The Importance of Agriculture

Why is agriculture important? Agriculture is the key element to the discovery of the various means of collecting and storing foods during the early times. The concept behind the creation of food surpluses will not be developed without people’s understanding of agriculture. This led to the implementation of stratifications in societies.

In present times, business people find it very helpful in supplying work opportunities to some areas in the world. Farm owners hire great number of workers to do jobs like pastoral herding of animals, plant cultivation and plant breeding. With ample knowledge on this field of study, it will be easy for humans to develop new technologies and systems that will be helpful in improving food supplies in the world.

Agriculture is significant to the production of organic food, which started in the 1980s. With the opposition of some agriculturists in the world to the frequent use of conventional non-organic food methods or procedures, consumers started to demand for the continuous production of organic food. Because of this economic trend, entrepreneurs find great financial opportunities in the expanding organic food market. In the late 1990s, more private corporations ventured in businesses that deal with the storing and selling of organic food.

Agriculture is also helpful to stimulate environmental and social growth. By learning the various environmental friendly methods of producing and storing food, hunger was successfully alleviated in many countries since the 1980s. Aside from these, agriculturists also discovered advance methods that are helpful to improve the food supply in the 1990s. One of these methods is known as genetic engineering, which is very popular because it allows humans to develop new breeds of crops.

Finally, agriculture is important to world economy because it has great contributions to international trade since most of the items that are imported and exported by countries are agricultural products. To sustain the economy of a particular nation, political leaders should concentrate on implementing laws and policies that will strengthen the agricultural sector because it has an impact on the gross domestic product.

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Gas is one of the important commodities in the world because this is used in operating large equipment and vehicles. Unfortunately, gas companies have limited control over the prices of the commodity in the world market because there are various factors that affect the costs of the product. In present days, most consumers complain about the high prices of this commodity. To know why are gas prices so high, it is best to look at the different factors that have great impacts on the costs of this product.

Improving Oil Demand

Why are gas prices so high? One of the important factors that affect the costs of the commodity is the improving demand of consumers for oil. According to some economists, the developing economies of India and China have great effects on the increasing demand for oil. Aside from these countries, the demands for oil in European countries and America are also high. The economies of the countries in the Middle East are also improving, which means that the nations also need a great supply of oil. Since the abundant supply of oil comes from the Middle East, the governments in this area prioritize their demands over the demands in the other parts of the world.

Supply Problems and Geopolitics

Two other factors that affect the prices of gas are the supply problems and geopolitics. International and local conflicts affected the supply this product in the different countries in the world. Some of the events that have limited gas supply are the war in Iraq and rise of rebel activities in Nigeria. The conflicts concerning the alleged development and use of nuclear weapons in Iran as well as the nationalization of oil companies in Venezuela also affected the supply of the commodity.

Geopolitics also affects the economic trends in gas. Companies have experienced problems with the production of oil in the past years because most of the sources of the commodity in America have gone dry. Because of this, companies resort to other areas like the Gulf of Mexico for abundant supply. Offshore production is very costly and expensive. Consumer should know that the higher the expenses of the companies, the higher the prices of gas in the world market.

Lastly, consumers can also attribute the increase in the prices to the exploitation of the natural limits of oil. According to some companies, most of the oil resources in the world have been used up. The companies also argue that there are only limited supplies of oil in the ground so they need to develop methods to find new sources for the commodity.

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A highly popular discount department store chain in the world, Kmart shocked the entire world when it filed for bankruptcy in 2002. The financial problem was very similar to that of Enron, as it almost put an end to one of the most notable retail store chains in history. A company marked with significant highs and lows, it is quite interesting to find out why Did Kmart filed bankruptcy.

Reason Behind the Bankruptcy

Why did Kmart filed bankruptcy? Then-President Mark Schwartz and former Chairman Chuck Conaway caused a financial disaster when they misled company officials and shareholders regarding a financial crisis. Instead of disclosing millions of income and revenues, the two were allegedly spending the money of the company on different kinds of luxuries. According to reports, they spent the money on boats, houses and airplanes.

