Conceptual and Theoretical Framework
Financial Problem on Agriculture
Financial problems occur for many reasons. Often, they occur after personal or professional
problems. Sometimes while we try to solve these problems, we lose sight of our financial
situation and debts pile up. Financial difficulties may mean the situation gets out of control,
before there is time to find a solution. Having financial problems means being unable to pay
debts over the short or long term. Debt complicates financial management and limits purchasing
power. Financial difficulties become a source of stress until all debts are paid (Ginsberg
Gingras).
Agriculture plays a big role to the life of people especially in developing countries. It has a
great impact on people living in the rural areas. Many rely on Agriculture as a source of their
daily income. However, access to agriculture finance maybe a problem for most. Many are not
Aable to get financial support for these agricultural needs. This maybe a hindrance for farmers to
level up. This can be a factor for them not to avail new technology and devices that can improve
in their farming and agricultural needs. (Cle Wiston)
Agriculture is regarded as a risky enterprise both financially and socially. It is first and
foremost an economic activity as it requires capital regardless of its scale. Planting materials,
fertilizers, pesticides and labor are only some of the investments needed to conduct farming
activities. This is the reason why farming decisions rely heavily on the capital at hand of the
farmers. With limited financial capital and access to land rights, it is virtually impossible for
ordinary farmers to prosper from this business. Adding to this is the vulnerability of agriculture
to climate change and weather disturbances such as long seasons of drought or El Nino and
strong, successive typhoons being experienced in the country.
Farm Expenses
1. Farming Equipment- Farm machinery, mechanical devices, including tractors and
implements are used in farming to save labor. Farm machines include a great variety of
devices with a wide range of complexity: from simple hand-held implements used since
prehistoric times to the complex harvesters of modern mechanized agriculture.
(Britannica) With the exception of land and buildings, farm equipment can be the most
significant financial expenditure for farmers. No matter what type of farming operation an
individual may have, nearly everyone will have at least one tractor and a handful of
implements which are critical to the successful week to week operation of the farm.
(Virginia Cooperative Extension)
2. Fertilizer- Natural or artificial substance containing the chemical elements that improve
growth and productiveness of plants. Fertilizers enhance the natural fertility of the soil or
replace the chemical elements taken from the soil by previous crops. (Britannica)
3. Chicken manure- Chicken manure is the feces of chickens used as an organic fertilizer,
especially for soil low in nitrogen. Of all animal manures, it has the highest amount of
nitrogen, phosphorus, and potassium. (Wikipedia)
4. Seeds- Seed is one of the most crucial elements in the livelihoods of agricultural
communities. It is the repository of the genetic potential of crop species and their varieties
resulting from the continuous improvement and selection over time. (FAO) Commercial
seed expenses include the value of seed and seedlings purchased though commercial
channels such as elevators, seed houses and seed dealers. (Statistics Canada)
5. Pesticides- Pesticide is a chemical or biological agent that deters, incapacitates, kills or
otherwise discourages pest. (Wikipedia) The costs to maintain crops using conventional
pesticides outweighs the economic benefits from crop production and yield according to a
report, Pesticides cost double the amount they yield by the French-based organization
Bureau for the Appraisal of Social Impacts for Citizen Information (BASIC).
6. Labor-In economics, any work whether manual or mental for acquiring income is called
labour. But we are concerned with physical labour expressed in terms of toil and exertion
involved in farm production.(College of Veterinery) The availability of labour is also a
major constraint in the agricultural land use and cropping patterns of a region. Labour
represents all human services other than decision making and capital. The labour inputs
vary considerably round the year for most of the agricultural enterprises with the result
that many farmers employ a mixed system of production in order to keep their labor fully
employed.
Factors Affecting the Financial Expense on Agriculture
1. Crop Failure- Crop failure (also known as harvest failure) is an absent of greatly
diminished crop yield relative to expectation, caused by plants being damaged, killed, or
destroyed, or affected in some way that they fail to form edible fruit, seeds, or leaves in
their expected abundance. (Wikipedia) One of the most direct ways disasters affect
agriculture is trough lower than expected production. This causes direct economic loss to
farmers which can cascade along the entire value chain- even affecting the growth of the
sector of entire national economies. (fao.org)
5 Reasons of Crop Failure in Vegetable Garden
1. Seeds fail to germinate- It’s heartbreaking when you did everything according to plan
and yet the seeds fail to germinate. This is one of the most common vegetable garden
failures. Failure in germination of seeds is caused by old seeds, washed away seeds,
lack of moisture, extremes of temperature, improper planting depth or seeds being
stolen by animals.
2. Spindly Plant Seedlings- Young plant seedlings become leggy, when they are growing
in an overcrowded container or pot. Needless to say, this occurs because the growing
nutrient hungry plants compete for organic nutrients, adequate sunlight. Furthermore,
root damage caused by disease or transplanting also result in spindly seedlings.
3. Low Yields- Low yields of crops in vegetable gardening usually results from
insufficient watering and using wrong type of fertilizer for a particular type of crop.
For example, tomatoes and peppers require high potassium and leafy plants like
cabbage grow well in high nitrogen containing soil.
4. Generally Slow Growth- Another crop failure in vegetable gardening is the overall
slow growth of the plants, which could be due to improper pH, infertile soil, cool
weather, low light condition, or poor drainage of soil. Its utmost vital for a plant to
grow in a timely manner to provide optimum growing conditions.
5. Pin Holes in Leaves- Destroying of leaves is usually caused by flea beetles that attacks
plant and form pin holes in leaves. Crop damage is avoidable by spraying the crops
with insecticides and pesticides. (aridagriculture.com)
2. Cost of inputs- In order to maximize yield, it’s necessary for farmers to aid their harvest
with agricultural inputs, especially smallholder farmers. Agricultural inputs are any
external source put into soil that can help a farmer’s upcoming yield.
(in.eastwestseed.com) The rising input costs impact farmers in a highly personal way.
When it costs more to keep their operation going, they end up spending a larger share of
their working capital on input costs while experiencing a lower profit. Rising input costs
affect a farm by reducing profitability and increasing the capital needed to purchase
inputs.
3. Decreased Market Prices- Farm prices of a commodity may be defined as the average
wholesale price at which the commodity is disposed off by the producer to the trader at
the market place during the specified harvest period. Farmers claimed that farm prices
were falling and, as a consequence, so were their incomes. One of the factors for low
prices is the over production.
4. Excessive debt loads- When farmers fail, causes usually include financial resources, as
well as the natural resources that farms depend on, like water and soil. It often goes
unrecognized that farm financial resources and natural resources are intimately linked;
both contribute to and are required to sustain a healthy farm. Excessive debt and resource
degradation is widely discussed and investigated. However, historically indebtedness has
been our country’s leading cause of agricultural sustainability.
