Resume Restructuring of the Livestock Semi-subsistence Farms: Real Option Analysis

D. NIKOLOV

Abstract: The need of applied method of the real options (RO) in agriculture is required for several reasons. First of all in practical terms stands the problem for inclusion in the investment analysis of the preliminary costs. They are significant on its size, but may not be reinstated, if the investment project not specified. At a subsequent place we can put high degree of uncertainty during the implementation of investment projects in agriculture. In the sector exists difference between investment and its return and information failure connected with the project implementation? It is essential in the process of taking the strategic investment decisions is that on what is your method of analysis of investment to be used in the conditions of risk in the industry, so that this analysis to be presented in a clear and accessible manner. As a result of the Treaty of Bulgaria with the EU dairy farms must meet by the end of as two group’s standards for the animal breeding and hygiene of milk. In the group of semi-subsistence farms (SSFs) these investments to the number of the animals kept are very large and farms are unable to carry them out. In this respect can be distinguished following alternatives: interruption of agricultural activity; postponement of the investment; rejection of the investment and transition to new sector. For the purposes of the study was organized and conducted in-dept survey at the beginning of April, 2010 by Institute of Agricultural Economics, Sofia. The study is deep in order to clarify the behavior of SSFs on the possibilities for restructuring and to deal with their assigned hygienic and sanitary requirements.

Keywords: investment analysis; real options; semi-subsistence farm

Date published: 2024-09-05