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UPTONVILLE OIL & GAS INSTITUTE PORT - HARCOURT, RIVERS STATE, NIGERIA
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APICULTURE BANANA CASSAVAGINGER
JATROPHA
MUSHROOM
BAMBOO & RATTAN
BUSH CLEARING
FARM MANAGEMENT
GRASS CUTTER
MAIZEMUTURU CATTLE
PROCESSING, MARKETING AND EXPORT POTENTIALS OF GRASS- CUTTER AND RABBIT PELTS
GRASSCUTTER FARMING: A NEW INITIATIVE IN PROTEIN SUPPLY
AN INVITED PAPER PRESENTED AT
AGRICULTURAL PRODUCT DEVELOPMENT STRATEGY WORKSHOP
ORGANISED BY RIVERS STATE SUSTAINABLE DEVELOPMENT AGENCY (RSSDA), HELD ON 9 – 10TH SEPTEMBER, 2008 AT THE
ELKAN TERRACE, 12B ABACHA ROAD G.R.A PHASE 3,
PORT HARCOURT, RIVERS STATE.
BY
AKINOLA, LETORN A. F. (MRS)
DEPARTMENT OF ANIMAL SCIENCE & FISHERIES
FACULTY OF AGRICULTURE
UNIVERSITY OF PORT HARCOURT.
Tel: 08063816121, E-mail: [email protected]
GRASSCUTTER FARMING: A NEW INITIATIVE IN PROTEIN SUPPLY
BY
AKINOLA, LETORN A. F. (MRS)
DEPARTMENT OF ANIMAL SCIENCE & FISHERIES
FACULTY OF AGRICULTURE UNIVERSITY OF PORT HARCOURT.
Tel: 08063816121 E-mail: [email protected]
1.0 INTRODUCTION
1.1 Preamble
Grass-cutter (Thryonomys swinderianus), also known as cane-rat is about the latest introduction into the livestock world. The idea of domesticating wildlife animals for meat production to improve protein supply in Africa is not new. It dates back to 1848, however, only the Ostrich and Camel had been completely domesticated from African wildlife species. FAO (1970) had suggested that the shortage of animal protein in Nigeria can be ameliorated by improving the existing conservation programme of wildlife, particularly the domestication of rodents that are tractable, prolific and widely accepted to the public for consumption.
1.2 Overview
Thryonomys swinderianus, the larger grass-cutter, also referred to as Thryonomys swinderianus Temminck by some because it was first described and differentiated from the giant rat by Temminck in 1827, is the second biggest wild rodent after porcupine in Africa. The animal is distributed widely throughout the semi-humid regions of Africa. They are found in grasslands, forest clearings, savannah, cultivated lands and secondary forests. Grass-cutter meat constitutes an important delicacy for many Africans. For a long time in Nigeria, it had been very popular in road-side eating homes and some restaurants both in local and urban areas, in soups, pepper-soup and stews. It is the dominant type of bush-meat in these eating places probably because of its availability, palatability and flavour compared to other bush-meat. In an attempt to continuously provide grass-cutter meat, its hunting had served 3 main purposes, namely, pest control to save crops in the farms, provision of animal protein and income generation for the hunters and the owners of the restaurants.
1.3 Product Description, Classification and Geographic Distribution
The grass-cutter belongs to the mammalian order - Rodentia and to the family Tyronomydae. Although, many varieties had been described, they belong to two different species namely: Smaller grass-cutter (Thryonomys gregarinus), (Thomas 1894) and Larger grass-cutter (Thryonomys Swinderianus), (Temminck 1827). T. gregarianus is smaller in size, may reach 8kg with body length of 50cm and has shorter tail. They are found in savannas in Cameroon, Central Africa Republic, Zaire, Sudan, Ethiopia, Kenya, Uganda, Tanzania, Malawi, Zambia, Zimbabwe and Mozambique. T. swinderianus is greater in size, weighing 9kg or more and has head-body length up to 60cm with a long tail. It can be found from Senegal to South Africa (all countries of West, East and Southern Africa).
Grass-cutter has short stocky legs, a short rat- like tail, coarse bristly and even spiny hairs. The coat colour is speckled brown or
buffy above, and paler on flanks and grayish or whitish below. Some have yellowish–brown bodies with whitish bellies. The fur is extremely coarse, film and bristly with thick heavy claws and orange coloured incisions that are capable of cutting the toughest vegetation. Nevertheless, they do not bite when handled, though their claws can sometimes cause injuries.
The population of wild grass-cutter in Africa, Nigeria and especially Rivers State is declining due to over hunting, encroachment and destruction of their habitat in search of shelter, recreational space and facilities for the ever -increasing human population. The domestication of grass-cutter is currently attracting more attention than ever before, especially, given the fact that some success in domestication has been achieved in
West Africa. This is aimed at increasing animal protein intake, ensuring sustainable existence of the rodent, provide more jobs, increase income generation and reduce the incidence of bush fires.
2.0 POLICY AND GOVERNANCE
2.1 Existing Policy Framework
Good governance is sine qua non to human freedom, human rights and a good environment, for the expression of human talents. From the time of independence to the present day, various policies and programmes supposed to directly improve human livelihood had been proposed and implemented.
Whether these policies and programmes were successful or not, the government in power had always praised itself herself for doing a good job. The present administration seeks to implement a seven point agenda which include agriculture. It is hoped that Federal Government will initiate and implement good policies and programmes that will increase animal production and increase animal protein intake. At the State level, it is hoped that the vigor with which the Rivers State Sustainable Development Agency (RSSDA) is implementing its plan especially as regards to training of practical farmers will be sustained to realize its 15years strategic plan.
2.2 Past measures taken
Past policies and programmes executed were aimed at the provision of social and economic infrastructure that can generate employment, enhance earnings, increase productivity and ensure equitable distribution of income. Examples of some of the policies and programmes that affected agricultural development are the National Livestock Production Programme (NLPP), National Accelerated Food Production Programme (NAFPP), National Directorate of Employment (NDE), River Basin Development Authorities (RBDAs), Better Life for Rural Women Scheme, Family Economic Advancement Programme (FEAP), People’s Bank and Community banks, Oil Mineral Producing Area Development Commission (OMPADEC), Poverty Alleviation Programme (PAP) which later metamorphosed into the National Poverty Eradication Programme (NAPEP), National Economic Empowerment and Development Strategy (NEEDS), which was implement in close collaboration with state and local government levels, the equivalent were State Economic Empowerment and Development Strategy (SEEDS) and Local Government Economic Empowerment and Development Strategy (LEEDS), Niger Delta Development Commission (NDDC) and New Partnership for Africa Development (NEPAD).
2.3 Constraints
Most of these policies and programmes were ‘thrown at the people’ and were therefore hardly understood. Most of them failed because they had narrow focus on qualitative indices which affect the quality of life, thus there was the socio-economic problem of income inequality, unequal access to food, shelter, education, health and other necessities of life. The outcome was increased poverty especially among rural dwellers.
2.4 Proposed Strategies
With the recent establishment of the Nigerian Institute of Animal Science (NIAS), Federal and State Governments should partner with NIAS members at both levels to formulate, implement and coordinate policies and programmes that will impact positively on the livestock sub-sector. Some of the statutory functions of NIAS which suggest their competency in solving this issue include:
Advance the education, science, technology and art of animal science and livestock/poultry production
Advise and encourage the enactment and enforcement of laws that will guarantee efficient production and consistent supply of high quality (animal source) proteins to Nigerians,
Promote the production of animals and set the research agenda for animal science.
