Farm Planning, Budgeting and Record Keeping.pptx

Farm Planning, Budgeting, and Record Keeping

1. FARM PLANNING, BUDGETING AND RECORD KEEPING

2. Build a HOUSE Group Exercise

3. Group Exercise Materials Needed: 6 pcs. Paper 6 pcs . Bamboo/ barbeque stick 1 roll Masking Tape

4. It is a process of choosing alternative courses of action at a given time for the future. “ Planning" means preparing a sequence of action or steps to achieve specific goal. A plan is like a map. What is Planning?

5. Limited farm resources, especially capital Useful for making decisions on how to increase profits or help the farm closer in attaining its goals Why do we need to plan?

6. For preparing the series of necessary activities in the farm A record of all that need to be prepared for every activity A reminder when to conduct farm operations (schedule of farm activities) A guide for analysis and effective farm operations Uses of Farm Plan

7. Step 1. Review Goals and Specify Objectives - crop yields ( higher production) - cost of production (low cost of production) - net income (higher profit) Include both farm & personal goals to maximize profit (additions to revenue exceed the additions to cost) Maintain financial independence Allowing time for leisure activities Specify performance objectives Farm Planning Procedure

8. Land resource (type, source of irrigation) Machinery (number, type, size, capacity) Labor quantity (hours available) quality (skill levels) labor requirement (hired, contract) Capital (operating capital, equity, amount to be borrowed) Management (skill levels) Other resources (local markets, transportation, etc.) Farm Planning Procedure Step 2. Inventory of Available Resources

9. The resource inventory will show which alternatives are possible Estimate the resource requirements Farm Planning Procedure Step 3. Identify Possible Interventions

10. The Estimate the gross income/ revenue and variable costs *Gross Margin = Total Revenue - Variable Costs Data needs: Total Revenue: Yield/ produce and selling price Variable Costs: Quantity of inputs needed and its corresponding costs Farm Planning Procedure Step 4. Estimate Gross Margin/ Revenue

11. Farm Planning Procedure Step 5. Prepare the Farm Budget Items Price/ unit Total Cost ( P ) GROSS REVENUE Yield or produce (kg/heads/liters/ml) Price ( P /kg) VARIABLE COSTS Feeds Biologics Labor Fuel and oil Irrigation fee Farm supplies Other costs

12. It is a process of determining requirements and allocation of resources to different activities in the plan and estimation of the results or returns. The purpose of farm budgeting is to enable farmers to objectively assess what plan or enterprise would be most profitable. Budgeting

13. Complete Budget Summarizes all expenses and returns such that the net return figure reflects the performance of the entire farm. 2. Partial Budget Considers only the items in the farm’s total expenses and returns that will be affected with the adoption of some changes in the farm plans. Helps us determine which alternative is better Types of ‘Farm Budget”

14. Added Returns & Reduced Cost Added Cost & Reduced Returns Additional Profit or Probable Loss minus equals Positive impact Negative impact Incremental change Basic Components of ‘‘Partial Budgeting”

15. Importance of Record Keeping

16. Every farmer should practice farm record keeping and accounting regularly to observe an efficient farm operation. A famous economist stated that “running a business without record is like running a clock without hands.” If a farmer does not keep farm records, he would not able to track down whether he is earning profits or losing. Farm Record Keeping and Accounting

17. To easily recall what happened in the last operation or cycle, specifically: To determine which operations needs improvement/s. To determine which breed of animals or crops performs well. To monitor what diseases or pests attack in different stages of animals and record which management practice is effective Why do we need to record?

18. To easily compute and determine farm income – whether earning or losing To economize on inputs! To easily detect causes of income losses To determine sources of BIG income Why do we need to record?

19. To aid in analyzing what went wrong and what went perfectly If project is successful, it will be easy to repeat the same practices to get the same produce or yield. If project fails, it will be easy to recognize the ineffective practices and avoid them. Why do we need to record?

20. Keep it simple Record immediately Record accurately Organize Tips in Record Keeping

21. ________________ (Indicate month and year) Name of farmer/caretaker: ______________________________________ Size of farm (in hectare):_____________ Tenurial status: (Please check) ____ Tenant ____Owned _____Rented ____ Leased ____ Others ____________ Address (village, town, province) _________________________________________________________________________ Field Supervisor/manager:______________________________________________________________________________ Land Tax/Prevailing land rental in the village (if owned): _________________________________________________ Production cycle: ___1 st ____2 nd ____3 rd Farm Record Keeping Calendar Date Activity Source of Power Type of Power Rent/ Payment Source of Labor Number of Person Number of Hours/ Persons Wage/ Contract Payment Material Inputs Quantity Price/ Local Unit Other Expenses

22. Cost and Returns (sample) Item Amount Yield (kgs/cycle) Price (P/kg) GROSS RETURNS (P/ha) Production Costs Materials Feeds Biologics Disinfectants Labor Other Costs TOTAL PRODUCTION COSTS NET RETURNS Net Profit-Cost Ratio Cost per kg (P/kg)

23. THANK YOU