Types of Enterprises


Types of Enterprises

1. Independent enterprises,

2. Competitive enterprises,

3. Supplementary Enterprises,

4. Complementary Enterprises and

5. Competitive Enterprises.

1. Independent Enterprises:

Independent Enterprises are those which have no direct bearing on each other, an increase in the level of one neither help not-hinders the level of other. In such cases each product should be treated separately e.g. production of wheat and maize independently.

i) Joint Enterprises:

Joint products are those which are produced together e.g. cotton and cottonseed, wheat and straw etc. the quantity of one product decides the quantity of the other products. In case of joint products there is no economic decision the make with respect to the combination of products and two products can be treated as one.

2. Competitive Enterprises:

Competitive enterprises are those which complete for use of the farmer limited resources, use of resources to produce more of the necessitates a sacrifice in the quantity of other product.

When enterprises are competitive three things determine the exact combination of the product, which would be most profitable.
1. The rate at which one enterprises substitute for the other.
2. Prices of the products and
3. The cost of producing the product.

The rate of which one product substitute for another is known as the marginal rate of substitution.

Two rate of which one product substitute for another is known as the marginal rate of substitution.

The products can:

1. Constant rates of substitution.
2. Decreasing rate of substitution
3. Increasing rates of substitution
E.g. paddy- sorghum, paddy- groundnut

3. Supplementary Enterprises:

Two products are said to be supplementary when an increase in the level off one does not adversely affect the production of the other but adds to the income of the farm i.e enterprise which do not complete with each other but adds to the total income. For example, on many small farms daily enterprise or a poultry enterprise may be supplementary to the to the main crop enterprises because they utilize surplus family labour and shelter available and perhaps even some feeds, which would otherwise go to waste. When two products should be product up to the end of supplementary stage. Some time enterprises are supplementary for one resource but competitive foe another. In such cases the relationship should be treated as one of competitive. Even though they are supplementary to one another in respect of other sources e.g. mixed crops.

4. Complementary Enterprises:

Complementary enterprises are those, which add to the production of each other e.g. Berseem and maize crops. Two products are complementary when the transfer of available input for the production of the one product to the production of the other results in increases in the production of both products. Then two crops are complementary enterprises, the use of resources for the two crops result in the increases production on both the crops.

Two enterprises do not remain complementary over all possible combinations. They become competitive at some stages. When both complementary and competitive relationship occurs, the complementary relationship occurs; the complementary relationship occurs first and then is followed by competitive relationship.

Indices for Evolution of Cropping System:

Various types of cropping systems are practiced  in a farm  region .They are to be properly evaluated to find out their stability and relative advantages such a comparison may be made with references to land use efficiency, biological potential, economic viability etc. 

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