For these reasons, the company sought Chapter 11 bankruptcy protection. The blame for such crazy downfall for such a huge company was on Conaway, who admitted the fault during a company conference that took place on January 22, 2002. This was the very same date that the company filed for bankruptcy protection. As a result, the stockholders and other company officials forced Conaway to resign. Simultaneously, he was asked to return and pay back all the money and loans that he took from the company.

Important Events and Developments that Took Place After the Bankruptcy

Edward Lampert decided to buy the bonds of Kmart during the time of its bankruptcy. The move was made for ESL Investments. After some time, the discount department store chain slowly emerged out of bankruptcy on May 6, 2003. The newly established Kmart Holdings Corp. started trading at the NASDAQ stock exchange on June 10, 2003. Instead of operating the company for sales, Lampert controlled it in a way that the company would profit.

After emerging from such bankruptcy situation, it was a perfect time for the company to restructure. As part of this all-important move, 34,000 employees were laid off. At the same time, approximately 300 stores closed. All of these significant moves were made after Schwartz and Conaway were dismissed.

In November 2004, Kmart decided to purchase Sears, Roebuck and Co. Under the terms of the merger, the new entity would carry the name Sears Holdings Corp. In addition, both Kmart and Sears can still operate stores under their respective brands.

Today, the company runs in four different successful store concepts. K-Café is a nice restaurant found within stores that sells sandwiches, hot dogs and soft pretzels. Furthermore, it also serves coffee and other kinds of refreshing beverages. The other three store concepts are Kmart Super Center, Big Kmart and simply Kmart.

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Saving Money is Paramount

It doesn’t matter if you can save hundreds of dollars or only a few. It’s just crucial that you do. You don’t need to have a particular goal. That is, you’re saving so you can buy this or that. You’re just saving money. In fact it’s a good idea not to spend it. It won’t be long before that amount starts to grow.

For most, saving is probably the hardest part. Expenses are numerous, but make a note of the things you pay for. The importance of financial planning lies in its ability to make you see and think clearly. Learn to distinguish between the things you need to pay for and those you just want to buy.

Cut Down on Extra Costs

You probably think you don’t spend much on trivialities, but it’s likely you do. These can range from the cigarettes you buy or that six pack of soft drinks. By cutting down on junk food and other stuff, you’ll be able to start saving. These may not seem much, but they will accumulate quickly.

Investing Wisely

If you have some money, you’ll naturally want it to grow. When you realize the importance of financial planning, you’ll recognize the various options available. The most common is to put the money in a savings account or time deposit. Other alternatives are investing in the stock market, mutual funds or forex.

A word of caution: the options mentioned above yield higher profits than banks. However, they do have risks. If you’re not familiar with these markets, hire a broker or do some research first. Most would also say that the money you put in the stock/forex should be cash you can afford to lose.

There’s an element of gambling involved there, so be careful if it’s your retirement fund. As you study the importance of financial planning, don’t get too caught up in the numbers; use your common sense too. Be wary of scams and other schemes that sound too good to be true.

Set Your Priorities Straight

There are a number of goals you can set: building a home, saving for your children’s education etc. If these are included in your goals, always think in the long term. If you want to get a loan from a bank, be sure that your papers are in order.

The same can be said if you want to start your own business. Even if you have piles of money, it will go down the drain if you don’t plan or do research. By having predetermined set of priorities, you’ll have an easier time managing your money.

A personal emergency or nationwide economic crisis can strike at any time. For this reason, you must know the importance of financial planning. By being prepared, you’ll be ready to face any challenges that will appear.

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Submitting Proposals and Ideas

These gatherings are a great time to present proposals or ideas about running the company. These proposals can be presented for evaluation by the other participants. The agenda can refer to changes in policies or new ways of managing an asset or client.

This doesn’t just apply to businesses of course. Even homeowners’ associations can submit revisions at the gatherings. These can refer to security arrangements or regulations. The importance of administrative meetings is that it can give you the chance to study any proposed changes.

Reviewing Policies

It is also an ideal time to appraise existing policies. For companies, it’s always a good idea to check existing protocols or agreements with other parties or within its ranks. Even when things are going well, it’s crucial that strategies are always reviewed.

If there are changes in the business environment, the standard regulations should be reviewed. By assessing them at regular intervals, fresh perspectives can be attained.

