AGRICULTURAL PRODUCTION

DEFINITION OF PRODUCTION

Production refers to all economic activities which result in the creation of goods and services. In other words, production is the process of making or manufacturing goods as well as the process of providing services.

For goods and services to be created during the process of production, certain factors have to come together. These resources or factors that are combined for goods and services to be produced are known as factors of production. There are four factors of production. These are Land, Labour, Capital and Entrepreneur or Management.

FACTORS OF PRODUCTION

LAND AS A FACTOR OF PRODUCTION
Definition: Land refers to where productive activities such as growing of crops, rearing of animals and establishment of farmstead are carried out.

FEATURES OR CHARACTERISTICS OF LAND IN PRODUCTION

(i) Land is a natural gift
(ii) Land can appreciate or depreciate in value
(iii) It is geographically immobile
(iv) It is abundant in some areas and scarce in other areas
(v) It is heterogenous in quality differing from one place to another in topography, soil texture and structure and soil fertility
(vi) Because of its limited supply, land is also subject to the law of diminishing returns

(vii) Reward for land is rent
(viii) Availability is subject to land use Act/Law
(ix) Its suitability influences output
(x) Its value is determined by its location
(xi) It can be used as collateral for loan

IMPORTANCE OF LAND IN AN AGRICULTURAL ENTERPRISE

(i) Land is used for the cultivation of food crops such as maize, rice and cowpea
(ii) It is also used for the cultivation of cash crops, e.g. cocoa, rubber and oil palm
(iii) It is used for the rearing of animals
(iv) It is used for forest development
(v) It is also used for fish pond development
(vi) It is used for wildlife conservation
(vii) Land is used as collateral for securing loans from banks

NON-AGRICULTURAL USES OF LAND IN PRODUCTION

(i) Land is used for construction purposes, e.g roads and airports
(ii) It can be used for social or recreational purpose e.g stadia, schools, markets and cemeteries
(iii) Land is used for residential building
(iv) Land can also be used for industrial buildings
(v) Land can also be used for mining purposes e.g extraction of petroleum and gold

APPRECIATION OF LAND IN PRODUCTION

Land can appreciate (increase) in its value through the following ways:
(i) Fallowing – allowing farmlands to rest thereby regaining its lost nutrients
(ii) Addition or use of fertilizers or manure to increase its fertility
(iii) Use of clean uninfected inputs, e.g planting materials like seeds
(iv) Weeding/clearing to remove weeds that compete with crops for nutrients and space

(v) Good or appropriate soil tillage that can prevent soil erosion
(vi) Irrigation the artificial application of water to soil to supplement insufficient rain
(vii) Good access road – to ensure proper usage of land
(viii) Good drainage – the artificial removal of excess water from soil to promote crop growth
(ix) Increase in population density – which makes land expensive to buy

DEPRECIATION OF LAND IN AGRICULTURAL PRODUCTION

Land can depreciate or decrease in its use or value through the following ways:
(i) Erosion menace – this removes the top soil
(ii) Infestation by weeds – these remove nutrients from soil
(iii) Infestation by pests – these pests reduce the yield of crop if present in the soil

(iv) Infestation by diseases – this also reduces the yield of crops
(v) Continuous cultivation without the use of fertilizers or manure
(vi) Abuse on land, e.g overgrazing, indiscriminate bush burning
(vii) Dumping of toxic materials at it tends to reduce soil fertility
(viii) Water logging – this also reduces soil fertility and land for farming

LABOUR AS A FACTOR OF PRODUCTION

Definition: Labour includes all forms of productive human efforts put into or utilized in production. It also refers to man’s mental and physical exertions generated in the process of production

FEATURES OR CHARACTERISTICS OF LABOUR

(i) Labour is also one of the factors of production
(ii) Human effort can be intellectual or mental, manual or physical, provided it is directed towards the production of goods and services
(iii) Labour is mobile and had feelings and cannot be used anyhow
(iv) Labour exist in three kinds. These are:
(a) Skilled Labour (White Collar Jobs): Highly educated and technical to provide the expertise for farm operations

(b) Semi-skilled Labour: Averagely educated to perform simple farm operations
(c) Unskilled Labour: (Brown Collar Jobs): These are illiterates that provide manual labour for farm operations
(v) The unit of labour is man-hours or man-days
(vi) The reward of labour is wages and salaries
(vii) It converts natural resources into usable products
(viii) It is a variable asset
(ix) Its size and quality influence production or output
(x) Its output can be improved by training

FORMS OF LABOUR AVAILABLE TO THE FARMER

(a) Family Labour
(i) This refers to the labour provided by the man, his wife and children, i.e. the farmer’s family)
(ii) It involves the head of the family as the operator/manager
(iii) He organizes the family labour by himself
(iv) He assigns job to each member of the family
(v) This is the major source of labour available to the farmer and it is very cheap
(b) Personal Labour

This is the labour provided by the owner of the farm
(c) Communal Labour: This is the kind of labour provided by neigbours and the community
(d) Hired or Paid Labour
(i) This is the kind of labour that is paid either daily or they receive salary at the end of the month
(ii) It is common where a farmer has large farm size
(iii) Hired labour is engage either in a permanent or time-rated basis
(iv) The farmer pays for each labour
(v) It is not readily available; hence, expensive

IMPORTANCE OF LABOUR IN AGRICULTURAL ENTERPRISE

Agricultural Enterprise
(i) It uses other factors for production
(ii) Intellectual labour ensures high agricultural production
(iii) Skilled labour provides the expertise required for major farm operations

(iv) Labour ensures the success of any agricultural enterprise
(v) It provides the services required to achieve the various stages of agricultural production

CAPITAL AS A FACTOR OF PRODUCTION

Definition: Capital includes all man-made productive assets which are used in production. In other words, these are assets made by man to enable him to produce goods and services.

