Agriculture Farm Management

 

Farm management:

Agriculture Farm Management

Farm management is the process of coordinating and carrying out decisions necessary to run a farm efficiently and profitably. Agricultural economics provides information on prices, markets, agricultural policy, and economic institutions like leasing and credit that is used in farm management. 

It also makes use of agricultural engineering for information on farm buildings, machinery, irrigation, crop drying, drainage, and erosion control systems, as well as plant and animal sciences for information on soils, seed, and fertiliser, control of weeds, insects, and disease, as well as rations and breeding. 

Psychology and sociology are also consulted for information on human behaviour. A farm manager thus incorporates knowledge from the social, physical, and biological disciplines into his decisions.

Due to the enormous variety of farms, the primary concern in farm management is the particular individual farm; the strategy that works well for one farm could not work at all for another. Farm management issues can affect small, family-run farms that are close to subsisting, large, commercial farms that employ trained managers and the newest technology, as well as farms run by sole owners or the government.

A severe capital-land management challenge exists in Southeast Asia for the manager of the average small farm with plenty of labour, little capital, and just four to eight acres (1.6-3.2 hectares) of land, which is frequently dispersed and fragmented. Utilizing early-maturing crop varieties, planning the preparation, planting, and harvesting of the land well, and using seedbeds and transplanting.

The average family farmer in western Europe has less land than is economically feasible given modern machinery, equipment, and levels of education and training; as a result, he must choose from an emerging stream of technological innovations the components that promise improved crop and livestock yields at low cost, adjust his choice of products as relative prices and costs change, and purchase more land as farm labour is drawn to nonfarm employment opportunities and farm numbers decline.

Physical factors and current technologies enable a wide range of alternatives in farming systems on a typical 400-acre (160-hectare) corn-belt farm in the United States with a labour force equivalent to two full-time workers. Operating on an expanding output scale and increasing productivity are necessary for one to obtain a satisfying salary.

Along with corn-fed hog and corn-fed beef fattening farms, the number of cash crop farming systems for corn and soybeans has expanded. Therefore, management's main concerns are the selection of a farming system, the level of specialisation to be adopted, the scale of the operation, and the source of funding.

Large-scale usage of hired labour is a significant management challenge for a typical crop-livestock farm in Brazil's Paraba Valley, near So Paulo. With 30 to 40 employees per institution, obtaining and managing the labor—including monitoring the supply and demand for hired labour, negotiating contracts (wages and other incentives), choosing how to combine labour with other inputs, and supervising the workforce—are crucial tasks.

In the pampas of Argentina, the plains of Australia, or the prairies of the United States, a rancher with thousands of acres is worried with the rate of herd growth through births and purchases as well as the composition of the herd—cows, calves, yearlings, steers, and heifers. Drought, winter storms, and price shifts can all pose significant risks. Farm managers that are knowledgeable and aware are constantly concerned about the weather, potential yields, and the pricing prospects.

As a result, millions of farmers manage the resources they have under their control to get the most satisfaction out of their choices and actions. These choices and actions are made in a wide range of settings with regard to human, capital, and land resource combinations; technological possibilities;

As well as social and political structures. The quality of management and the environment in which farmers make decisions must be improved, and farmers must be assisted in adapting their decisions to the changing environment. 

Greater research, enhanced input supplies and transport infrastructure, expanded market prospects, and other supportive conditions promise to offer up a significantly larger space for managerial choice and decision-making in the low-income agricultures of the world in the 1980s. 

Land, animals, and labour:

A good farm manager is knowledgeable with the farm's legal description, location in respect to adjacent properties, roads, markets, and sources of supply, the specifics of the field arrangement and farmstead layout, the farm's capital position or relation, and other relevant information.

The farm's capital condition, or the ratio of debt to assets, as well as its resources, like the potential of its soils. The manager can examine, assess, and plan the usage of his resources with the use of such information. The farm manager makes an estimate of the production anticipated from each acre or hectare of land as well as each head of cattle in order to determine the possible profit. He then assigns monetary values to these amounts.

