Farm management decisions and management

Farm management which helps the farm enterprises

1. Farm management decisions
•importance
•Frequency

• Imminence
• Revocability
• Available alternatives.

2. Changes in management decisions over
time
• Economic
• Biological
• Technological
• Institutional
• Personal
• The process of decision-making - to be dynamic
so as to adjust to such changes.

3. Three methods in decision making
•Traditional Method:- by traditions in the family or
region or community.
•Technical Method:- This method makes use of
scientific and technical knowledge.
•Economic Method:- While using this method,
special attention is paid to the cost aspect.

5. Production and organization decisions
• fundamental questions regarding production of
enterprises and organization (land resources, what to
produce and how to produce)

Two types - Strategic and Operational
Strategic Management Decisions
These are the management decisions which
involve heavy investment and have long lasting
effect.

6. Strategic Management Decisions are,
•Deciding the best size of the farm
•Decisions on farm labour and machinery
•Decisions on construction of buildings
•Decisions regarding irrigation, conservation and
reclamation programmes

7. Operational Management Decisions
-continuously made in the day-to-day operations of the
farm business (more frequent decisions)
 What to produce?
 How much to produce?
 How to produce?
 When to produce?

8. What to produce? (Selection of
enterprises)
•alternative enterprises ( consistent with the
technical feasibility) available to a particular farm
•The law of comparative advantage will help to
take decisions
•Information on crop rotations, new varieties and
physical requirements of different enterprises
and the relative profitability of these enterprises
is essential.

9. How much to produce?
(Enterprise-mix)
•This decision has two aspects: Enterprise-
mix and resource-use.
•Product-mix
•It involves degree of specialization or
diversification. (Combination of crop and
livestock enterprises)
•Level of each enterprise will be decided on
the basis of principle of substitution

10. How to produce and When to produce
How - Selection of least cost/efficient method or practice.

Decisions on the best practice or combination of
practices and methods. (choice among different ways of
doing the same operation).
When- Timing of production
Farmers are frequently faced with questions, whether
to produce normal, early or late variety of a crop or what
combination thereof.

11. Administrative Decisions
•Financing the farm business
• Supervision of work
•Accounting and book-keeping
•Adjustments to Govt. programmes and policies
•Production for home consumption and the market

12. Farm management decision chart