Agriculture Reference
In-Depth Information
Table 18.4
Partial enterprise budget for
subsistence goat production.
any additional costs associated with the improved buck
compared to a local buck. Loss of revenue is any revenue
that would be lost after the change. Another example is a
partial budget for the alternative uses of fodder trees for
fi rewood or timber, and selling corn instead of feeding. In
this case, total gains or comparative additional gains
include costs saved as a consequence of the change
and extra revenue of producing superior offspring. Extra
profi t is the difference between total additional gain and
total additional loss. However, there are other positive
outcomes such as improved food security and women pres-
tige, given availability of veterinary services and fodder.
It can be extremely challenging to estimate the values used
in the calculations. Meeting this challenge requires
maximum farmer involvement so that appropriate esti-
mates can be made that accurately refl ect the intangible
and tangible value of gains and losses for a given subsis-
tence farm (Andreasen and Qwist - Hoffmann, 1997 ).
Description:
Using an improved breeding buck for improved goat
production
Gains
(Comparative additional gains)
Costs saved
Extra revenue Higher priced offspring
Food security
Women prestige
Losses
(Comparative additional losses)
Extra costs
Payment for buck service
Extra labor for animal care
Extra tree fodder for buck
Improved shelter for buck
Loss of revenue
Use fodder for fi re/timber
Income from selling corn
used for extra feeding
Extra profi t
Total additional gains — total additional losses
MARKETING
Marketing is the practice of identifying and understanding
consumer needs, tailoring products to best meet those
needs, and then delivering the product to achieve maximum
consumer satisfaction in tandem with maximum fi nancial
return. It is a source of power for producers, which allows
them to have control over prices and volume. An effective
marketing plan should be developed by producers to maxi-
mize sales and profi ts associated with their products.
Source: Andreasen and Qwist - Hoffmann, 1997 .
http://www.fao.org/docrep/X5676E/X5676E00.htm
objectives of the enterprise may be different from those
used in developed nations. In subsistence systems, it may
be diffi cult to assess market value or price of products,
which are needed to quantify revenue and returns; and
consequently, fi nal true cost/benefi t results may not be
achieved. However, socioeconomic factors are often used
to determine the economic value of products. These same
factors are often used for informed decisions made at the
household level. Under these circumstances, partial
budgets can be developed for decision making and
improved goat production. A simple partial budget is pre-
sented in Table 18.4 for reference.
Market Plan
The purpose of a market plan is to defi ne the market,
identify customers and competitors, outline a strategy for
attracting and retaining customers, and identify and antici-
pate market change. The plan should include product,
price, place, and promotion. A market plan should contain
the strategies listed below:
•
Identifying and describing customers (target market) by
their age, sex, income/educational levels, profession/
career, and residence. Know the customers better than
anyone, including their likes, dislikes, and expectations.
As business grows and the customer base expands, it
may be necessary to consider modifying this section of
the marketing plan and to include other customers.
•
Identifying the direct competitors and the indirect com-
petitors. Start a fi le on each, and identify their weaknesses
and strengths. Keep fi les on their advertising and pro-
motional materials and their pricing strategies. Review
these fi les periodically to determine when and how often
they advertise, sponsor promotions, and offer sales.
Structure of Partial Budget
The fi rst step in any economic analysis, and in this case
partial budget analysis, is to describe the enterprise. The
next step is to assess total losses/gains and comparative
additional losses/gains associated with any changes made
to improve the operation. For example, in a partial budget
for using an improved buck to enhance goat production,
total losses and comparative additional losses would
include extra costs and loss of revenue. Extra costs are the
expenses associated with adopting the planned changes,
which would include payment for buck service as well as
