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Unit 1 Lesson 2 Outline Characteristics of Farming

This document outlines various characteristics of farming. It discusses how farms integrate home and business, combine management and ownership, and are often small business units. It also notes that farm products are difficult to standardize, farmers have limited control over production, demand and supply for farm products are inelastic, and farming involves great risks. Additionally, it examines similarities between farming and other businesses, key decision areas in farming, factors that determine farm types, disadvantages of farming, and ways farms can be classified.

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Bryan James Paranaque
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1K views2 pages

Unit 1 Lesson 2 Outline Characteristics of Farming

This document outlines various characteristics of farming. It discusses how farms integrate home and business, combine management and ownership, and are often small business units. It also notes that farm products are difficult to standardize, farmers have limited control over production, demand and supply for farm products are inelastic, and farming involves great risks. Additionally, it examines similarities between farming and other businesses, key decision areas in farming, factors that determine farm types, disadvantages of farming, and ways farms can be classified.

Uploaded by

Bryan James Paranaque
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Characteristics of Farming

Unit 1, Lesson 2
Agricultural Economics

Characteristics of Farming
1. Home and farm business are integrated
2. Functions of management and ownership are combined
3. Most farms are small business units
4. Farm products are not easily standardized
5. Farmers’ control over production is limited
6. Demand and supply of farm products are inelastic
7. Farming is subject to great risks
8. Financing farming is a difficult task
9. Farming can be carried on by persons who have limited education
10. A high proportion of production cost consist of fixed cost
Similarities of Farming to Other Business
1. A farm manager must also plan his production program to fit the local market channels
2. The farm manager must plan his everyday operations to achieve efficiency
3. He must prepare his products for the market to maximize profit
Some Decision Areas in Farming
1. What combination of crops and/or livestock to raise?
2. What is the optimum size for each enterprise?
3. What technology to adopt?
4. What level of inputs to use? Extent of substitution between inputs
5. What new investment to make? Source of funds?
6. What adjustment to make in production scheduling in order to respond to changes in market
demand, without sacrificing technical or operational efficiency?
Why are Farms Different?
Farms vary because one type of farming requires different inputs from that of another. Below are the
factors which determine the types of farming:
1. Physical factors. Differences in climatic, soil surface and water supply determine the kind of
crops that can be grown including animals. These differences explain why regions or countries
differ in the crops and animals they raise.
2. Location factors. The site of the farm in relation to its distance in the market likewise
determines the kind of crops to be grown.
3. Biological factors. The presence of plant and animal pests and diseases affects the type of
farming in a region.
4. Human factors. The personal, cultural and educational background of the farmer influence his
choices of farming
5. Historical and institutional factors. Established market connections and the good reputation of
crop producers have economic and management advantages.
Disadvantages of Farming
1. Farm products are highly competitive
2. Farming has many uninsurable risks
3. Farm production cost is high caused by a relatively small-sized production unit
4. Farm wages are lower compared with other industries
5. Farm production is difficult to control
6. Farm work is given low social status by Asian societies
Classification of Farms
1. Based on economic orientation
a. Kitchen oriented farms
b. Market oriented farms
2. According to the number and kind of enterprise
a. Number of enterprises
1) Specialized farms
2) Diversified farms
b. Kind of enterprise
1) Crop farms
2) Livestock snd poultry farms
3. According to tenure
a. Owner operated farms
b. Part-owner operated farms
c. Tenants
1) Leasehold
2) Share tenanted
d. Certificate of stewardship contract
4. Based on the system of farming
a. Source of labor and management
1) Family farms
2) Plantation farms
b. Source of power
1) Mechanized farms
2) Non-mechanized farms
c. Intensity (land/labor-capital ratio)
1) Intensive farms
2) Extensive farms
a. Source of water
1) Irrigated farms
2) Non-irrigated farms

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