AEC 301 Production Economics and Farm Management (1+1)
Theory
•Production Economics : Meaning- Definition – Nature and Scope - Farm Management : Definition - Objectives of Farm Management - Production Economics Vs Farm Management
•Farm Management Decisions - Decision making process - Scope of farm management
•Types and systems of farming: types - specialized and diversified-mixed – systems of farming – peasant farming – state farming – capitalistic – collective- co-operative farming.
•Factor-Product relationship : Meaning - Agricultural/horticultural Production Function : Meaning – Definition- Laws of returns: increasing, constant and decreasing returns
•Classical production function and three stages of production – Elasticity of production
•Types of Production functions- Linear, Cobb-Douglas and Quadratic
•Cost concepts and cost curves: total, average and marginal cost concepts and curves, economics of scale.
•Determination of optimum input and output: input approach and output approach - physical and economic optimum.
•Mid semester examination
•Factor-factor relationship : meaning- isoquant – definition and types - isoquant map - marginal rate of technical substitution - factor intensity – isoclines – ridge line
•Returns to scale – elasticity of factor substitution- iso-cost line – principle of factor substitution and least cost combination of inputs – Expansion path - Effect of input price changes on the least cost combination
•Product-product relationship: Meaning – production possibility curve – marginal rate of product transformation - Enterprise relationship: joint products – complementary – supplementary – competitive products
•Iso-revenue line – optimum combination of products – principle of equi-marginal returns – Principle of opportunity cost
•Farm planning : importance – characteristics of good farm plan – farm planning procedure
•Budgeting : definition and types – complete budgeting – partial budgeting – enterprise budgeting – cash flow budgeting – limitations of budgeting
•Linear programming : Assumptions – Linear programming model defined – graphical solution - advantages and limitations
•Risk and uncertainty : definition – types of risk and uncertainty – safeguards against risk and uncertainty
Practical
•Estimation of Optimum input – output combination.
•Determination of least-cost combination
•Determination of optimum product combination
•Computation of cost concepts- cost of cultivation and cost of production of agricultural/horticultural crops
•Cost of cultivation and production of perennial crops/ horticultural crops.
•Cost of production of livestock products
•Depreciation: methods of calculating depreciation
•Visit to a farm (government/private/corporate) to study the layout and organization
•Farm records and accounts : Usefulness, types of farm records–farm production records-farm financial records
•Visit to a private agricultural/horticultural farm to collect information on farm business
•Farm inventory analysis: Examination of assets – valuation of assets by different methods
•Preparation and analysis of Net worth statement and Profit and loss statement
•Estimation of Break-even analysis
•Preparation of complete budget and partial budgets
•Preparation of farm plan
•Graphical solution to Linear programming problem
•Final practical examination