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Ag YEAR 1 > Farm Business Managment > Flashcards

Farm Business Managment Flashcards

1
Q

Organisation

A

Goal-directed and deliberately structured

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2
Q

Social entity

A

Made up of two people or more

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3
Q

Goal-directed

A

Designed to achieve an outcome

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4
Q

Deliberately structured

A

Tasks are divided, different responsibilities are assigned to designated members who will produce the best performance

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5
Q

Efficiency

A

Refers to number of resources- used to produce a desired volume of product

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6
Q

Effectiveness

A

Refers to the degree to which the organisation achieves their desired goals

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7
Q

Performance

A

Organisation’s ability to attain their desired goal by using resources both efficiently and effectively to become a profitable company

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8
Q

Management

A

Attainment of the organisation’s goals by planning, organising, leading and controlling resources efficiently and effectively

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9
Q

Managers

A

In control of assuring these things are done correctly, by coordinating and motivating other people in relation to the organisation

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10
Q

Resources:

A

Land
Money
Water
Human resources

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11
Q

4 Management functions

A

Planning
Organising
Leading
Controlling

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12
Q

Farm Business Management

A

Involves the strategic, tactical and operational decisions that aim to optimise the use of resources for the maximum productivity and profitability

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13
Q

Importance of Farm Business Management

A

Plays a crucial role in modern agriculture by enhancing efficiency, ensuring sustainability and adapting to market and environmental changes

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14
Q

3 pillars of sustainability

A

Economic
Environmental
Social

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15
Q

3 roles of Farm Business Management

A

Efficiency and effectiveness
Ensuring optimal productivity
Strategic planning

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16
Q

4 functions of Farm Business Management

A

Planning
Organising
Leading
Controlling

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17
Q

6 planning strategies in Farm Business Management

A

Strategic planning
Setting long term goals
Defining the farms vision
Diversification
Sustainability
Market positioning

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18
Q

Crop rotation

A

Rotating different crops on each field to enhance soil fertility, reduce pests and improve yields

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19
Q

Diversification

A

Expanding agricultural activities into non-agricultural business types to spread risks, improve resilience and enhance farm profitability

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20
Q

SMART

A

Specific
Measurable
Achievable
Relevant
Time bound

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21
Q

4 factors influencing decisions

A

Market trends
Environmental conditions
Technological advancements
Government policies

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22
Q

SWOT

A

Strengths
Weaknesses
Opportunities
Threats

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23
Q

5 ways of understanding management accounts

A

Profit and loss statements
Shows farm revenue, costs and profits over a specific period of time
Essential for assessing profitability and financial performance
Balance sheet (snapshot of a farms financial position, showing assets, liabilities and equity)
Critical for assessing financial stability

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24
Q

Precision agriculture

A

Using technology to apply inputs more accurately, reducing costs and environmental impacts

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25
Q

Efficiency metrics

A

Used to measure productivity and operational efficiency

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26
Q

3 examples of risks

A

Climate
Market
Operational

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27
Q

3 examples of risk management techniques

A

Crop insurance- risk mitigation tool
Diversification- used to reduce risk exposure and stabilise the farm income by spreading the risk across different enterprises
Future contracts- protect against market volatility and secure a stable future income for the farm

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28
Q

3 examples of marketing farm products

A

Direct to consumer- farmers allowed to sell directly to consumers, reduces supply chain and increases profitability
Subscription based CSA program- provides consistent income and builds loyal customer base
E- commerce platforms- enable farmers to reach a broader audience

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29
Q

CASE STUDY- Marketing farm products

A

RIVERFORD- successful company who used social media and E-commerce to sell organic products and build a brand presence online

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30
Q

Post brexit challenges

A

Navigating new regulations and trade barriers

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31
Q

2 examples of human resource management

A

Labour management- seasonal labour, ensuring compliance with regulations
Investing in training and upskilling of farm workers- crucial for adapting and improving the farm productivity

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32
Q

4 examples of environmental management

A

Organic farming
Conservation tillage
Reduce environmental impact and improve soil health
Farmers must adhere to environmental regulations, to be able to receive funding and support

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33
Q

3 examples of technology

A

Precision farming- involves advanced technologies like GPS and sensors
Robotic farming- requires less labour, but more workers must be more skilled to use the technology, reduces input costs and increase yield efficiency
Farm management software- help manage data, analyses performance, make informed decisions regarding crop and livestock management

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34
Q

2 examples of sustainability and climate resilience

A

Water conservation techniques- drought resistant crops, renewable energy sources (solar+wind), reduces vulnerability to climate change
No till farming- use of cover crops, carbon sequestration through agroforestry helping to mitigate emissions

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35
Q

3 examples of digital transformation

A

Use of big data- helps optimise crop monitoring, predict weather patterns, streamline logistics, leads to better decision matter and increased productivity
Robotic automation- improve harvest efficiency
AI- predictive analytics

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36
Q

Legal and compliance issues

A

Protecting farm innovations and securing farm legacies

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37
Q

2 global trend impacting agriculture

A

International trade agreements
Global food security challenges

38
Q

Planning

A

Management function concerned with defining goals for future performance and how to attain them

39
Q

4 benefits of farm planning

A

Clarifies direction
Helps motivate people
Helps ensure efficient use of resources
Will help to measure progress

40
Q

What is the mission?

