Farm Management and Budgeting - JSS3 Agricultural Science Past Questions and Answers - page 2

Farm management primarily involves the efficient operation of agricultural enterprises, encompassing strategic planning, resource allocation, and decision-making to optimise productivity and profitability.

Operational budgets in agriculture serve the purpose of estimating costs and revenues for specific activities or enterprises on the farm. They help farmers plan and manage their financial resources effectively by providing insights into cash flow management, income projections, and expenditure planning for day-to-day operations.

Fluctuations in market prices are associated with price risk in agriculture. This risk arises from uncertainties in market conditions, affecting the prices of agricultural products and subsequently impacting farm revenues and profitability.

Diversification is the risk management strategy that involves spreading risk by engaging in multiple enterprises. By diversifying th, eir agricultural activities, farmers reduce their dependence on a single crop or livestock speciesthereby mitigating the impact of adverse events such as crop failures or market downturns on their overall income.

Input subsidies are a government intervention aimed at reducing the cost of agricultural inputs for farmers. These subsidies may include financial assistance or incentives to offset expenses related to seeds, fertilisers, pesticides, and other essential inputs, thereby promoting agricultural productivity and ensuring farmers' access to necessary resources.