THE ECONOMIC MODEL FOR DETERMINING THE OPTIMAL STRUCTURE OF PRODUCTION, PROCESSING AND EXPORT OF AGRICULTURAL PRODUCTS

Abstract

The paper analyzes the features of agri-food market functioning in Ukraine. Taking into account the importance of the agri-food sector in Ukraine, the authors develop the model for determining the optimal structure of production, processing and export of agricultural products. The purpose of the study was to define the optimal relation of agri-food industries in Ukraine that would provide a balance of production, processing, and export in Odessa, Mykolaiv, and Kherson regions of Ukraine while maintaining the maximum economic productivity of the regional agricultural system. The multi variant model based on the methodology of mathematical modelling in economics was developed to define the optimal structure of production, processing, and export of agricultural products. The model was developed based on the statistical data of Mykolaiv, Odessa, and Kherson regions of Ukraine. Using the model matrix, the authors analyze the statistical information as the input data to forecast the trends for the domestic agri-food market in Ukraine. The authors develop the system of variables and constraints indices that includes the sets of regions; agricultural and processed industries; planted areas in a corresponding region; numbers of cattle in the regions; processing and distribution of agricultural products; production of processed outcomes; agricultural and processed products sales in the domestic market; agricultural and processed products export; general needs in different kinds of resources; additional feed; production capacity; raw materials; general expenses on production and processing of agri-food products; general expenses of labor resources; general cost of final agri-food products in the domestic market; processed products costs in the domestic market; export agri-food products costs. Considering the developed system of 9 structural groups of constrains, the model deals with such coefficients and parameters as planted area, raw materials, production and sales volumes of agri-food products, and export volumes of these products. The paper allows to conclude that optimization of the parameters reflected in the model will allow to increase the productivity and export potential of agri-food industries in Ukraine. Although these industries are influenced by climate and political risks, the model can be used to optimize the relation of important components of Ukrainian agri-food market in order to improve its competitiveness and productivity. Thus, by optimizing the relation of planted area for growing cereals, industrial crops, vegetable crops and melon fields, the raw material base for processing industry and feed, numbers of cattle for regional needs, and the export potential for agricultural and processing industries higher productivity of Ukrainian agri-food industries can be achieved.