key terms for today farm a farm is an economic unit that engages in production and the sale of agricultural produce and services to gain a profit now key part of this definition is one economic unit two agricultural produce and services to gain a profit key terms profit and economic unit let's continue production land labor capital management value chain supply chain consumption and marketing now let's see how we can best explain some of our economic the economic functions we have three economic functions and today farmer joe will assist us now farmer george driving his structure here we have our three economic functions which are marketing consumption and production our engine would have been our production and as in every big engine we have different parts so production has various factors so we have a big engine right so for this tractor to move it needs an engine great next we have consumption consumption would have been the fuel behind or injured so in the movement we look at production and it says best with or consumption so both rely on each other if you have a big engine and you have a great gas what would you need next all farmers all right he would have been the driver so marketing is the driver behind production and consumption so each factor would have its own role in getting the economy moving understood great so now let's break them down let's look at production production is an economic activity that engages in the management and use of normal agricultural operation for the production of a farm economy commodity so an economic activity that engages management so how we utilize all the factors to ensure we get a profitable outcome that would have been looking at production now production focuses mainly on two things production focuses on goods and services now here goods and services production provides goods and services to satisfy people's need and their wants again production is geared to support to provide goods and services to satisfy people's needs and their wants listen how we can look at the benefits how best you can remember the benefits of production now if we improve production increased production would increase what would increase your wealth next increased wealth would automatically gonna have a better economy so increased wealth would promote economic welfare and if you have economic welfare what would improve your standard of living so the three main benefits of production is that we look on increased wealth it promotes economic welfare and it improves the standard of living those are the three benefits of production on the farm now next we're looking at the processes or the functions that are involved in production now production functions has its inputs and its outputs the inputs of production would have been the factors of production so the factors of production are land labor capital and entrepreneurship and time again i'll be using the term enterprise or management so these are the factors or the inputs of production now the outputs of production would have been the end result of production that would have been goods and services great now outputs are example tractor crops a refrigerator computer those are all different types of goods and services that would have been the end result of putting in on your in your business now the factors of production let's highlight them the factors of production are land labor capital and management again the factors of production are land labor capital management or enterprise these four factors are what keeps production going four factors of production there are different aspects to best outline no let me ask you a question if you're listening now the question is mrs labor omnia winkette lives in jamaica she lives she's least she'll leave she's least started one next year of land and decides to start a poultry business list the factors of production she would need for a profitable outcome so mrs labor omnia lives in winkit she's leased one hectare of land and decides to start a poultry business list the factors of production she would need for a profitable outcome tick tock you guys were listening before what happened let's go great i'm assuming you know what the four factors are which are land labor capital and management so what would she need no she would not need land because clearly it state that she was leased land so she would not need land as a factor she would know me the additional factors which are labor capital management or enterprise very good i know you're listening now let's look further on the types of production there are three types of production we have primary production secondary production and territory production again we have three types of production primary secondary and territory let's look at the first one primary begin primary production looks at the raw material and goods produced initially so after production on the farm what is my result so for example i'm planting a crop i harvested guavas i reared chicken so my raw material would have been my chicken and my guava so those are classified as primary production on the farm now i want to convert my production to give it a longer life so i move into a different category of production to secondary so secondary production looks at converting my raw material into a different state so now i can turn my guava into guava jam i can turn my chicken into sausage or frankfurters or baloney i process my good so hence i would move to secondary production next i look at the other stage which would have been territory production territory production highlights the services that are given now services to include commercial technical and professional services commercial services speaks on maybe owning a farm store that you would sell fertilizer and feed to farmers we look at technical services like a teacher an extension officer these are what you would offer as technical support then we look at the professional support consultation so therefore you have an animal who is sick you refer to your veterinarian so these are a few persons or aspects of professional technical and commercial services now let's break down our four factors of production first one is land land refers to all natural resources found in the sea and on land land refers to all natural resources found in the sea and on land land is the most essential factor it is the most essential right so therefore if you are venturing into production the first thing you must consider is land location location location where am i going to operate