Ag. Econ. 6.
4
Farm Management, Production and Resource
Economics
Credits 3 (2+1)
Course Teacher
Dr. Shreeshail Rudrapur
Farm Records and Accounts
Introduction
It is always said that Indian cultivator is good producer rather than good business man.
He knows how to produce but he does not know how to keep accounts of the farm.
Accurate and up-to-date records are essential for good management and successful farming.
It is therefore very necessary to have knowledge about farm accountancy in order to handle the farm
business efficiently.
Records are essential in any management operation.
A good record keeping system will allow managers to monitor and evaluate the performance of their
production system.
It will help them to identity problem area in the production plan, and to make the necessary corrective
measures.
FARM RECORDS
Records are statements of fact or data concerning a specific subject which may be specified in
physical, monetary, mathematical or statistical terms.
Farm records pertain to information recorded on the day-to-day operation of a particular farm.
Farm records can the defined as systematic documentation of all activities taking place in a farm
enterprise over a given period of time.
It is an act of writing down every activity engaged on the farm in every production season and at
different stages of the production process up to the final disposal of the goods and services to the
ultimate consumer.
Benefits or importance of Farm Records
1. Means to higher income:
Farm records are the sources to know the present income and net returns of the
farm.
They help to check the unproductive expenditure and identify profitable
enterprise to improve the returns on the farm.
2. Basis for diagnosis and planning:
Farm records provides data for farm planning.
Analysis of farm records helps in diagnosing the omissions in current plan.
3. Way to improve managerial ability of the farmer:
Systematic recording of farm business transactions helps the farmer in knowing the
strengths and weaknesses of the business.
It helps to acquire business habits which can help in taking advantage of changes in the
economic environment.
It leads to the improvement in the management of farm.
Farmer can avoid mistakes and losses which would otherwise result to dependence only on
his memory for guidance.
5. Basis for Research in Agricultural Economics:
Research requires precise and correct data which is possible only if proper records and
accounts are maintained on the farms included in the study.
6. Basic for government policies:
The farmers need to continuously feed the facts for state and national farm policies such as
land policies, price policies and crop insurance.
Records and accounts are helpful in obtaining the correct data for examining and developing
such sound policies.
In general, farm records are essential to:
know financial status at a point of time.
know gains and losses over time.
know better source of income and items of costs.
keep a check on unproductive expenditure.
examine comparative profitability & costs involved in different enterprises
know weak points of farm organization.
develop rational short term and long-term production plans.
Limitations/ difficulties in the maintenance of farm records
Subsistence nature of farming
Triple role of Indian farmer and difficulties of management: Farm manger, Farm labour,
Family head
Illiteracy and lack of business awareness
Complicated nature of Agribusiness
Inadequate extension service in making farmers record oriented
Non availability of suitable and simplified farm record books under Indian conditions
Lack of record consciousness
Small size of holding
Fear of taxation
Complicated nature of record keeping
Characteristics of good farm record system
Easy to keep be up to date
Give needed information for the analysis
Provide the information when needed and serve a definite purpose
Permit the analysis of the information needed
Types of Farm Records
1. Physical farm records
2. Financial farm records
3. Supplementary farm records
Physical Farm Records
1. Farm map
2. Land utilisation records
3. Production and disposal records for crops, livestock, poultry and others
4. Labour records
5. Machinery use records
6. Feed records
7. Stock and store register
Financial Farm Records
Farm inventory
Farm cash record
Capital asset and sale register
Cash sale register
Credit sale register
Purchase register
Wage register
Funds borrowed and repayment register
Farm expenses paid in kind register
Non farm income register
Classified farm cash account and annual business analysis record
Supplementary Farm Records
Sanction register
Auction register
Rainfall register
Hire register
Stationary register
Records maintained on an average farm as well as on commercial dairy farm
Records maintained on Records maintained on
an average farm commercial dairy farm
1. Land use records 1. Livestock register
2. Farm livestock records 2. Milk production register
3. Permanent dead stock register 3. Milk disposal register
4. Farm labour records 4. Calf feeding register
5. Input records 5. Feeding schedule register
6. Feed records 6. Insemination register
7. Crop production and disposal records 7. Calving register
8. Livestock production and disposal records 8. Gynecological status register
9. Input and feed stock register 9. Health and vaccination register
10. Log book 10. Mortality register
11. History sheet
12. Cash book
Land Use Records
Sr. No. Particulars Area (ha)
1 Land-use pattern
a. Total land holding
a. Land leased-in
a. Land leased-out
a. Cultivated land
a. Irrigated land
a. Un-irrigated land
a. Permanent fallow
a. Land under fruits/plantation crops/trees
a. Land under building
a. Problematic land
2 Cropping pattern
Season Name of crop Area (ha)
a.
