RESOURCE MANAGEMENT IN

AGRICULTURE
 FOCUS ON;
• 1. INTRODUCTION
• 2.LAND
• 3.LABOUR
• 4.CAPITAL
• 5.MANAGEMENT/ENTREPRENEURSHIP
• 5.TIME
 LEARNING OBJECTIVES
• At the end of this topic, you must be able to:

• Define, outline the characteristics and articulate the

importance of land, labour, capital,
management/entrepreneurship, and time as factors of
production in agriculture.
 INTRODUCTION
• Economists in later years generally agreed that there were 4
factors of production in any production system: land, labour,
capital and management/entrepreneurship

• Present day economists have agreed that there are 5 factors of

production: land, labour, capital, management/
entrepreneurship, and time.

• This chapter will discuss each of the 5 factors of production,

starting with land.
 LAND
Definition of Land

• The upper surface of the soil, its fertility, forest and herbs;
All minerals under the surface (iron, gold, coal, etc);

• Natural and physical features, e.g water, climate, topography;

• According to Cairncross, “All free gifts of nature that yield

income, i.e. agricultural land, residential land, mines, etc. are
included in land”.
 Characteristics of land

• Limited supply: can not be increased or decreased by

any human effort.

• Heterogeneous: differ in nature, fertility and

productivity.

• Multiple use: dairy; beef; cereals; horticulture; etc.

• Subject to diminishing returns: diminishing yields

 Characteristics of land cont
• Indestructible: can not be destroyed.

• Occupies space

• Has a specific location

• Reposition of natural factors: houses ecology, physical,

chemical and biological properties of the soil-soil fertility.
 Importance of land in agriculture
• Food and fiber protection: the primary necessities of life are agric products
produced on land.

• Extensive use of factors of production: agricultural is the only sector which

requires the extensive use of land as a factor of production.

• Source of increasing income: through the selling of agri product produced on land.

• Basic of economic development: 70% of the population in Zimbabwe derived their

livelihood and income from the land.

• Basic of human life: all human beings depend on the land for their well being,
residence and other necessities.
 Factors affecting the productivity of land

• Natural factors: climate, slope of the land, soil fertility, etc.

• Irrigation potential; salinity, alkalinity, sodisity, water

holding capacity, availability of water capacity.

• Land tenure/ ownership: title holders or land owners are

more likely to make significant improvements on the land.

• Available of capital: money to buy inputs such as stock

 Factors affecting the productivity of land
cont.
• Land husbandry practices: proper soil and water management
techniques.

• Availability of labour: the human factor that activates factors of

production.

• Government policy: policies that provide assistance to farmers

• Agricultural research and extension: improving techniques

adoption by famers.
 LABOUR
• Smith defined labour as being inclusive of all efforts made by
man to earn a living.

• Thomas defined it as “all human efforts of body or mind,

undertaken in the expectation of reward”.
 Characteristics of Labour
• Labour means human exertion.

• A man’s labour is part of himself

• Labour has low bargaining power (has limited influence in

negotiating wage levels and working conditions)

• Labour has intelligence and judgement (because labourers

are human beings).
 Efficiency of labour
• Efficiency of labour refers to the power of a worker to produce goods and
services during a given time period;

• It is the quality and quantity of goods and services which can be produced over
a given time period under certain conditions.

• Lekhi and Singh (1996) defined the efficiency of labour as the quality and
quantity of goods and services which can be produced over a given time period
under certain conditions.

• According to Saxena, “By efficiency of labour we mean the amount of work

which a labourer can do within a given time”.
 Ways of improving efficiency of labour
• ducation and training

• Wages levels: competitive/attractive salaries.

• Incentives for better work: piece work; extra holidays/off days; promotions;
etc.

• Working conditions: well equipped machines and tools; sanitation; tension-

free environment;etc.

• Farm organizations and layout: well laid out roads; buildings; sheds; fences;
fields;etc.
 Ways of improving efficiency of labour
cont.
• Allowance for bad weather: roofed sheds ; protective clothing;etc.

• Social and political security: medicine in case of illness; old age

pension; personal security; favorable socio-economic
conditions;etc.

• Trade unionism: respect for workers’ representative organization.

• Proper supervision: ensure that labour adhere to instructions;

assigning specific jobs well in advance
 Ways of improving efficiency of labour
cont.
• Planning labour requirements: planning in advance the
number of workers and time needed for each task.

