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
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