UNIT 2: BASIC PRODUCTION ECONOMICS

1
UNIT 2 BASIC PRODUCTION ECONOMICS

• THEME 1 PRINCIPLES OF FARM MANAGEMENT

2
Farm management

• ..A process whereby a farmer plans, organises,
  coordinates and controls all the production
  factors of a farm business in order to attain
  certain objectives such as maximum profit,
  growth, sustainability and an improved standard
  of living.

3
MANAGEMENT PRINCIPLES

• Strategic management
• Decision-making
• Farm management tasks

4
Strategic management

• Elements of the strategic management process
• Planning
• Implementation
• Co-ordination
• Control

5
The strategic management process

• Step 1 Formulate a mission- provides guidelines
  for realizations of a specific objective
• Step 2 Formulate farming objectives- guide the
  planning process (should be SMART)
• Step 3 Internal and external evaluation- SWOT
  analysis

6

• Step4 Develop strategies- specify means of
  achieving stated objectives i.e. planning
• Step 5 Implementation- entails applying the
  chosen strategy i.e. putting the plan into
  practice
• Step 6 Control- evaluating the results and
  taking corrective action

7
Decision-making

• The decision-making process
• Step 1Identify and define problems or
  opportunities
• Step 2 Collect and analyse relevant information,
  opinions and facts
• Step 3 Identify and analyse alternative actions
  and solutions

8

• Step 4 Make a decision- choose the best
  alternative
• Step 5 Implement the decision
• Step 6 Accept the responsibility for the
  decision and its consequences
• Step 7 Evaluate results of the decision

9
Farm management tasks

• Planning determination of future activities
  required to attain objectives
• Organisation/Implementation prioritization of
  different tasks, drawing up time schedules,
  acquiring necessary resources
• Co-ordination/Control measuring performance and
  correcting deviations, prevent plans from going
  askew

10

• Figure 1.1
• Table 1.2
• Table 1.3