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Financial Management in Agriculture
What makes a
successful farmer? What are the requirements that farming as an
occupation imposes on an individual? Must the farmer be a good
mechanic? No doubt this helps, but we all know successful farmers
who are not mechanically inclined. Must the farmer have great
knowledge of crops and soils? Such knowledge would be of value;
but if the knowledge is available the farmer need not be a skilled
agronomist. Successful farming, if we measure success in terms of
profitability, is determined by the farmer’s managerial ability.
Farm management is the ability to make decisions that affect the
profitability of the farm business. Obviously this is a very
broad definition of management because there are many decisions
that affect profitability.
Successful farm
management requires the ability not only to make decisions, but to
make the right decisions in a timely manner. Their decisions must
“pay off over the long pull.”
Five steps in
the decision-making process are listed below.
1.
Developing ideas and
making observations
2.
Analysis and
observations including formulation and reformulation of problems
and ideas concerning their solutions
3.
Decision making
4.
Action
5.
Acceptance of
responsibility for action
This web page will contain tools to assist in
dealing with planning, analyzing and controlling the farm business
performance.
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