Activity #3:
Choose one agri-crop related business opportunity identified in Column 4.
Carefully study the potential of that business idea. Use the Swot guide
below to accomplish this task. Present your SWOT Sheet to the class for
critiquing and feed backing. Be sure to record feedbacks given by the
teacher and classmates.
Answers
2.1.5 Economics as the framework for farm-system analysis
(a) Money value: The convenience of using money or financial values as the basis of commercial farm systems analysis will be obvious: it permits the various system inputs (e.g., seed, fertilizer, power, labour etc.) to be standardized as money costs and the various system outputs to be standardized as money returns so that net revenue, i.e., money returns minus money costs, can be used as the basis of comparison between alternatives. In commercial farming, all or most of these inputs/costs and outputs/revenues can be stated in explicit quantitative terms. On the other hand, when dealing with less commercialized systems where there are no actual price-setting markets for farm inputs and/or outputs, one is often obliged to base the analysis on imputed values. However, this is possible only up to a point; beyond this point, as one moves further from a commercial environment towards a traditional one (as discussed in Chapter 6), the attempted use of money value as the basis or numéraire for analysis becomes too abstract to be useful and one has to search for some other base (Dillon and Hardaker 1993, pp. 28-30).
(b) Family labour effort: Probably the best alternative to money value on small family farms of a subsistence or semi-subsistence nature is labour input, both as a measure of inputs and as a yardstick to judge the worth of outputs. At least this is so in the eyes of the majority of Asian (and African) small-farm families for two reasons. First, on these farms most production activities involve few if any commercial inputs and most outputs are also not disposed of through commercial channels. Money hardly enters into the matter at all. What such activities do have as their common factor is family labour - often very hard labour - from hand-preparation of fields, to carrying all inputs/outputs perhaps long distances, to hand-pounding the harvested grain. Not unnaturally then, these families plan, compare and evaluate their several different farming activities and alternatives (i.e., analyse their systems) in terms of labour content. To conduct such analysis on any other basis such as money value would be an incomprehensible abstraction. However, 'labour' is not a simple quantity. It can have several dimensions: quantity when labour is measured in terms of standardized units (e.g., labour-days or task-days on estates); quality where the relevant factor is the actual effort required or the degree of skill or unpleasantness associated with separate tasks; and agency where the labour measurement reflects the social position or status of the person performing the task. Thus, in different societies, patriarchal or matriarchal, women's labour will be valued less or more highly than the labour of men regardless of the actual effort expended, while the labour performed by children might also be valued according to their (usually inferior) social status rather than to the actual work they perform. These dimensions of labour and the implied difficulties of measurement often limit the use of this factor as an alternative to money value. Nevertheless labour often provides a more relevant basis for systems analysis of a very large number of small traditional farms than does money.
(c) Bio-mechanical energy: A factor which all farm-household systems and their subsystems have in common is their explicit or implicit energy content (including labour, above). Farm-system models have sometimes been structured on the basis of such energy content and inter-component energy flows - see, e.g., Axinn and Axinn (1983). Use of energy-based farm systems analysis rests on the view that, in a world of declining energy resources and materials that can be represented by their energy content, the energy generation and consumption of farm-household systems is a more valid basis for systems analysis than is money profit, and usually also that energy flows which are directly or indirectly involved in all economic activities (including agriculture) are not properly represented - indeed they are often severely distorted - by commercial pricing mechanisms. However, these views involve issues and require solutions at much higher than farm level. Farm systems analysis based on energy flow is more appropriate for some aspects of macro/industry/sector strategic planning than for farm-level operational planning where the immediate interest of farm families is in income (in whatever form it takes) and the effort required to achieve it.