my business right next thing we look at as land land is a limiting factor that cannot be replaced self-explanatory three valley the value of land increases over time so the value of land can increase based on the natural resources found there look on how fertile the land is the location of the land so if it's found in a certain region where we have rich soil urchin nutrients that can support plant growth the cost of it would have been really high natural resource if a land occupies maybe like you know we have oil falling there that land will have high will be increase in value based on the fact that we have with natural resources found there now to every factor you may have a few problems let's look at land now problems that are associated with land first thing increasing population creates demand on land increased population creates demand for land so we have an increased population in an area and that this would cause the demand for land to go up because we have more persons wanting uh the land to use based on increased amount of persons in an area we look on two at the competition for housing and industry and agriculture so housing does compete with agriculture in regards to the need for the land then we look at three the increase in demand for land leads to an increase in the price for the land now these three are problems associated with land now these three problems can be highlighted further now we are looking at the problems that affects land first increasing population creates a demand for land so due to the increasing population in an area it would rise to a competition for housing and agriculture which leads to the second problem three increasing the amount of land would lead to an increase in the price for the land so the price would eventually go up based on the demand and if you're applying knowledge you would know that an increasing demand for something or you know if i have two things i want i'm selling something and i want to increase or sell something i should say if i have two persons mine i'm gonna increase my price so that's how i would consider having the price go up for land now let's look at a few solutions first allocated green belt or zoning of a few areas of which i know you may see along the way these areas are areas designated just for farming so you wouldn't have any permanent structures being erected on these buildings on these land areas i'm sorry two we look at financial assistance to acquire these land problem solution aid many farmers need loans to actually access land and three subdivide land break up large parcels of land into smaller pieces and allow a few farmers to lease and then you know practice farming let's move further to our other factor the other factor is labor labor this is the human effort needed in production of a good or a service now labor we have three types of labor we have family labor operator labor and higher labor family labor lends to a farmer operating the farm with his family so for example a small poultry unit mom son and father so marcy and andre operates their poetry farm this would have been family labor on a farm then we look further to operate our labor where we look at a farmer does everything on the farm the farmer is the manager the farmer is the consultant he's the laborer he markets his own business the farmer does everything on the farm so there it will link to him doing actually everything inclusive of the labor now hired labor would lend to people being employed to work for you now here we have temporary and we have permanent temporary labor lends to maybe employing seasonal persons so if you are planting surrey is that time when you're gonna harvest your soil right so you would employ persons to come to work seasonally for you and when you cut permanently but where persons are employed and they stay on they come to work every day prominent workers now let's look to a few of the problems that affects labor first problem rural urban drift this term came up last week it's here again now rural urban drift speaks the persons leaving the rural area or the country where you have the farmlands to come to cities to live for a better life now this pose a problem for labor because if i am i have three kids and my kids decide they want to leave who will work for me if i want to employ somebody who lives don't wander nobody's there they have all moved to kingston are saying andrew or saint catherine to live now we look at low wages in some instances we look at the farm not you know the cost or the the fee that's attached to working a day on the farm is not as cost effective or you know it doesn't pay much for many persons so the wage sometimes is a bit low for many persons we look at two the saturday the psychological attitude many persons assume that you know farming leads to slavery so the mindset is that nobody wants to work on the farm it's too hard to in the soil that's you know weeks slavery just for some persons for demographical changes we look at birth rate you know back then my grandmother had about 13 kids her daughter my mother gondolin had two so what you read is that many persons now are the birth rate has reduced certainly less persons around in regards to labor force on a farm we look at gender we look at migration where persons may leave the era to go to live somewhere else now solution to a few of these problems one educate the public persons need to be aware of the benefits involved in agriculture the job opportunities involved in agriculture these are all important aspects that persons cannot turn a blind eye to or they are not informed to the benefits of farming next we look at provide basic infrastructure came up last week it's here again providing roads buildings modern buildings access to wi-fi these are things that would keep persons intact and you know keeping up the time now we look at incentive programs so programs that can promote um farmers like giving them a reduced um costing a few of the goods that they have if i'm going to buy a chemical i would pay less i'll give away maybe free ceiling to some farmers free chicks a few farmers this actually encourages farmers to continue in their labor force or their production line next factor is capital capital speaks on compromise compulsory compromising of money and all building equipment tools machinery plants livestock it uses its use in production of agricultural goods and services so this factor looks on two different aspects a working aspect and a fixed aspect these are all factors that