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Thursday, September 24, 2009


Direct selling fresh from the farm. Keep any record?

Do you know what is Farm Record Keeping?
Farm record keeping is an activity to record all farming activities so that the farmers can analyse their profit margin. Farm Record Keeping is one important component in Farm Management Practices. Ability of farm managers and Commercial Farmers to record either by manual or computerised method analysed towards year end or periodically. Farms Inputs Record is to write all input used in the farm such as Fertilizer Usage, Chemical, Weedicide, Seed, Planting Materials, Organic Manure, Plastic Silvershine, Basket, Nylon and many others.

The data recorded in a farm Input Record Form indicated by Date of Purchase, Amount used, Input Balance and Price of Inputs. Farm Labour Record keeping is to record all cost of manpower to do all farm activities from land preparation to harvesting up to grading and selling the product. It's unit was mandays ( 1 mandays equivalent to 8 working hours to do one activities) and the cost per mandays depending on the area i.e normally about RM 20.00 per mandays in Malaysia. There is Farm Family Labour and Hired Labour in Farming Activities to be recorded. Yield Production Record Keeping is one important record to write all yield from the farm and indicated by Date Of Harvest, Amount Harvested (kg), Price per unit (RM/Kg) by grade and marketing outlet. Its is important to record by each commodities separately.

Me Deliver farm Management Lecture at Kg Ba' Kelalan, Interior Sarawak

Each crop cycle must has one record keeping system especially for short-term crop such as vegetables. For perennial crop the recording activities less due to nature of activities. Farmers can tabulate all farm records after one cycle or one season and start doing Farm Financial Analysis. Cost of Production calculated by dividing amount of production (Total Farm Yield) by Total Amount of Cost of Production and if the value is RM 0.60 means the cost of production for one kg is 60 cents (Farmers has to sell the produce more than 60 cents to make a profit). Farmers analyze their Gross Profit Margin by deducting Total Farm Income (Yield x Price) and Total Cost of Production (Costs of Inputs/Cost of Labour/ Other miscellaneous Cost). If the value is NEGATIVE means farmers are Losing and if the Value POSITIVE means farmer is gaining or make profit.

Farmers can calculate Benefit Cost Ratio (BCR) by dividing Total Gross Income by Total Costs of Production to indicate every one unit (RM1.00) the farmers invested how much is the return, if the value is RM2.15 means that every RM1.00 farmers spent it will give a return of RM1.15 extra as a profit. Other method to do farm analysis is to count Payback Period whereby how long the activities to be carried out so that the activities results profitable ventures in the units of Months or Years. Net Present Values (NPV) is other method to analyse farming activities. It uses special formula in a Farm Cashflow for each commodities. Microsoft Excel Programme has a VPV Formula in the cashflow system and very useful.

For further information of Farm Management Subject please refer to my Lecture.

M Anem
Senior Extension Specialist

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