Agrarian Economy 2022 Т. 15 № 3-4: 101-107

Mechanism of implementing the financial potential of agricultural enterprises based on the «growth spiral» idea

V. Kovaliv, Candidate of Economic Sciences (PhD), Associate Professor
ORCID ID: 0000-0003-2915-9990
I. Yavna, PhD student
ORCID ID: 0000-0001-7295-1989
Lviv National Environmental University

https://doi.org/10.31734/agrarecon2022.03-04.101

ANNOTATION

The article reveals the essence and opinions of scientists on the financial potential and its place in the system of financial support for agricultural enterprises. The idea of the «growth spiral» as a factor of development of small agricultural enterprises and private households is analyzed. In the modern economy, the «growth spiral» is used as an idea of extended reproduction, which is a problem for small agricultural forms of farming. It exists due to the limited possibilities of obtaining investments in the form of contributions to the share capital, bank loans and funds from donor organizations. A particular attention is paid to the sources of capital accumulation by enterprises. Bank loans are an important source of financing business activities, but they are also a source of stress. Financial stress is the driving force of progress as it pushes entrepreneurs out of their comfort zones and forces them to work harder to achieve their goals. Entrepreneurs must receive a rate of return on equity that compensates for the risk and is 2–3 times higher than the interest rate on loans, which is possible if the price-quality ratio is ensured. An important place in advanced reproduction is given to innovative production methods that intensify the use of natural resources, and innovative products increase the benefits obtained from processing natural materials.

Some factors affecting development of small agrarian formations have been identified, among which borrowed funds and financial stress dominate. The aim of the «growth spiral» is to encourage transformation of households engaged in agricultural production. It will make it possible to stimulate them and collect taxes from them. The state is interested in increasing the number of taxpayers who are the source of state and local government funds.

KEY WORDS

agriculture, households, agricultural enterprises, financial potential, growth spiral

FULL TEXT

LINK

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