Similar steps should be taken with other professional agricultural bodies as a way of improving the agricultural sub-sector. Thus, it is expected that very soon, animal protein intake of Nigerians will increase.
3.0 TRAINING AND DEVELOPMENT
3.1 Current Situation
The issue of training and re-training of agricultural (livestock) officers and farmers had always been on the low key, yet millions of naira is assigned for this at the federal and state levels in other sectors of the economy. Fortunately, Rivers State Government is currently training some of her farmers through the state Sustainable Development Agency in all aspects of agriculture.
3.2 Constraints
Although most farmers are willing to learn new techniques of livestock production, handling, processing and marketing of their products, they are constrained by the fact that workshops on training and re-training are not usually organized. To worsen the situation, even the agricultural extension officers do not have the opportunity to be re-trained, coupled with lack of mobilization to reach out to the farmers. Facilities for animal production, processing and storage are grossly inadequate or completely absent. The power situation in the country does not support production, processing and marketing of livestock products.
3.3 Recommendations
Extension officers, and livestock farmers should be properly trained on how to disseminate, process, package and market their products to reduce post harvest losses. Alternative power sources (such as hydroelectric power and solar energy) should be adequately provided. Government should champion the course of partnering with private individuals (Public Private Partnership) to boost agricultural production especially, animal agriculture.
4.0 LAND RESOURCE ISSUES
4.1 Quality of Land/Size and Availability
Rivers state lies between latitude 60 and 80 south and longitude 90
and 600 west and situated in the southern boundary of the humid zone. The mean annual rainfall is 330mm, lasting from March to October. Mean daily temperature ranging from 22-320c and mean relative humidity of 11-34%. The state is spread over a land area of about 12,000 square kilometers made up of wetland and water. The geographical location of the State shows that there is
availability of grass-cutter for hunting. This is evidenced by the sales of freshly captured grass cutters along the road-side as one travels from one location to the other at both the outskirt and within rural communities in the state
4.2 Physical Factors
Fortunately, the nature of the land in Rivers State in terms of topography (slope of the land) and the soil type favours grass cutter production. The plain and massive land area is suitable for the establishment of grass-cutter farms. It favours the growth and production of grasses, legumes, plants and crops needed for grass cutter production. The rich soil in the state also support the growth and production of feeds needed for grass cutter domestication. The vegetation encourages the growth of cereals that can be used in the preparation of concentrate feeds.
4.3 Social Factors
It is interesting to note that grass-cutter require little space for domestication compared to cattle, sheep and goat. A deep litter house measuring 6m x 4m can accommodate 100-150 grass-cutter to market weight if the target is for meat production. The presence of multi-national companies in the state which lead to continuous increase in population and the subsequent rise in demand for shelter, recreational space and other social amenities therefore has no significant effect (limitation) on the production of grass-cutter in Rivers State. It rather increases the demand for food (extra food), especially animal protein, thus favouring the production of grass-cutter in the State. The increased encroachment into forest and river valleys from the increasing population in the state which reduces the number of grass-cutters
obtained from direct hunting lead to less occurrences of bush fire and reduces the negative impacts of poachers and hunters.
4.4 Economic Factors
Increasing industrialization and urban expansion sometimes affect the amount of land available for agricultural purposes. Land owners are usually attracted by the fantastic prices offered by the industrialists which are far beyond the rich of farmers; thus either reducing the availability of land for agricultural purposes or increasing the cost of production of agricultural products.
4.5 Land Ownership System
Although, land ownership system which allows the fragmentation of land for individual ownership may affect large scale investment, grass-cutter production, even on a commercial basis, may not be significantly affected by this practice in the state.
5.0 SEED SOURCE
5.1 Availability (Wild Grass-cutter)
To obtain foundation stock, wild grass-cutter can be captured alive. Although attempts at capturing grass-cutter alive are difficult, out of the several methods tried, some are yielding appreciate results. In West Africa and particularly in Nigeria, long weir-like baskets are placed on grass-cutter paths and short
lateral wing-like fences are erected at an acute angle. Grass-cutter deliberately frightened run into the baskets, get stacked and are collected by the hunter. Ditches are also dug around rice and maize fields and covered with a thin layer of grass to camouflage. A grass-cuter attempting to enter the maize or rice field falls into the ditch and is collected from there in the morning. Portable and movable cage traps provided with baits are also placed where grass-cutters are located to trap them alive. Young grass-cutters are also taken alive whenever their mother is trapped or short. Captured adults adapt to captive life in 4-5 months while the young ones does on within a month.
5.2 Methods of Regeneration
The method of regenerating grass-cutter is by breeding. A typical example of breeding wild grass-cutter which later served as a good foundation stock was the grass-cutter promotion project (PPEAU: Project promotion de I’Elevage d’ Aulacodes) initiated in Benin Republic in 1983. The PPEAU captured wild grass-cutter from the natural habitat in Benin during a 3-year campaign (1983 – 1985). All animals obtained from this source and partially domesticated grass-cutter purchased from farmers were kept in confinement and subjected to a breeding and selection scheme. The criteria for selection was based on live-weight at 4 months, 8 months, and docility in males and live-weight at 4 months, 8 months and litter size in females. The PPEAU project became the sole source of supplying breeding stock to many Africa countries including Nigeria.
Domestication of grass-cutter commenced in Nigeria in the early 90’s with imported stock from the above scheme. Presently, intending grass-cutter farmers can obtain foundation stock from Obasanjo Farms Ota, Pavemgo Farms, Badagry, Lagos other farms in Nigeria and neigbouring Benin Republic.
5.3 Recommendation
Even the domestic fowl is traced to its wild ancestors, so a well targeted effort in breeding and domestication of grass-cutter could significantly boost animal protein intake, create jobs and reduce poverty.
6.0 SEASONALITY ISSUES
6.1 To obtain foundation stock, wild grass-cutter can be captured alive. Although attempts at capturing grass-cutter alive are difficult, out of the several methods tried, some are yielding appreciate results. In West Africa and particularly in Nigeria, long weir-like baskets are placed on grass-cutter paths and short lateral wing-like fences are erected at an acute angle. Grass-cutter deliberately frightened run into the baskets, get stacked and are collected by the hunter. Ditches are also dug around rice and maize fields and covered with a thin layer of grass to camouflage. A grass-cuter attempting to enter the maize or rice field falls into the ditch and is collected from there in the morning. Portable and movable cage traps provided with baits are also placed where grass-cutters are located
7.0 RECOMMENDED SPECIAL FARMING TECHNIQUES
7.1 Selection of Foundation Stock/Breeding
It is important to obtain the foundation stock (weaned grass-cutters) for a new farm from an already established farm. The number of grass-cutters to purchase will depend on the production objectives (consumption, sales or both). The weaned females should have at least 2 pairs of teats (there are usually 3 pairs of teat) and should be about 3 to 6 months (though normally weaned at about 2months) at a weight of about 1.4 – 2.2kg. The males should have equal size of testicles, with good carriage (well balanced on its limbs), be docile, at least 4 months old and weigh about 1.5kg. The grass-cutter is sexually mature at 8 months, but
does not have a well–defined oestrus cycle; thus could be termed a polyoestrus animal. The gestation period of grass-cutter is about 5months (152 days). Young grass-cutters are born with their eyes open (4 – 8 young ones or more/litter), their fur are fully developed with 8 teeth present at birth (4 incisors and 4 premolars) out of the 20 teeth, (10 pairs) expected, with another 4 molars at 2 weeks old, 5- 8 months and the final 4 teeth at 9 months old. Birth weight varies between 120 – 150g, although some researches had recorded 70- 130g.
