Formation of strategic management of hemp cultivation in a developing country: A case of Ukraine

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After a long period of decline and persecution, there is a revival and rapid development of the cannabis industry around the world: the use of this unique crop is expanding rapidly, and finally, it was transferred from a narcotic to an agricultural one (except for Ukraine). Nowadays, the Ukrainian hemp industry has practically gone unnoticed by the state, scientists, practitioners and society. At the same time, it has development prospects and can play a significant role for rural areas and the national economy. The paperis aimed at exploring the possibilities of growing hemp (Cannabis sativa L.) and justifying the need for strategic management of the development of the cannabis industry in Ukraine. Based on the analysis of hemp production, it is established that during the years of Ukraine’s independence, the area of hemp crops has decreased almost 8 times; the number of producers is limited; hemp processing plants do not function; the yield of technical hemp seeds has a slight tendency to increase andapproximates 6-7 kg/ha. The prospects for cannabis cultivation require building strategic management of the cannabis industry to address key issues and mitigate threats. The key elements of the production development strategy are identified as improving institutional and financial support at the state level. The main guidelines of strategic management of hemp cultivation are: simplification of regulation for producers; intensification of agribusiness entities; increasing production volumes; and improving the competitive environment in the hemp market. It is proved that the strategic development of the hemp industry requires developing hemp processing enterprises; disseminating knowledge among the population about the usefulness and benefits of this multi-purpose culture. To substantiate the effectiveness of strategic decisions, the algorithm was proposed for assessing the effectiveness of growing different types of hemp products by different technologies, which is carried out using economic and mathematical modeling.

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    • Figure 1. Dynamics of acreage of industrial hemp in Ukraine and Sumy region, thousand hectares
    • Figure 2. Technical hemp area by enterprises and institutions of Sumy region in 2019, hectares
    • Figure 3. Yield of fiber and seeds of technical hemp in Ukraine, c/ha
    • Figure 4. Algorithm for assessing the efficiency of strategic decisions in hemp cultivation
    • Table 1. Data from the State Register of Industrial Hemp Varieties as of December, 2019
    • Conceptualization
      Liubov Mykhailova, Andrii Mykhailov, Liudmyla Korenivska
    • Data curation
      Liubov Mykhailova, Liudmyla Korenivska
    • Formal Analysis
      Liubov Mykhailova, Liudmyla Korenivska, Lyudmyla Khromushyna
    • Methodology
      Liubov Mykhailova, Andrii Mykhailov, Liudmyla Korenivska, Lyudmyla Khromushyna, Marharyta Chuprina
    • Project administration
      Liubov Mykhailova, Andrii Mykhailov, Liudmyla Korenivska
    • Resources
      Liubov Mykhailova, Lyudmyla Khromushyna, Marharyta Chuprina
    • Supervision
      Liubov Mykhailova
    • Validation
      Liubov Mykhailova
    • Writing – original draft
      Liubov Mykhailova, Andrii Mykhailov, Liudmyla Korenivska, Lyudmyla Khromushyna, Marharyta Chuprina
    • Writing – review & editing
      Liubov Mykhailova, Andrii Mykhailov
    • Funding acquisition
      Andrii Mykhailov, Liudmyla Korenivska, Lyudmyla Khromushyna, Marharyta Chuprina
    • Software
      Andrii Mykhailov, Liudmyla Korenivska
    • Visualization
      Andrii Mykhailov, Liudmyla Korenivska, Lyudmyla Khromushyna
    • Investigation
      Liudmyla Korenivska, Lyudmyla Khromushyna, Marharyta Chuprina