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Q.1. What are the advantage of farm planning. Name the different techniques which can be used for farm planning under Nepalese condition?
Ans :
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 farmer.
Objectives of farm planning:
- to maximize the annual net income sustained over a long period of time,
- to maximize the net income through improved resource use planning,
- to improve the standard of living of farmer.
Advantages of farm planning:
The advantage of farm planning are as follows:
a. Income Improvement:
Farm planning provides opportunity to cultivator to improve their level of income. It is this opportunity of income maximization which includes farmers to adopt desirable changes. Such income maximization could be achieved from a given bundle of resources by re-organizing present type of production as well as introducing change in technology.
If carefully planning of production programs of the farm will be conducted then obviously farm income increases.
 b. Education Progress:
Farm planning is an educational tool to bring about a change in the outlook of the cultivator and the extension workers. Knowledge of the last technological advance in agriculture is pre-requisite for better farm planning, so farmer keep their information up to date through this forced   of farm planning process. this acts as a self-educating tool for the farmers. The farmers can closely study their own business and see more clearly their opportunities and limitations, thus improving their managerial ability.
c. Desirable organizational changes:
Farm planning is an approach which introduces desirable changes in farm organization and operators and makes the farm available unit. The advantage of farm planning approach lies in its treating the farm as an operational unit and tailoring the recommendations to fit into the individual farmers, opportunities, limitations, problems and resource positions.
The techniques which can be used for farm planning under Nepalese condition are as follows: -
1. Preparing the farm map:
The general layout of the farm, number and shape, irrigation, channels can be shown in farm map.
2. Recording the history of farm:
It is very important to obtain the information pertaining to utilization of resources and their efficiency.
3. Planning Bullock and Human labor requirement:
Next a calendar of farm operation should be prepared and bullock and human requirements determined for different months.
4. Planning the land use and soil conservation practices:
When a fully 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 taken for soil conservation.
5. Planning livestock programs:
Livestock and crop production is having supplementary relationship. the size of livestock depends upon size of farm, cropping intensity availability of irrigation etc. If irrigation water is ample naturally cultivator can grow fodder crop throughout year and he can maintain which animal 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 the market condition, prices etc are essential to deduce the time of selling. Similarly, the agency through which marketing is to be done must be identified in view of getting maximum shares in consumer's price.


Q.2. You are the manager of large farm. How do you successfully manage the farm and how you incorporate good agricultural practice (GAP) in your farm business.
Ans  Successful farm manager requires the ability and capacity on the part of farmer not only to make decision but to make the correct decisions.
 If I am the manager of large farm, I would successfully manage the farm and incorporate gap in my farm business by following steps.
·     Formation of the goal or objectives of farm.
·     Recognition and definition of a problem and opportunities.
·     Obtaining information, observation of relative facts.
·     Specification and analysis of alternatives.
·     Decision making choosing alternatives,
·     Taking action,
·     Responsibility for decision or action taken,

·     Evaluation of output,

The increment of farm business depends upon how we use our GAP in the farm production. The GAP gives us which kinds of crops and verities to be grown, the dosage of fertilizer to be applied, the implements to be used, the way the farm functions are to be performed. So, by using our GAP we can increase our farm business and finally our company economy.




ENGINEERING ECONOMICS
AE 656

Lectures   :   3                                                                                          Year   :   III
Tutorials   :   1                                                                                          Part    :   II
Practical   :   0
Course Objective:
After completion of this course the students will be able to:
·         Understand the basic terms, concepts and principles of economics required for management decisions.
·         Prepare simple farm planning and budgeting to modify existing tools and equipment for better crop production or repair and maintenance work of them.
·         Carryout the simple economic and financial analysis in the field of agricultural engineering.

1.       Basic Terms and Concepts in Economics                                               [10 hours]
1.1    Definition and Scope
1.2    Basic Concepts of Goods, Utility, Value, Wealth, Equilibrium and Margin
1.3    Consumption and Indifference Curve- Meaning, Types and Properties and Price Effects and Income Effects
1.4    Law of Diminishing Marginal Utility- Meaning, Assumption, Limitations and Exceptions
1.5    Law of Demand and Elasticity of Demand
1.6    Law of Supply and Elasticity of Supply
1.7    Concept of Cost Curve
1.8    Types of Cost- Real, Opportunity, Implicit, Explicit, Social, Fixed, Variable and Marginal
1.9    Short Run and Long Run Cost Analysis
1.10Market and Price Determination:
-          Market Forms
-          Characteristics of Perfect Competition Market
-          Characteristics of Monopoly Market
-          Characteristics of Monopolistic Market
2.       Production Economics Related to Management Decision                [10 hours]
2.1    Production Economics and its objectives
2.2    Production Relationships:
-          Factor- Product Relationships
-          Factor-Factor Relationships
-          Product-Product Relationships
2.3    Principles Involved in Management Decisions
-          Principle of Diminishing Return
-          Cost Principle
-          Principle of Substitution
-          Principle of Combining Enterprises
-          Principle of Equi-marginal Returns
-          Principle of Comparative Advantage
-          Principle of Time Comparison
3.       Tools of Farm Management                                                                      [9 hours]
3.1    Farm Planning
3.2    Farm Budgeting:
-          Partial Budgeting
-          Complete Budgeting
3.3    Farm Business Analysis:
-          Farm Records and Accounts
-          Farm Inventory
-          Measuring Financial Condition
-          Measuring Farm Profits
-          Farm Prices and Production Efficiency
-          Factors Affecting Farm Costs and Income
4.       Economic and Financial Analysis                                                               [8 hours]
4.1    Definition of Cash Flow
4.2    Interest and Time Value of Money:
-          Simple Interest
-          Compound Interest
-          Interest Tables and Charts
4.3    Compounding Factors
4.4    Methods of Economic Analysis:
-          Present Value Method
-          Future Value Method
-          Internal Rate of Return Method
-          Benefit/Cost Ratio Method
-          Breakeven Analysis
-          Payback Period Method
4.5    Financial Analysis
4.6    Risk and Sensitivity Analysis

5.       Investment Decisions                                                                                 [8 hours]
5.1    Comparison of Alternatives having same useful life
5.2    Comparison of Alternatives having different useful life
5.3    Comparison of Alternatives including and excluding the time value of money
5.4    Comparison of Alternatives using Capitalized Worth Method
5.5    Comparison of Mutually Exclusive Alternatives


Tutorials
Tutorial shall be used in problem solving on such farm management decisions as- profit maximization, optimal input decision, least cost combination and on farm inventory and farm budgeting. In addition case studies on economic analysis of such projects relating to the areas of Agricultural Engineering as- Agricultural Mechanization, Soil Conservation and Watershed Management, Irrigation and Water Management, shall be discussed as case studies. Students shall be given assignments based on these case studies.

References:
i.         Small Business Management: An Entrepreneur's Guidebook by Megginson, I.C., Byrd M.J. and Meginson W.I. McGraw Hill Book Co.
ii.        Walter J. Wills. An Introduction to Agricultural Business Management
iii.      Economic Analysis for Engineering and Managerial Decision Making by N.N. Borish and S. Kaplan. McGraw Hill Book Co.


Evaluation scheme:
The questions will cover the entire chapter of the syllabus. The evaluation scheme will be as indicated in the table below:      
Chapter
Hours
Marks Distribution*
1
10
15
2
10
20
3
9
15
4
8
15
5
8
15
Total
45 hrs
80
*There may be mirror deviation in marks distribution.
Ø  The questions setting should be in the multiplication of either 8 or 10.
  source:-Department of Agricultural Engineering