After parturition, the doe can be mated after 15 days and checked 2 weeks later for signs of conception. Thus a female grass-cutter can have its first litter at 12 – 18months and is capable of having 2 litters in one year. The newborn suckle their mother. At maturity young bucks ceases to tolerate each other. They can fight to kill one another especially when reproduction groups are formed, thus mature bucks should be housed individually or 1 buck to 5 females. Bucks should be castrated if group- keeping is planned.
7.2 Housing
Depending on the purpose of production and the finance at the owner’s disposal, 3 types of housing can be used for rearing grass-cutter. These are: enclosure, deep litter (floor management) and cages. An enclosure consist of a wall (1m high), topped with wire fence (1– 2m high). Crops such as cassava, potato, maize and grasses (elephant grass, guinea grass) should be planted in the enclosure and left bushy to mimic the wild condition. Hollowed tree trunk and dug–outs in the ground should be provided for hide–outs.
In deep litter or floor management system, a wall of 1.2-1.4m high completed with wire mesh is recommended. Straw, thatch or asbestos roofing material is preferable in order to avoid or reduce
heat stress. The floor should be made of concrete, with straw beddings. Generally, 2m2 can accommodate 5 – 8 growing grass-cutters while 1m2 can accommodate 2 mature males or females. Buildings protect animals against bad weather condition, predators (snakes, ants, and dogs), thieves and prevents escape of the animals. Cage management for grass-cutter is similar to that of rabbit. Cages may be constructed singly as individual cages or community cages or may be two or three tier cages with the first level about 40cm above the floor. Each cage is covered with a roof of galvanized sheets, thatch, straw or are placed in a big building with sufficient open sides to provide adequate ventilation. The measurement for individual cage is 0.5m x 0.45m x 0.3m with 18m x 18cm opening (as door) while community cages measure 2m x 1.25m x0.4m with 30cm x 25cm opening; capable of housing 7 breeders per cage.
7.3 Feeding
The raising and breeding of grass-cutter in captivity requires a sound knowledge of its feed and feeling habits in the wild. Grass-cutter is a herbivore, thus grasses constitute a greater percentage its feed. The most widely used grass is elephant grass (Pennisetum purpureum). This grass looks like sugar-cane, but it is as greenish as guinea grass it can be easily grown because of its high demand and preference for grass-cutter feeding. Other grasses, plants and crops use for feeding include: guinea grass (Panicum maximum), maize (Zea mays), guinea corn (Sorghum vulgare), cassava tuber and stem (Mainhot esculenta), yam tuber (Discorea dumentorium), pineapple leaves etc. The grasses are cut to size to enter the pens. Those for the small ones are dissected for easy consumption in addition to feeding the young leaves and stems to them. Grasses are usually placed in a slanting position to rest on the wall or placed in racks (on deep litter) provided to prevent the animal from trampling on them. Irrespective of the kind of forage, grass-cutters first eat stalks, bark of twigs and finally some leaves. They consume nuts, barks, soft parts of grasses and shrubs and also roots and tubers. This
eating habit cause wearing of the teeth and lead to high forage wastage.
Grass- cutters practice coprophagy or cecotrophy (the act of consuming the soft, fecal pellets). As much as 20% of the protein, 10% energy and some vitamin needs of the animal may be met by the microbial protein and energy of the cecotrophs. This practice also aids in the digestion of the fibre it consumes.
Grass-cutters can adapt to changes in diet and so can be gradually introduced to rabbit, swine or chickens feed or agro-industrial by-products and chicken left-over (Garri, boiled plantain and even bread and biscuit). Conventional feed is used to make up the nutritional requirement of the animal. It also enhances the growth of the animal. When feed is to be compounded, the crude protein content should be about 15-18%. It is advisable to use pelleted feed for better acceptance and to minimize wastage. They can be fed three times daily:- morning (grass), afternoon (concentrate) and evening (grass). Water should be provided always in their drinkers especially during low temperatures. Several research work had shown that grass-cutter drinks more water when the out door temperature is low and water intake is reduced when the temperature high. The reason for this unexpected behavior is not yet understood and should be a subject of further research.
7.4 Management Practice, Health Care and Benefits of Grass-cutter Production.
Like other domesticated animal, grass-cutter production needs proper management and health care. The animal’s pen or cage, feeders or rack and drinkers should be cleaned properly every morning. The pen\house should be disinfected weekly. Clean water and feed should be served to the animals; while sick
animals should be isolated and treated. The surrounding should be cleared and kept neat. Grass-cutters should be paired and bred at the right time, (8months for females and 5-6months for males), young ones should be properly cared for and weaned at the proper time (ideally 30 – 45 days). Males that are not selected for breeding should be castrated (at 3-4months) to enhance growth and enable them to stay in groups at maturity.
Although, grass-cutters are hardy animals, they could be sick like any other animal. Work on the health of grass- cutter and disease control have not yet reached an advanced stage, being a relatively new initiative. Hygienic measures such as cleaning of grass-cutter houses and environment and disinfection with any available disinfectants are effective adjuncts to medication. Deworming may be done using fenbendazole. Vaccinations are available against clostridial infections. Common health problems like diarrhea and external parasites can be handled by veterinarian, thus health care of grass-cutter should not hinder any intending farmer.
There are numerous benefits of grass-cutter production. These include:
1. They can be easily reared at home; they can be started on small-scale with a space of less than one room; on part-time basis.
2. They can generate much income as they command good selling
3. price:- a family of 5 grass-cutters can be sold for N25, 000 or more.
4. They are herbivorous animals, so can feed exclusively on grasses.
5. Grass-cutter farming is capable of creating job opportunities for rural and urban dwellers. The business of producing, processing, transportation, storage, financing and servicing grass-cutter products can provide employment for many people.
6. It serves as an alternative protein source, its tasty meat fetches higher price than beef, mutton, and pork and its high carcass quality and protein is comparable to that of poultry.
7. These is no known religious discrimination against grass- cutter meat, the meat is well accepted to all classes of people in both urban and rural areas.
8. Grass-cutter does not compete with man for food, as a pet, people derive pleasure and satisfaction from raising grass-cutter.
9. Production of pharmaceuticals: The pancreas of the grass-cutter is believed to have a high concentration of insulin, thus it is used in local preparation of medicine for the treatment of diabetes.
10. Gras-cutter production reduces the occurrences of bush
fire and the negative impacts of poachers and hunters.
8.0 ENVIRONMENTAL AND CONSERVATION ISSUES
8.1 Land, Light, Water and Air Management
Grass-cutter building should be sited far away from source of noise to avoid stress. Although the animal can adapt to noise, grass-cutter buildings should be situated at least 10m away from busy roads within the farm. Young grass cutters are more adaptable to noisy environment than adults. Noisy environment can lead to reduction of the weight of grass cutters.[[
A grass-cutter newly captured from the wild should be transported to its destination in dark cages. This will reduce the animal’s attempt to escape, thereby preventing injuries. On arrival at its destination, they should be transferred into quarantine stables that are dimly lit for 3 weeks.
