Classification of farm efficiency measures
- Physical efficiency measures:
A. Aggregate measures
Total Area of farm = ………….Bigha/Ropani
The first measure of size is the acreage of the farm; either of total land or land
under crops. This is a fairly satisfactory measures for comparing a given type
of land and a given type of farming.
Number of livestock = ………..
Total production= ………………….qtls.
B. Ratio measures
a. Land use efficiency
i) Yield/area (production efficiency):
- The production efficiency of with respect to any particular crop enterprise can be expressed in terms of percentage as compared with average yield of the locality. Eg. Rice yield/katha of the selected farm (1)= …………….
- Average yield of the locality (2) =……………
- Production efficiency of the selected farm =1/2*100=……………..
ii) Crop yield Index:
- It is the measures of comparison of the yields of all crops on a given farm with the average yield of these crops in the locality.
|
S.N. |
Crops |
Average yield in locality |
Average yield in selected farm |
Area |
Crop yield on selected farm as % of locality |
% Multiplied by area |
|
1 |
Rice |
1 |
1.5 |
60 |
150 (1.5/1×100) |
9000 |
|
2 |
Wheat |
0.8 |
1 |
15 |
125 |
1875 |
|
3 |
Maize |
0.7 |
1 |
15 |
143 |
2143 |
|
4 |
Total |
|
|
90 |
|
13018 |
Crop yield index= 13018/90 = 144.6
iii) Cropping intensity:
- It measures the extent of land for cropping changed during a given year.
- It is expressed as a percentage
Cropping intensity (Rice) = Cropped area /Total cultivated*100
=90/60*100
=150%
b. Labor use efficiency:
- By comparing the labor efficiency, we can know whether a labor or a farm is more or less than what is required.
- We can also find out whether the labor is relatively more or less efficient. Given below is a list of important measures of labor efficiency.
i) Crop area/man
ii) Livestock kept/man
iii) Gross profit /man /year
iv) Work units /man
- Financial efficiency measures
Cost ratios:
- Cost ratios are averages and their magnitudes reflect physical production efficiency, selection enterprises, prices received for commodities and the expenses for the productive elements.
Operating cost ratio:
- It represents the proportion observed by operating expenses out of the gross profits is calculated as:
Operating cost ratio=Total operating cost/Total profit
- It shows the proportion of total income used in (1) hiring labor (2) buying seeds, fuel, and other annual supplies, and (3) in keeping equipment in operation, etc.
Financial ration
(i) Total capital ratio=Total assets/Total liabilities
(ii) Working ratio= (Working asset+ Current asset)/(Short term+ Intermediate
liabilities)
(iii) Current ratio = Current asset/current liabilities