Agricultural sector value added chains and imports of everyday consumer goods

Abstract

The agricultural sector of Ukraine traditionally generates a significant share of export revenues; however, its contribution to gross value added remains disproportionately low due to the dominance of a raw-material development model. As a result, key stages of processing and commercialization are increasingly shifted outside the national economy, while the domestic market becomes more dependent on imports of finished goods. This problem is particularly evident in everyday consumer goods produced from agricultural raw materials, despite the country’s substantial natural resource base and historical specialization in crop and livestock production.
The article aims to provide a quantitative assessment of import flows of consumer goods made from agricultural raw materials through the prism of value added formation and losses within national value chains, as well as to identify factors constraining the development of domestic processing in Ukraine’s agricultural sector. The methodological framework is based on statistical grouping, index and comparative analysis, complemented by correlation-regression modeling.
The empirical results reveal a persistent growth of import dependence in leather, footwear, textile, and pulp-and-paper product groups, indicating structural breaks in national value chains. Econometric analysis confirms a statistically significant inverse relationship between the development of primary agricultural sectors (livestock numbers and crop areas) and the value of imports of corresponding processed goods. The contraction of the domestic raw-material base directly translates into increased imports and losses of potential value added.
The findings suggest that imports of agricultural-based consumer goods should be viewed not only as a trade indicator, but also as a measure of the effectiveness of national value chains. Strengthening domestic processing capacities and forming complete value chains from raw materials to final products are essential for reducing import dependence, retaining value added within the economy, and ensuring sustainable economic growth.