As mentioned earlier, several research work had shown that grass-cutters consume more water when the outdoor temperate is low than when the temperature is high, Further investigations need to be done to understand this.
8.2 Biodiversity Conservation
Sustainable use of the diverse genetic resources and reduction in its further loss is currently the major concern of many. It is therefore not surprising that intensive production of grass-cutter has been undertaken in any Africa countries, including Nigeria.
8.3 Other Environmental and Conservation Issues
Livestock production is ever increasing. Manure obtained from livestock production can help to improve soil fertility. Animal manure also help to maintain or create a better environment for soil micro-fauna. On the other hand, overloading fields with organic nutrients from farms can become a problem.
Carbondioxide, methane and nitrous oxide from animal manure affect the world’s atmosphere by trapping the sun’s energy and contributing to global warming.
8.4 Recommendation
It is necessary to establish sound policies and regulatory measures that will specifically address this and other environmental problems in developing countries.
9.0 STORAGE AND PROCESSING
9.1 Processing
The aim of domesticating grass-cutter is to obtain its meat which is highly cherished by many as bush meat. Grass-cutter that have attained market weight (3.5 to 10kg) depending on the production objectives are usually processed is not sold alive. The various stages of processing include: slaughtering, bleeding, scalding or flaming, pucking, evisceration, dissecting into parts or whole meat and washing.
9.2 Storage and Preservation
In order to retain the quality of meat till time of consumption, processed meats are stored. The various methods of meat preservation include: air drying (dehydration), curing and smoking (cold and hot smoking), cooking, chilling, freezing, canning.
10.0 ENTREPRENEURSHIP
10.1 Breeding Stock
This is a specialized operation which requires training and skills. This aspect leads to the production of weaned grass-cutters needed as foundation stock for new farmers.
10.2 Commercial Bush Meat Production Farms
Although grass-cutters are not the most prolific rodents, but the high demand for its meat makes this aspect of production very attractive and profitable. Weaned grass- cutters procured from breeding farms are fed and cared for to attain market weight which may be 3.5 to 10kg or more depending on the target of the producer. Some are selected for breeding (continuity of the farm). Male animals that are not selected for breeding are castrated to enhance their growth rate and to enable them live together. The economics of medium-scale grass-cutter enterprise is given below (a 3year projection).
Table 1: The Economics of of Medium-scale Grass-cutter Enterprise
ITEM COST (N)Fixed Cost
Land 125,000
Building(14m x 7m) 50,000
Fencing 15,000
Drinkers 2,500
Feeders/racks 2,500
Cutlass/shovel 1,000
Wheelbarrows (8) 4,000
Feed scoops 500
Total Fixed Cost 199,500
Variable cost
Parent grass-cutter (40males, 210 females) 75,000
Growers mash 80,000
Drugs/Vet. Services 8,500
Disnfectants 1,500
Labour (grass-cutter/pasture maintenance) 120,000
Total Variable Cost 295,000
TOTAL 494,500
Sales:
Expected Revenue = 210 x 4 litters each = 840
Ready for sale = 840 – 5% mortality rate = 798
794 @ N4000 each = N3,192,000
Profit = Total sales – Total cost
= N3,192,000 - N494,500
= N2,697,500
PROFIT = N2,697,000
10.3 Grass-cutter Processing and Marketing
This aspect gives grater opportunity to persons who may not be able to venture into grass-cutter production because of lack of necessary skill and training. Such entrepreneurs may engage in processing, preservation and marketing of grass-cutters. It is important to identify a good marketing outlet to make quick returns.
11.0 MARKETING
11.1 Importance of Marketing
The flow of goods from the producer to the consumer is very important. All the stages of production (assemblage, storage, processing, grading and financing) which aid the movement of products from the point of production to the consumer is termed marketing.
11.2 Markets
A market exists when buyers and sellers are in touch with one another, not necessarily meeting face to face. The most important factor about a market is that the goods to be sold must exist and
these must be seller(s) and buyer(s) both agreeing on a price. Depending on one’s experience, grass-cutter can be sold alive, packaged to outfits as paper soup meat, suya, frozen or dried meat. Most fast food and Chinese restaurants look out for grass-cutter meat in the international market (especially Latin American and Asia) if a good packaging is done.
12.0 CHALLENGES
12.1 Constraints at the Farm Level
One of the major challenges confronting grass-cutter farming is the provision of balanced diet especially during long dry seasons. But its copraphagous nature enables it to get a personal supply of some vitamins and proteins.
The lack of readily available breeding stock as obtainable in other livestock business had been a major set back to the domestication of grass-cutter. Where stocks were obtained, improper understanding of the reproductive ecology had constituted a major challenge to the propagation of the rodent. Even with the success recorded so far, many who are into the business of grass-cutter farming are unwilling to let others know about the farming methodology. The techniques are shrouded in secrecy.
The initial capital investment may be relatively large if land, building (s) and cages are part of the initial cost. However, it is interesting to note that grass-cutter farming is very profitable.
12.4 Constraints at Market Level
There is limited technical experience; this hampers the entire marketing process.
13.0 CRITICAL SUCCESS FACTORS
13.1 Adaptation technique
An animal that is newly captured is put into quarantine stable that is dimly it for 3 weeks; cage keeping quickens the adaptation to confinement and taming process. Reducing the time that the personnel stays in the stable and prohibiting visits to the breeding location help to minimize stress on the animal.
13.2 Feeding
Avoid feeding bitter cassava because it contain higher concentration of cyanide which can be lead to death of the animals. Over-riped fruits should not be fed to them because it causes diarrhea. A newly captured grass-cutter should be administered 6g of glucose/liter of water for 15days to reduce stress. Animal deprived of practicing cecotrophy/coprohagy frequently develop nutritional deficiencies especially when fed solely on grasses.
13.3 Housing
Once the female is pregnant, she should be separated since cannibalism of males on the newly born is common. There are also cases where one nursing doe eats up the young ones of another nursing doe, in such case, the wicked doe and her young one should be removed and housed separately. If for any reason a nursing doe is isolated because of sickness or dies, the young
ones should be rubbed with litter from the foster mother’s pen for easy adoption.
13.4 Other Critical Success Issues
The best time for routine work at the quarantine section is in the evenings.
A small tidbit (choice food) should be fixed below the cage for about 2hours. This helps the grass-cutter to grind its claws by scratching the bottom of the cage continuously.
Regularly renew the small piece of wood kept in the cage for the animals to grind their teeth.
At the age of 3-4 months, young bucks should be housed in individual cages or castrated if group-keeping is planned.
Avoid fighting among females by grouping them into pens immediately after weaning.
13.5 Conclusion
The strategic location of Rivers State highly favour the production of grass-cutter. The land, vegetation cover, availability of wild and domesticated seed sources and the prevailing environmental condition all favour the domestication of the rodent. A good understanding of the principles and techniques of production explained in this paper will lead to a profitable grass-cutter business in the state. The ever-increasing population of the state provides a ready platform for marketing and quick income generation for all intending grass-cutter farmers.
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Njoku, P.C. (2007). The Challenges for Animal production in the National Poverty Eradication Programme.
Onadeko, S.A. and Amubode, F.O. (2002). Reproductive indices and performance of captive reared grass cutter (Thrynomys Swinderianus Tennincks). Nigerian Journal of Animal Production. 29(1): 142-149.