Develop Short and Long Term Goals

It’s too easy to get caught up in the current business climate. These conferences will allow the body to take a step back and look at the big picture. The importance of administrative meetings is it makes assaying long and short term goals easy. An ongoing economic crisis might only have short term effects.

Therefore the long term goals should be maintained. The reverse is also true. If revisions must be made, it should be done in these gatherings.

Prepare for Contingency Measures

When unexpected events happen, it’s necessary to hold conferences to sort them out. These events can refer to external problems (i.e., falling sales, changing rates etc) or internal (disagreements among members). These occasions can also be an opportunity to sort these problems out. It’s also a place to prepare for any potential troubles.

Preparing for the Meeting

The importance of administrative meetings can be seen in the fact that numerous subjects can be raised and discussed. There is no standard way to conduct the conference. The rules and procedures are determined by you and the other participants.

Before you go to the conference, make sure that you are prepared. If you are making a proposal, be sure that you have all the details in hand. If there are internal problems, be sure that everyone’s opinion is heard. Disagreements are bound to happen. Just keep your cool and stick to the facts. Shouting doesn’t help.

If policies or goals need to be reset there must be some back up plan. If you have one, inform everyone and let them know you are open to amendments.

By recognizing the importance of administrative meetings, a lot of issues can be settled sooner than later. Ultimately it is about getting everyone’s opinion heard in the matter.

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Reporting the Facts

This is its most basic role. It’s only natural for any government to look or report on only the bright side of things. The news organizations on the other hand, can state the facts. This role is critical to understanding events not just in your country but the world at large.

An example would be economic news. While a government may report glowing figures, journalists perform man on the street interviews and stories. This gives you the chance to look at the entire picture. The importance of free news media can also be seen when reporting from various parts of the world. In countries where military juntas rule, people have no access to the facts. It’s only through media that they can find out the truth.

Offering Balanced Views

Journalists are also responsible for airing both sides. Again, we take for granted that when a story is aired, reporters talk to the opposing sides. This can be seen when a crime is committed. The suspect and the victims are interviewed and given equal space and time.

In political issues this is just as critical. Regardless of the issues the political opposition and the administration are given ample time to explain. The importance of free news media in this regard can be seen in countries where it isn’t allowed. Consider Nazi Germany or Russia under Stalin. What people knew were limited to what the government controlled papers reported.

Exposing Graft and Corruption

The role of media in exposing corrupt or abusive officials must also be mentioned. Perhaps the best known example of this was Watergate. However, it is not limited there. In other parts of the world we see media reporting on atrocities that would otherwise be ignored.

These include the genocide in Rwanda, the continuing drug wars in Colombia and many others. It goes without saying that journalists take great risks in bringing these stories. When it comes to learning the truth about corrupt regimes, the importance of free news media is paramount. Even today, there are countries were reporting is suppressed.

Covering Other Events

The role that the press plays can be seen in other ways. Whenever there’s a natural disaster like tsunamis and earthquakes, news organizations brings people up to date. They also help in the distribution of goods with government agencies. It can also be seen when they cover sports and headlining events like the US elections.

It’s true that news organizations have shortcomings. They have a tendency for sensationalizing reports. Yet these shortcomings are negligible compared to what they contribute to society. It wouldn’t be incorrect to say that their role in shaping society is immense.

A country can’t be called a democracy if press coverage is restricted. By understanding the importance of free news media, you will be able to appreciate and be thankful for their presence.

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Whether you’re an employee or employ workers, you need to know why companies downsize. This knowledge can make the difference between recovering or going bankrupt.

To Reduce Costs

The primary reason is to keep the costs down. Business enterprises usually have long term forecasts. These are used to make decisions in the present. If the forecast is that it will lose money, cutting jobs or shutting down factories may be the only option.

Sometimes this takes place without the result of a long term study. An unexpected event like an economic crisis can happen. In this situation, the corporation may be forced to make mass layoffs. This is one reason why companies downsize.

To be More Profitable

In some cases a firm might decide to do it to make more money. It can happen that a company expands in operation (i.e., opens branches overseas). If it doesn’t make money, the firm will shut it down. Another reason is that the company will lay off workers or factories to increase their profit.

