FARM MANAGEMENT- DEFINITION & OBJECTIVES

FARM MANAGEMENT- DEFINITION & OBJECTIVES

Farm

Basically farm is an area of land which is primarily used for agricultural processes with the objective of mainly food production.  So, it is the basic component of food production. It is an economic unit used for agriculture and livestock production often under single management. Usually the name “farm” is used for specialized units such as arable farms, vegetable farms, fruit farms, and dairy, pig and poultry farms etc. depends on purpose, its degree of dependence and size of the farm.

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Farm Management

Farm management is the science and art of optimizing the use of resources in the farm of farm-households and of achieving the optimal functioning of these systems in relation to household-specified objectives. In short, we may conclude following points-

• Since all the three main factor of farm i.e. land, labor and capital are limited, FM deals with judicious decision while using scarce farm resources having alternative uses to obtain maximum profit and family satisfaction on a continuous basis from the farm as a whole under sound farming programmes.
• Optimization means achieving the farm household’s goals as efficiently as possible in the face of whatever constraints of a physical, environmental, legal or socio-cultural nature may be relevant. This implies obtaining maximum possible net benefit over time from the operation of the farm system. Net benefit is measured in terms of output/profit or more broadly, as satisfaction or utility.
• Maximization of net benefit implies efficient use of available resources and opportunities. For the achievement of a given level of net benefit, it implies the minimization of costs.

Objectives–

There are two main points implies in farm management-

• How to maximize the production and to get maximum profit?
• How to minimize the cost of production?

Therefore, there are broadly two objectives:

1. Minimization of costs, losses and damages, also reducing inefficiency and unemployment.
2. Maximization of profit, productivity, efficiency and employment.

So, the farm holder/manager has to take care of farm management in the following ways to achieve the goal.

• Individual farmer has to take production decisions such as what is profitable amount of resources? Which combination of resources is most profitable? And what to produce or which enterprise is to be selected?
• To determine the relation of size of farm to land utilization, cropping pattern, capital investment and labor employment.
• To study the impact of technological changes on farm business.
• To find out ways and means for increasing the efficiency of farm business through better input-output relationship and proper allocation of resources among different uses.

Read more….
MCQ on Farm management Economics Part 1