The argument doesn't depend on assuming that current attempts to develop new strains are futile. The author's claim is about the past—that researchers failed to develop new strains because they were focused on their own research. Whether any current efforts would succeed or fail is a separate issue from whether the researchers' past failure explains the drop in potato production.

Necessary, because if this weren't true—if the strains commonly grown in Rosinia could have produced the same yields last year that they produced twenty years ago—then the author's hypothesis falls apart. If the existing strains were perfectly capable of maintaining previous production levels, then the failure to develop new higher-yielding strains couldn't explain the decline. The drop would have to be caused by something else entirely, like bad weather or less farmland. The author can only blame the researchers for failing to develop better strains if better strains were actually needed to maintain the previous level of production.

This would arguably undermine the argument rather than support it. If researchers often find practical solutions while investigating seemingly unrelated questions, then the researchers' focus on "their own research" might have been a reasonable path toward developing better potato strains after all.

If wide fluctuations in the potato crop over twenty years are normal, that would suggest the drop might just be a natural fluctuation rather than something that needs the author's hypothesis to explain it. So this would open the door to an alternative explanation for the decline, which weakens the argument. The author's reasoning depends, if anything, on the assumption that this kind of decline isn't just a normal fluctuation and therefore demands an explanation.

You might be thinking that if the research is government-funded, the researchers have more of an obligation to serve Rosinia's needs, which makes it more reasonable to blame them. But the author's argument is about causation—did the researchers' failure to develop new strains actually cause the drop in production? Whether the researchers had a moral or professional obligation to focus on potato yields is a separate issue from whether their failure to do so is what caused the decline. Even if the research were privately funded and the researchers had zero obligation to help Rosinia, the author's hypothesis could still be correct. And even if the research were government-funded, that wouldn't make it any more likely that the lack of new strains actually explains the drop.