Investments in the Sustainable Development of the Potato Sector in Ukraine Based on the Optimal Balance of Production and Consumption
January 2022 WSEAS Transactions on Business and Economics 19:186-196
Authors: Ruslan Lavrov, Lyudmyla Remnova, Іryna Sadchykova, Hennadii Mazur
Growing role of potato farming in food security system of the country needs attracting the new investment in preserving and process restructuring of the sector, at scientifically proven approach to defining the optimal scope of potato production, processing, and storage – to avoid the extra stocks, unnecessary losses, and inefficient investment resources at any stage of agri-food chain. Purpose of the study is to justify the conceptual model of investing in development of Ukrainian potato sector, based on calculated optimal structure of balance between potato production and consumption, as well as the effective combination of fresh and processed products, to ensure competitive parameters of potato market in actual market environment. Object of the study is forming and increasing the added value in agri-food chain, due to optimal parameters of balance between potato production and consumption. The study methodology is based on system analysis laws, which allow justifying the competitive parameters of Ukrainian potato sector in varying economic space, thus reducing the unnecessary loss in “producing-processing-transporting-sale-consumption” chain. Use of developed optimization model for potato production/consumption balance, by minimizing the potato residues at the end of year, revealed the extra stock (2.4 million tons) in early 2020, which was unbalanced with consumer demand. Due to inefficient distribution of gross potato yield in Ukraine, conclusion was made on need to reduce investment in overproduction (17.5%) and direct the major investment flows in potato processing industry, increase the export potential, and expand the foreign market boundaries for Ukrainian potato products, semi-finished and fresh products, at ensuring the relevant quality. In this view, authors proposed a conceptual investment model for potato sector of Ukraine, based on optimal balance of potato production and consumption till 2027, which ensures achieving the strategic result in terms of global competition.
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