Introduction 

� Economics is the study of how man and society chooses to allocate scarce productive resources to produce various commodities, over time, and distribute them among various consumers in society. 

� It attempts to explain how man can best use the limited resources to produce goods and services which satisfies his needs with minimum wastage or loss of these resources 

 Example;

- food, 

- clothing 

- shelter 

- Agricultural economics is therefore defined as a science that aims at maximizing output while minimizing costs by combining the limited supplies of goods and services for use by the society over a certain period of time. 

� These are; 

- land, 

- capital, 

- labour 

- management

Basic economic Principles 

Scarcity 

� Economic scarcity means resources are limited in supply relative to demand. 

� This principle implies that there is no time that man can have enough resources to satisfy all his need or desires 

Choice/Preference 

� Human wants are many and varied and means of satisfying them are limited. 

� Therefore, man has to make a choice among the alternatives in order to use the resources available. 

� Man does this by satisfying the most pressing needs first.

� This is called scale of preference. 

Opportunity Cost 

� Opportunity cost is the revenue forgone from the best alternative.

� It exists only where there are alternatives. 

� Where there are no alternatives the opportunity cost is equal to zero. 

� Opportunity cost helps in decision making.

Farm Records 

� Farm records are documents kept in the farm 

� They show farm activities carried out over a long period of time 

� Or information kept in the farm in written form, about the farm and all activities in it. 

Uses of Farm Records 

� Show the history of the farm 

� Show whether the farm is making a profit or loss. 

� Show all the assets and liabilities of the farm which can be used to value the farm. 

� Help in supporting insurance claims on death, theft, fire or loss of farm assets. 

� Help in tax assessment to avoid over taxation. 

� Used as a guide in planning and budgeting. 

� Helps to detect losses or theft in the farm. 

� Make it easy to share profits or losses in partnerships. 

� Help in settling disputes among heirs to estate if the farmer dies without a will. 

� Provide labour information on terminal benefits for a worker. 

Type of Farm Records 

� Production Records - Show the total yield and yield per unit of each enterprise. 

� Inventory Records - A record of all permanent and consumable goods in the farm.