Budgets play an important role in the successful management of a farm as they form part of the financial planning of any farming enterprise - NSC Agricultural Management Practices - Question 4 - 2023 - Paper 1

The aims of a budget for a farming business include:

1. Setting Spending Limits: To set limits on the amounts to be used for farming activities, ensuring that expenditures do not exceed planned budgets.

2. Coordinating Resources: To coordinate resources and money spent as planned to avoid resource wastage or financial mismanagement.

3. Feasibility Analysis: To determine the profitability and feasibility of any proposed business decisions before implementation.

4. Long-term Planning: To quantify long-term strategies and goals by evaluating anticipated returns and expenses over time.

• Prices: The costs of goods and services that will be purchased in the production process.
• Yield estimates: Predictions of how much product will be generated, impacting income and planning.