Farm Management, Marketing and Economics: notes

Factors of Production

• Land, labour, capital and management are the four factors a farm needs.

Money

• Gross margin: total income minus variable costs.
• Profit: total income minus all costs, fixed and variable.
• Variable costs: seed, fertiliser, feed. Fixed costs: buildings, machinery, rent.
• Records: show what makes money and are needed for loans.
• Budget: a plan of expected income and costs.

Marketing

• Channels: farmer to buyer, auction floors, grain depots, cooperatives.
• Cooperative: farmers join to buy inputs and sell produce together at better prices.
• Value addition: processing, such as making groundnuts into peanut butter, raises the price.
• Extension officers: advise farmers and share new methods.