Economic Theories and Crop Production
Added on 2020-01-28
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Grain Forecast: Frost hits WesternAustralian crop production1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3BACKGROUND.............................................................................................................................3ECONOMIC ANALYSIS...............................................................................................................4CONCLUSION................................................................................................................................5REFERENCES................................................................................................................................62
INTRODUCTIONGrain forecast refers to prediction of grain supply from the crop production. It involvesmonetary policy and analysis of market structure regarding selling and profit earning capacitythrough crop production. The present is based upon case study of Western Australian cropcondition which is affected by frost. Moreover, the study covers microeconomics concept toidentify financial situation that includes different policies related to overcome the issue. Inaddition to this, market structure and factors which put a direct impact on production anddistribution of grain has been understood here. BACKGROUNDWestern Australian crop industry provides grain to UK and in the global market. Atpresent, grain industry association is suffering from imbalances in production of crop due tospring frost (Clark, 2013). Therefore, economic theories can be applied to balance the productionsystem such as business model, decision theory and new growth theory to implementproductivity and profitability of grains. Some of these theories are explained as below:-Decision theory: - It is a disciplinary concept to analyze the best decision for businessorganization. Under this theory, manager of grain industry can forecast further activities throughapplying strategic plans. It involves two tools to make decisions to solve the issue. These arenormative and descriptive decision theories. Here, normative decision theory is related torecognition of the best decision (Gillingham and Palmer, 2014). It sets target to determine toolsand methods for future development. Similarly, descriptive theory involves assumptions on thebasis of which structural framework is prepared with description to reach the set target.Real business cycle theory: - Different changes occur in business organization which areneeded to be resolved. Under the same, decision maker prepares plans for bringing effectivenessin the entity. It aims to get constant growth in productivity and profitability. Moreover,government policies like fiscal and monetary plans affect the financial position of firm. Further,increase in interest as well tax rates reflects the economic position negatively. While on the otherhand, decrease in rates influences monetary profile of grain industry. Hence, on the basis of theseassumptions, crop production can be improved. It is helpful to prepare strategic plans andfollowing action activities to bring efficiency in distribution of grain.3
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