About Consumption and marketable surplus
Answers
Skip to main content.
Small Business» Advertising & Marketing» Marketing»
What Is Marketable Surplus?
by Ronald Kimmons
Surplus goods may be a revenue windfall in disguise.
By describing something as "marketable," people in the business world mean that it is fit to sell on the market. Surplus is the amount of product that a company manufactures or produces in excess of what is necessary to continue operations. Marketable surplus is a term that agriculturalists use to refer to a specific type of surplus that farmers and ranchers deal with.
Definition
Farming requires investment. Farmers must make financial investments in labor, tools, fertilizer and land. They must also invest in seeds. If it is the farmer's first year to grow a certain crop, he probably has to purchase seeds from someone else. A farmer must also invest in the form of personal labor. The marketable surplus for an agricultural entrepreneur is the surplus of produce that exists after the point at which he can make back any money he paid to laborers or used to buy tools, fertilizer and land. If he takes some of the crop for his own family's consumption and to use as seed for the next year, he must account for this as well before calculating the marketable surplus. In this way, marketable surplus is what a farmer makes for his personal labor.
Use
Marketable surplus is the portion of a harvest that a farmer can sell on the market to earn a profit. With this profit she can reinvest into farming operations by purchasing more land or better farming equipment. She may also simply save this profit or use it to purchase personal items.
Uncertainty
In agriculture, farmers and ranchers can never know exactly how much product their efforts will yield for a particular season until it is over. For this reason, a farmer may not know what his marketable surplus will be until he actually harvests his fields. This uncertainty of the size of a crop's marketable surplus lends a certain level of uncertainty to the farmer's income expectations.
Marketed Surplus
Another term that closely relates to marketable surplus is marketed surplus. In some cases, these terms may be interchangeable. The principal difference is time perspective: marketable surplus is produce that a farmer currently has on hand to take to market to earn a profit, while marketed surplus is what she has already taken to market to earn a profit.
mark it as a brainlist