Temminck C. I (1827). Aulacodus Swinderianus Temmirick 1827, Monographies de mammalogie I. Sierra Leone: 248.
Thomas, O. (1894). Description of a new species of reed-rat (aulocodus) from East Africa, with remarks on the milk- dentition of the genus. Annals magazine of Natural History. XIII (6): 202-204.
Wekhe, S.N and Ochonma V. (1994). Business Projects in Agriculture Rivers State Newspaper Corporation Port Harcourt. Nig. ISBN: 978-2533-01-2.
Our Mission Statement Our Vission Statement Our Objective
APICULTURE
BANANA
CASSAVAGINGER
JATROPHA
MUSHROOM
BAMBOO & RATTAN
BUSH CLEARING
FARM MANAGEMENT
GRASS CUTTER
MAIZEMUTURU CATTLE
LECTURE DELIVERED TO PARTICIPANTS OF RIVERS STATE SUSTAINABLE DEVELOPMENT PROGRAMME ON NATIONAL FADAMA DEVELOPMENT PROGRAMME (FADAMA III) ACTIVITIES IN RIVERS STATE BY KINGSLEY O. AMADI, STATE PROJECT COORDINATOR ON TUESDAY, JULY 8, 2008.
MANAGING SOIL AND UNDERSTANDING CLIMATIC CONDITION TO INCREASE YIELDS
TRANSPORT AND LOGISTICS IN AGRICULTURAL DEVELOPMENT
FARM SITE SELECTION AND LAND MANAGEMENT FOR OPTIMIZING CROP PRODUCTION AND MINIMIZING ENVIRONMENTAL DEGRADATION
A PAPER DELIVERED AT THE RIVERS STATE SUSTAINABLE DEVELOPMENT AGENCY (RSSDA)
ON
FARM MANAGEMENT AND RECORD
KEEPING
BY
F.R. SOMIARI,
MONITORING & EVALUATION OFFICER,
THIRD NATIONAL FADAMA DEVELOPMENT PROGRAMME,
RIVERS STATE COORDINATING OFFICE,
ADP PREMISES, PORT HARCOURT.
ON
17TH SEPTEMBER, 2008;
FARM MANAGEMENT AND RECORD KEEPING
1.0 INTRODUCTION
The concept, principles and application of the above topic could be segmented into two parts thus: “Farm Management” and “Record Keeping”. Sound knowledge and application of the above concepts and principles is very essential in order to maximize farm income and other welfare objectives. These two topics shall therefore be treated in two parts as follows:
2.0 Farm Management
Definition
Who are the Farm Managers?
Five steps in decision making process
Classification of decisions
Problems faced by the farm Manager
3.0 Farm Records
Definition and importance
Purpose
Types of Farm Records
Use of Farm Records
4.0 Farm Management
In defining Farm Management, no one definition will suit all purposes equally well. Such definition will emanate from the objective of such farm establishment, be it for profitability, social or welfare. However, Castle, Becker and Smith (1972), defines it as being covered with decisions that affect the profitability of the farm business. Akuibuilo (1976), sees farm management as the science of farm organization which makes use of a number of closely related disciplines. In order words, an ideal farm manager should be versatile and hence should have knowledge of the following disciplines: economics, Sociology, Psychology, Political Science, Mathematics, Statistics, Logic and Agriculture. An uninformed individual would question the relationship of these disciplines to farm management. We do know. However, that a farm manager who is grounded in these disciplines usually does better than one who is ignorant in these disciplines. And Adegeye and Dittoh (1982), looks at it as a practical aspect of the applied science of agricultural economics, as it embraces the application of physical and biological sciences in keeping with the economics of profitable resource allocation for the maximizing of the farmer’s net farm income. Therefore, farm management is the science which applies scientific laws and principles to the conduct of farm operations. Farm management is applied science. It is also a pure or fundamental science. A good farm manager makes use of his knowledge of various disciplines in arriving at answers to his management problems. The farm manager is basically, a decision maker, and the function of decision making is very important since a wrong managerial decision can throw a would be successful farmer out of business. He operates in a dynamic environment with ever changing input and output prices; and there is usually an array of possibilities and/or alternatives open to him from which he must be able to choose those alternatives that maximize his (net) income.
2.1 Who is a Farm Manager?
Three categories of people are involved in farm management.
2.1.1 The Farmer: This is the most important farm manager, because he is the one who owns his farm and some of the resources, and he is the one who determines his priorities. In situations where the farmer
is illiterate, the setting of priorities and determining how to maximize income along with some other welfare objectives may depend on the advice of the extension worker if that is one is available.
2.1.2 The Extension Worker: This is the second category of farm manager. In ideal situation, the extension worker should be well informed about research findings which knowledge he must then apply to give organized guidance to farmers to increase their managerial skill. He must, therefore be close to the farmer to be able to understand his problems and help in solving them.
In Rivers State (and indeed Nigeria) today, the extension personnel cannot fulfill their expected roles effectively. The reason is not far fetched. The ratio of extension workers to farmers is usually between 1:1000 and 1:3000 in some places. This makes contact with farmers almost impossible in most cases.
2.1.3. Research Workers: These are those who design questionnaires and record sheets, collect data and analyze them for the purpose of drawing management conclusions which would help farmers to take proper decisions.
The role of these three groups of actors is very important in understanding what management does, and what problems it has to face in order to effectively utilize the available resources. In making farm management decisions there are certain steps needed
2.2 FIVE STEPS IN DECISION MAKING PROCESS
2.2.1 Developing ideas and making observations: This essentially entails definition of the problem. One must get the fact of the situation or problem.
2.2.2 Analysis of observations: Including formulation and reformation of problems and ideas concerning their solution.
2.2.3 Decision making: One must form a judgment as to what these facts portend.
2.2.4 Action or acting on the decision once it has been made: One must act before it is too late. Many
men talk intelligently, even brilliantly, about something, only to prove helpless when it comes to acting on what they believe.
2.2.5 Acceptance of responsibility for actions: A manager is bound to take decisions in the day to day running of his farm. Such decisions fall into two groups:
2.2.5.1Operational decisions: For example the type of fertilizer to buy, which type of crop rotation to adopt, etc.
2.2.5.2 Organizational decisions: type of labor to use, whether permanent of casual, type of livestock to produce, whether to concentrate on poultry or cattle, type of building to set on the farm.
2.3 There are other numerous classification of decision that can be used in farm management. The following are some characteristics that are helpful in classifying decisions commonly faced in farm management.
2.3.1 Importance: It is obvious that decisions vary as to importance. The importance of a decision may be measured by the size of the potential gain or loss involved.
2.3.2 Frequency: Decisions vary with respect to the frequency with which they are made. For example livestock must be fed everyday. The choice of what to feed and how much to feed is repeated many times.
2.3.3 Imminence: The penalty of waiting is not the same for all decisions. When the cost of waiting is low, it may be desirable to wait until more information is available before committing resources to a particular line of action. In other instances it is quite important to act promptly.
2.3.4 Revocability: Once made, some decisions can be revoked only at considerable cost. For example, the decision to plant an orchard may be revoked only at a very high cost once trees have been planted. On the other hand, changing a decision as to what kind of feed to give livestock is a simple matter. Therefore, the farmer who cannot afford drastic, costly changes is wise to select a type of farming which will permit him flexibility of planning as conditions warrant.
