Worked scenario
The season's supply extended before the crop exists
Seasonal input credit concentrates a supplier's entire risk into one settlement window that depends on weather and prices.
3 min read
Input suppliers extend credit across a season because farmers have no cash until harvest. The whole book settles in a narrow window.
Risk is correlated
Unlike ordinary trade credit, every account in a region depends on the same weather and the same prices. A bad season does not produce a few defaults; it moves the whole book at once.
Knowing the shape of the book
Exposure by crop and by area is what tells a supplier whether it is diversified or simply large. Most know their total and not its composition, which is the number that matters when a season turns.
What changes
- Exposure per farmer visible during the season, not at settlement
- Supply recorded against the season and the crop
- Settlement expectations tracked against actual harvest timing
- Concentration by village or crop understood
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