DECISION MAKING PROBLEMS OF AGRICULTURAL PROJECTS FINANCING UNDER INFLATION UNCERTANTY
Issue № 10, 2021, article № 13, pages 116-123
Section: Management in the agricultural sector
Original language title: ПРОБЛЕМЫ ПРИНЯТИЯ РЕШЕНИЙ О ФИНАНСИРОВАНИИ АГРОПРОМЫШЛЕННЫХ ПРОЕКТОВ В УСЛОВИЯХ ЦЕНОВОЙ НЕОПРЕДЕЛЕННОСТИ
Keywords: AGRICULTURAL PROJECTS FINANCING, INFLATION UNCERTAINTY, DECISION MAKING
Abstract: In order to provide intensive development of the agro-industrial complex, it is necessary to create conditions for the implementation of investment projects in this area. The growing uncertainty about the future dynamics of prices, both in Russia and in many developed and developing countries, leads to the fact that projects in the agricultural sector may be considered to be more risky, and therefore investors may refuse to finance them. The purpose of this study is to develop measures to stimulate investments in agricultural projects in the environment of growing price risks based on the analysis of the impact of such risks on decisions on project implementation. The research uses such scientific methods as synthesis, analysis, longitudinal method and methods of quantitative analysis. In the article, based on a sample of 89 countries for the period from 1990 to 2019, it was shown that decisions on financing projects in the agricultural sector are more sensitive to price risks than projects in other industries. In particular, this is manifested in the fact that with an increase in price uncertainty, the share of loans to agricultural enterprises in the total volume of loans to non-financial companies decreases, the dependence is significant at the 1% level. To support agricultural projects in conditions of price uncertainty, it is proposed to allow banks to extend loans in the agricultural sector once without accruing additional reserves, expand opportunities for prolongation of investment agricultural loans received from authorized banks, form measures of long-term support for agricultural enterprises, which are provided only in case of realization of price risks (for example, if the average market price level for manufactured products falls below a certain level).
Authors: Gurov Ilia Nikolaevich