ECON-232

ECON-232: PRODUCTION ECONOMICS AND FARM MANAGEMENT

Credits: 2(1+1)

THEORY:
Production Economics: Meaning, Definition Nature and Scope of Agricultural Production Economics. Basic concepts and terms. Concepts of Production. Production Functions: Meaning, Definition, Types.

Laws of returns: Increasing, Constant and decreasing. Factor Product Relationship. Determination of optimum input and output. Factor relationship. Product relationship. Types of enterprise relationships. Returns to scale: Meaning, Definition and Importance.

Farm Management: Economic principles applied to the organizations of farm business. Types and systems of farming, Farm planning 3rd budgeting, Risk and uncertainty, Farm budgeting. Linear programming: assumption, advantages and limitations of linear programming.

PRACTICAL:
Computation of cost concepts; Methods of computation of depreciation; Analysis of Net worth statement; Farm inventory analysis; Preparation of farm ) plans and budgets; Types of farm records and accounts; Preparation of profit 3rd loss account; Break, Even analysis; Economics analysis of different crop and livestock enterprises; Application of Farm Management Principles.

Practical (Experiments):
1)Computation of Cost Concepts.
Estimation of Cost of Cultivation of Seasonal Crop: Cost –A, Cost – B, Cost- C, Per Qt. Cost of Production, Net profit / ha.
2) Estimation of Cost of Cultivation of perennial Crops.
Estimate per ha establishment cost of orange/ Mango garden for 5 year, Estimate of per ha. Cost of cultivation during bearing years, Methods of Computation of Depreciation.
3) Methods of Calculating Depreciation of farm assets.
Meaning and Methods of Depreciation; Methods – Straight Line Method, Diminishing value Method, Sum of the year Digits Method.( To compute with example and graphical presentation). Analysis of Net worth Statement.
4) To study & Estimate the Net Worth Statement.
Net Worth statement /balance sheet: Meaning and Definition; Meaning and Concepts of Assets and Liabilities; Estimate Different Test Ratio for preparing the Balance sheet of farm business: Current Ratio, Intermediate Ratio, Net Capital Ratio, Debt – equity Ratio, Equity value Ratio.
5) To study & Estimate the profit and loss statement or Income statement. Meaning of Profit and loss Accounts; Estimate & study the different financial test Ratio for preparing the income statement of farm – Operating Ratio, Fixed Ratio, Gross Ratio, Capital turnover Ratio, Rate of return on investment, Net Farm Income, Farm Inventory Analysis.
6) To detail study the farm Inventory.
Meaning of farm Inventory, Purposes of farm Inventory, to study farm Inventory – Non depreciable Assets, Depreciable Assets, Cash Assets, to calculate the change in Inventory, Methods of Valuation, Cost minus depreciation, Cost/Market price whichever is lower, Net selling price, Replacement cost minus depreciation, Income capitalization.
Computation of Annual Depreciation rate calculated by different depreciation methods for a tractor – Straight line Method, Diminishing balance Method, Reduction fraction Method.
7) Study of break even analysis of project involving large Investment.
Two Approaches of Break Even Analysis -Linear Approach, Curvilinear Approach. Algebraic Method, B.E.P., Margins of Safety (Detail studied with example and graphical presentation).
8) Economic Analysis of different Crop Enterprises.
Estimate the economics of Paddy Crop – Variable Cost, Overhead Cost, Risk factor of Managerial Input, Gross Return, Cost of Production/qt., Input – output Ratio.
Estimate the Economics of Rice/Cowpea Crop – Variable Cost, Overhead Cost, Risk factor of Managerial Input, Gross Return, Cost of Production/qt., Input -output Ratio.
9) Economics of Supplementary Enterprises.
Calculate the Economics of Milk Production for One Year (One Buffalo) Fixed Capital; Fixed Cost for One year, Variable Cost, Total Cost, Receipts, Profit loss, Input – Output Ratio, Per liter Cost of Milk Production, Calculate the Economics of Milk Production of one Cow for one year.
10) Study of Laws of Returns: Concept of T.P. A.P. & M.P.
Law of Increasing Returns, Law of Constant Returns, Law of Diminishing Returns (Explain with example and graphical presentation)
11) Estimation of Equi-marginal Utility.
Law of Equi-marginal Utility, Significance; Estimation of Equi-marginal Utility: Total Utility, Marginal Utility, Graphical Presentation.
12) Stages of production & Relationship between TIP, APP & MPP (Law of Variable proportion)
Relationship between total Product and Marginal Product, Relationship between Marginal Product and Average Product, Explain with Example and graphical Presentation, Stages of Production – Stage- I, II and III.
13)Preparation of Alternative Farm Plan. Estimate Input Requirement of Alternative Crop Plan.
14)Study of Partial Budget.
Meaning of Partial Budget, Examples of Partial Budget.
15)To study the farm Records & Accounts
Advantages of Farm and Accounts; Problems and difficulties in farm Accounting; Types of Farm

Records and Accounts – Farm inventory, Farm financial accounting, Farm cost accounting, Physical farm Records Farm Map, Land Utilization record, Crop Production and disposal record, Labour records, Machinery Use record, Feed records, Stock and Store record.