Economic efficiency of agricultural enterprises: criteria and evaluation indicators, impact of risks
Year: 2025
Type: article
Abstract: The purpose is to examine the impact of the risk aversion factor, as well as subsidies, on the choice of production direction and structure of agricultural enterprises under the natural and economic conditions of Northern Kazakhstan. Methods — farm survey data for the period 2020– 2024 were used to build a mathematical model. The initial assumption was that subsidies have a significant impact on farmers’ attitudes toward risky decisions, the formation of production systems of agricultural entities, and contribute to more complete utilization of their economic resources. The organizational principle of modeling is based on a stochastic approach, which makes it possible to account for variability of the natural environment, price criteria, and behavioral characteristics of agricultural producers, and to analyze the effect of risk minimization and preferences for risk-free situations in farming strategies. Results — calculations using the risk model confirmed that crop production in the region has a relative market advantage compared to livestock production. At the same time, the development of meat and dairy cattle breeding is possible only with an effective mechanism of state subsidization and other financial support measures that compensate for a high level of uncertainty and the probability of unfavorable outcomes, ensuring income stability. Conclusions — optimization of only two or three key sectors within a farm may be sufficient to significantly reduce material losses and instability. Creating a business model with maximization of expected utility requires substantial intellectual, financial, and time resources. Therefore, the use of such an algorithm is justified when the task is to forecast and analyze possible consequences of implementing large territorial agroeconomic programs: significant volumes of invested funds allocated to develop such an operational scheme are conditioned by the scale and social significance of such initiatives, the need to enhance the competitiveness of the economic entity in the market, and to search for optimal product marketing channels.
Source: Problems of AgriMarket
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7123438589