2.3.5 Available Alternatives: Some situations present a multiple of possible choices for decision
making; others may provide only two alternatives. When a wide range of choices is available, techniques must be developed for eliminating less likely courses of action and concentrating on a few workable choices for careful study and analyses.
But even in the face of taking a farm management decisions, a lot of problems are being faced.
2.4 PROBLEMS FACED BY A FARM MANAGER
It may be said that if a person is adept at all steps in the decision making process, he will be an efficient farm manager. Such statement is true, but it does not tell us very much. It is necessary to detail more specifically the kinds of problems farmers face in the order to understand how decision making applies to farm management.
2.4.1 Characteristics of Agriculture: Management of farm is more difficult generally than management of industrial enterprises. This is due in many cases to the special characteristics of agricultural enterprises. Some of them include:
2.4.1.1 Production uncertainty: This can manifest itself in many ways, e.g. crop yield depending upon the amount of rain under rain fed Agriculture. Total crop failure can result, if rain does not fall at the right time. Excessive rainfall that can cause erosion and leaching, as well as outbreak of diseases, etc.
2.4.1.2 Price Changes: Inputs and outputs are both subject to wide fluctuations in prices. Though this occurs in other enterprises, they are more difficult to deal with in farm planning, e.g. increase in wages cannot easily be absorbed in Agriculture since the farmer cannot easily increase his price to match the increase in costs.
2.4.1.3 Government Action and Policies: Various Governments take actions the effect of which farmer may be unaware of what Government actions will be before a production season. Policies like land use decree, agricultural credit schemes, lack of counterpart funding for most world Bank/ IFAD projects in the state etc, are important and management decisions which must be taken within this framework.
2.4.1.4 Other Risks and Uncertainties: The greatest problems facing farmers whether new or old are the problems of risks and uncertainties. Apart from the production uncertainty discussed above, there are such other problems as water shortage, power failure, sickness, deaths, etc which may complicate the farmer’s decision process.
2.4.2 Technical Information: Because farmers work closely with physical and biological phenomena, the successful farmer must be able to obtain such technical information from reliable sources. He need not be an engineer, agronomist, or a nutritionist, but he must have access to such information. He must locate the source of such information and select relevant data.
2.4.3 Other types of decisions/problems faced in farm management include the following:
What to produce
How much to produce
The equipment to use
The amount of resources to use
Farm practices to employ
When and where to sell and buy
Question of financing
2.5 TOOLS OF FARM MANAGEMENT
There tools or aid available to the farmer that can improve decision making. First, however, he must develop the skill necessary to use these tools. This involves the reasoning process itself.
2.5.1 Deductive reasoning: The formulation of ideas is largely deductive, i.e. we reason from certain known information to a tentative conclusion on idea. After doing this, information is collected to test the idea. This is empirical evaluation, the testing of an idea by observing specific evidence. By converting these thought processes from the unconscious to conscious most people can improve their effectiveness. They become more systematic in their thinking. This systematic process known as the scientific method, has been shown by experience to be the most effective means of investigating a problem.
2.5.2 Economic Principles: These principles have been developed over the years and they constitute an important tool, to be used in deductive reasoning. They are helpful in telling us what type of information we need to collect and study. The common tools and concepts are:
The law of diminishing returns
The principle of substitution
The principle of farm costs
Opportunity costs
Comparative advantage
Gross margin and farm profit
Valuation and depreciation
2.5.3 Historical Information: Such information on the internal operation of farm business may be a valuable source of information for decision making. Although, such information is useful for such reports as income tax returns, it s usefulness does not end there.
2.5.4 The farm Budget: The farm budget and farm simulation procedure are testing devices. By the use of such techniques it is often possible to compare farming alternatives on paper before committing funds to put an idea into practice. These techniques are no panacea to all farm management problems, but they have proved useful in making many farm management decisions.
3.0 FARM RECORDS
3.1 Importance of record keeping
Farm records are important tool in farm management. The main reason why an agribusiness needs to keep proper records is that it is a fundamental management tool. Accurate records of financial and production data provide the basis for analyzing business decision problems, generating the information required for taking appropriate decisions. Appropriate decisions are crucial for efficient running of agribusinesses, which in turn is the only way to guarantee profitability in an extremely competitive global economy. Production and financial data complement one another in aiding good decision making. The availability of accurate production data enables a good understanding of financial records.
There are two additional reasons for an agribusiness to keep good records. One of them is that it is required for attracting non equity financial resources to the business. The banks will demand to the records in order to assess credit worthiness of loan applicants. The bank will usually request amongst others, for a balance sheet, an income statement and a cash flow statement. Similarly, an existing creditor will look at these documents to repayment capacity and determine repayment schedule. Finally, a potential investor and trade partners of the business, will demand to see/review the books kept by the business as part of its due diligence.
The third and perhaps the least considered reason in the Nigerian environment, is for tax reporting purposes. Improperly kept records will invariably lead to under or over assessment of tax. From the legal point of view under assessment of tax due to improperly kept records can lead to sanctions from authorities.
3.2 PURPOSE OF FARM RECORDS/ACCOUNTS:
3.2.1 Performance Evaluation: There is the need to take stock of any farm whether commercial or otherwise in order to determine how well it has performed towards achieving the aims of the farmer within a period of time. Physical records and their corresponding accounting records are important in the determining this. In commercial farms with well kept records and accounts, evaluation of farm is an annual affair, but one should note that even on farms where records are poorly kept and in a peasant farms, some kind of evaluation by the farmer is attempted at certain periods in the production cycle. This underscores the importance of accurate records and accounts. With accurate physical records and corresponding accounting records, evaluation of the farm is easy, simple and a matter of routine and one is sure of progress of the farm enterprise over periods of time. Accurate records and accounts show how within a period of time, labor costs or feed costs for example either have been increasing or decreasing and how revenue from various enterprises has been increasing or decreasing either because of price changes or changes in physical production and so on.
3.2.2 Farm management Decisions: In taking day to day decisions on the farm, one finds records and accounts most useful. The records show the strong and weak points in management. A farm enterprise may not be doing well because of a particular factor in production but such a factor cannot be identified easily or perhaps, at all without good record and accounts. In pig production for example, profit depends on large and frequent litters, economic use of feeds. Mortality rate, marketing the pigs at the right weight, and such other factors. Without accurate records and accounts therefore, it would be difficult to identify which of these factors is contributing to lower profits. The records will show which areas need improving upon.
3.2.3 Credit purposes: Almost all banks will only give credit if a farmer can produce adequate physical records with the corresponding accounting records as well as the overall farm plan. This is necessary and beneficial to both the bank and the farmer for the good use of the loan which must be repaid with interest. The bankers will know the present state of the farm and the projected plan and monitor the progress of the farm as well as offer advice. The farmer on the other hand, will try to achieve his goals to be able to fulfill his commitments to his bankers as well as make profit. This will ensure further and accurate record keeping. There is no gain saying that it is lack of accurate records and accounts in small farmer production that makes it difficult for banks to extend credit facilities to small farmers. The banks must be convinced that money will be used for what is being asked for and that can only be done by presenting records of what has already been done.
3.2.4 Taxation and Insurance purposes: The produce from most farms, be they crops or livestock’s in Nigeria and many other developing countries is hardly taxed directly and very few farmers or farms take insurance policies. It is however important to be aware that good record keeping can help in taxation and in taking adequate insurance polices, since it is not inconceivable that in the not distant future taxation of agricultural products and insurance policies for farmers will become important in development countries.
