All planning is a matter of forecasting. It is an attempt to state logically in conformity with the economic principles as to what will happen in the future. Evidently planning is to serve as a blue print for the future. All business undertakings plan their production and marketing operations consciously in respect of what how much, how to produce and when and where to buy and sell. The planning of operations and their execution is secret of their success. In agriculture also planning is must. Therefore farm planning has been defined by different farm economists as under.
Farm planning is a process to allocate the scare resources of the farm to organize the farm production in such a way as to increase the resource use efficiency and the income of the farmer.
Farm planning is process of deciding in the present what to do in the future about the best combination of crops and live stock to be raised through rational use of resources.
Farm planning is mainly a process of choice making or choosing from among competitive alternatives. It is concerned with various adjustments the farmer makes in the existing organizations with the purpose of making the most profitable USC of scarce resources.
Objective of Farm Planning:
The immediate objective of farm planning is to maximize the annual net income sustained over a long period of time.
The maximization of net income through improved resource use planning.
The ultimate objective of farm planning is improvement in the Standard of living of the farmer.
Importance of Farm Planning: If necessity is the mother of invention, scarcity of resources is the mother of farm planning. The fact of scarcity makes it necessary for the farmer to make the most what he has in their efficient utilization. Farmer can make optimum utilization of scarce productive resources. The farm planning, of course, may be annual or long range planning. Annual planning obviously is meant for ensuing agril year. In case of long range planning, long range objectives are involved, covering a longer period over the next 5 to 10 years.
The importance of farm planning can be examined through its helpfulness (or usefulness). In view of this following things are very important (Advantages).
It enables the farmer to achieve his objectives in relation to his farm and family in a more organized manner.
Farm planning enables a careful examination of the existing resources and their best allocation.
It helps farmer to take decisions in relation to selection of crops, hectarage under different crops and kind and number of live-stock to be maintained.
It helps the farmer to identify the input and credit needs.
It helps in estimating future cost and returns.
To have a best farm plan, some steps are needed to follow while farm planning is prepared. They are
1) Preparing the farm map: The general lay out of the farm, number and shape, irrigation channels can be shown in the farm map.
2) Recording the History of the Farm: It is very important to obtain the information pertaining to utilization of resources and their efficiency. What was the crop rotations followed previously, etc on the basis of this information planning in respect of crops to be grown, crop rotations to be followed; requirement of credit along with their sources etc can be possible.
3) Planning Bullock and Human Labour Requirement: Next a calendar of farm operations should be prepared and bullock and human labour requirements determined for different months. A labour schedule should be developed as to guide a farmer to appraise the amount of labour need in relation to the availability.
4) Planning the Land Use and Soil Conservation practices: When a full picture of the resources and their appraisal is obtained, the next step in farm planning is to adopt such practices which would lead to the best use of land. While planning the cropping scheme, due importance should be given for soil conservation. Therefore purposively crops and crop rotations need to be introducing a plan which will enhance soil conservation.
5) Planning Live stock Programme: Live stock and crop production is having supplementary relationship. The size of live stock depends upon size of farm, cropping intensity, availability of irrigation etc. If irrigation water is ample naturally cultivator can grow fodder crops through out year and he can maintain milch animals more.
6) Planning the Marketing of Produce: Only production is not sufficient to maximize the returns, good price for the produce is also important. Therefore, study of market conditions, prices etc. are essential to decide the time of selling. Similarly the agency through which marketing is to be done must be identified in view of getting maximum shares in consumers price.
Characteristics of a Good Farm Plan
The main objective of farm plan is to obtain maximum returns; therefore following attributes are required to possess the farm plan
Good farm plan provides a cropping scheme that includes a most profitable crop as well as some legumes to maintain fertility of soil.
It offers balanced combination of crops and live-stock enterprise leading to profit maximization.
The plan must be able to fulfill the farm and family requirement of the farmer.
The farm plan provides a regular employment and income to farm family and bullock labour, through the development of sounds crop rotations.
It is flexible enough to take advantage of any new technology or source of power.
The plan when it is practically implemented should be resulted into least cost. (i.e. minimum cost).
Farm Management Decision
Farm management is basically decision making science. On farm every day decisions are required to be taken keeping in view the profitability. These decisions are generally:
1) What to produce? – Selection of enterprise
2) How much to produce? – Enterprise mix
a) Product – mix b) Resource – use
3) How to produce? – Selection of least cost/efficient method
4) When to produce? – Timing of production.
Thus to achieve the objective of farm management the answers of above mentioned questions are very important.
Those answers can be obtained by understanding the principles used in farm management. They are –
The law of diminishing marginal returns.
The law of Equi-marginal returns.
The law of substitution (Least cost principle)
The principle of combining enterprises.
Cost concepts and principles
The law of opportunity cost.
The law of comparative advantages