Farm Business Management: The Fundamentals of Good Practice (Farm Business Management Series)

Farming is a complex job with many unique challenges, but can also be a rich and rewarding career that is full of opportunities. Following the author's (https://styluspub.presswarehouse.com/browse/catalog?filter=%7B%22Series.TitleOfSeries%22%3A%22Farm+Business+Management+Series%22%2C%22Series.Title.TitleType%22%3A%2214%22%2C%22Series.Title.TitleText%22%3A%22Agriculture%22%7D&page=1) Farm Business Management Series , this new textbook takes the core principles and techniques and distills them into an accessible student resource. This book: * covers the most important aspects of farm management, such as observation, decision making, budgeting, risk assessment and record keeping * is organized into easy-to-navigate sections such as the farmer's environment, financials, key skills and farm systems * includes student-focused pedagogy throughout, comprising learning objectives, focus study exercises and review questions. Written by an expert with decades of teaching and research experience around the world, this book also incorporates two brand new chapters on farm accounting and computer systems and software. Providing a hands-on learning experience for students of agriculture, it will continue to be a much-used resource throughout their farming career. Cover Farm Business Management: The Fundamentals ofGood Practice Copyright Contents About the Author List of Focus Study Exercises Preface Acknowledgements 1: Introduction Introduction to Problem Solving Optimal Solutions to Problems Formulating the Problem Formulating the Problem The decision maker’s objectives Alternative courses of action Using the objectives for choosing between courses of action Models Symbolic models Constructing and Using Models Models are approximations Possible simplification methods Sequential decision models Deriving solutions from models The Manager (Decision Maker) The Road Ahead Questions and Exercises Reference 2: A Synopsis of Production Economics Introduction The Decision Problem The Factor–Product Problem The Factor–Factor Problem The Product–Product Problem Summary: Optimal Decision Rules Obtaining the Data Concluding Comments Questions and Exercises References 3: The Environment Farmers Operate Under Introduction Risk and Uncertainty A certainty environment A risk environment An uncertainty environment A typical decision-making environment Types of risk and uncertainty found in primary production Price non-certainty of products and input factors Technical and yield non-certainty Technological advance non-certainty Institutional non-certainty Financial non-certainty Quantifying non-certainty The Nature of the Management Problem Under Non-certainty The Nature of the Management Input Managerial Ability The Farm–Household Complex Background The general nature of the relationship Conflict Between Farm and Household Capital Asset ownership and capital conflict Labour A non-conflict aspect Concluding Comments Questions and Exercises References and Further Reading 4: Budgeting Theory: The Core Method of Farm Systems Analysis Introduction Types of Budgets Simple forecast budgets Comparative budgets Parametric Budgets Introduction Using a parametric budget Uses of parametric budgets Concluding comments on parametric budgets Gross Margins Introduction The theory behind gross margins Uses of gross margins Difficulties in calculating gross margins Programme Planning Introduction General method Steps involved An example Concluding Comments Questions and Exercises References 5: Budgeting Practicalities: Costing Out the Proposals Introduction What is Important in Putting Plans on Paper The Initial Steps on Costing Out Proposals The full budget The Components of a Full Budget Examples of Budgets A simple enterprise budget (gross margin) A full budget example for a sheep and cattle farm Concluding Comments Questions and Exercises 6: Introduction to Managing Risk and Uncertainty Introduction Why Reduce Variability? Measuring and Describing Risk and Uncertainty How to Calculate the Expected Value of an Outcome The Past as a Basis for Future Probabilities Graphs representing risky/uncertain events Why Bother Allowing for Risk and Uncertainty? The Sources, or Anatomy, of Risk and Uncertainty Farmer’s choices Attitude to Risk Calculating Costs and Outcomes Under Risk and Uncertainty Construct a cash-flow decision diagram or tree Construct a ‘pay-off matrix’ from the cash-flow decision diagram Management Options for Reducing Risk and Uncertainty Introduction Methods of reducing risk and uncertainty Insurance Diversification Conditions for diversification to work Summary on diversification Contracts Assessing contracts Concluding comments on contracts Products and production methods with low variability Method of analysis Asset structure approaches Flexible buildings and machinery (all-purpose, low-value buildings and machines) Getting the right structure organized Summary on asset structure as a variability-reducing method Flexible systems and resources Knowledge and information Data and information Individualistic approach Using a tax system Income