Farm Planning, Budgeting, and Record Keeping

1. FARM PLANNING,
BUDGETING AND RECORD KEEPING

2. Build
a HOUSE
Group Exercise

3. Group Exercise
Materials Needed:
• 6 pcs. Paper
• 6 pcs. Bamboo/ barbeque stick
• 1 roll Masking Tape

4. • It is a process of choosing
alternative courses of
action at a given time for
the future.
• “Planning" means
preparing a sequence of
action or steps to achieve
specific goal.
• A plan is like a map.
What is Planning?

5. • Limited farm resources,
especially capital
• Useful for making
decisions on how to
increase profits or help
the farm closer in
attaining its goals
Why do we need to plan?

6. • For preparing the series of necessary activities in
the farm
• A record of all that need to be prepared for every
activity
• A reminder when to conduct farm operations
(schedule of farm activities)
• A guide for analysis and effective farm operations
Uses of Farm Plan

7. Step 1. Review Goals and Specify Objectives
- crop yields (higher production)
- cost of production (low cost of production)
- net income (higher profit)
 Include both farm & personal goals
- to maximize profit (additions to revenue
exceed the additions to cost)
- Maintain financial independence
- Allowing time for leisure activities
 Specify performance objectives
Farm Planning Procedure

8.  Land resource (type, source of irrigation)
 Machinery (number, type, size, capacity)
 Labor
 quantity (hours available)
 quality (skill levels)
 labor requirement (hired, contract)
 Capital (operating capital, equity, amount to be
borrowed)
 Management (skill levels)
 Other resources (local markets, transportation, etc.)
Farm Planning Procedure
Step 2. Inventory of Available Resources

9.  The resource inventory
will show which
alternatives are possible
 Estimate the resource
requirements
Farm Planning Procedure
Step 3. Identify Possible Interventions

10.  The Estimate the gross income/ revenue and
variable costs
*Gross Margin = Total Revenue - Variable Costs
Data needs:
Total Revenue: Yield/ produce and selling price
Variable Costs: Quantity of inputs needed and its
corresponding costs
Farm Planning Procedure
Step 4. Estimate Gross Margin/ Revenue

11. Farm Planning Procedure
Step 5. Prepare the Farm Budget
Items Price/ unit Total Cost (P)
GROSS REVENUE
Yield or produce
(kg/heads/liters/ml)
Price (P/kg)
VARIABLE COSTS
Feeds
Biologics
Labor
Fuel and oil
Irrigation fee
Farm supplies
Other costs

12. • It is a process of determining
requirements and allocation of
resources to different activities in the
plan and estimation of the results or
returns.
• The purpose of farm budgeting is to
enable farmers to objectively assess
what plan or enterprise would be most
profitable.
Budgeting

13. 1. Complete Budget
• Summarizes all expenses and returns such that the net
return figure reflects the performance of the entire
farm.
2. Partial Budget
• Considers only the items in the farm’s total expenses
and returns that will be affected with the adoption of
some changes in the farm plans.
• Helps us determine which alternative is better
Types of ‘Farm Budget”

14. Added Returns
&
Reduced Cost
Added Cost
&
Reduced
Returns
Additional
Profit
or
Probable
Loss
minus equals
Positive impact Negative impact
Incremental
change
Basic Components of
‘‘Partial Budgeting”

15. Importance
of Record
Keeping

16. • Every farmer should practice farm
record keeping and accounting
regularly to observe an efficient farm
operation.
• A famous economist stated that
“running a business without record is
like running a clock without hands.”
• If a farmer does not keep farm records,
he would not able to track down
whether he is earning profits or losing.
Farm Record Keeping and
Accounting

17. • To easily recall what happened in the last
operation or cycle, specifically:
• To determine which operations needs
improvement/s.
• To determine which breed of animals or
crops performs well.
• To monitor what diseases or pests attack in
different stages of animals and record which
management practice is effective
Why do we need to record?

18. • To easily compute and determine farm income
– whether earning or losing
• To economize on inputs!
• To easily detect causes of income losses
• To determine sources of BIG income
Why do we need to record?

19. • To aid in analyzing what went wrong and what
went perfectly
• If project is successful, it will be easy to repeat the
same practices to get the same produce or yield.
• If project fails, it will be easy to recognize the
ineffective practices and avoid them.
Why do we need to record?

20. • Keep it simple
• Record immediately
• Record accurately
• Organize
Tips in Record Keeping

21. ________________ (Indicate month and year)
Name of farmer/caretaker: ______________________________________ Size of farm (in hectare):_____________
Tenurial status: (Please check) ____ Tenant ____Owned _____Rented ____ Leased ____ Others ____________
Address (village, town, province) _________________________________________________________________________
Field Supervisor/manager:______________________________________________________________________________
Land Tax/Prevailing land rental in the village (if owned): _________________________________________________
Production cycle: ___1st ____2nd ____3rd
Farm Record Keeping
Calendar
Date Activity Source
of Power
Type
of
Power
Rent/
Payment
Source
of
Labor
Number
of
Person
Number
of
Hours/
Persons
Wage/
Contract
Payment
Material
Inputs
Quantity Price
/
Local
Unit
Other
Expenses

22. Cost and Returns (sample)
Item Amount
Yield (kgs/cycle)
Price (P/kg)
GROSS RETURNS (P/ha)
Production Costs
Materials
Feeds
Biologics
Disinfectants
Labor
Other Costs
TOTAL PRODUCTION COSTS
NET RETURNS
Net Profit-Cost Ratio
Cost per kg (P/kg)

23. THANK YOU