b.
Kharif c.
d.
Sub-total
a.
b.
Rabi c.
Sub-total
a.
Summer b.
Sub-total
Grand-total
Farm Livestock Records
Number Purchase
Expected
Sr. Type Homebred Purchased Breed Age Year of value life in
No. purchase (Rs.) years
1 Milch animals
cows
She-buffaloes
2 Draft animals
Bullocks
He-buffaloes
3 Young stock
Heifers
Calves
4 Other
Sheep
Goat
Poultry birds
Camel
Horse
Permanent Dead Stock Register
Sr. No. Particulars Year of No. Rate Contruction/ Amount spent
constructio or (Rs.) purchase on repairs/
n/ purchase Size value maintenance
(Rs.) (`Rs.)
1 Buildings
Farm building
Cattle shed
Wells / tube wells
Pump house
2 Irrigation equipments
Oil engines
Electric motors
Submersible pump
Drip irrigation set
Fountain set
3 Farm machinery / Equipments
Tractors
Trolley
Bullock cart
Threshers
Sprayers
Dusters
Seed drills
Iron ploughs
Wooden ploughs
Cultivates
Harrows
Crowbars
4 Small implements / Minor equipments
Spades
Sickles
Hand hoes
5 Other
Farm Labour-Use Records
Season: Crop: Variety: Area:
Date Farm Owned labour Hired labour Wages/rent paid (`)
Operation T B Human T B Human T B Human
R L M F R L M F R L M F
TR=Tractor (hours), BL=Bullock (pair-days),
M=Human man-days (Male), F=Human man-days (Female)
Input-Use Records
Season: Crop: Variety:
Area:
Date Input Quantity Rate Total Value
Farm Produced Purchased (Rs.) (Rs.)
FYM
Seeds
Urea
DAP
SSP
Feed-use Records
Type of feed : Amuldan
Date Milch animals Draft animals Young stock Total
Qty. Value Qty. Value Qty. Value Qty. Value
(Rs.) (Rs.) (Rs.) (Rs.) (Rs.)
Crop Production and Disposal Records
Season Crop Area Date of Main By Household Consumption
(ha) harvest Product Product Qty. Value
Qty. Qty. (Rs.)
Kharif a.
b.
c.
Rabi d.
e.
Summer f.
g.
Used as Seeds Kind Payments Sold Balance
Qty. Value Qty. Value Qty. Value Qty. Value
(Rs.) (Rs.) (Rs.) (Rs.)
a.
b.
c.
d.
e.
f.
g.
Livestock Production and Disposal Records
Date/ Milk
Month Production Household Consumption Conversion to Ghee Sold
(lit) Qty. Value Qty. Value Qty. Value
(lit) (Rs.) (lit) (Rs.) (lit) (Rs.)
Date/ FYM
Month Production Household Consumption Sold Balance
(cart-load) Qty. Value Qty. Value Qty. Value
(cart-load) (Rs.) (cart- (Rs.) (cartload (Rs.)
load) )
Date/ Eggs
Month Production Household Consumption Sold Balance
Qty. Qty. Value Qty. Value Qty. Value
(no.) (no.) (Rs.) (no.) (Rs.) (no.) (Rs.)
Input and Feed Stock Register
Name Opening Receipt Usage Balan Sou Details Cost
of Balance Date Q Date Qty. ce rce of usage (Rs.)