A

Vision
Values
Mission
Goals

41
Q

Strategic plan

A

The mission of the company, future goals and ambitions - very broad and general

42
Q

Tactical plan

A

Specific actions to support or work toward the strategic plan - specific actions and ideas but not very detailed

43
Q

Operational plan

A

Specific plans for day to day activities that will support and enable the tactical plan- very detailed

44
Q

10 examples that planning involves

A
  • Appraising goals and objectives
  • Assessing the industry
  • Preparing for inventory
  • Selecting alternatives
  • Determining inputs and production
  • Selecting prices
  • Calculating expected costs and returns
  • Estimating range of costs and returns
  • Analysing probable results
  • Developing an operating plan
45
Q

Plan summary

A

Reference to the mission statement and strategic and tactical goals

46
Q

Financial summary

A

Reference to current financial data and future financial projections

47
Q

Farm description

A

Existing and future descriptions of farm enterprises and farm resources allocation and use

48
Q

Implementation plan

A

Completing tasks to deliver a project successfully

49
Q

5 reasons why risk is attached to decision making

A

Increased competition
Competitor churn
Customer demands
Investment requirements
Technology change

50
Q

International management

A

Management of business operations conducted in more than one country

51
Q

9 steps of the decision making process

A
  1. Decide if a decision needs to be made
  2. Define what the specific problem is
  3. Clarify the objectives of the decision
  4. Collect the data
  5. Generate alternative options to the decision
  6. Evaluate the alternatives
  7. Make the decision
  8. Implement the decision
  9. Monitor the outcome
52
Q

Strategy

A

How people organise major resources to enhance the performance of a farm business/enterprise

53
Q

Strategic management

A

Set of managerial decisions and actions to formulate and implement strategies

54
Q

Programmed decisions

A

Made in response to recurring organisational problems
Handled by a routine approach
Enable decision rules to be developed

55
Q

Non-programmed decisions

A

In response to unique, poorly defined and unstructured problems that have important consequences for the organisation

56
Q

Bookkeeping

A

Provides details of a business’s transactions over a time period
Insufficient to determine the profitability of a business
Consider the increased value of stock on the farm
Value of products used for personal use
Considers capital investment
Generally, to record and track all financial transactions of the farm

57
Q

5 benefits of bookkeeping

A

Financial clarity
Plan ahead
Tax compliance
Informed decision making
Easier to access loans and investments

58
Q

Variable costs

A

Vary in proportion to scale of an enterprise (crops, fertilisers .etc.)

59
Q

Fixed costs

A

Do not vary regardless of output of the enterprise (rent, electricity .etc.)

60
Q

Enterprise

A

Division or department of a total business

61
Q

Output

A

Value of production, yield times product price

62
Q

Gross margin

A

Output minus variable costs

63
Q

Cash flow

A

Movement of funds through a business

64
Q

Capital

A

Wealth of a business at a particular point in time, collection of physical and financial assets that have a market value

65
Q

Gross profit

A

Sales balanced against opening and closing valuations of stock and cost of sales

66
Q

Net profit

A

Gross profit balanced against all items of expense

67
Q

Accounting period

A

Revenues and expenses over a given period of time

68
Q

Depreciation

A

Items get old and lose value

69
Q

Stocks

A

Defined loosely as possession of the business that are likely to be consumed in one production cycle

70
Q

Capital

A

Wealth in the form of money or other assets

71
Q

Debtors

A

Debtors owe to the business

72
Q

Creditors

A

Creditors are owed from the business

73
Q

Benchmarking

A

Comparison

74
Q

Wayleaves

A

Leasing part of land for electricity

75
Q

Cash flow

A

All cash items
Throughout the year

76
Q

Balance sheet

A

What the business has
What they owe
Year end

77
Q

Profit and loss account

A

Cash items
Non-cash items
Relating to trading activities
Year-end

78
Q

What 3 things dictate the success of a business?

A

Equity
Liquidity
Profitability

79
Q

Equity

A

Fairness and justice
Make adjustments to imbalances

80
Q

Liquidity

A

Ability of a company to convert their assets into cash without losing significant value

81
Q

Profit

A

The costs that relate to the production of an item are matched against the income that the item generates

82
Q

5 reasons why we need profit and loss accounts

A

Supports decision making
Shows the profit made from trading activities
Allows owner/entrepreneur/manager to understand profitability of the business
For potential funders, partners and entrepreneurs to asses
For the government to file the taxes needed by the law

83
Q

Own consumption

A

Non-cash item in the profit and loss accounts

84
Q

What’s the point of a profit and loss account?

A

Important to tell you if the business is profitable and generating cash, see if there is the potential to expand the business

85
Q

Importance of valuing stock

A

Identify and carry forward those costs incurred before that date, but which will not give a rise to income until a later period
By carrying forward those costs, they can be matched with the income when it arises

86
Q

Uses of valuing stock

A

Growing and finished livestock
Growing and harvested crops
Unused inputs (fertilisers)

87
Q

Reason of valuing stock

A

Legal reasons (HM revenue and customs)

88
Q

Calculation for profit

A

Revenue + Closing valuation - Opening valuation - Expenses

89
Q

Valuation

A

Items produced or bought but not yet used or sold

90
Q

What does revenue include?

A

Debtors
Own consumption

91
Q

What does expenses include?

A

Creditors
Depreciation

Ag YEAR 1 (7 decks)

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