Farmer as a profession
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Farmer’s Role as Decision Maker
Farmers have many alternative uses of their resources. A farmer cannot employ his resources in all possible uses at the same time. Example, a person can sell his labour for production of a commodity or can keep it leisure. At the same, it is not possible to have both money income and leisure from the use of the same labour. A piece of land can be used for wheat, paddy, onion, garlic etc. But all enterprises like wheat, paddy, onion, garlic etc., cannot be produced at the same time in a piece of land. There are five major economic decisions that must be made by a producer.
1. What to produce
2. What method of production to use
3. How much of each commodity to produce
4. When to buy and sell
5. Where to buy and sell
1. What to produce
There are many possible commodities that a farmer can produce. He must choose on the basis of preference among the alternative commodities. Suppose, commodity A and B can be produced in a piece of land. But it is not possible to produce both A and B at the same time. Choice must be made whether to produce A or B.
2. What method of production to use
There are many possible ways to produce commodity. A producer must choose a method by evaluating all possible methods for producing a commodity. The method of production affects the cost of production. Producers always seek for least cost method of production.
3. How much to produce
There are many possible levels of output of a commodity. A farmer must decide for the quantity of the commodity. He will not produce more than he will expect to sell for a profit. On the other hand, he will increase production when he will expect to increase profits by doing so.
4. When to buy and sell
The amount and quality of a commodity vary over time and side-by-side the price of the commodity is also varied. Farmers will buy inputs for producing a commodity when its price will be cheap. On the other hand, farmers will sell their produced commodity when its price will be high.
5. Where to buy and sell
Farmers have alternative markets for sale their commodity. Frequently, prices vary from one market to another. Transportation costs to the markets are also different. Markets must be chosen where a producer will receive the less transportation costs and more profits.
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