkova, Yaroslav Sydorov, Anatolii Karpuk, Yaroslav Oliinyk, Viktoriia Samofatova       justice (concerning the distribution of the consequences of the introduction of tools between various social groups and business entities); feasibility (organizational and informational, resource, staffing measures); flexibility (adaptability and adaptation to changes in the market environment, orientation towards the progressive improvement of the environmental situation); time factor (use of long-term incentives, motivation for innovations in the best technologies, taking into account the long-term consequences of greening); socio-political acceptability (determination of socially acceptable limits of negative impact on the environment, social harmony and tolerance, voluntary decision of environmental obligations and responsibilities of producers) determination of environmental commitments and liabilities of producers) EXPERIMENT AND ANALYSIS OF THE RESULTS As a basis for the experiment, an option will be chosen to create an environmental entrepreneurship fund, with subsequent modelling of its activities, in the field of financing ecological entrepreneurship in the processing of agricultural waste Fig shows the origins of formation and the direction of spending the funds of the environmental entrepreneurship fund Sources of financing Payments for negative environmental impact State subsidies Profit from the activities of the fund Environmental Entrepreneurship Fund Waste processing Environmental science New technical developments Direction of spending Figure Sources of funds and directions of fund financing An essential feature of the environmental entrepreneurship fund will be to maintain this type of activity in the field of interests of the state agrarian policy, that is, in this situation, its work will be carried out in financing projects in the environmental sphere Accordingly, there is a need to decide on determining the size of the lending rate for investment projects in the field of processing waste of different profitability The interest rate as the price of a credit resource is a complex characteristic since it is formed under the influence of a complex system of factors, especially in the environmental sphere The most important factors affecting the interest rate include inflation since it affects the level of depreciation of money Internal factors that not depend on the state of the country's economy include loan term, loan size, demand for credit resources, borrower category and its economic situation In our study, the output rate Y was selected as the interest rate for lending to plants for the processing of wastes from the FEP in% Under the conditions of the available information, http://www.iaeme.com/IJM/index.asp 91 editor@iaeme.com Economic and Mathematical Modelling of Ecological Entrepreneurship as a Direction of State Agrarian Policy five variables were included in the model: X1 - loan size; X2 - loan term (year); X3 - inflation rate (%); X4 - the possible profit of the borrower (rubles); X5 - level of risk (%) The popular program Statistica was chosen as the statistical data processing software product, and in particular, the Multiply Regression module was used The final form of the equation is obtained: The testing of modelling tools for environmental entrepreneurship in the provision of agricultural waste processing services is presented in three options, in Table 1:  production complex for anaerobic digestion of agricultural waste;  production complex for the generation of energy from agricultural waste;  production complex for the production of animal feed and fertilizer from agricultural waste Table Resulting indicators of agricultural waste processing plants Complex for Complex for the Complex for the anaerobic generation of production of feed digestion of energy from for animal and rural waste rural waste fertilizer from farms farms agricultural waste Options The volume of processing waste production, t/year (capacity) 2000 2000 1200 Productivity of the installation for finished products, t/year 3000 3850 1800 Capital expenditures for the creation of production, million USD 25,5 27 49,5 Price with VAT per unit of output, USD/T 9000 5000 26000 Prevented environmental damage, million USD year 9,5 11,4 5,7 Economic profitability 0,8 0,68 0,89 Environmental profitability 0,44 0,87 0,14 Next, a matrix is constructed for positioning the complexes according to the criteria of environmental and economic profitability (Fig 6), to choose a technology that provides the necessary level of profitability of the use of waste for the production of marketable products Figure Production option positioning matrix in terms of economic and environmental profitability http://www.iaeme.com/IJM/index.asp 92 editor@iaeme.com Antonina Bobkova, Yaroslav Sydorov, Anatolii Karpuk, Yaroslav Oliinyk, Viktoriia Samofatova Complex for anaerobic digestion Complex for the generation of energy Production of feed for animal and fertilizer Economic profitability 0,8 Economic profitability 0,68 Economic profitability 0,89 Environmental profitability 0,44 Environmental profitability 0,87 Environmental profitability 0,14 Highly profitable Highly profitable Medium profitable Investment tax credit Preferential taxation Preferential taxation Soft loan Soft loan Pricing Microcredit State guarantees State guarantees Environmental Enterprise Fund Environmental Enterprise Fund Environmental Enterprise Fund Government Policy Tools Rate of return Performance indicators As can be seen from the matrix, depending on the option, agricultural waste can be processed into various possibilities for useful raw materials, and according to the degree of profitability, it can be either a profitable or an average lucrative option Next, we consider the options for instruments that the state can use in the framework of agricultural policy, to ensure financing of the most effective business projects of environmental entrepreneurship (Fig 7) Figure The scheme of choice of instruments of state regulation If FEP is chosen as the source of financing, then an option is proposed for calculating the interest rate (under the following conditions: loan term - 10 years, inflation - 6%, risk level 9%, since this production is classified as profitable, based on risk allocation schemes): Y = 5.218 + 0.098 * 10 + 0.273 * + 1.533 * = 21.63% CONCLUSION Activities in the field of environmental entrepreneurship already in the first stages of its development (prevention of environmental impact) can lead to significant economic and environmental effects The state, as a participant in economic relations, may be the catalyst that stimulates the development of environmental entrepreneurship in the right direction from agricultural policy Economic and mathematical modelling of environmental entrepreneurship is a powerful tool that allows you to make informed decisions and analyze using relevant and verified data The effect of the positive impact on both the environmental and economic components of this type of activity is difficult to overestimate In modern conditions, it is the managerial will of the state apparatus that is able to make this mechanism work for the good of society REFERENCES [1] Antoshin K.A., Development of the system of agribusiness information and consultation as direction of state agrarian policy, August 2015, DOI: 10.18551/rjoas.2015-08.04 [2] Michael J Lenox, Jeffrey G York, Environmental Entrepreneurship, January 2012, DOI: 10.1093/oxfordhb/9780199584451.003.0004 http://www.iaeme.com/IJM/index.asp 93 editor@iaeme.com Economic 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Tahir Khan, “Multimedia OSS and Entrepreneurship: opportunities” Journal of Management, 5(3), pp 32–35, 2018 http://www.iaeme.com/IJM/index.asp 94 editor@iaeme.com .. .Economic and Mathematical Modelling of Ecological Entrepreneurship as a Direction of State Agrarian Policy Keywords: Agrarian Policy, Agricultural Waste Processing, Environmental Business... editor@iaeme.com Economic and Mathematical Modelling of Ecological Entrepreneurship as a Direction of State Agrarian Policy [3] Bautin V.M., Lipchenko E .A. , State Agrarian Policy: Structuring of Investments... Viktoriia Samofatova All of the above factors show that environmental entrepreneurship has great potential when used properly in the field of state agrarian policy 2.2 Economic and Mathematical Modelling