By M. Buckett (Auth.)
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Extra resources for An Introduction to Farm Organisation & Management
H o w e v e r , if carefully i n t e r p r e t e d in relation to a given farm situation they c a n p r o v i d e guidelines t o h e l p t h e f a r m e r t a k e decisions necessary for successful, e c o n o m i c p r o d u c t i o n . T h e r e a d e r m u s t b e p r e p a r e d o n s o m e occasions to find t h a t literal a p p l i c a t i o n of e c o n o m i c c o n c e p t s is m a d e difficult by imperfect i n f o r m a t i o n . A n a t t e m p t is m a d e in this c h a p t e r to give a simplified p r e s e n t a t i o n .
1 . 2 . Technical Efficiency S o m e farmers are technically efficient at p r o d u c t i o n w i t h o u t necessarily being economically efficient. T h e m e a s u r e m e n t of technical efficiency is u n d e r t a k e n by calculating t h e r a t i o of o u t p u t to i n p u t in physical t e r m s . 2 kg to o b t a i n 1 kg of gain. 3. Economic Efficiency W h e n m e a s u r i n g e c o n o m i c efficiency it is c o m m o n practice to use profit as t h e objective, relating i n p u t s t o o u t p u t s in financial t e r m s .
H e c o u l d h a v e 50 light stores a n d 32 h e a v y beasts. In o t h e r w o r d s t h e t w o enterprises are c o m p e t i t i v e with a c o n s t a n t rate of s u b s t i t u t i o n . E x a m i n a t i o n of t h e factor (feed)/product relationship (Fig. 15a) shows t h a t as m o r e feed is d e v o t e d t o each type of a n i m a l t h e n u m b e r of beasts w h i c h can b e kept increases constantly. If t h e p r o d u c t / p r o d u c t r e l a t i o n s h i p is d r a w n (Fig.