The total number of acres or hectares in a farm, acres or hectares planted to cash crops, productive man-work units (the number of workdays of labour required under average efficiency to care for crops and livestock), livestock units kept, and other factors are used to determine a farm's size andpotential for profit.

Total cash receipts, capital invested, and investment. Although the total amount of land is frequently used to characterise the size of a farm, this measurement is not very accurate because it does not indicate how much of the land is hilly, stony, marshy, or otherwise unproductive. Better metrics include total cropped land, total receipts, total capital invested, or productive work units. 

For management purposes, one cow is about equivalent in value to two calves,  seven sheep, fourteen lambs, or one hundred laying hens, even if animals are numbered by the head for comparison's sake.

Even though a farm's total land area is essentially fixed, many farmers choose to purchase or rent extra land in order to boost production and save costs per unit. 

Land can frequently be utilised economically if such acreage is present within a practical distance. Including unimproved pasture and woodland in the cropping plan as well as switching to either more intensive farming techniques or more expensive crops are additional approaches of increasing volume. 

The farm manager tries to reassure himself that the new crops will grow well and will find a market in his region before making significant adjustments. Today, almost every government in the world has an agriculture department or ministry that was created to advance agricultural welfare by disseminating technological knowledge. 

These organisations frequently conduct considerable research with new crop varieties, cultivation methods, and improved livestock breeds, thereby lowering the danger.

Based on the specific farm management thinking on such improvements. Private agricultural supply companies also conduct a significant amount of experimenting and research in an effort to increase their ability to compete in the market by creating a worthwhile new product.

Due to inheritance rules and traditional patterns of land tenure, one farmer may own numerous, relatively tiny parcels of land spread apart from one another in various developing nations. Governments in these nations frequently pass laws to allow or compel consolidation of such holdings in order to lessen the resulting labour inefficiencies and low productivity and to promote the growth of large-scale agriculture (see land reform).

Farm work can be fruitful in a number of different ways: directly, indirectly, and completely. tasks like ploughing,

Unless it increases the farm's market worth, tasks like trimming shrubs and mowing lawns are not seen as productive. Similar to how capital can be either extremely productive—like in the case of livestock—indirectly productive (like tractors, buildings, and supplies) or unproductive—like a big, ostentatious house or barn. 

Land can also be very productive, only somewhat so, or useless. Farm records analysis has revealed that farmers frequently over-equip their land, employing structures and equipment to a lesser extent than they should. In general, research has revealed that small farmers invest a greater percentage of their overall capital in structures than in machines. A distinct approach is taken in developing nations where relatively large volumes of labour and modest amounts of capital are utilised.

Farm managers in these regions require a large workforce to work the fields during planting and harvest and a much smaller workforce to carry out normal cultivation duties. As a result, these nations deal with the issue of underemployment of agricultural labour for a large portion of the year.

Managing money and running a Big enterprise:

Financial statements, profit and loss statements, and cash-flow statements are examples of the financial instruments a farmer might use to analyse, plan, and manage his business. 

The amount of money invested in farm assets, current liabilities, owner equity in the company, and the extent of the farm's liquidity and solvency are all disclosed in a financial statement. 

Liquidity is the capacity to pay bills on time, but solvency is the capacity to settle all debts in the event thatThe business must shut down. The sources and sums of income and operational expenses are shown on a profit and loss statement. When profit and loss statements are compared over a number of years, it may be determined which resources have been the most profitable and whether net income has increased or decreased. 

An annual cash-flow statement reveals the sources and expenditures of monies at specific times. Such a declaration offers a helpful check on the veracity of the farm's other financial data.

The primary resources for the typical farmer are land and labor—both his own and that of his family. Under advantageous circumstances, the farmer transitioned from being a worker to an operator and manager, which led to the development of considerably larger farm units with significant capital expenditures. 