3.2.5. National Agricultural and Economic planning purposes: Adequate and Accurate physical and their corresponding accounting farm records are very essential for general economic planning and for agricultural planning in particular.
To be able to plan the purchase of inputs such as fertilizer and machinery for example, it is necessary to estimate the demand for the fertilizer and machinery and that can only be done if the number of farmers in the country as well as their present fertilizer and machinery use rate and patterns are known. It is also necessary to know the number of hectares under various crops in the country as well as the cost structure on farms.
Data on various aspects of climate such as rainfall, humidity, etc, for all areas in the country are essential in taking a number of decisions such as for example, where to establish an irrigation scheme and what the nature of the scheme should be. Physical and accounting records of all aspects of the farm are necessary for effective planning at the village level, the local government level, the state and the federal level.
It is noteworthy that Agricultural and economic planning in Nigeria and most other African countries have been difficult to undertake particularly at the implementation stage because of the dearth of adequate and accurate data at the farm level.
3.3 KEY FEATURES OF RECORD KEEPING SYSTEMS
The farm business operations should have a complete, but simple, data recording and filling system that ensures all the relevant information pertaining to the different farm enterprises is available whenever it is required. This will enable the Agribusiness Manager to make crucial production decisions and set goals for the future.
A good record keeping system should have a number of key features. These include:
Simplicity: It should not be complicated. This will minimize mistakes.
Appropriateness of production and financial records: The level of details should be appropriate to the complicity of the operations.
Timeliness: It should provide the essential management /decision making, information as at when required. The elements of a good record keeping system should include the following:
Income Ledger
Expense Ledger
Asset register to keep inventory assets in terms of types, numbers and values
Balance sheet to determine net worth
Income statement to determine net profit and loss
Cash flow statements to keep track of flow of funds.
3.4 TYPES OF FARM RECORDS AND ACCOUNTS
These are a number of ways of categorizing farm records and accounts. Anyone adopted by the farmer depends on the information he thinks is most essential to him. However, the categorization of strategy adopted here tends to cover all the known ways of categorization. Broadly, farm records and accounts could be put into four classes.
3.4.1 Inventory Records: refers to complete count and evaluation of all assets and liabilities on the farm at a specific date. Assets in this context refer to all materials, i.e. goods and services owned by the farmer and used in the production processes. Liabilities on the other hand, refer to good and services which the farm owes to others.
An inventory record of a farm is important for number of reasons. First, it shows the net worth position of the farm at a point in time as well as the stocks such as feeds, medicines, etc on hand. Thirdly, it records the expense due to depreciation.
There are two steps in taking an inventory. First, there is a physical count of the assets and liabilities (physical records). This involves simple listing of the assets and liabilities on the farm. The second step in taking an inventory is the valuation of the assets and liabilities already listed using appropriate methods.
3.4.2. Production Records: This is also known as physical records. They are records of quantities of inputs used in the farm and outputs obtained from it, eg records of hectares under various crops, chemicals, inputs used in various crops, crop yields, livestock records such as quantities of feeds fed to various types of livestock, weight gains of livestock, the production rate such as number of eggs collected per day, week, amount of milk produced per animal, number of piglet farrowed per sow, etc.
Labour input records also fall within production records.
3.4.3 Expenditure and Income Records: These are derived from production records. They comprise purchases and wages (Expenditure) and Sales (Income). Expenditure and income records together with
production records normally form the basis of day to day management decisions.
3.4.4 Special or supplementary Records: These are very essential records for the farm, but which do not fit into any of the categories discussed above, e g farm (layout) map, which can change over time and the farm soil map, legal document pertaining to the farm. Both the farm layout map and the soil map are necessary for consistent planning and economical use of the land and its improvement, such as irrigation facilities.
3.5 RECORD KEEPING METHODS
Basically, there are two primary methods for record keeping namely:
3.5.1. Cash Method: All item received during the year are included in the gross income and expenses are deducted in the tax year they are paid.
3.5.2 Accrual Method: Income is generally reported in the year it is produced or earned, and expense are deducted or capitalized in the year they are incurred, not necessary in the year received or paid. The accrual method provides a basis for inventory reconciliation and calculation of “actual” net income. It hence provides a better basis for taking management decisions.
The keeping of records and generating management decision information can be divided into four steps; namely:
Step One: Record Receipts and Expenses. Use the income and expenses ledgers for this purpose.
Step Two: Keep track of inventories. Carry out annual inventory to determine the changes in inventory of the agribusiness. When these changes are recorded, net income can be calculated using the accrual method.
Step Three: Record Production data. This should be done systematically and consistently. Systematic recording of the production data makes it easier to interpret and hence utilize the data. Consistency ensures there are no gaps in data availability making it possible to analyze and observe trends in performance. Under this situation the Agribusiness Manager will be able to use the available production data to take appropriate production decisions and hence run the business efficiently.
Step Four: Analyze the data. The last step is required to derive maximum benefit from record keeping. This step enables the manager to obtain a complete picture of the agribusiness. The agribusiness manager
should carry out analysis on the data to reveal:
Where the income was produced.
Strengths and/or weaknesses of the business
Returns to labor and management
Trends in net worth
The operation’s production efficiency.
3.6 FINACIAL STATEMENTS
3.6.1 The Balance Sheet: This is a statement of financial position of the business. It indicates the position of the assets, liabilities and owners’ equity of the agribusiness at a specific point in time. It is a snapshot and it is most useful when compared with the balance sheet of the previous periods. It could also be compared with balance sheet of similar enterprises within the same period. In summary, it shows what is owned (i.e. .the assets) and what is owed (i.e. the liabilities), and the net worth, which is the difference between what is owed and what is owned. The relevant accounting equation in respect of the balance sheet is:
Assets = liabilities + owner equity
A sample balance sheet for a peasant farmer is provided below: This will be used for analysis when we shall discuss the use of farm records and accounts.
3.6.2 Balance sheet for Njoku’s farms as at December 2005
Assets Liabilities
Item Value (N) Item Value (N)
Current Assets Current Liabilities
Cash in hand 500 Debts due for payment 500
Stocks for sale 1,500
Accounts Receivable 1,200 Medium term Liabilities
Debts due for payment in
A year or two 12,000
Working Assets
Feed in stock 500
Supplies 200
Harvested Crops 9,000
Fixed Assets Long term Liabilities
Land (including crops) 3,000 Mortgages 5,000
Buildings 10,000 Debts due for payment
Machinery & Equipt 15,000 in a long term 20,000
Goats 15,000
Total Assets 55,000 Total Liabilities 37,500
Net worth 18,400
Measuring financial position of a business at a point in time is done primarily through the use of solvency and the liquidity concepts:
Solvency measures the liabilities of the business relative to the amount of the equity the owners invested in the business. It provides an indication of the ability of the business to pay off all financial obligations if all assets were sold.
The three main solvency ratios are:
(a) Debt to Assets Ratio: This is calculated as total liabilities divided by total assets. This ratio measures the proportion of total assets owed to lenders. This ratio should have values less than one. Smaller values are preferred. From the balance sheet this is 0.67.
(b) Equity to Asset Ratio: This is calculated as total equity divided by total assets. The ratio measures the proportion of total assets that is financed by the owners’ equity. This ratio cannot exceed one. Higher the values are preferred.
(c) Debt to Equity Ratio: This is calculated as total liabilities divided by total equity. This ratio measures the proportion of the financing that is provided by lenders in relation to what is provided by the business owner. Smaller values are preferred. This ratio will approach zero as liabilities approach zero.