Entering into a New Business Partnership

Mergers often take place among corporations. When this happens laying off workers can take place. The joining of two firms usually means new goals and tasks. It signifies that employees and personnel may be added or removed.

If the economic situation forces the business to move in an entirely new direction, more layoffs will ensure. Thus, the need to join up with another firm is one more reason why companies downsize. This doesn’t always occur of course. If the merger is between two healthy corporations, there might even be the need for more workers.

To Restructure

When a firm is heavily in debt or struggling financially, restructuring may be required. There are several elements in a typical restructuring program. This can include cutting down jobs, selling off assets or get government bailout funds.

In the latter case, the corporation will get some money from the government. In return it must make a pledge to change its operations and return to profitability.

Help doesn’t have to come from government though; the financial aid can come from another private company. But the conditions are usually the same; reorganize from top to bottom, which is why companies downsize.

Pay off Debts

Lowering costs is also used to make debt payment easier. Usually the first step is to sell off non performing assets. These are usually priced low (obviously) and can’t help much.

Subsequently, other actions must be taken. This can include terminating contractual / temporary workers and closing down dealerships or suppliers. The money earned will then be used to pay off the debt and any incurred interest.

Handling the Situation

For a businessman / employee, the first step to coping with the situation is accepting it could happen anytime. The best time to prepare would be when the economic situation is rosy.

By making decisions based on long term thinking one can ease the burden when the economic crunch comes. By learning why companies downsize, you’ll have a less difficult time making the right choices.

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The unraveling of Ford, General Motors and Chrysler have become lessons in how not to manage a company. Although the situation for each corporation is different, here are some of the shared reasons why car sales statistics are falling and the big 3 US automakers are losing money.

High Labor Costs

Chief among them are the labor laws and costs. The three companies all have powerful unions and they have exercised great power during negotiations. As such, workers for Ford, GM and Chrysler make more dollars per hour than in most other companies.

In addition they also have extensive health coverage. It’s been estimated that GM spends over $1,600 per vehicle on health care alone.

It is also worth pointing out that GM has an extensive retirement program. What this means is that the retirement pay for workers are huge. This doesn’t even include health care coverage for active and retired workers.

Another reason why the big 3 US automakers are losing money are labor laws. For example, paid holidays, line relief and other measures total more than $1.000 per car. There is also a law stating that when a factory shuts down, the car company has to pay them about 90 percent of wages.

Large Bonuses

The labor unions aren’t the only ones to blame. The CEOs and executives also gave themselves large bonuses. As with the labor unions, this practice was acceptable when the companies were making money.

It can be argued that the CEOs and labor leaders couldn’t have foreseen the problem. However, their penchant for fat bonuses and overly generous labor benefits is what is making it difficult for the car companies to get bailout funds. This is one reason why the big 3 US automakers are losing money.

These bailout funds come at taxpayers’ expense, and understandably don’t feel like giving aid to these CEOs.

Foreign Competition

Other problems stemmed from competition overseas notably Japan. Unlike the big 3, Japanese automakers were able to create fuel efficient and cost effective cars.

During the 50s to the 60s, US car companies built large gas guzzling vehicles. It was acceptable then. Fuel prices were at reasonable levels back then. During the 1970s however, the oil crisis hit several countries, including America. Industry observers point out that GM, Ford and Chrysler should have learned their lessons there.

They didn’t. Instead the US car companies continued to make gas guzzlers, all the while the Japanese were chipping away at their market share. So the lack of innovation is why the big 3 US automakers are losing money.

High Gas Prices

During the 1990s the three were able to make profits with their SUVs. But then came the high oil prices. With oil hovering in the $100 range, people started looking for more fuel efficient cars.

The Credit Crunch

This was followed by the US housing and credit crisis. It plunged the US into recession. Thousands of people have lost their jobs. As people tightened their belts, people stopped buying cars and SUVs. With low sales and huge debts, the car companies are now faced with huge financial losses.

There are many more reasons why the big 3 US automakers are losing money. But the bottom line is that a lot of the problems could have been avoided if they had a little foresight.

