- Introduction to Agricultural Economics
- Basic Economic Principles
- Farm Records
- Economics is the study of how man and society chooses to allocate scarce productive resources to produce various commodities, over time, and distribute them among various consumers in society.
- It attempts to explain how man can best use the limited resources to produce goods and services which satisfies his needs with minimum wastage or loss of these resources
Example of basic human needs are; food, clothing shelter
- Agricultural economics is therefore defined as a science that aims at maximizing output while minimizing costs by combining the limited supplies of goods and services for use by the society over a certain period of time
These are; land, capital, labour, management
Basic Economic Principles
- Economic scarcity means resources are limited in supply relative to demand.
- This principle implies that there is no time that man can have enough resources to satisfy all his need or desires
- Human wants are many and varied and means of satisfying them are limited.
- Therefore, man has to make a choice among the alternatives in order to use the resources available.
- Man does this by satisfying the most pressing needs first.
- This is called scale of preference.
- Opportunity cost is the revenue forgone from the best alternative.
- It exists only where there are alternatives.
- Where there are no alternatives the opportunity cost is equal to zero.
- Opportunity cost helps in decision making.
- Farm records are documents kept in the farm
- They show farm activities carried out over a long period of time
- Or information kept in the farm in written form, about the farm and all activities in it.
Uses of Farm Records
- Show the history of the farm
- Show whether the farm is making a profit or loss.
- Show all the assets and liabilities of the farm which can be used to value the farm.
- Help in supporting insurance claims on death, theft, fire or loss of farm assets.
- Help in tax assessment to avoid over taxation.
- Used as a guide in planning and budgeting.
- Helps to detect losses or theft in the farm.
- Make it easy to share profits or losses in partnerships.
- Help in settling disputes among heirs to estate if the farmer dies without a will.
- Provide labour information on terminal benefits for a worker.
Type of Farm Records
- Production Records - Show the total yield and yield per unit of each enterprise.
- Inventory Records - A record of all permanent and consumable goods in the farm.
Consumable Goods Inventory
- Field Operation Records - Show in details all field practices carried out together with the input used for all the crop enterprises.
- Breeding Records –Show all the breeding activities in the farm. From these records it is possible to select the prolific animals and cull the infertile ones.
- Feeding Records – A record of the types of feeds used in the farm and their quantities.
- Health Records – Indicates the health conditions of the animals in the farm. From these records it is possible to: Select and cull animals on health grounds.
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