Explaining Profitability and Borrowing
This booklet is designed to be used by farmer discussion groups, farmer field schools and extension or advisory officers involved in agricultural or rural development. The ability to adopt or introduce changes to agricultural production methods and non-farm enterprises depends on the availability of money. It is, therefore, important for farmers to be able to think carefully about their financial circumstances. Predicting costs, prices, profit margins and cash flow patterns is vital for planning and decision-making for poor farmers. These concepts need to be explained in a way that small scale, and possibly, illiterate farmers can understand. The booklet introduces financial topics to farmers using a variety of tools, some of which can be used even by people who cannot read or write. The concepts are intended to provoke discussion and be used in a participatory manner. The booklet explains the following topics:
- Livelihood strategies;
- Calculating profitability of farm enterprises;
- Importance of making profit;
- Balance sheet;
- Improving the enterprise's profitability, including guidelines on conducting a SWOT analysis.