There are two main liquidity ratios:
(a) Current Ratio: This is calculated as current assets divided by current liabilities. Ratio values larger than one are preferred. A value close to 1.0 indicates that current assets are just enough to cover current liabilities. This is not considered a comfortable position. Usually, higher the ratio values are preferred. However, a very high value for this ratio indicates too much cash on hand, which could be invested elsewhere, thus generating some returns. From the balance sheet this is 6.4.
(b) Working Capital Ratio: This is calculated as sum of working and current assets divided by sum of medium and long term liabilities. This measures the degree of financial safety of the farmer over an intermediate period of time, say a couple of years. From the balance sheet this is 1.03. This value indicates that the farm is less financially safe in the shorter than in the long term.
3.7. The Income Statement
This is a summary of revenues and expenses for a given accounting period. The difference between the revenues and expenses is called net income. A positive difference indicates a profit and a negative value indicates a loss. Under cash accounting, the above explanation would suffice for tax reporting purposes. However, the cash method as a way of measuring net income can be misleading and result in poor decisions when used for management purposes. If accrual accounting is used, the necessary adjustments to reflect beginning and ending accounting period differences, such as variations in inventories, accounts payables and receivables, accrued expenses, etc, are included in net income calculation.
A sample Income Statement is provided below:
Farm Income Statement of Timothy’s Farms, 2005
Receipts Expenses
Item Value Item Value
(N’000) (N‘000)
Yam tubers 200 Salaries and Wages 200
Cassava roots 50 Planting materials 100
Yam flour 150 Fertilizers & herbicides 50
Cassava flour 50 Interest Charges 15
Garri 300 Others 20
Total cash receipts 790 Total cash expenses 385
Total cash expenses 385
Net cash income 405
Change in inventory 50
Depreciation - 40
Net Farm Income 415
Once the net farm income is determined, the next step consists of assessing profitability through ratios. The most important of these is the profit margin. This is usually calculated as net farm income divided by the total revenue. Other profitability ratios include rate of return on assets (ROA) and rate of Return on Equity (ROE). Good record keeping is important for efficient farm management. Analyzing the records will enable the Agribusiness manager to determine how well the business is performing and to plan for the future.
4.0 POLICY AND GOVERNANCE IN FARM MANAGEMENT AND RECORD KEEPING
The National Agricultural Policy and Governance in Farm Management and Record Keeping is that vested with Federal Ministry of Agriculture and Rural Development in generating data for National Agricultural policy formulation and planning. Under this, various units under the ministry is charged with the responsibility of implementing the National data bank collation policy as well as coordinating the activities of various Agricultural establishments in the 36 States and Abuja in order to generate qualitative data for policy formulation and planning. The platform upon which policies are formulated and implemented is that of the National Council for Agricultural conference/meeting (NCA). This is a gathering of all commissioners for Agriculture in the various states, permanent Secretaries, Directors of Agriculture, Programme Managers of ADP’s; Federal Minister for Agriculture who chairs the meeting and Directors, etc.
It is important to state that through the ADP’s, the World Bank/IFAD have been making conscious effort in sponsoring socio economic surveys in order to generate data for Agricultural policy formulation and planning. Some of the surveys are:
Crop Area and Yield Survey (CAYS): This is now called Agricultural Production Survey (APS). This is an annual survey conducted across the states and local governments in the country. The data when collated is analyzed with the aid of a special computer software programme designed by National Food
Reserve Agency (NFRA), and a report produced for a particular year. The report captures such information as total crop area for individual crops, their production figures, crop mixtures, average farm size, organic and inorganic use of fertilizers, total no of plots in the state, total cultivated number of plots in the state. It has recently been reviewed to capture fisheries and livestock data.
Market Price Survey (MPS) and Report: This captures the monthly market prices of various inputs and Agricultural commodities.
The Village Listing Survey (VLS) and Report: This captures the actual farming households in the state, the average size of households, etc. This report is capital and labour intensive. It is like conducting census for the state. It is sad to note that the last survey was conducted in 1987. After the bifurcation of Bayelsa State, we are left with a total figure of 479,20 as the actual farming household in the state. This figure is no longer realistic and needs a review. The only way to realize this is through conducting another village listing survey. This survey is supposed to be conducted every three years, but lack of fund has prevented the conduct of this survey. The only one conducted in 1987 was sponsored by the World Bank.
Crop Budget Study and Report: This is now Farm Management Survey (FAMAS). This survey captures the annual farm inputs and outputs and their market prices. It enables us to know the total cost and revenue per hectare for all crops grown in the state with the aim of knowing the profitability or otherwise for any particular year. The data for this is also collected from the farmers from every local government on an annual basis.
Weather Data and Report: This captures the rainfall data, relative humidity, temperature, etc for the Agricultural zones in the local government areas. Unfortunately, the ADP could not continue with this because due to obsolete equipment and lack of fund.
The other areas of governance in record keeping is that being implemented by the Root and Tuber Expansion Programme (RTEP) in promoting root and tuber production, expansion, processing, marketing and record keeping, as well as providing training for farmers and processors; the National Food Security Programme which is site specific and with the intension of improving fisheries, crop and livestock production, farm management and record keeping. The third National Fadama Development Programme just starting has the intension of sustainably increasing the income base of 2000 Fadama User Groups (FUG’s), and 200 Fadama Community Associations (FCA’s) and over 5000 actual farming and fishing households in the state The project is coming with complete package including training in farm management and record keeping and actual implementation of it. This will help contribute to generating data for the built up of the state data bank. With the aid of 80 facilitators now posted to the 20 participating local government and by their training, it is hoped that they will not only guide the farmers and groups from benefiting from the Fadama programme, but to also guide them in the keeping of proper record as well as good management practice for the farmers.
5.0 TRAINING AND DEVELOPMENT ISSUES IN FARM MANAGEMENT AND RECORD KEEPING
Training of farmers
Training of field Enumerators and Facilitators
Regular field visits and monitoring
Training of Monitoring, Information and Evaluation Officers
Building an efficient and data bank for the state Agric Sector
An official and empowered body to liase with all relevant stake holders in
Generation of data
State Government to adequately and timely fund the activities of data Generation
6.0 CHALLENGES/PROBLEMS
Training of farmers on good farm management and record keeping
Training of field Officers
Recruitment/Training of fresh Agric Graduates to fill the gap in the
Field
Mobility and Equipment problems for field monitoring visits and data
Capture
Regular payment of allowances of field officers
Early and actual budget release
7.0 CONCLUSION AND RECOMMENDATION
Good record keeping is important for efficient farm management in modern Agricultural business. This will lead to improve farming method and increase in output for our state which will eventually increase the income and standard of living for our rural farmers. Presently, the farming method and capacity of our farmers is still backward. Major food stuffs we eat in this state are from outside. Therefore every effort should be made by both the Government and Private sector to improve food production.
REFERENCES
Rural Enterprise Management (REM) and Community Driven Development (CDD); Training/Workshop by Agricultural and Rural Management Training Institute (ARMTI) Ilorin, on “Record keeping for Agribusiness Management.
A.J. Adegeye, and Dittoh J. S. (1982), Essentials of Agricultural Economics, pp 111-145.
3.E. N Castle, Becker M. H. and F. S. Smith, (1972) Farm Business Management, pp 1-15.
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