• Treating workers as human beings: personal

encouragement and sympathy.

• Reduce peaks and troughs in labour requirements:

absorb labour through supplementary enterprise; use of
casual labour and and overtime during time of peak
labour requirements.
 CAPITAL
• Capital is inclusive of such physical things as building, machinery,
equipment, tools, etc

• Anything which has been produced and is used to increase the

efficiency of current production capacity.

• Wealthy employed in the production of income

• According to Chapman (2001), “Capital is that wealth which yields an

income, or aids the production of income, or is intended to do so”.
 Characteristics of capital
• Capital is the result of labour i.e. equipment, machinery, tools and
building were manufactured by man or labour.

• Capital is the result of savings i.e. you forgo current consumption and
divert the money to investments in agric.

• Capital is productive: produce goods and services when combined with

other factors like land and labour.

• Capital is temporary: has to be replenished, replaced, or reproduced

from time to time.
 Characteristics of capital CONT.
• Capital is a passive factor meaning it can only
produce when used in combination with other factors
of production.

• Capital is not a free gift because it is earned hard

labour and sacrifice.

• Capital is a substitution of labour, eg to some extent

machines can display labour.
 MANAGEMENT/ENTREPRENEURSHIP
Role of the manager/entrepreneur
• Land, labour, capital cannot produce anything unless they are organized
together.

• Management is the factor or resource that is used by humans as manager to

ensure that other resources are organized or controlled in such a way as to
make those resources productive.

• The person who takes the decision to organize these factors of production
and bears the risk is called a “manager” or “entrepreneur”.

• The manager is responsible for deciding what is produced eg maize, wheat,

bead, etc.
Role of the manager/entrepreneur Cont.
• The manager is also responsible for deciding how
production is implemented, e.g whether to use labour-
intensive or capital-intensive methods.

• He/She is in addition responsible for marketing the

product (when, where and how)

• The managers role is also to set up goals or

objectives, and ensuring that they are met or
achieved.
 Basics of managerial decision making
• Observing a problem and thinking about its solution.

• Analyzing with further observations.

• Making the decision.

• Taking action.

• Accepting responsibility for actions taking.

 TIME
Definition of Time
• Duration i.e. hours, days, weeks,months, years,etc.

• Temporary position, e.g. morning, afternoon, evening,

night.

• Clock reading e.g 1030; 1926;etc.

• Season e.g summer, autumn, winter, spring.

 Importance of time as a factor of
production
• All agric production activities are time bound, time consuming,
time specific and time sensitive.

• This is a cross-cutting and over-arching issue in all forms of

production.

• Time is closely interlinked with other factors of production,

namely land, labour, capital, and management.

• You can attach a price tag on time and also people are paid for
the amount of time they work.
Importance of time as a factor of production cont
• Time determines the value of output.

• Time determines the value of other factors of

production.

• Agric and non-agric activities compete for the use of

time; therefore it is a scarce resource that should be
used wisely.
 Characteristics of Time
• Fixed in quantity: there is a fixed number of hours in a day, days in a week,
weeks in a month, months in a year,etc.

• Free gift of nature: time is freely available: it’s acquisition does not require
the outlay of money or other resources.

• Cannot be stored: unused time is wasted.

• Homogeneous: to some extent each hour, day, week, month or year is

identical to each other.
 Characteristics of Time cont.
• Infinite number of use: time can be used for practically
anything.

• Abstract: time is invisible and intangible and is therefore

immune to natural processes such as decay,
denaturation, or degradation.
 Factors affecting productivity of time
• Natural factors e.g temperature, humidity, precipitation soil fertility.

• Land tenure/ownership: land owners use time more expeditiously/

prudently/profitably.

• Available of capital: amount of capital available determines output

per unit time.

• Managerial capabilities: more competent management produces

higher output per unit time.
 Factors affecting productivity of time COT.
• Available and efficiency of labour: more efficient labour
produces a better quality and quantity of goods and
services.

• Government policy: policies supportive of farmers and

agric in general, lead to higher output per unit time.

• Macro-economic environment: a more conducive

environment leads to greater productivity.
 CONCLUSION
• Land, labour, capital, management/entrepreneurship, and time as
factors of production in agriculture are all scarce resources.

• Efficient management of these resources is essential for

profitability in agriculture.

• Management/entrepreneurship is the factor of resources that is

used by humans as managers to ensure that other resources are
organized and controlled in such a way to make them more
productive.