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Current Category » Economics of Natural Resources & Farm Management

Alternate or optimum Farm Plan

Alternate or optimum farm plan implies optimum utilization of available resources in order to obtain maximum possible returns. While alternate plan is to be developed it involves the aspects, planning and budgeting. Further alternate farm plan is generally based upon the existing one. In other words it is improved version of existing plan. For preparation of the alternate farm plan different techniques have been evolved. Important techniques are (1) Production function technique (2) Linear Programming and (3) budgeting. Here, the budgeting technique has been discussed. It involves three stages viz.

  1. Appraisal of available resources.

  2. Estimation of farm and family requirements

  3. Estimation of costs, returns and profits of different activities.

  4. Developing a plan.

a) Appraisal of the farm resources: Appraisal of the farm resources both quantitative and qualitative is very important. The farm resources viz., land labour, capital and management ability is basis for any farm plan. The resources are always scarce, it is therefore important to know the constraints of land, labour, capital and management. For example whether land is irrigated or unirrigated, having good soils or poor soils and what is its size, similarly the labour availability needs to be judged and month wise how much labour force will be available along with its ability require to determine. Capital is another factor which is very scarce and hence availability of capital along with its source must be known before developing the alternative farm plan.

b) Estimation of farm and family requirements:
The agril produce is required for domestic consumption in the form of food grains and seeds. Similarly provision of fodder and feed for livestock is also very important. Therefore estimation of these requirements should be done before the preparation of plan so that necessary provision of crops can be done in the alternate plan.

c) Estimation of costs, returns and profits of different crops:
This is very important step as alternate farm plan includes mainly the profitable enterprises. Therefore estimation of costs and returns of each and every crop or enterprise is required to be done. For this purpose the input output data can be obtained from the following sources:
i) The experience of the farmer himself or from the neighboring farmers.
ii) Experimental farms
iii) The field trials conducted by agricultural universities
iv) Extension agencies conducting demonstrations on farmer’s fields.

d) Developing a plan:
While developing a plan, first of all consider those crops or enterprises which you want to meet the consumption needs of the family and farm animals. Decide the area that is to be put under each of these crops. Pick up one crop and allocate the quantity of limited resources required by it from the quantity available. Repeat this process for all these crops. Remaining limited resources are now available for allocation among other crops.
Then take up the crop which promises the highest net income per hectare over direct expends (cost ‘A’) decide the maximum possible area which can be put under the crop considering the availability of the limiting resources. Allocate the required resources to the crop and subs tact the same from the total available resources.
Then take up the next profitable crop and repeat the same process. Thus the above process should continue till all the available resources are completely a finished. Thus the above procedure will give the optimum farm plan consistent with the resources.

Current Category » Economics of Natural Resources & Farm Management