Planning a vital part of farm management
29 July 2020 | Agriculture
Planning is an important component in farm management as it enables an informed decision-making process.
It allows timely responses and adjustments in the farm business based on realistic information or data from the farm and market.
It also helps the farmer position the farm business in the industry, and monitor and evaluate progress on the farm.
“This is where record keeping becomes essential,” said Erastus Ngaruka, a technical officer in Agribank's Agri Advisory Division.
He said a farm management plan is a defined tool designed for the control of farm resources and situations to achieve the desired goal.
The basic farm resources include water, grazing and livestock as well as financial and human resources.
“The situations that commonly occur on farms are droughts, veld fires, disease and pest outbreaks.”
Ngaruka said the desired goal for a farm can be defined by either the production scale or an income level as targeted.
For example, production records should be used to review the progress and performance of an enterprise and its contribution to the whole farm business.
This process identifies shortcomings and possible corrective measures.
The farm management plan should encompass a production plan, marketing plan, financial plan and labour plan.
“The plan is the broader guide in managing the entire farm business operations, and the supportive resources such as water and soil amongst others,” Ngaruka said.
According to him, the production plan lays out specific production targets and assign specific scheduled activities or duties to be executed to achieve the set target for each farm enterprise.
For example, the measurable production attributes for farm enterprises would include weaning and slaughter weight, number of eggs, or crop yield.
Ngaruka further explained that a marketing plan helps identify potential and profitable markets, as well as the timing or the best times to market the products.
“In order to have an efficient resource allocation to the farm operations, the financial plan becomes very useful as it portrays the associated costs and incomes through budgeting.”
He further stressed that the success of the farm business directly hinges on the labour output.
Therefore, Ngaruka said the labour plan is important to direct the implementation of farm operations, responsibilities, performance, and skills needs and development of the workforce.
Any farm operation faces risks associated with production, market, finance and labour.
“Therefore, risk management is integral to the implementation of the farm management plan.
A risk plan is needed to identify and profile the risks, its likelihood to occur, the impacts, and the possible control measures.”
He added that an effective farm management plan is one that is practicable and adaptive to both internal and external forces that could influence the normality of the farm business.