Analysis of investment resources’ impact on food security condition

Abstract

Ensuring food security and developing agricultural production is impossible without investment. At the same time, some scientists note that a significant amount of foreign investment increases the dependence of the domestic economy and enterprises on foreign investors. In addition, subsidies lead to a lack of motivation among entrepreneurs to attract additional investment resources and increase the dependence of production on areas of state support. Some investment models contribute to the deterioration of the environment, and technological advances are not available to small farmers who do not have the financial resources to apply the technology. Therefore, investment is important to ensure the effective development of the agricultural sector and food security mechanism. However, the presence of a significant amount of foreign investment can lead to the dependence of the national economy on investors, which can have a negative impact on the cost of agricultural products, production volumes, exchange rates and purchasing power of the population. The aim of the article is to analyze the impact of investment on the agricultural production as the main component of food security mechanism. To analyze the effectiveness of investment we chose the indicators “Government spending on agriculture”, “Foreign direct investment in agriculture” and the indicator “Agricultural production”. As a result of the analysis, it was found that the impact of government investments on agricultural production is not significant. This trend can be explained by the existing theory that there is no significant positive impact of government investments on the efficiency of agricultural enterprises due to the lack of incentives for farmers to innovate and compete in the market environment. A strong direct link between the indicators “Foreign direct investment in agriculture” and “Agricultural production”, which indicates a significant impact of foreign direct investment on agricultural production, is emphasized.