Economics of Farm Management

Economics of Farm Management

DOI: 10.4018/978-1-5225-3059-6.ch003

Abstract

The concept of farm management can be defined as the organization of land, labour, capital, and management (decision-making and risk-taking) in operating a farm enterprise to meet the stated objectives including profit maximisation. Of the four fundamental factors of production, management stands out in its onerous role in organizing all the others in meeting the defined objectives of the enterprise. Onerous as the role of management as a factor of production is, it cannot work in isolation of the others. There is therefore a need to discuss farm management as a concept with due focus on the notion of entrepreneurial spirit and at the same time bring out the peculiar features of the factors of production in working together to maintain a going concern. It is against this background that this chapter discusses the concept of farm management. The specific objectives of the chapter include defining the meaning and scope of farm management, highlighting the resources available to the farm enterprise, highlighting the relevance of entrepreneurship behaviour and entrepreneurship spirit in growing an enterprise, and highlighting the importance of farm management. The methodology adopted is descriptive. It is argued in this chapter that present and prospective farm managers should essentially have entrepreneurial spirit with which to start, grow, and expand their enterprise in line with the objective of the enterprise in question. Searching out investment opportunities and effectively ploughing back profits on existing or new investments for expansion enterprise is one of the decisions of management.
Chapter Preview
Top

Meaning And Scope Of Farm Management

Management involves the control and making of decisions in a business or similar organization. The complete range of farm business management refers to the process of making and implementing decisions involved in planning, organizing and operating a farm business for optimum productivity and attendant profit. Productivity refers to the ratio of the amount of output per unit of input employed in the production process.

The science and art of farm management borrows from the knowledge of such disciplines as production economics, marketing, and finance including government policy pronouncements. Farm management is concerned with the organization of land, labour, capital and human resources in operating a farm enterprise to meet the stated objectives. It deals with the profitability and profitable organization of individual farm units. Farm management entails control and decision-making processes in a given farm unit. It also involves actual execution of decision taken. The individual at the centre of the decision-making process is the farm manager.

The resources of land, labour, capital and human beings available to the farm firm for management and ultimate production of the required goods and services are collectively called productive resources or factors of production. Availability and efficient control and decisions over these resources go a long way in defining the attainment of the stated objectives of the farm enterprise. Let us take a closer look at these resources available to the farm firm.

Complete Chapter List

Search this Book:
Reset