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close this bookBetter Farming Series 26 - The Modern Farm Business (FAO - INADES, 1977, 55 p.)
close this folderPart 4 - The farmer's expenses
View the document(introduction...)
View the documentYearly production costs
View the documentInvestment
View the documentWhen is an expense profitable?


So far, we have seen how the farmer can earn more money.

A farmer tries to earn more money in order to have more money to spend, and in this way to meet his needs. Now we shall see how the farmer can use the money he has earned. We are going to study the farmer's expenses.

A farmer has various kinds of expenses.

Expenses for the family

A farmer may buy clothes for his wife, his children, himself: shorts, dresses, shirts, trousers, shoes. He may buy food: salt, sugar, fish, meat, beer, wine. He may buy furniture for his house: a table, chairs, beds. He may buy things for the kitchen: jars, cooking pots. He may buy articles of everyday use such as soap, paraffin, matches. All these expenses are to satisfy the family's needs; they are called consumption expenses (or family expenses). These expenses make up the family budget. They are not expenses for the farm business.

In studying a farmer's expenses, we must keep apart expenses for the family and expenses for the farm business.

Expenses for the farm business

Expenses for the farm business make up the farm budget

There are two chief kinds of expense for the farm business.

· First, there are expenses that come every year.

These are called yearly production costs. They are expenses that have to be met every year, so that the farm can go on working and earn more money.