Posted on November, 1, 2016 at 10:23 am
By Michael J. Ssali
The national effort to improve household incomes through farming should involve teaching farmers about bookkeeping. We cannot talk about commercialisation of agriculture without emphasising farm accounts.
Most of our farmers work on small plots of land, which are also their homesteads. It is easy for them to mix household expenses with farm expenses.
Many of them spend more than they earn as profit from their small farms and fail to buy vital inputs such as fertilisers or good quality seeds. They spend the money as they get it on incidental requirements and fail to re-invest into the little farm to keep it productive.
A farmer’s decision to take a child to an expensive school should be based on the interpretation of the recorded financial transactions of the farm over a long period of time to be sure if he can sustain that child in the chosen school without ruining the farm.
Some harvest seasons are better than others; every now and then farmers make losses. A farmer who keeps records is better placed to understand the historical performance of the farm and to know what he can afford or not.
A farmer should record the money spent on wages, seeds, transport, feeds, veterinary medicines, herbicides, pesticides, fertilisers, and any other farm related expenses.
There should also be recordings of sold animals and birds, harvested crops, eggs, milk, and any other farm products including those spoiled.
When he sells the farm yields and is paid an amount of money, he will be in a better position to assess his net profit and income. It will also be prudent to make a recording of his personal expenses in order to guard against living beyond his means.
He will be more certain of the performance of the farm and he will think twice before taking loans that his farm can hardly pay.
Bookkeeping makes it easy for all family members to know the farm income. In the eventual case, when the parents die, the children can share the profits instead of dividing up the farm into small pieces.
Source: Daily Minitor