equalization Income estimation Claiming development expenditure Cautionary comments on using tax systems Subjective and Objective Probabilities (Chances) Analysis Principles Concluding Comments Questions and Exercises References 7: Investment Analysis: Recognizing Input–Output Timing Introduction The Value of Time (the Reason Why Timing Must Be Considered) Optimal Investment Decisions Discounting Related Arguments for Differentiating Between Input and Output Timing Cost–Benefit and Investment Analyses Formulae Used in Investment Analysis and Related Work Introduction Some possible criteria for ranking alternative projects Possible criteria Investment analysis formulae The future value or worth of a monetary sum The present value or worth of a monetary sum The future value of a uniform series of monetary sums The present value of a uniform series of monetary sums The present value of a uniform series of monetary sums that continue into infinity The capital recovery or amortization factor The sinking fund factor Tables of factors The Internal Rate of Return Discount Factor Tables Investment Analysis Criteria Introduction The characteristics of primary industry investment projects The criteria The net present worth (NPW) Net future worth The investment ratio (commonly known as the cost–benefit ratio) The internal rate of return Definition Calculation of the Internal Rate of Return The annuity equivalent of the NPV Choice of Criterion Introduction The requirements of a good criterion A comparison of the criteria NPV The investment or cost–benefit ratio The internal rate of return Conclusion on Criteria The Incorrectness of the Internal Rate of Return The Value of Time and the Opportunity Cost Characteristics of the Criteria Introduction Conclusions Farming Investment Analysis Introduction Types of analytical approaches An ex-post study An ex-ante study General and specific studies Method Interpreting the Results The incorporation of depreciation in the cash profiles Incorporating income tax into the cash profiles The choice of a discount rate The specific case with financing costs included The general case (financing costs ignored) The Handling of Uncertainty Technological Change The Planning Horizon The Effects of Inflation Again Concluding Comments Questions and Exercises Note References and Further Reading 8: Farm Finances, Financial Accounts and Records in General Introduction Record Keeping in General Assessing What Records Should Be Kept Data and Information What Records Might Be Kept? Personal records/documentation Farm: general records/publications Farm: physical records Farm: financial records Record keeping in a nutshell Farm Financing Recording the Farm Finances Profit and Loss Appropriation Books of Account and Double-entry Book Keeping Farm Size Accounts Analysis Concluding Comments Questions and Exercises Further Reading 9: Skills Required Introduction The Source of the Information Managerial Attributes Entrepreneurial Skills Personal Attributes Bringing Together the Farmers’ Views on Competencies Summary of Skills Required Introduction Risk management Observation Negotiating Anticipation Planning Learning from experience People skills Implementation Technology Solutions Analysis Concluding comments Introducing Two Farmers and their Views Margrave Hank Introducing Two Consultants and their Views Bruce Prof Concluding Comments Questions and Exercises References 10: Observation Skills Introduction Relevant Facts to Observe Observation Skills Needed Reality Check: Questionnaire on a Case Farm (or Perhaps Your Farm) Visual Observation Steps in visual processing Reading Skills Junk science: how to recognize it Summary of effective reading Objectives, Goals and Skills Where it all starts: thinking carefully about the objectives General objectives Specific objectives Specific objectives provide the action plan Summary Memory and Good Management Lodging information into long-term memory Retrieval of information on demand may need help Summary of memory improvement Problem Definition Define and specify Defining the problem (opportunities) Deciding Relevance Maintaining a critical view of all proposals Listening Skills (One of the Most Important Observation Skills) Encouraging the speaker, and concentrating on the relevant Active communication: concentrate hard on the speaker Making use of active communication in problem solving Listening with your eyes: part of observation Passive listening: hard work is also necessary for success Concentration is a key to message receipt Summary of listening and communication skills You must understand the change process Concluding comments on listening Concluding Comments Questions and Exercises References 11: Anticipation and Looking Ahead Skills Introduction Imagination and Creativity Introduction The steps involved in exercising and disciplining imagination Creativity: areas to consider when thinking ahead Rolling out imagination Approaches to thinking ahead and creativity Futures approach to creativity: stimulating a forward-looking attitude Defining the components and stages of the futures approach Environment scanning Scanning: gathering material