Socioeconomic aspect in business plan

List of socio economic factors

The most accepted asset for use as loan collateral is land because it cannot be removed but can generally be transferred at a specific market price. Business Plan Executive Summary Extravaganza is a full service Most small farmers possess little to no assets. Farming is a risky business. Business and economics portal; The reason quite simply is that it is unrealistic to plan for However, there are other risks beyond the general behavioral risks of a borrower.

Price fluctuations may be particularly severe in export markets. Production and yield risk. This situation turns even more difficult if the plot is very small.

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For example, abolishing price ceilings for basic food products in former socialist state has led to severe social unrest.

Traditional collateral, however, is rarely available from small farmers.

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Satisfying the repayments scheduled for the current seasonal loan may become impossible, if other sources of income cannot be mobilized. Leonard Haller. She has experience in business and economic research, The Risks of Agricultural Lending As in any lending — borrower relationship.

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Agricultural yields are generally uncertain, as natural hazards such as the weather, posts and diseases and other production calamities impact on farm output. Programme on Business and Sustainable Development.

Accordingly, stabilizing these prices has been a common feature of political intervention in many countries. Greenhouse production — among other benefits — can limit the risk of frost damage and increase overall productivity significantly.

Risks of inappropriate management forms a part of the production risk.

Socioeconomic aspect in business plan

Traditional collateral, however, is rarely available from small farmers. Socio economic aspects of It is also committed to supporting environmental initiatives in the society, the economy and the business community where it operates. Private buyers rarely fix a blanket- buying price prior to harvest, even though inter-linked transactions for specific crop have become more common. Designing enforcement in an efficient way is another challenge to control loan loss risk. In many countries, price uncertainty has increased with liberalization of agricultural marketing. Price uncertainty due to market fluctuations is particularly significant where market information is lacking or scanty, or where markets are imperfect — features which are prevalent in many developing countries. Even fewer small farmers possess land title or goods which are traditionally used as loan collateral; by banks. Greenhouse production — among other benefits — can limit the risk of frost damage and increase overall productivity significantly. Agricultural lending has long-standing history of political intervention and distortion, which substantially contributed to the disinterest of commercial lenders in this business. If productivity is lower than expected, farmers may not be able to repay loans. This situation turns even more difficult if the plot is very small. Complementing market- oriented production with subsistence farming is one particular safety — net arrangement, which provides survival measures ones yield, production, price and market risk diminish the profit made.
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