Farm records to be maintained by a medium farmer and why it is to be maintained. The advantages and difficulties of farm record maintenance.

1. Maintained by a medium farmer
FARM
RECORDS
DEVASENA M - 2019001028AEC 201 Farm management production and resource economics ( 1+1 )

2. 01
INTrODUCTION
What is farm record ?
maintenance and why it is to
be maintained ?
02
FARMRECORDS
4 Business records that are
maintained in a farm
03
PROS&CONS
Advantages and the
difficulties faced in farm
record keeping
04
CONCLUSION
A brief overview of the
topic and references to
find out more.
contents
FARM RECORDS MAINTAINED
BY A MEDIUM FARMER

3. Farming is an enterprise. A farmer has tasks such as monitoring farm income,
making outside transactions and keeping track of the farm supplies. A farmer
must employ some key tools to manage his business. Farm records and
accounting forms are key tools where the farmer may base his future decisions
INTRODUCTION
A fine farming + Good record maintenance = Better business

4. IMPORTANCEOFFARMRECORDS
Farm records are a management tool they allow you to measure
how efficiently you are using resources and to determine whether
or not you are having income;
Farm records are also essential for,
● Planning and decision making;
● Obtaining credit
● Income tax management.

5. BUSINESSRECORDSTOBEMAINTAINED
➢ Production enterprise
➢ Service enterprise
➢ Holding (storage) enterprise are
maintained
03
CASHBOOK&FLOWRECORD
01
INVENTORY
04
INCOMESTATEMENT
The flow of funds into the business
and the flow out of the business over
the accounting period as well as all
the transactions done are maintained
An income or profit and loss
statement lists receipts and
expenses by type and the result is net
profit or net loss.
02
BALANCESHEET
The resources of a farm business
land, labour and capital are
maintained

6. 01.
INVENTORY
◦ Production Enterprises - these are crop and
livestock enterprises that produce marketable
commodities.
◦ Service Enterprises - include machinery and
equipment services, an on-farm retail market, and
the farm shop. These enterprises are internal to
the farm business and provide services not
directly marketed.
◦ Holding Enterprises - these are storage facilities,
buildings, capital—enterprises that hold the inputs
or farm-produced commodities until they are
ready for use in a particular enterprise or are
ready for sale

7. INVENTORY
SAMPLE
1. PRODUCTION
2. SERVICE
3. HOLDING

8. 02.
BALANCE
SHEET
A general way of recording the facts about the available farm
resources is the Balance Sheet (BS) – also known as the Net
Worth Statement
◦ It is a listing of all the possessions and debts of the farm
business at a certain date
◦ its primary use is to establish the financial solvency of the
business
◦ Represents a financial snapshot of the business at a specific
point
◦ The three components of the balance sheet are
1. Assets or things owned
2. liabilities, or things owed
3. difference between owner’s equity or net worth.

9. ASSETS ANDLIABILITIES
ASSETS:
The assets are listed in the following
order:
1) the most fixed assets, such as land
2) the more current assets;
3) and finally the most liquid, such as
cash in hand and money to be
received.
◦ The total assets, also called Gross
Capital, is the total value of all land,
capital goods, stocks in store or in the
field and money available in the
business.
LIABILITIES:
Liabilities are grouped into 3
◦ Current liabilities are those
corresponding to current assets, like
debt payments within the year
◦ Intermediate liabilities relate to
working assets, like farm equipment,
and include the
balances due on intermediate assets
with terms from one to ten years
◦ Long-term liabilities include land
and contracts on real property
exceeding ten years in duration.

10. BALANCE
SHEETSAMPLE

11. Income statement also called profit/loss statement. It is the
summary of receipts and expenses and the resulting profit or loss
during an accounting period, usually a year.
Profit/loss statement has 3 components:
1. Receipts: Gross returns from the sales of farm products should be
added as receipts. This section assigns a value to gross farm
production.
2. Expenses: The outlays for items paid for and used
during the time period is covered by the income statement. This
also
includes all the cash operating expenses as well as the fixed
expenses incurred during the accounting period.
3. Net cash operating income: Determined by subtracting the cash
operating expenses from gross receipts
03.
INCOME
STATEMENT

12. Income
statement
SAMPLE

13. 04.
CASHBOOK&
CASHFLOW
STATEMENT
❏ It is to know the flow of income and expenses during the
accounting period to ensure you can meet your financial
obligations on time
❏ It helps you assess your ability to pay bills on time
❏ It can be completed on an annual, semi annual, quarterly,
monthly, or bimonthly basis depending on the size and
type of business
❏ Cash Flow is different from Income statement because
cash flow statement includes non-farm items such as
non-farm income, living expenses,and income taxes.
❏ It summarizes all the transactions during a given
accounting period.

14. CASH
FLOW
STATEMENT
SAMPLE

15. ADVANTAGES ANDDISADVANTAGES
ADVANTAGES:
1. It permits the farmer to find
out the size of the income
which is derived from the
farm
2. It is simply a organised record
of the money you spend and
the money you earn that
provides the necessary data
for a correct income tax
assessment
3. To detect loss or theft of cash
or stock
DISADVANTAGES
1. Normally farmers dislike
paperwork , as they are very
busy with their farm work
2. Where to keep records may
be a real problem for a
farmer, as one cannot expect
an office or a desk on the
average farm.
3. There is no proper awareness
among the farmers to
maintain their farm records
and avail the advantages.

16. Farm record is a primary tool used for
assessing and mitigating farm
business risks and opportunities. So any
farmer should possibly maintain a
simple farm accounting system.
A good record keeping is a sign of a
targeted and organised business.
CONCLUSION

17. RESOURCES
E-reference
● https://www.agrifarming.in/keeping-farm-records-a-
beginners-guide
● https://www.southpointfinancial.com/the-importance
-of-keeping-farm-records-in-agricultural-production/
● https://www.treehugger.com/how-to-keep-farm-recor
ds-3016896
● https://www.croptracker.com/resources/farm-record-k
eeping.html
REPORTS
● Farm records and accounting by
Dr. Caesar.T.Villanueva in advanced
agribusiness.
BOOKS
● Economics of farm production and
management by V.T.Raju and D.V.S.Rao

18. THANKS!
-DEVASENA M 2019001028