These circumstances include In the United States, for instance, where capital makes up a continually rising share of farm inputs, the trend toward replacing labour with capital is particularly obvious. Inputs for agriculture in the United States in 1940 were composed of 29 percent capital, 54 percent labour, and 17 percent land; by 1976, capital accounted for 62 percent of inputs for agriculture, 16 percent labour, and 22 percent land. When massive machines perform the tasks of numerous workers using smaller tools, such as when chemicals substitute the scythe and hoe for weeding, capital often replaces labour.

When a mechanised installation takes the place of the fork and bushel basket in dairy, beef, or hog feeding; when automated sprinklers bring irrigation water to crops; 

The technical expertise needed to manage a modern large-scale farm is usually seen as being far higher than that needed by the majority of businessmen with equivalent investment; the capital needed to run such a farm is beyond of most people's reach. As a result, industry-like financial management strategies are frequently used. Capital is brought in from outside, and manufacturing is planned to fulfil quantity, quality, and scheduling requirements.

As in a factory, capital is brought in from outside, production is planned to satisfy standards for quantity, quality, and scheduling, and labour is assigned to particular jobs.

Many developing nations have made efforts to foster large-scale agriculture because they understand the economic advantages of it. In just a few years, national governments have altered the lives of many traditional farm managers by funding large-scale development schemes that involved the irrigation or rehabilitation of vast acreages through the use of dams, drainage systems, and canals. 

Improvements in crops, animals, marketing strategies, transportation, and power have in certain cases multiplied the productivity and income of agriculture. Since the government has controlled both capital and management, theHowever, the typical farm manager frequently loses part of his independence, and not all of these initiatives are successful. Some costly failures have been caused by ineffective planning and management by the government and resistance from the farmers themselves.

lower market risks:

For three crucial reasons, the market for agricultural commodities is extremely risky. The quantity of a commodity taken off the market does not rise in proportion to price declines, and third, the farm manager cannot quickly switch production from an unprofitable item to a profitable one in response to falling prices. The first of these limitations is that no single farm producer can put or withhold enough of a single item on the market to affect the market price. The farm manager may specialise in order to lower his risks and protect revenues.

Depending on the situation, he may use the futures market or diversify .

The focus of a specialised farm manager is on the production of a single good, such as wheat, cotton, milk, eggs, or fruit. Through such specialisation, he can benefit from mass production and maximise his profits from a business in which he is an expert. The expert, on the other hand, is susceptible to unexpected market fluctuations, animal and plant diseases, and soil exhaustion brought on by the cultivation of a single crop.

The act of horizontally or vertically distributing one's skills across multiple farming enterprises is known as diversification. The manufacture of multiple products for sale is referred to as horizontal diversification. In vertical diversification, the farm managerfor purchase The farm manager manages raw materials in vertical diversification.

In the past, falling prices for these commodities or plant disease epidemics were thought to have a terrible impact on the prosperity of the country. Concern was also raised about erosion issues. In response, the governments vertically diversified by creating factories to process these commodities or transform them into manufactured items before export and horizontally diversified by investing in other profitable crops.

A skilled farm manager might try to reduce his risks by using the futures market. In the futures market, the farm manager signs a contract with a buyer promising to provide a certain amount of a product at a specific future date for a fixed price. The buyer is frequently a speculative who anticipates price increases to enable him to sellthe good or the agreement for a profit. 

The farm manager can set a crop's price in advance or get paid to keep a harvest in storage thanks to futures markets. Additionally, futures markets allow certain farmers to speculate on a price increase without storing a crop, set an advance price for livestock, as well as establish a price for livestock feed that will be used later.

Specific size issues:

The intricacies of farm management differ over the world; here, we will only mention a few of the most prevalent methods in various major agricultural nations.

Large farms produce more effectively than tiny farms, according to research. For instance, management of large farmsthe most productive plantation for sugarcane production may include thousands of crops.