employ or its use in production capital is used to secure farmers outsource money so for example how or where farmers get money from so this aspect lends to loans loans how they access money to increase production now capital has two classifications here so let me look at fixed capital and working capital now fixed capital we look on items that have a useful life for more than a year so after years time you can't exhaust these items so for example building machinery they're being used for a long period of time or more than one year right then we look at the working capital working as the word implied means it's constantly being replenished it's a revolving process so for example we look on feed each time you use feed you have to replace it so it's constantly being right used up and replaced so this normally it doesn't last for a year it normally lasts for less than a year cash we look at cash as an example of working capital and cash for example i'm going to purchase something after replacing my cash each time i use so this is why we consider them working capital so we have two types of capitals we have fixed and we have working capital on our farm now to the following we have what you call rewards now rewards are on a farm for more than one reason so let me look here at um let's go back to it all rewards on the farm no there was on the farm we had we spoke about a few other factors to include land labor and capital now let's look at some of the benefits of each of them so for example land somebody who owns land they're able to rent their land they're able to lease the land that's benefit to them right so they can earn money from owning or having this factor called land two we look at a reward for labor no i'm a work on the farm and i'm gonna come to work for you i'm going to sell my labor to you so you have to pay me wages so a benefit or a world system to labor would have been me collecting my weekly or daily monthly wage next we look at capital there's a reward function attached to capital you know the providers of financial capitals are able to receive interest so for example i'm going to lend you ten dollars and when you're gonna pay me back in total i want a hundred and fifty dollars that means i'm going to make money on what i loan you right so there's an interest attached to lending money next we look at enterprise management in enterprise the all benefit or reward of enterprise is profit remember a farm is an economic unit that drives a result of profit right so let's go further now i'm assuming you are listening let's take a break to look at an activity the activity goes listen in the table below our group of solutions associated with the factors of production to which factor does each solution belong let's go so i have a table here i'm just going to call and you're going to tell me or say out loud to yourselves you know which factor would each apply so let's look first one green belt and zoning i'm hearing good right that is land great basic infrastructure is attached to which one um great you guys learning my listing good so you look at subdivision subdivide land great educate the public land and labor because remember you know educating the public is there is many many problems that we have in jamaica just by educating because sometimes persons aren't aware until they are educated on a topic right so let's move next into management or final factor no management focuses on all other factors of production management determines the success or the failure of any production line so on the farm it seeks to speak on hobas we monitor or manage our land or labor and or capital so we have to have good labor force monitor it well monitor our land keep a track of our business with the capital once we do that it's considered management or enterprise now this gives rise to if your business will fail or the business will make a profit so it involves analyzing decision making budgeting and absorption of the farm's outcome next we look at a good farmer manages his resources well and makes a profit simple if you're a great farmer the end result is always profit now we look at production as a whole now we're going to look at the other economic function which is consumption now consumption speaks to this a con a consumer for focuses sorry a consumer focused activity that incorporates purchases and the utilizing of goods and services so consumption leaks to utilizing a good or using a service so that's what we consider consumption which lends to our consumer there are four factors that we're going to look at which is health income level religion and aesthetics now picture this health based on consumption now many persons now they are leaning towards a healthy lifestyle so they're gonna pull away from a few items so no longer will they want fatty food with high cholesterol they're gonna want no they're gonna lean to vegetables melons fruits all that stuff so that would have been pulling away from one source to another which would affect consumption of a good because persons are more leading towards a health focus lifestyle healthy lifestyle next look at income income affect what you buy at the shop so for example on sundays mommy and daddy will cook chicken and money right but because of income they will only buy one so let's say you know this sunday you're going to only get chicken so because of their income and you contribute to what your parents or what the consumer is willing to purchase and three we looked at religion so same red members for an example these persons do not consume pork so that would affect the consumption of pork because of religion great and like me i eat with my eyes so aesthetics so how something looks will determine what you want if you're at the line and you're buying food that may be a buffet line like i mean a few restaurants you look at what looks nice to you with the eyes what looks juicy and more watering like a burger right so you wouldn't want to buy the burger because of the picture that you see next marketing so marketing as we said before marketing speaks on the what drives the economy so marketing links consumption and it links production so marketing promotes goods and services flow from the producer to the consumer so you look at production moving through to consumers you look at supply moving into demand these activities they entertain vendors and the merchants no marketing has four server functions we look at merchandising handling processing and supporting now merchandising we look at buying and