Record Keeping and Cost Analysis, Agri-crop

Importance of Record Keeping

           Record keeping is very important in any venture especially in agricultural  enterprise. It provides substantial information important in decision-making. Data gathered from farm records also help in planning and budget preparation. It is a source of data in obtaining credit, insurance, and in preparing tax returns and reports required by the government. It is also useful in marketing farm produce and in other farming activities. Farm records determine the value of the project. Agricultural managers use them as collaterals in obtaining loans from banks and other financing entities. Or if the owner wants to sell the farm, this could be used as document in presenting the performance of the farm to would be buyers.

          To facilitate effective record management, the following records can be kept.

1.  Cash records.  This is a record of the cash accounts in a project. It can be seen in one record or this may be a special cash record wherein the cash received journal and cash payments journal are separately recorded transactions.

                             Sample Combined Cash Record

Date	Cash Received			Cash Paid
	Amount	Receipt No.	Remarks	Amount	Receipt No.	Remarks
March 2, 2014 March 10, 2014	P8,000.00 P12,000.00	0913412 0877611	Sale of  10 cavans of palay @ P800/cavan Sale of  12 cavans of milled rice @ P1,000.00 at 50kg/ sack	P4,400.00 P3,400.00	0112311 0887123	Payment for 8 sacks of 14-14-14 fertilizers @ P550/bag (50k) Payment for 4 liters of pesticides
Total	P20,000.00			P7,800.00

                  

   2. Farm sales record. This is used to record all sales in rice production. There are two kinds of farm sales record: general and the classified.

          The general form has only one amount column where the value of farm produce sold is recorded. The other columns are for the other pertinent information such as date, unit, description, and unit value.

Date	Description	Quantity	Unit	Unit Value P	Total Value P
March 2 March 3	rice     glutinous	50        5	cavans   cavans	P 800.00 1,000.00	P40,000.00     5,000.00

          The classified farm sales record contains special columns for the main product of the farm stock record.

3. Stock record. This record shows the stock of supplies and materials needed by the farm for all farming activities, especially in large-scale production.

          Aside from the date item columns, the stock record has three main columns the received column, the issued column, and the balance column. The received column has three sub columns: quantity, unit price, and the total amount of the materials received. The issue column shows the quantity used while the balance column shows the materials or supplies which are unused. The stock record is useful in determining how much supplies and materials are needed per cropping .

          Here is an example of stock record.

Date	Item	Quantity	Unit Value	Total Value	Issued/Used Quantity	Balance Unused Quantity
Mar. 3   Mar. 8	Fertilizer Herbicide	8 bags 2 bottles	P800/bag P1,200/b	P6,400.00 P2,400.00	4 1	4 1

 4. Production record. This record determines the annual profitability of a farm enterprise. It lists the different  crops grown in the farm during the whole year, the amount spent for the production, the total sales, the remaining stock, and the net income. This record summarizes the performance of the farm in each year. It can be used by the farmer in determining which crop is performing well or which is not. It could be the basis of the farmer in deciding what crop has to be maintained or which one is supposed to be changed.

Cropping season	Description of the commodity	Cost of Production	Total Sales	Remaining stock	Net Income
January to April	Pepper	P3,500.00	P10,500.00	500 grams	P7,000.00
May to October	Rice	P5,000.00	P22,000.00	250 grams	P17,000.00
November to December	Beans	P2,000.00	P8,000.00	90 grams	P6,000.00
	Total	P10,500.00	P40,500.00		P30,000.00

          From the sample above, it may be noted that the total annual income of the farm for that year gained P30,000.00. However, the amount does not include its remaining stocks.

 5. Cost  and Profit Analysis. This record tells the farmer how much profit he/she will gain for the project undertaken. It contains a list of all the farming activities that were done in a season and the expenses incurred per farming activity. It also indicates the cost of supplies and materials used for the cropping season. The cost and return analysis helps the farmer get the total cost of production and estimate the net return he/she will gain depending on the crop  yield or the mode of production.

          The following table shows a sample cost and return analysis in rice production for one-hectare lowland and irrigated rice.

Method of planting:  Transplanting (Wet Season)

Variety:                     HYV

Seeds                 : 2 bags certified seeds at P1,200.00/sack

Soil condition      :  High/Medium NPK (Soil Test Results)( RR= 68-28-45)

Item	Labor Cost of Man/Day (8 hrs) P	Labor Cost of Man  & Animal /Day (8hrs)	No. of Days Req. at 8 hrs./day	Amount
1.Land Preparation   Seed and seedbed preparation        Wetbed     Plowing     Harrowing and        Leveling     Repair and  Dike        Cleaning Sub total	P200      P200	P300         P300         P300	2             .5          10            8          4 persons	P   400.00 P   150.00  P3,000.00  P2,400.00      800.00 P6,750.00
2. Crop Management      Sowing and Care         of seedlings      Pulling and bundling seedlings      Transplanting      Weeding (Manual)      Irrigation      Application of herbicides      Application of insecticides Application of Fertilizers (Basal and Side dressing	P200      P200      P200      P200           P200      P200      P200		2 persons        4 persons        15 persons         5 persons                   1 person          4 persons          4 persons	P    400.00 P   800.00 P3,000.00 P1,000.00             200.00       800.00       800.00
Sub total				P7,000.00
3. Other Major Operations Harvesting,  threshing, winnowing, and hauling (contractual basis) Drying and hauling	contract 7 cavan/ha @5/cavan @5/cavan		4,500/ha  @ P14.00/kg @ 110 cavans/ha	P4,500.00   4,900.00.      550.00      550.00
Sub total				P10,500.00
Agricultural Inputs Herbicides Machete Insecticides Karate      Cymbush Fertilizers	1 liter @ P680.00 1 liter @ P1,020/liter 0.5 liter @ P850/liter 4 bags T14 @ P1,100.00/b    87 kgs. 46-0-0 @ P1,000/bag (1 bag= 50kg.) 28 kgs. 0-0-60 @ P750/bag			P   680.00 P1,020.00          425.00   4,400.00   1,740.50      420.00
Sub total				P8,685.50

          Assumption: Average yield per hectare = 5.5 metric tons or 110 cavans. Price of palay  is estimated at P14.00 per kilogram

                   Total expenses   =   P35,335.00

                   Total Income      =   P77,000.00

                   Net Income        =    P41,665.00

                   ROI (return of investment)  =  117.91%

                   (Net income/total cost of production x 100)