Farm Management Decision
Farm management is basically decision making science. On farm every day decisions are required to be taken keeping in view the profitability. These decisions are generally:
1) What to produce? – Selection of enterprise
2) How much to produce? – Enterprise mix
a) Product – mix b) Resource – use
3) How to produce? – Selection of least cost/efficient method
4) When to produce? – Timing of production.
Thus to achieve the objective of farm management the answers of above mentioned questions are very important.
Those answers can be obtained by understanding the principles used in farm management. They are –
The law of diminishing marginal returns.
The law of Equi-marginal returns.
The law of substitution (Least cost principle)
The principle of combining enterprises.
Cost concepts and principles
The law of opportunity cost.
The law of comparative advantages.