The different Factors of Production

1. Productionisthe act of manufacturinggoods.The factorsof productionare:land,labour, capital and
management.
Land
Land isa natural resource thatcan increase ordecrease invalue.Itincludesspace onthe ground,hills,
seas,oceans,airetc. Land isa primaryrequirementforall enterprise andisof immense importance.
Land increasesinvalve due to:demand,location,natural resourcesdiscoverye.g.oil andfertilityof the
land
Land decreasesinvalue due to: landslide (erosion),lackof infrastructurese.g.road
Labour
Labour isthe physical andmental effortsusedinthe productionof goodsandservices.
There are three typesof labour:operator,family andhired
Operatorlabouriswhere the farmerdoesall the workon the farm. The farmeris the manager,
supervisorandlabourer. Thisisnotan efficientformof laboursince the farmerdependssolelyon
himself forhislabour.
Familylabouriswhere the farmisownand operatorby the farmerand hisfamily.Thistype of labour
systemis notusuallyefficientandeffective oncertaintypesof farms. Familylabourisefficient onfarms
such as broilerbirdproduction.
Hiredlabourisa termuse whenreferringtoskilled,semi-skilledandunskilledworkersforshorttermor
longtermposition.
There are twotypesof hiredlabour: permanentandtemporary
Permanentlabourisusuallyrequiredformediumtolarge scale farms.Thistype of labourishire with
paidleave entitlementsandworkall yearround.
Temporarylabourisusuallyrequiredformediumtolarge scale farms.Thistype of labourishire on fixed
termcontract. Temporarylabourcan be classifiedasoccasional orseasonal.
Capital
Capital isthe accumulationof assetssuchas tools,buildings,equipmentandcash.These are things
neededforproductiontotake place.
Capital can be groupedintotwogroups: fixedordurable capital andCirculatingorworkingcapital
Fixedcapital are assetsthatare not use upin the actual productionperiodorassetswithmore thanone
yearuseful life e.g.machineryandbuildings.

2. Circulatingcapital are assetsthatare usedupin the actual productionperiodoritisinputswhichare
frequentlyusedupina shortperiodof time e.g.fertilizerschemical andcash.
Characteristicsof capital:manmade and involvestimeelement
Functionsof capital:-supplyraw material,supply appliancesand equipment,provisionof subsistence
and employmentmeansof transport.
Management
Managementisthe factor of productionthat combines the otherfactorsof production(land,labourand
capital).