Introduction
- Economics is the study of how man and society chooses to allocate scarce productive resources to produce various commodities, over time, and distribute them among various consumers in society.
- It attempts to explain how man can best use the limited resources to produce goods and services which satisfies his needs with minimum wastage or loss of these resources
Example;
- food,
- clothing
- shelter
- Agricultural economics is therefore defined as a science that aims at maximizing output while minimizing costs by combining the limited supplies of goods and services for use by the society over a certain period of time
These are;
- land,
- capital,
- labour
- management
Basic economic Principles
Scarcity
- Economic scarcity means resources are limited in supply relative to demand.
- This principle implies that there is no time that man can have enough resources to satisfy all his need or desires
Choice/Preference
- Human wants are many and varied and means of satisfying them are limited.
- Therefore, man has to make a choice among the alternatives in order to use the resources available.
- Man does this by satisfying the most pressing needs first.
- This is called scale of preference.
Opportunity Cost
- Opportunity cost is the revenue forgone from the best alternative.
- It exists only where there are alternatives.
- Where there are no alternatives the opportunity cost is equal to zero.
- Opportunity cost helps in decision making.
Farm Records
- Farm records are documents kept in the farm
- They show farm activities carried out over a long period of time
- Or information kept in the farm in written form, about the farm and all activities in it.
Uses of Farm Records
- Show the history of the farm
- Show whether the farm is making a profit or loss.
- Show all the assets and liabilities of the farm which can be used to value the farm.
- Help in supporting insurance claims on death, theft, fire or loss of farm assets.
- Help in tax assessment to avoid over taxation.
- Used as a guide in planning and budgeting.
- Helps to detect losses or theft in the farm.
- Make it easy to share profits or losses in partnerships.
- Help in settling disputes among heirs to estate if the farmer dies without a will.
- Provide labour information on terminal benefits for a worker.
Type of Farm Records
- Production Records – Show the total yield and yield per unit of each enterprise.
- Inventory Records – A record of all permanent and consumable goods in the farm.
Consumable Goods Inventory
- Field Operation Records – Show in details all field practices carried out together with the input used for all the crop enterprises.
- Breeding Records –
Show all the breeding activities in the farm.
From these records it is possible to select the prolific animals and cull the infertile ones.
- Feeding Records – A record of the types of feeds used in the farm and their quantities.
- Health Records –
- Indicates the health conditions of the animals in the farm.
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