TOPIC 2:

PRINCIPLES AND CONCEPTS IN

FARM MANAGEMENT
• Farming practice can be subsistence or commercial (gain profit)

• Farming for profit requires that products produced on the farm are
sold.

• Commercial farming- more complicated than simple farming for food

(subsistence)
CUSTOMER??
Change mindset…Grab Opportunities…Increase wealth

Market Oriented
Subsistence
Farmer

• need to understand :

 the kinds of products that

consumers want,
 the quality of the product
they must produce,
 the quantity demanded and
 the price that consumers are
willing to pay.
• Nowadays, farm products can be sold anywhere in the world in many
platforms.

• These changes create opportunities for farmers to earn more money

and to make more profits.

DIRECT SELLING E-COMMERCE

• Profit generates the capital needed to reinvest in the farm:

to buy machinery and implements,

to carry out soil conservation measures

to introduce irrigation.

Etc..(need consultation, install technology, increase worker..)

• Economic in farm management is about profit/ wealth generate
from the farm

• Most of the activities in farm are controlled by farm manager

Farm Manager

• better decision-makers.

• able to compete with other farmers.

• develop greater skills in buying and selling,

• Good knowledge in farm business management.

• Apart from the above personality traits, successful farmers must also
have the following:

• Adequate capital
• Practical experience
• Technical and production know-how
• Management and business knowledge.
 • A good farm manager should know what is the best to
manage their farm.

• They should understand the difference between success and

failure, and between profit or loss”
Role of farmer
• Farm management is about making decisions.

• How to gather all the resources together &

generate the profit

• How efficiently the farmers use their resources

affects how much wealth they can create.

• Farmer can be regarded as the head of the

farming body and his task is to direct, co-
ordinate and utilize all the limbs and activities
accordingly
 Definition of Management
• Giving guidance is a universal human activity. It is a task carried out by someone who is in charge
of the activities of others and involves making decisions and taking steps to achieve specific goals.“

• Van der Schroeff: Management is to give direction to a common action."

• Drucker: Without management, resources of production remain sources and never become
production.“

• Others:
— Management is decision-making and human relations.
— Management is getting things done through (other) people.
— People can say what they want to do, but when it comes to the actual doing, leadership and
management are necessary.

It is obvious that no single definition can contain all the above ideas, which is why it is preferable to
give an analytical description of management.
• Management involves rational decision-making -planning, organization, execution
and control of human and material resources to achieve the entrepreneurial
objectives.

• The management of a farming enterprise does not differ in essence from that of
any other business enterprise.

• Although the four management tasks are discussed separately, their application
in the enterprise are not necessarily in sequence.

• Some of the tasks are carried out simultaneously.

 Planning Organize

• Determine future • determining the different

activities that are tasks that have to be carried
necessary to achieve out,
specific objectives.
• combining those tasks that
go together in a function,
• Efficient (do things
correctly) & effective • Make sure the staff know
(do the right things) their responsibility & their
job
 Implementation
• Place personnel according to the tasks and
functions that have to be carried out
• Negotiate with marketers, agricultural co-
operatives, banks and other suppliers of
inputs
Control
• is the process whereas the
farmer sees to it that the
actual activities correspond
with the planned activities.

• Communicate with personnel;

• Co-ordinate activities;

• Consultation with and participation by

personnel;

• Direct, instruct and motivate personnel; and

• Train personnel.
Guideline to make a good decision making

1. Identify and define the problem or opportunity--planning

2. Identify alternative solution--planning
3. Collect data and information--planning
4. Analyze the alternative and make a decision—planning/organize
5. Implement the decision--implementation
6. Monitor and evaluate the results--control
7. Accept responsibility
 PLANNING
Small scale farmer may think:
“Should i eat the chickens/
Resource Utilization eggs?”

Shifting of subsistence “Should I sell the eggs/ the chicken?”

farmer to profit farmer

“should i look after them and have

a regular supply of eggs? “
 THINK…What u need to plan?
• Situation:

1. You want to start farming for small scale, what are questions you
need to THINK before start the farm development?
2. What you need to THINK regarding to the land to be developed?
3. What you need to THINK once you want to expand the existing
farm?
4. What you need to THINK in term of daily care of the crop?
5. What you need to THINK in term of daily care of the livestock?
 THINK…What u need to plan?
• Situation:

6. What you need to THINK in terms of labour & mechanical

equipment?
7. What you need to THINK in terms of purchase the input for your
farm?
8. How to market your product?
9.Financing of your farm?
10. How to trace the record of your farm?
• All these questions will guide the farmer to achieve their goal and
take related courses of action.
 Organize the activities

• Each person is occupied in a specific task and can therefore specialize in his task.

• Each person knows his duties and responsibilities.

• Management and control are facilitated since the farmer now knows what
each person should be doing, which means that he can keep each one
responsible for his task or tasks.

• The farmer saves time; it is not necessary to make new decisions every day
and he is not solely responsible to see that everything gets done.
Example of organization for mix farming
(dairy farm and maize farming)
 SUCCESS IN MANAGEMENT
• The ability to identify a problem or an opportunity, evaluate it, take a logical decision about
it and to implement the decision

• are motivated and have ambition. They want to achieve success and are prepared to spend
long hours on their enterprises, make decisions and adjustments, and certainly do not wait for
"an overall perfect plan" before they take action.

• develop their strong points. Not everyone has the same talents and abilities. Successful
farmers identify their strong points and concentrate on these. They prefer to make slow, but
definitive progress, rather than skipping from one unknown project to the next.

• emphasise increased productivity. They are constantly on the look-out for opportunities to
improve their enterprises, broaden their knowledge and learn new skills.
• Concentrate on key areas in their enterprises. This is done without
neglecting less important matters.

• take calculated risks. They know that few actions or decisions in the
enterprise are free from risk and are therefore prepared to take well-
considered risks.

• stay in contact with persons and institutions that can influence the success
of their enterprise. This implies contact with input suppliers, banks,
agricultural cooperatives, control boards, state departments, universities, etc.