Input Qty. Qty. of
pur
chas
e
FYM
Cake
Seeds
Urea
DAP
SSP
Log Book
Name of Machinery: Date of purchased:
Price `:
Date Work/operation Time Power/fuel consumed Lubricants Repairs/
done (hrs) maintenance
Qty ` Qty. `
FARM ACCOUNTANCY
FARM ACCOUNTANCY
Account, Accounting and Accountancy
Account is a summary of business transactions.
It is vertically divided in to two parts in ‘T’ shape. The benefits received by that account are recorded on
the left hand side and the benefits given are recorded on the right hand side.
Accounting is the art of recording, classifying and summarizing the business transactions.
Recording refers to writing in journal.
Classifying means writing in ledger and summarizing relates to preparation of trading account, profit and
loss account and balance sheet.
Farm accounting is an application of the accounting principles to the farm- business.
Accountancy means the art of keeping books of account in a regular and systematic manner.
The farm accountancy is also called “Farm book keeping”.
System of Book Keeping
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Single Entry System
This is the system which ignores the double effect of transactions.
Only personal account of debtors and creditors are kept and the impersonal
accounts are ignored completely.
Under this system, the trader does not get all the information which he
generally likes to have.
This system is incomplete and inaccurate.
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2. Double Entry System
It is a method of recording each transactions in the books of accounts in its two fold
i.e. two entries are made for each transaction in the same set of books, one being a
debit entry and other a credit entry.
Every business transaction involves two parties one, for receiving the goods or
services and other for giving them.
Every transaction, therefore, is entered at two places, for credit and for debit.
Ex: Receipt of money from Mr. Prasad is Rs. 5000.
Cash account received > Debit entry
Prasad paid the amount Credit entry (Credit to Prasad’s account)
30 Advantages of Double Entry System
Both personal and impersonal accounts are opened in order to keep a complete record
of business transaction.
It provides a check on the arithmetical accuracy with the help of trial balance.
It reduces the chances of errors. Hence, it is accurate and more reliable.
It helps to prepare Balance Sheet which explains financial position of the firm.
It is useful to the tax and legal authorities.
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Difference between Double & Single Entry System
Double Entry system Single Entry System
Record of both personal and impersonal Only personal accounts are kept
accounts are kept
It is perfect, accurate and more reliable It is imperfect, inaccurate, unscientific,
and unreliable.
Types of Accounts
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1. Personal accounts
a. Natural person : e.g., Mahesh A/C, Vijay A/C, etc.
b. Artificial person: e.g., Agri College A/C, Firms’s name A/C, etc.
c. Representative person: e.g. Salary A/C, Rent A/C, etc.
2. Real Accounts
The accounts relating to assets are known as real account. E.g., Cash A/C, Machinery A/C, Sales A/C, Purchase
A/C, Building A/C, etc.
3. Journal
All business transactions are first recorded in a book called journal.
It means a daily record.
The journal is also called as a “book of original entry”
Ledger
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The ledger is the chief book of accounts. A ledger is a book which contains various
accounts to which the entries made in the journal are transferred.
The act of transferring each entry from the journal to their respective accounts in ledger
is called posting.
There are two sides in the ledger.
The left side is called Debit (Dr.) side and the entry made in this side is called debit
entry-the side of the value received.
The right side of the ledger is called the credit side and the entry made is credit entry-the
side meant for value given out.
Every transaction entered into ledger affects two accounts in the ledger; one receives and
the other gives.
34 Rules of posting
1. Every debit entry must have a corresponding credit entry and vice versa.
2. Every debit entry is recorded by a word ‘To’ and credit entry by a word ‘By’.
3. Debit account receives and credit accounts gives.
4. Indexing in alphabetical order.
5. All debit items are posted first and then credit items to avoid mistakes.
35
Cash Book
Transactions relating to only cash are recorded in one book called cashbook.
The principle here is, cash coming in is placed on debit side and cash going
out is entered on credit side.
Thank You
