2023-10-09 18:20:35
Throughout business life, financial management of any enterprise involves several aspects that fall into different stages of its economic existence. Cash flow in the short term is one of the important factors for business development, just as the budget is for the medium and long term.
If, on the one hand, the entrepreneur needs to be aware of his liquidity and payment capacity, on the other hand, he cannot neglect investment plans in new equipment that will enable the enterprise to survive and remain competitive in the future.
Academically, economic development in a capitalist system, profit and profitability are decisive factors in any analysis of business activities and the willingness to invest.
“Interest, low or high demand, competition, international circumstances, among others, are variables that positively or negatively affect the disposition of the entrepreneurial investor. In agribusiness, in addition to the variables mentioned, there is also the climate, pests and diseases as preponderant factors”, explains Luiz Antonio Barbagallo, economist at ABAC Associação Brasileira de Administradoras de Consortia.
Specialists from ABAC predict that, after three years of results above historical averages, agribusiness may face periods of turbulence in future harvests. Imbalance between production costs and sales prices, the return of the El Niño phenomenon, the protectionist influences and tendencies of some countries, are expected to impact the 2024/2025 harvest.
Faced with these difficulties, decisions about investments in purchasing new equipment and services need to be evaluated considering several factors. “The amounts invested in agribusiness are significant and the return, due to the various variables involved, is permeated with uncertainties”, says Paulo Roberto Rossi, executive president of ABAC.
On the other hand, by failing to invest, the problems may worsen, compromising results after a period of two or three years, when the turbulence passes.
Present for just over 60 years in Brazil, the Consortium System can be an alternative response to face these situations that afflict investors. Just like in the automobile industry, where the mechanism works as a true instrument for production planning, it could also play a fundamental role in agribusiness.
When talking about strategic planning, it is recommended that the minimum deadline for a well-designed plan is 12 months. “However, given the characteristics of rural activities, the most appropriate period is over 60 months, which makes the consortium an ideal mechanism”, warns the economist.
Variations in crop maturation times, especially smaller ones such as fruit and vegetables, and larger ones, such as coffee and other grains, for example, need to be foreseen in the agricultural calendar.
“In planning, it is important to provide financial control, where the budget plays a fundamental role, with a view to achieving more efficiency and competitiveness”, recalls Rossi.
The multifaceted agribusiness scenario requires constant attention from its participants. Planning must anticipate financial fluctuations, imposed by price variations in national and international markets, as well as those caused by climate change or losses due to disease.
The recent rains and floods that occurred in Rio Grande do Sul caused losses and delays in the harvesting schedule and the beginning of sowing. For rural businessman Alexandre Longaray Buchain, 57 years old, from the company Sementes Capão Grande, in Camaquã, with rice and soybean crops on Rio Grande do Sul soil, “the consortium has been an ally throughout his life”, as he already has in his assets , tractor, truck, van and platform, originating from the modality.
By currently participating with ten shares in different groups, he explained that the characteristics of the consortium adjust to the peculiarities of agribusiness. In a situation like now, even with some quotas not yet included, the eventual financial loss is lower than what would have been the case if the equipment and other vehicles had been financed with the interest burden. The necessary stoppage of agricultural activities for any reason, for a few weeks, results in losses.
“It is possible to deduce that cost reduction, predictability, compatible deadlines, cash purchasing power, are exclusive peculiarities of the consortium that are perfectly suited to agribusiness activities”, adds Barbagallo.
Brazil is the second largest producer of soybeans in the world, second only to the United States. The grain is cultivated and exported by Brazil, generating currency in the balance of payments, being, alongside other grains such as corn, coffee, among other agricultural products, the basis of agribusiness. “Considered the “breadbasket of the world”, our country has an unquestionable agricultural vocation, and the Consortium System will continue to be a strong partner, always ready to contribute to its development”, concludes Rossi.
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