AGRICULTURAL SCIENCE

SECTION D: THE BUSINESS OF FARMING

TOPIC: ECONOMIC FACTORS OF PRODUCTION
TEXT: UNIT 4 - PAGES 41 - 61
 OBJECTIVES:
• Relate the factors of production to agriculture
• Define the term production
• State the factors of production
• Describe how the factors of production are related to
agriculture
 PRODUCTION
• Production is the action of producing or manufacturing of
goods and the provision of a number of services. It is a
planned economic activity incorporating inputs.

• The main aim of production is to satisfy people’s needs and

wants.
FACTORS OF PRODUCTION
 FACTORS OF PRODUCTION
TENURE
LAND
SUITABILITY

PRODUCTION FAMILY LABOUR

FACTORS OF

LABOUR
HIRED LABOUR

SOURCE OF
CAPITAL
CAPITAL
TYPES OF
CAPITAL
MANAGEMENT
 LAND

• LAND TENURE – The rights and conditions under which people hold,
own, use, control and enjoy land.
• MUST BE SUITABLE FOR PRODUCTION
• THE AVAILABILITY OF FARM LAND IN THE AREA OR COUNTRY
• LAND BE ACQUIRED IN 3 WAYS
✓LEASED OR RENTED – Pay monthly or annually
✓SHARECROPPING – Land owned by someone other than the
farmer. The farmer then shares the produce with the owner
✓LAND FRAGMENTATION – Dividing land among relations from
generation to generation
• LOSS OF AGRICULTURAL LAND – Appreciation ( increase in value),
development, unsustainable practices
 LABOUR

INCLUDES THE MONIES PAID TO WORKERS, NUMBER OF HOURS

WORKED FOR THE PRODUCTION ON THE FARM

TYPES OF LABOUR
▪ FAMILY LABOUR – Farmer and family members
▪ CASUAL LABOUR – Temporary paid labour (wages – paid by
hours of work)
▪ HIRED LABOUR (FULL-TIME WORKERS) – Permanent workers
paid monthly salaries (or fortnightly)
▪ CONTRACTED LABOUR – For building of infrastructure and for
engineering
 CAPITAL

ALL THE TOOLS, EQUIPMENT, AND OTHER RESOURCES SUCH AS MONEY THAT ARE USED
FOR AGRICULTURE GOODS AND SERVICES ON A CONTINUOUS BASIS.
• Capital also includes crops. Trees, livestock and more

TWO TYPES OF CAPITAL

FIXED WORKING

• LAND • LABOURERS
• BUILDING • STOCK – SEEDS,
• VEHICLES FEED ETC
• TOOLS • MONEY
• EQUIPMENT
• MACHINES
• CROP TREES
 MANAGEMENT/ENTREPRENEURSHIP
FOCUSES ON THE EFFECTIVE USE OF RESOURCES BY THE FARMER TO ENSURE
PROFITABILITY AND ONGOING SUCCESSFUL PRODUCTION.

ROLE OF THE MANAGER/ENTRPRENEUR

▪ Decision-making – take responsibility for the outcome
▪ Have knowledge and skills and experience
▪ Managing the business/enterprise and operations
▪ Plan
▪ Organize
▪ Direct
▪ Supervise
▪ Ensure that resources are used efficiently
▪ Responsible for analyzing situations
▪ Keep cost at minimum
▪ Sets vision or goal for your business
 WORKING WITH THE PERSON NEXT TO YOU;
1. A young man would like to start a farm. He does not have any capital. He does not
understand what capital is. Explain to him what it is and what capital he will need to
start a vegetable farm.
2. John wants an acre of land to plant corn. What must he look for when purchasing this
land. If he does not have the money, how can he acquire this land.
3. Mya has a really big farm and a large extended family. She require a lot of workers to
tend to all her animals and plants. Explain to her how she can acquire workers, what
type of workers she should get and how should she organize payment.
4. Chris farm is huge with all the necessary tools and machines. However, his farm is
failing miserably. Explain to him what management strategies and objectives he
should implement and/or pay specific attention to.

SHARE AND DISCUSS YOUR FINDINGS WITH THE CLASS.