containing ideas about the future Issues management Sorting out the issues that future conditions might create Vulnerability assessments What threats and difficulties might the future bring? Scenario production Sorting out the scenarios: the likely conditions in, say, 10 years? Conclusion Retirement planning Retirement plans, ownership structures and possible pitfalls Review: creativity and idea generation Problems, goals and assumptions Risks and uncertainties Cultivate the forward-looking mentality Visualization Introduction Pattern matching: the way it works The other senses Visualization procedures The farm totality: relationships between the components Capturing the Vision Introduction The general procedure Checking out the visions (plans, SWOT and time lines) Action–time charts Creating a chart of the jobs and their timing The initial steps on costing out proposals Review: vision capture Practicality Introduction Project management and critical path analysis Monitoring, control and rules Rules and regulations Getting the sums right: using basic economic optimization principles Conclusions and action Time management The procedures What do you do with all your time? Planning your time management Keeping to your schedule Procrastination Conclusion Feed management: the culmination of observation and anticipation (and comments on the cropping equivalent) Culmination of skills Stocking rate Practice Comments Cropping farms Concluding Comments Questions and Exercises Reference 12: Understanding the Human Factor in Management General Overview What Defines Management Skill? Introduction Personality and its links to management Openness Conscientiousness Extroversion Agreeableness Anxiety (neuroticism) Other personality ideas Personality and tests Attitude to risky situations Intelligence and its links to management Memory Constructs (rules of thumb) and intuition Imagination and creativity Shapes Intelligence and tests Motivation and objectives Motivation theories Drivers Assessing motivation Learning Style Concluding Comments on the Factors that Impact on Managerial Ability Putting Numbers on the Origins of Managerial Ability Introduction Introduction Objectives Locus of control Modelling Managerial Ability Measureable variables that affect ability Modelling results Concluding Comments Questions and Exercises References 13: Decision and Management Processes and their Improvement Decision Processes Introduction Decision Processes Linear approach Dynamic approaches Modifications to the processes Constructs Innovations and their adoption Objectives and Their Impact on Managerial Processes Maximization Satisficing Integration Complications Biases and Stress Introduction Areas of Bias Observation Forecasting People relationships Implementation General Stress and Decisions Introduction Combating stress Modifying the situation Mental reaction Concluding Comments on Biases and their Reduction Methods of Improving Managerial Ability Introduction Learning processes Benefits of changing Training methods Overview of methods Working in groups Simulations Mentoring approaches People oriented Role-playing Desensitization Self-help Groups again, and participation Professional consultants’ views Farmer oriented Role models The will to change Concluding Comments Questions and Exercises References 14: Improving Farming Systems Using Survey Data Introduction to Surveys and Comparative Analysis Comparative Analysis: A Description Introduction Methods Used in Comparative Analysis Potential uses of comparative analysis The steps involved in a typical system Step 1: Calculate the basic statistics Step 2: Calculate summary statistics and make comparisons A simplified example Basic information calculated from accounts and records Comparative Analysis: Problems, Disadvantages and Advantages Introduction Comparisons General inconsistencies and problems The fallacy of physical efficiency measures (the technologist’s dilemma) Yearly variations in standards Product and input aggregation Is the best system optimal? The limited scope of the suggestions Data comparability Concluding comments on problems and disadvantages The advantages of the comparative analysis approach to farm improvement Ease of understanding Create interest Inexpensive advisory system Records Conclusion Whole Farm Production Functions Description Problems Cost Accounting Description Cost allocation methods Variable cost allocation Fixed cost allocation Practical problems Usefulness of cost accounting information For farm management purposes For governmental use The Measurement of Efficiency The problem The objective A comparison of some efficiency measures The comparability of the measure ‘profit surplus’ The use of ‘percentage return on capital’ The opportunity cost of unpaid factors The need to measure efficiency Residual Imputation and Resource Valuation Concluding Comments Questions and Exercises References and Further Reading 15: Introducing Further Methods of Farm Systems Analysis Introduction Linear Programming Introduction The linear programming model of a farm Constraints in a typical farm problem The available products A feasible farming system The objective