Investments in the Sustainable Development of the Potato Sector in Ukraine Based on the Optimal Balance of Production and Consumption

Abstract

The increasing role of potato breeding in the country’s food security system calls for additional investments into maintenance and technological reconstruction of the branch on the basis of scientifically proven methods and approaches to defining the optimal potato production volumes, its processing and storage to avoid surplus stock, unnecessary losses and inefficient investment resource use at all stages of agricultural and food chain. The aim of the research is to substantiate the conceptual investment model into the development of potato breeding in Ukraine on the basis of estimating the optimal structure of balance between potato production and consumption, as well as efficient combination of the volumes of fresh and processed produce to ensure the competitive potato market parameters in the modern market environment. The object of the research is the process of formation and increase of added value in the agricultural chain through application of optimal parameters of the balance between potato production and consumption. The methods of the research are based on the system analysis law, which enable to substantiate competitive parameters of the potato breeding branch in Ukraine in the changing economic environment, thus to reduce unnecessary losses in the “production-processing-delivery-sale-consumption” chain. Incorporation of the developed optimization model of the balance between potato production and consumption according to the criterion of minimization of potato rest at the end of the year enabled to discover its extreme surplus of 2,4 mln. tons at the beginning of the 2020 year, which was not balanced by consumption demand. The inefficient distribution of the gross domestic potato stock in Ukraine made it possible to draw a conclusion about the need to reduce its surplus production by 17,5% and redirect the main investments into the development of potato processing industry, improvement of its export power and extension of foreign markets for selling Ukrainian potato ready and intermediate products, with further possibility of selling raw potatoes of ensured required quality. In this context the authors proposed the conceptual model of investment into potato breeding in Ukraine proceeding from the optimal balance between potato production and consumption by 2027 year that enables the achievement of strategic effect under the conditions of the global competition.