Chapter
3 The organisation of capital - general
Assessing capital requirements
Return on tenant's capital
Discounted cash flow: principles
Discounted cash flow: application
Discounted cash flow and the rate of return: an assessment
Maximum return on total capital
Return on equity and the principle of increasing risk
Rules for capital use on farms
Appendix 3.1: Compounding, discounting, tables ofdiscount and annuity factors
Appendix 3.2: DCF: illustration of the 'extended yield'method
4 The organisation of capital - machinery, buildings and land
Justification for mechanisation
Total farm machinery costs
Estimating machinery costs for budgeting
Machinery costs: further details
Own machine versus contractor
Number and size of machines
Replacement policy and buying second-hand
Alternatives to owning and contracting
Reasons for excessive machinery costs: a summary
Appendix 4.1:and buildings
Appendix 4.2: Systems simulation as an aid tomachinery selection
Appendix 4.3: Machinery replacement - the principleof 'holding cost"
5 The organisation of labour
Special features of farm labour as a resource
Farm output, enterprise efficiency and labour use
Other factors affecting labour productivity
Planning farm labour requirements
The standard man-days calculation
Criticisms of the standard man-day calculation
Labour saving in and around buildings
Part II The organisation of enterprises
6 An introduction to enterprise organisation
Enterprise organisation and fixed resources
Enterprise organisation and efficiency
Structure and classification of livestock enterprises
7 Livestock yield and fixed costs
Fixed costs in livestock production
Fixed costs, yield and profits
Break-even output - permanent livestock
Break-even output - temporary livestock
Flexible finishing weight in a given time span
Given finishing weight in a flexible time span
Flexible finishing weight in a flexible time span
8 Yield, variable costs and optimal feed conversion
Time and output combinations
Permanent production - output variable and time fixed
Temporary production - output variable and time fixed
Temporary production - output fixed and time variable
Temporary production - output and time variable
Feed conversion ratios and feeding efficiency
Appendix 8.1: Mapping optimal feed rate boundarieswith variations in the cost of time-variable andweight-variable inputs
Appendix 8.2: Feed conversion ratios and technical andeconomic efficiency
9 The selection of feedstuffs
Rates of substitution between feeds
The valuation of feedstuffs
Home-grown, saleable foods specifically grown for livestock
Home-grown, unsaleable foods
Feed substitution and the time factor
The maximisation of margin over feed cost
Patterns of feeding and land use
Appendix 9.1: Marginal rates of substitution offeedstuffs and least-cost rations
Appendix 9.2: Metabolisable energy
Appendix 9.3: Real cost of home-grown fodder crops
Net opportunity cost of one hectare of land
Net opportunity cost of one hour ofMay IJune labour
10 The influence of season on livestock production
Seasonal production and yield
Seasonal production and prices
Seasonal pricing and length of process with temporarylivestock - intermittent production
Seasonal pricing and length of process with temporarylivestock — continuous production
Seasonal production and costs
Seasonal production and the interaction of yield,price and cost
Appendix 10.1: Length of process and sellingpatterns
Appendix 10.2: The evaluation of alternative sellingpatterns
Appendix 10.3: Overlapping versus single batches incontinuous production
11 The provision of replacements
Purchased v. home-reared replacements
Temporary livestock - maximum purchase price
Pig breeding herd example
Appendix 11.1: Permanent livestock - optimal age ofreplacement
Output necessary to justify retention
Discounting to present value
Establishing standardised data
The economics of rotations
Appendix 12.1: Further points in relation to yieldsand costs
Part III The combination of enterprises
13 Principles and procedures in planning enterprise combination
Background to planning enterprise combination
Resources and constraints
Resource—enterprise relationships
Principles in planning. A graphic example
Factors directly linked to changes in the planning framework
Factors not directly linked to changes in the planning framework
Planning and long-term development
Appendix 13.1: Short-term planning data
Appendix 13.2: Theoretical basis for solution ofpotato/wheat mix problem
Appendix 13.3: Marginal value products
Appendix 13.4: Planning assumptions
Appendix 13.5: Growth theory
14 Budgeting and programme planning
Additional notes on budgeting
Budgeting in relation to long-term farm development
Use of budgets in diverse planning situations
Planning using gross margins per hectare
Stages in programme planning
Gross margin per unit of shared resource (stage 2)
Planning procedure (stages 3 to 8)
Evaluation of programme planning
Appendix 14.1: Livestock units and forage allocation
Livestock units and forage hectares
Non-allocative procedures
Appendix 14.2: Alternative path to solution ofprogramme planning example
Appendix 14.3: Alternative methods of starting theprogramme planning procedure
Principles and procedures in linear programming
Data input — layout of linear programming matrix
Computations (Simplex method)'
Computer output and its interpretation
Theoretical considerations
Evaluation of linear programming
Linear programming as a planning technique
Linear programming and operational feasibility
Representative farms and management objectives
Appendix 15.1: Example of stages in linearprogramming computations
Appendix 15.2: The hand calculations
Appendix 15.3: The Basic equations
16 Uncertainty and farm organisation and planning
Imperfect knowledge and the farmer
Attitudes to uncertainty, and profit maximisation
Dealing with uncertainty - measures to reduce variability anduncertainty in farm incomes
Contract and futures trading
Dealing with uncertainty - measures to increase the resilienceof the farm business
Uncertainty and farm planning
Incorporating attitudes to uncertainty
Taking account of variability and imperfect knowledge
Analysing the probability of events occurring
Seasonal variation within enterprises
Seasonal variation between enterprises
Minimum returns and fixed commitments
Variability and practical planning
Appendix 16.1: Decision analysis1
Potential practical usefulness
17 Further programming techniques
Conceptual criticisms of linear programming
Other computer programming techniques
Dynamic linear programming
Stochastic linear programming
Appendix 17.1: Further reading: selected references
Dynamic linear programming
Stochastic linear programming
Resource - activity relationships
Specification of supply and demand
Basic operations with activities
Constraints on individual crops
Land and intermediate commodities - the forage complex
Selection of peak labour periods
Length and degree of flexibility in peak periods
Extending the time available for crop operations
Overtime, casual labour and contract services
Labour transfer between crops and livestock
Spreading livestock labour 'overheads'
Specialist livestock labour
Flexibility in the size of labour force
Operations reflecting management attitudes to uncertainty
Incorporating attitudes to uncertainty
Allowing for seasonal variability
Allowing for minimum net revenue
Part IV The control of resources and enterprises
Introduction - why record?
Appendix 19.1: How to record - financial records
Concentrate feedingstuffs
Appendix 19.2: How to record - physical records
Monthly record of livestock numbers
Appendix 19.3: Office procedure1
Appendix 19.4: Inflation accounting
Criticisms of account analysis
Comparison of gross margins
Some problems in calculating gross margins
The flow of funds and the capital account
Appendix 20.1: Assessing stocking rate and grossmargin per forage hectare.
Appendix 20.2: Livestock efficiency measures
Annual budgetary appraisal
Whole farm budgetary control
Budgetary control in livestock production
Combining planning and control
Farm Planning and Control
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