FEATURES OR CHARACTERISTICS OF CAPITAL

(i) Capital is also a factor of production
(ii) Examples of capital are hoe, cutlass, tractor, farm building, cash in hand and plough
(iii) It can depreciate or appreciate
(iv) Sources of capital include personal savings, banks, government agencies and cooperative societies
(v) The reward for capital is interest
(vi) It is a stock of assets used in production
(vii) It is used to purchase farm inputs, e.g. seeds, agro-chemicals or used as working capital
(viii) It is used to acquire other factors, e.g. land and labour
(ix) It is obtained in form of loans or subsidies
(x) Capital is grouped into two classes:

(a) Fixed Capital: These are capital or assets purchased for continuous use in production. In other words, these are items or materials which are not used up during production. Examples of fixed capital include: farm building, motor vehicles, farm tools and implements, land furniture and fittings, incubators, ploughs, harrows, tractors, milking machine, feeders, drinkers, hoes and irrigation equipment
(b) Working or Variable Capital: These are capital or assets which are used up during the process of production. Examples are: water, feeds, drugs, cash in hand vaccines, litters, fertilizers, seeds and chemical

IMPORTANCE OF CAPITAL IN AGRICULTURAL PRODUCTION

(i) Working capital is used in the day-to-day running of the farm enterprise
(ii) Working capital is used for paying wages
(iii) Working capital is used for purchase of farm inputs, maintenance services on the farm, and feeding livestock, etc.
(iv) Fixed capital in form of immovable house and farmsteads provide shelter for farm operations.
(v) Fixed capital in form of machinery provides farm power for farm operations
(vi) Fixed capital is used to generate more funds and the success of farm enterprises usually depends on the maximum use of these capital assets
(vii) Working capital helps to facilitate farm expansion or increase in farm size
(viii) Capital is used to establish farm enterprise

Some of the important factors of production are: (i) Land (ii) Labour (iii) Capital (iv) Entrepreneur.

Whatever is used in producing a commodity is called its inputs. For example, for producing wheat, a farmer uses inputs like soil, tractor, tools, seeds, manure, water and his own services.

All the inputs are classified into two groups—primary inputs and secondary inputs. Primary inputs render services only whereas secondary inputs get merged in the commodity for which they are used.

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In the above example, soil, tractor, tools and farmer’s services are primary inputs because they render services only whereas seeds, manure, water and insecticides are secondary inputs because they get merged in the commodity for which they are used. It is primary inputs which are called factors of production.

Primary inputs are also called factor inputs and secondary inputs are known as non-factor inputs. Alternatively, production is undertaken with the help of resources which can be categorised into natural resources (land), human resources (labour and entrepreneur) and manufactured resources (capital).

All factors of production are traditionally classified in the following four groups:

Factors of Production
(i) Land:

It refers to all natural resources which are free gifts of nature. Land, therefore, includes all gifts of nature available to mankind—both on the surface and under the surface, e.g., soil, rivers, waters, forests, mountains, mines, deserts, seas, climate, rains, air, sun, etc.
(ii) Labour:

Human efforts done mentally or physically with the aim of earning income is known as labour. Thus, labour is a physical or mental effort of human being in the process of production. The compensation given to labourers in return for their productive work is called wages (or compensation of employees).

Land is a passive factor whereas labour is an active factor of production. Actually, it is labour which in cooperation with land makes production possible. Land and labour are also known as primary factors of production as their supplies are determined more or less outside the economic system itself.
(iii) Capital:

All man-made goods which are used for further production of wealth are included in capital. Thus, it is man-made material source of production. Alternatively, all man-made aids to production, which are not consumed/or their own sake, are termed as capital.

It is the produced means of production. Examples are—machines, tools, buildings, roads, bridges, raw material, trucks, factories, etc. An increase in the capital of an economy means an increase in the productive capacity of the economy. Logically and chronologically, capital is derived from land and labour and has therefore, been named as Stored-Up labour.
(iv) Entrepreneur:

An entrepreneur is a person who organises the other factors and undertakes the risks and uncertainties involved in the production. He hires the other three factors, brings them together, organises and coordinates them so as to earn maximum profit. For example, Mr. X who takes the risk of manufacturing television sets will be called an entrepreneur.

An entrepreneur acts as a boss and decides how the business shall run. He decides in what proportion factors should be combined. What and where he will produce and by what method. He is loosely identified with the owner, speculator, innovator or inventor and organiser of the business. Thus, entrepreneur ship is a trait or quality owned by the entrepreneur.

Some economists are of the opinion that basically there are only two factors of production—land and labour. Land they say is appropriated from gifts of nature by human labour and entrepreneur is only a special variety of labour. Land and labour are, therefore, primary factors whereas capital and entrepreneur are secondary factors.

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WEED AND THEIR BOTANICAL NAMES
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