Farm:
It means a piece of land where crops and livestock enterprises are taken up under a common management and has specific boundaries.
Management:
Management is the art of getting things done by others.
Management is the process of designing and maintaining an environment in which individuals working together in groups for accomplish selected aims.
Meaning
Farm Management comprises of two words i.e. Farm and Management.
Farm means a piece of land where crops and livestock enterprises are taken up under common management and has specific boundaries.
Farm management
Farm management is defined as the science of organization and management of farm enterprises for the purpose of securing the maximum continuous profits. (G.F. Warren)
Farm management is a branch of agricultural economics which deals with wealth earning and wealth spending activities of a farmer, in relation to the organization and operation of the individual farm unit for securing the maximum possible net income. (Bradford and Johnson)
Principles of Farm Management
Some of the economic principles that help in rational farm management decisions are:
- Law of variable proportions or Law of diminishing returns:
- It solves the problems of how much to produce ?
- It guides in the determination of optimum input to use and optimum output to produce.
- It explains the one of the basic production relationships viz., factor-product relationship.
- Cost Principle:
- It explains how losses can be minimized during the periods of price adversity.
- Principle of factor substitution:
- It solves the problem of ‘how to produce?. It guides in the determination of least cost combinations of resources. It explains factor -factor relationship.
- Principle of product substitution:
- It solves the problem of ‘what to produce?’.
- It guides in the determination of optimum combination of enterprises (products).
- It explains Product-product relationship.
- Principle of equi-marginal returns:
- It guides in the allocation of resources under conditions of scarcity.
- Time comparison principle: It guides in making investment decisions.
- Principle of comparative advantage: It explains regional specialisation in the production of commodities.