function The planning objective Gross margins analysis, programme planning and linear programming Graphical presentation and solution Introduction The feasible values of x1 and x2 The profit-maximizing solution An outline of the solving process The assumptions of the linear programming model The objective function The marginal rates of substitution Divisibility Certainty Concluding comments The linear programming solution The application of linear programming: general Dynamic Programming Background and computational principles Introduction Features of the solving process A farm example (with some general terminology introduced) The problem: possible states Terminology for defining possible states Terminology representing decisions and actions (feeding alternatives) The problem: costs and returns The problem: the general return function The backwards solution to the problem The second and first stages The optimal solution Description A feature of the solution tables The dynamic programming principle The assumptions, problems and use of dynamic programming Introduction The assumptions of the dynamic programming approach Calculation problem Dynamic programming and the nature of real-world farm decision problems Systems simulation (models of systems that do not fit common analytical techniques) The uses of systems simulation General Input–output data Evaluating management systems Determining the profit distribution for a defined farming system Concluding comments on uses Monte Carlo simulation Introduction Generating data The profit distribution The use of the Monte Carlo approach General procedures Introduction Formulation of the problem Creation of the mathematical model Data collection Developing a computer program Validation Experimental design and experimentation Data analysis Simulation in a nutshell Concluding Comments Questions and Exercises Further Reading and References 16: Farm Computing and Software Introduction Software Available Introduction Financial systems Physical recording systems Simulation, mathematical programming and operations research systems Statistical systems Environmental systems General Apps Cloud Computing Operating Computers and Obtaining Software Concluding Comments Questions and Exercises 17: The Last Word: Objectives and the Family Introduction The Family Influence The Influence of a Spouse The Origins of Objectives Assessing the Origins of Objectives Entrepreneurship Concluding Comments: On Objectives and Family Postscript. Cases to Ponder: The Views of Two Farmers and Consultantson Objectives, Decision Making and Improving Farmers’ Managerial Ability The farmers Professional consultants Questions and Exercises References A1: Managerial Style Test A2: Managerial Aptitude Test Instructions Memory Experience Creativity General Shapes Calculations A3: Question Set to Assess a Farmer’s Locus of Control A4: Goals and Aims Question Set A5: Set of Questions to Assess a Farmer’s Risk Attitude Answers A6: The Workings of a Digital Computer Principles of computer structure Principles of software operations Index Back Cover La 4e de couv. indique: "Farming is a complex job with many unique challenges, but can also be a rich and rewarding career that is full of opportunities. Following the author's Farm Business Management series, this new textbook takes the core principles and techniques and distils them into an accessible student resource. This book: covers the most important aspects of farm management, such as observation, decision making, budgeting, risk assessment and record keeping; is organized into easy-to-navigate sections such as the farmer's environment, financials, key skills and farm systems; includes student-focused pedagogy throughout, comprising learning objectives, focus study exercises and review questions. Written by an expert with decades of teaching and research experience around the world, this book also incorporates two brand new chapters on farm accounting and computer systems and software. Providing a hands-on learning experience for students of agriculture, it will continue to be a much-used resource throughout their farming career." Farming is a complex job with many unique challenges, but can also be a rich and rewarding career that is full of opportunities. Following the author's Farm Business Management series, this new textbook takes the core principles and techniques and distils them into an accessible student resource. This book: covers the most important aspects of farm management, such as observation, decision making, budgeting, risk assessment and record keeping; is organized into easy-to-navigate sections such as the farmer's environment, financials, key skills and farm systems; includes student-focused pedagogy throughout, comprising learning objectives, focus study exercises and review questions. Written by an expert with decades of teaching and research experience around the world, this book also incorporates two brand new chapters on farm accounting and computer systems and software. Providing a hands-on learning experience for students of agriculture, it will continue to be a much-used resource throughout their farming career.--COVER