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Initially, Successfully managing a farm business is certainly the goal of farm owners. The quality of the decisions made by management is an important component in determining the longevity of the business.

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Farm management according to a source is the making and implementing of the decisions involved in organizing and operating a farm for maximum production and profit. Farm management draws on agricultural economics for information on prices, markets, agricultural policy, and economic institutions such as leasing and credit. It also draws on plant and animal sciences for information on soils, seed, and fertilizer, on control of weeds, insects, and disease, and on rations and breeding; on agricultural engineering for information on farm buildings, machinery, irrigation, crop drying, drainage, and erosion control systems; and on psychology and sociology for information on human behaviour. In making his decisions, amongst others. Among such management tactics is the way Capital typically replaces labour when large machines do the work of several men using smaller implements; when chemicals replace the scythe and hoe for weed control; when milking parlours, pipelines, and bulk tanks replace hand milking operations; when a mechanized installation replaces the fork and bushel basket in dairy, beef, or hog feeding; when automated sprinklers bring irrigation water to crops; when cisterns and lagoons handle animal waste; when combines and forced-air crop drying speed the harvesting of small grain; and in similar substitutions in the biological, physical, and social sciences amongst others.
For the traditional farmer, land and labour (his own and that of his family) are the major resources. Under favourable conditions, the farmer has changed his role from labourer to operator-manager; much larger farm units with high capital investments have resulted. Such conditions include the existence of a considerable body of applicable scientific knowledge, an opportunity for greater efficiency from large-scale operations, the existence of good markets and transportation, the opportunity to routinize and centrally direct farm work, and an absence of community antagonism to large-scale agriculture.

“The technical knowledge that a modern large-scale farm manager must possess is frequently held to be far greater than that required of most businessmen with equal investment; the capital required to operate such a farm is beyond the reach of many. In consequence, financial-management techniques resembling those of industry are often employed. Capital is imported from the outside; production is scheduled to meet quantity, grade, and timing requirements; and labour is given specific tasks, as in a factory.”

Recognizing the economic benefits of large-scale agriculture, many underdeveloped countries have attempted to create conditions for its existence. National governments, often with outside help, have financed large-scale development programs, involving irrigation or improvement of huge acreages by means of dams, drainage facilities, and canals, and these have revolutionized the lives of many traditional farm managers within the space of a few years. Improvements in crops and livestock, marketing techniques and organization, and transport and power have in some cases increased agricultural productivity and income several times over. Since capital and management have been in the hands of government, the traditional farm manager has, however, often lost some of his independence, and not all such programs have succeeded. Poor planning and management by government authorities and resistance from the farmers themselves have led to some expensive fail.

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The marketplace for agricultural commodities is exceptionally risky for three important reasons. First, no single farm producer can place or withhold enough of a single item on the market to affect the market price; second, the quantity of a commodity taken off the market does not increase in proportion to price declines; third, the farm manager cannot respond to falling prices by quickly switching production from an unprofitable item to a profitable one. To reduce his risks and safeguard profits, the farm manager may specialize or diversify depending on conditions; he may also use the futures market.

A capable farm manager may use the futures market to try to minimize his risks. In the futures market, the farm manager contracts with a buyer to deliver a given quantity of some commodity at a specified date in the future for an agreed price. The buyer is often a speculator who hopes that prices will rise, enabling him to sell the commodity or the contract at a profit. Futures markets enable the farm manager to establish in advance a price for a crop or earn payment for holding a crop in storage. Futures markets also permit some farmers to speculate on a price increase without storing a crop, establish in advance the price of livestock feed intended for later use, and establish an advance price for livestock.

Moreover, Farm management, making and implementing of the decisions involved in organizing and operating a farm for maximum production and profit. Farm management draws on agricultural economics for information on prices, markets, agricultural policy, and economic institutions such as leasing. Proper management of farmland is vital for an investor to capitalize on the overall appreciation of the asset. Farming today is more than just producing crops, it requires farmers and landowners to address profitability, fertility, conservation, and tax issues to name just a few. The importance of a knowledgeable and professional farm manager is essential for maximizing the appreciation and income of investment farmland.

All farmland is not created equal and a customized farm management plan and oversight will align the interests of the farmer and landowner to optimize their return on investment (ROI). The key to proper farm management includes focusing on the following areas:
 Capital Improvements
 Additional Revenue Opportunities

Overlooking just one of these key tasks can lead to a significant loss in the degradation of the farmland.

Farming over the last decade has become one of the most profitable industries, although the improvement in economics has not necessarily flowed back to the landowners.

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Professional farm management services will not only allow investors to optimize their management system, but own an asset that can be passed down for generations.
Ultimately, Managing a farm is a 24/7/365 responsibility and due to such a high-rated importance, It should be seen as the decision-making process aimed at meeting the vision, mission and goals of the business. All decisions made by management are focused on the efficient allocation of the factors of production land, labour, capital and management for effective yield and productivity.

Written by: Al-Mustapha Ibrahim I
University of Ilorin, Ilorin, Nigeria.
Edited by: Campus Agriculture Network Editorial Board.

Categories: Uncategorized


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