selling of items and this involves trading and promoting we look at handling in marketing which involves transporting goods sorting goods grading boards assembling goods these all are based on the handling of a good then we look at activity that is involved we look at processing and distributing to a retailer then we look at processing when you are processing a good you look at labeling a good packaging manufacturing a good and this normally involves you satisfying what the customer wants right and lastly supporting supporting needs so finances standardizations risks and assessment now a lot in interiors is how the item flows smoothly from the production line to a consumer that's what we're into supporting so what comes next is how we link together these functions value and supply chain now value and supply chain the value chain looks on the process in which a company adds value to its raw material to produce a product eventually it will be sold to consumers so value chain speaks on recreation of our raw material giving it value so for example if i have an increase in production a high supply of tomatoes i'm going to add value to estimator so i can present it to my consumers so i'm going to change my tomato to a piece and then i'm going to start the bottle ketchup so i'm adding value to my raw material right now after adding value we look at the supply chain the supply chain represents all the steps required to get this product to the consumer so after arranging multimeter to appease what i do from that stage until it reaches my consumer would have been my supply chain and i know you've heard a few of these terms before no let's look at this diagram to best explain the value chain gives companies a competitive edge an advantage when you add value to your product and two the supply chain leads to all our consumer satisfaction so the background here speaks and value so the farmers recreate they're good it's then processed or changed then we move to our wholesalers and distributors so now my to make a place would not move from my production line here to the wholesalers and distributors then it moves to the retailers shops right then you move to you the consumers who purchase this is a flow from value moving to the supply chain now these all interrelate as it promotes production of any raw material now for today we have covered a few topics as these topics are were diverted and went back straight to some of our key terms now before i move to my key terms let me ask you a question question says which of the following is not considered a factor of production so that proceeds a question so which of the following is not considered a factor of production so option a land option b capital c marketing and d management ah i'm sure they have some black lizard boys you know and ride marketing very good so i know you guys are listening now today we looked at a few topics now what we looked at today was farm production land labor management marketing and consumption so let's do a recap so for today we're going to find water farm is it's an economic unit that's involved in production we highlighted production production lends to improving standard of living we look on wide variety of how we can utilize the focus of production and production focuses on goods and services next we highlight the factors which are land labor and capital and management so land is the most important factor of production right and learn also incurs problems which are good you know you guys are listening so learning curve problems to include availability of land maybe an increase in production based on um population i'm sorry so these are a few factors that affect london you know we can solve these problems by looking at investing an area and providing financial assistance next we look at a little more and there were three types of labor we looked at higher labor operatory labor and family labor family lens still having your entire family working on the farm operator the fabulous everything on the farm and you look at higher labor where employment is taken on by the farmer then we look at the capital capital speaks to how we access information regarding our financial status on the farm so for example capital could have been working or fixed and you know working is aspects on the land on the property it has to be replenished over time so for example i would after um replenish my feed my fertilizers these are all important aspects that we have to keep on replenishing hence the term is called working and we looked at fix which lasts for more than a year great an example of fixed assets on the farm are buildings and machinery and a few tools next we highlighted management as we said before management gave rise to the success and failure of any business so how we monitor or manage land labor and capital would speak to whole best we are going to make a profit or a federal tanker lost on the farm next we look at marketing marketing is what links consumption and production marketing is the driver of the economy extensive processor good supporting the good and seeing sort of flow of the good from the production line right until which is the consumer now this looks at consumption consumption speak to how we utilize our goods and our services so i do hope what you guys are listing into what transpired in today's class now last week we had a student who actually was very successful she actually emailed me a few of her questions now the student from last week that was very did very well was alicia smith ferguson she is the student of the week because she's following up and she's keeping her breasts with everything now i hope you will become one of my two of the week for next week so how can you do that answer these few questions you can take a picture or you can take a quick snap of what's happening in a screenshot so one question one why is land often the essential factor of production two you look at which factor of production do you think is most important and why three is never always important to make a product and four is there a factor that is not necessary to make a product five what is the difference between fixed and circulating capital so in closure for today our thought for today the quote for the week is investments in agriculture are the best weapons against hunger and property poverty and they have made life better for billions of people again investments in agriculture are the best weapons against hunger and poverty and they have made life better for billions of people