Question

The following is a list of “Measures of Size” for a farm/ranch. Briefly explain to me why these are not appropriate measures of how well (or poorly) the operation is doing. You can either address each item on the list separately or as a group. Don’t just give me a definition – explain.

• Total or gross revenue
• Value of farm production
• Total farm assets
• Total acres farmed
• Livestock numbers
• Total labor used
• Quantity of sales

Answer 1

Measures of size of farm have no exact guide in terms of economics on the other hand it depends upon the various measures, they are :

• measures of output desired
• sales or turnover expected from the farm
• stock and flow will relate, i.e. number of labours, value of capital used,etc.
• requirement of land for the animals
• kind or type of crop of production
• various efficiency metre can be related to it like, physical effeciency, value efficiency measuring the financial efficiency, production efficiency
• locality of farm
• texture of soil available

apart from this, there can be done statistical calculations like calculating the value which is close to the avearge of among the uartiles with less standard deviation, which seems desirable to calculate a measure of average size but that is totally insensitive towards the concept of inclusion.

on the other hand given list below will give the amount of average size or measures of size of farm but will not exactly tell you the result with proper inclusion of each categorised result which is required for the size of farm.

• Total or gross revenue : this is the output of the activity done, this can be considered when we think it as the desired revenue from the farm investment.
• Value of farm production :market value of all farm produces , crops and animals is point to be considered but not the point only to be considered.
• Total farm assets :farm assets are the thing to be utilised after the farm holding size, not the primary point to be consider.
• Total acres farmed : this is the result of measures of size of farm , not the one thing to be counted for measures of size of farm.
• Livestock numbers : this is the point to be considered as more livestock more of land is required in size.
• Total labor used : labour used will be wrong to say but the availability of labour will be the actual concept to be conidered.
• Quantity of sales : desired sales are what to be considered out of the total produce and thus total production to be considered and the sixe required for it.