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One of the most successful natural gas merchants in North America, Enron Creditors Recovery Corporation was established by Kenneth Lay in 1985 from the merger of big natural gas pipeline firms InterNorth and Houston Natural Gas. The approval of legislation in the U.S. concerning the deregulation of natural gas sale is one of the events that affected the outstanding financial performance of the company in the 1990s. The development of the online business model known as EnronOnline also contributed to the popularity of the company in November 1999. However, stockholders were alarmed by the sudden decision of the firm to file for Chapter 11 bankruptcy protection in December 2001.

History of the Company

Why did Enron go bankrupt? There are several reasons for the bankruptcy of the firm. One of the reasons is the faulty and alleged fraudulent financial reports released by the natural gas company since 1997. Arthur Andersen, the firm’s auditor, announced that the profits posted by Enron before the 30th day of June in 2001 were overstated by almost $600 million or 16 per cent. After the release of the official statement of the firm regarding the fraudulent financial activities, its stock value decreased from $83.13 to $0.10.

Another reason for the bankruptcy of Enron is the poor performance of its investments in South America and India. According to the firm, this is caused by several factors like the improving world energy crisis and the alleged declining performance of the Internet broadband market.

The company also blamed its bankruptcy to the irrevocable resignation of CEO Jeffrey Skilling in August 2001. Skilling’s resignation alarmed the shareholders of the firm, which led to the decision of the U.S. Securities and Exchanged to investigate the declining financial performance of Enron in October.

The company reduced Enron’s stockholder profits by $1.2 billion. The move was caused by the losses incurred by the firm from its international subsidiaries, broadband division as well as partnerships with Chewco and LMJ. Days before November 2001, the company fired chief financial officer Andrew Fastow due to the failing and deceptive partnerships with energy firms.

In the mid November 2001, Enron was faced with troubling financial performance when the Securities and Exchange Commission forced the company to pay its debts to stockholders immediately. Because of the declining performance of the firm, Dynegy Inc. did not agree with the proposed merger with Enron. Before 2001 ends, the collapse of the largest energy company in North America was officially announced.

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Demands by Growing Economies

The emerging economies of China and India are partly responsible for the increase in oil costs. Statistics show that every year more people there are purchasing cars. This increases the demand in those countries. What happens is that the supply of oil is stretched out. This naturally increases the costs.

This doesn’t just apply to China or India. Whenever the world economy is up, the need for oil increases. This is just part of the natural law of supply and demand. So it would be correct to say that emerging economies are reasons why gas is so expensive.

Seasonal Demand

The weather also plays a part. During winter season in the Northern Hemisphere, the need for oil goes up. This is true in Europe and the United States. In this case the rise is temporary, albeit quite steep. When the winter season ends, the costs will go down to the pre winter level.

Lack of Refineries

People also need to realize that you can’t just dig oil from the ground and use it. Crude oil needs to be refined. These refineries cost thousands (if not millions of dollars) to set up. A company that invests in its construction will recuperate the cost from selling the oil. Because of their costs, there aren’t that many refineries around.

Another reason why gas is so expensive is that independent refineries have become scarce. Most now belong to the big companies. Thus they can control the output and the price.

Policies of Oil Companies

In some countries oil companies have a monopoly of the business. They can decide how high or low the cost will be. If they set it high, this will be reflected by their dealers. Sometimes the need to set costs high is due to operating expenses. But some corporations jack up the price just to make more money.

Low Value of the Dollar

In the United States, the value of the dollar plays a part in determining the cost. The lower the value of the US dollar, the costlier it will be to import.

War and Political Instability

International conflicts are also used to explain why gas is so expensive. Most of the world’s supply comes from the Middle East. However it’s one of the major hotspots in the world. Conflicts between Israel and Palestine can drive costs up. The war in Iraq and Iran’s nuclear programs also heighten tension. These factors combine to raise the costs of oil.

Scarce Resource

Oil is not an infinite resource. Even today, world governments are looking for alternative energy sources. The time will come when demand will exceed the available supply. But even now this worry contributes to its sky high costs.

As you can see, the causes and explanations for why gas is so expensive are numerous. With the need growing, there is little chance that it will go down.

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