FARM ACCOUNTING RECORD KEEPING AND ITS IMPACT ON THE PROFITABILITY OF FARM BUSINESS

Author: Bolaji, Saudat Adewumi

ABSTRACT

This work examined record-keeping culture in the agricultural sector and its impact on farm business enterprises. It evaluated in particular, the Farm Accounting Record Keeping (FARK) system among peasant farmers in farm settlements to determine their concerns, the importance attached to it, skills possessed, operational performance displayed, and its impacts on the profitability of the farming business in public, private or commercial practices.

The study focused on two of the agricultural sub-sectors: crop and livestock farming. It’s descriptive survey research in which structured questionnaires, interviews, and source documents were used to elicit information from 120 farmers in farm settlements in Oyo State. Pearson’s Chi-Square, Bonferonni correction test, and Z-test statistics were used to analyze the data. The result revealed that X2calculated is greater than X2critical (22.35>16.92), hence the difference between the observed and expected distribution is statistically significant, thus all the null hypotheses were rejected. That is farmers in small-scale public, private, or commercial farming businesses do not keep or are uninterested in farm record keeping. They do not also have professional skills in farm accounting records due to various farm activities/operations they are seriously engaged with. It was also established that FARK is significantly related to farm resources, and can enhance farm performance and profitability of the farm if well-documented and monitored.

The paper concluded that contemporary farming businesses should cultivate the habit of keeping farm records in a standard, computerized and accurate manner (regardless of what drag them to farming) to pave the way for the preparation of the financial statement, tax returns, business development, and another essential decision making of the farm from time to time. Farm Business Managers should align him/herself with modern and sophisticated technologies and equipment for the various farm operations; explore the opportunity of government incentives, international agencies, SMEDAN, FAO, etc of loan facilities to improve this lucrative farming business and to bring about high-level performance, productivity, and profitability.

Keywords:    Record Keeping, Farm Accounting Record Keeping (FARK), Profitability, Farm Settlements, Crop and Livestock Farming.

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