Farm Management Exam Questions with Correct Answers| Latest Update
Guaranteed Success
Factors contributing to increased average production/farm (5) 1)Mechanization- reduced
the number of workers and produce more crops/livestock, 2) Increased job opportunities
outside of agriculture, 3) Aspiration to earn a higher level of income and standard quality of life,
4) Availability of certain technology to higher scale of operation encouraged the farmers to
scale up their production and thereby spread the fixed cost of the technology. 5) Operators
who do not want to expand their scale started making alliances and partnerships. E.g.:
Outsourcing some tasks like harvesting, raising replacement breeding stock
Jointly owning machineries
Four General Business Strategies 1) Low volume, High Value Producers- Lack of access to
additional land, labor, and capital effectively limits the potential of many growers for expanding
their businesses. The key to success is producing higher valued commodities. EX- Bison, Ostrich,
emus, etc. 2) High Volume, Low margin producers- Profit margins are thin, thus saving as every
nickel is possible. EX- Produce generic feed, oil seeds, fruits and vegetables, etc. 3) Specialty
Product and service Providers- Specialize in just one or two skills and become one of the best at
performing them. EX- Custom harvesting, cattle feeding, raising stock, etc. 4) Part time
operators- Account for 52% of all farmers and 14% of all agriculture sales. These are lifestyle
farmers. There primary management concerns are to limit their financial risk and balance farm
labor needs with off farm employment.
New technology Agricultural technology will continuously be evolving. This will help the
farmers in:
1. Gains in production efficiency such as crop varieties for growing conditions, resistant to
herbicide, insects and disease, and more high-values chemical composition (high protein,
unsaturated oil content)
2. Livestock performance such as introducing new genetic characteristics and improving
nutrient use in feed
3. New non-food uses of agricultural products such as biodiesel and ethanol
E.g.: Global Positioning System (GPS): identify location, characteristics of soil and crop and there
by help in efficiently utilizing the farm resources (GPS with automatic guidance system)
Managerial Issue: Whether to adopt the technology or not.
, Contracting and vertical integration: Contract: guarantee that a constant supply of product
of a minimum quality and type
Vertical integration: Buyer supply inputs and management and the farmers are leasing their
facilities to produce the commodities.
Managerial Challenge: The decision to choose the better option for the farm so that it can
maximum profit.
Globalization: Expand the market through international trade and help farmers to earn
higher revenue while increased the opportunity for consumer taste.
E.g.: Bananas and Tropical fruits- Eastern European countries,
Kiwi fruit and imported cheese- US
Manager Challenge: Decision to participate in global market. Sometimes, the farmers cannot
produce commodities as efficiently as farmers in other countries.
Different aspects of the farm (4) 1) Economical-what to produce, how to produce, what
input and how much, finance of the business, market of the product. 2) Environmental-
Climate, weather, government policies, and international events. 3)Technological-
Development of new seed, weed and insect control, new animal health, feed ingredients, new
design/control/monitoring new machinery, 4) Other- Changes in income tax rules,
environmental regulations, and farm commodity programs.
Function of management (4) • 1) Planning- To formulate a good plan, managers must first
establish goals, or be sure they clearly understand the business owner's goals. Second, they
must identify the quantity and quality of resources available to meet the goals. Third the
resources must be allocated among several competing uses. The manager must identify all
possible alternatives, analyze them, and select those that will come close to meeting the goals.
• 2)Implementation- This includes acquiring the resources and materials necessary to put the
plan into effect, plus overseeing the entire process. Coordinating, staffing, purchasing, and
supervising are steps that fit under the implementation function.
• 3) Control- The control function includes monitoring results, recording information, and
comparing results to standards.
Guaranteed Success
Factors contributing to increased average production/farm (5) 1)Mechanization- reduced
the number of workers and produce more crops/livestock, 2) Increased job opportunities
outside of agriculture, 3) Aspiration to earn a higher level of income and standard quality of life,
4) Availability of certain technology to higher scale of operation encouraged the farmers to
scale up their production and thereby spread the fixed cost of the technology. 5) Operators
who do not want to expand their scale started making alliances and partnerships. E.g.:
Outsourcing some tasks like harvesting, raising replacement breeding stock
Jointly owning machineries
Four General Business Strategies 1) Low volume, High Value Producers- Lack of access to
additional land, labor, and capital effectively limits the potential of many growers for expanding
their businesses. The key to success is producing higher valued commodities. EX- Bison, Ostrich,
emus, etc. 2) High Volume, Low margin producers- Profit margins are thin, thus saving as every
nickel is possible. EX- Produce generic feed, oil seeds, fruits and vegetables, etc. 3) Specialty
Product and service Providers- Specialize in just one or two skills and become one of the best at
performing them. EX- Custom harvesting, cattle feeding, raising stock, etc. 4) Part time
operators- Account for 52% of all farmers and 14% of all agriculture sales. These are lifestyle
farmers. There primary management concerns are to limit their financial risk and balance farm
labor needs with off farm employment.
New technology Agricultural technology will continuously be evolving. This will help the
farmers in:
1. Gains in production efficiency such as crop varieties for growing conditions, resistant to
herbicide, insects and disease, and more high-values chemical composition (high protein,
unsaturated oil content)
2. Livestock performance such as introducing new genetic characteristics and improving
nutrient use in feed
3. New non-food uses of agricultural products such as biodiesel and ethanol
E.g.: Global Positioning System (GPS): identify location, characteristics of soil and crop and there
by help in efficiently utilizing the farm resources (GPS with automatic guidance system)
Managerial Issue: Whether to adopt the technology or not.
, Contracting and vertical integration: Contract: guarantee that a constant supply of product
of a minimum quality and type
Vertical integration: Buyer supply inputs and management and the farmers are leasing their
facilities to produce the commodities.
Managerial Challenge: The decision to choose the better option for the farm so that it can
maximum profit.
Globalization: Expand the market through international trade and help farmers to earn
higher revenue while increased the opportunity for consumer taste.
E.g.: Bananas and Tropical fruits- Eastern European countries,
Kiwi fruit and imported cheese- US
Manager Challenge: Decision to participate in global market. Sometimes, the farmers cannot
produce commodities as efficiently as farmers in other countries.
Different aspects of the farm (4) 1) Economical-what to produce, how to produce, what
input and how much, finance of the business, market of the product. 2) Environmental-
Climate, weather, government policies, and international events. 3)Technological-
Development of new seed, weed and insect control, new animal health, feed ingredients, new
design/control/monitoring new machinery, 4) Other- Changes in income tax rules,
environmental regulations, and farm commodity programs.
Function of management (4) • 1) Planning- To formulate a good plan, managers must first
establish goals, or be sure they clearly understand the business owner's goals. Second, they
must identify the quantity and quality of resources available to meet the goals. Third the
resources must be allocated among several competing uses. The manager must identify all
possible alternatives, analyze them, and select those that will come close to meeting the goals.
• 2)Implementation- This includes acquiring the resources and materials necessary to put the
plan into effect, plus overseeing the entire process. Coordinating, staffing, purchasing, and
supervising are steps that fit under the implementation function.
• 3) Control- The control function includes monitoring results, recording information, and
comparing results to standards.
