Principles of Farm Economics
Senior 1 · Agriculture
Principles of Farm Economics
Lesson 3 of 5
20 min
Let's begin
A family in Gicumbi has one hectare of terraced land, a cow, some hens and two pairs of hands. Every season they must decide what to produce. Some choices help each other: beans planted this season feed nitrogen to next season's maize, and the cow's manure feeds both. Other choices compete: a terrace planted with Irish potatoes cannot also carry wheat this season.
The way two farm products affect each other, when they share the same land, labour and capital, is called a product relationship. Understanding it helps a farmer combine enterprises (crops and livestock activities) to get the most from scarce resources.
Joint products come from the same production process at the same time: you cannot produce one without producing the other.
The farmer's decision is about the whole process, and the income from both products should be counted when judging it.
Competitive products compete for the same limited resources, so producing more of one means producing less of the other.
Choosing between competitive products involves an opportunity cost: the value of the best alternative that is given up.
A farmer has 0.5 ha for one season. Using illustrative figures, the plot can give either 1,500 kg of maize or 750 kg of beans, or any mix in between if the land is split.
| Land for maize (ha) | Land for beans (ha) | Maize (kg) | Beans (kg) |
|---|---|---|---|
| 0.5 | 0 | 1,500 | 0 |
| 0.25 | 0.25 | 750 | 375 |
| 0 | 0.5 | 0 | 750 |
Complementary products help each other: producing more of one increases the output of the other.
Worked example
Maize grown after maize yields 3,000 kg per ha, but maize grown after a bean crop yields 3,400 kg per ha (illustrative). The bean crop has added 3,400 − 3,000 = 400 kg per ha of maize, on top of its own harvest. The relationship is complementary.
Supplementary products can be increased without reducing the other product, because they use resources that would otherwise be idle or wasted.
Supplementary enterprises add income almost for free, but only up to a point: if the flock grows until it needs bought feed and much more labour, the relationship becomes competitive.
| Relationship | If output of A rises, output of B... | Example |
|---|---|---|
| Joint | rises too, automatically (same process) | milk and dung |
| Competitive | falls | potatoes and wheat on one plot |
| Complementary | rises (A helps B) | beans before maize |
| Supplementary | stays the same | backyard hens on scraps |
Tip
Memory hook, "J-C-C-S": Joint = born together; Competitive = fight for the same land; Complementary = help each other; Supplementary = side business that costs nothing.
Exam technique: to classify a relationship, ask one question: "If I produce more of A, what happens to B?" Rises automatically (joint), falls (competitive), rises because A helps B (complementary), or no change (supplementary).
Classify each relationship: (a) maize grain and maize stover; (b) sorghum after soybeans; (c) cabbages and tomatoes competing for the same plot in the same season; (d) a few ducks living on leftover grain.
Solution: (a) joint; (b) complementary; (c) competitive; (d) supplementary.
Define opportunity cost and give a farm example.
Solution: The value of the best alternative given up when a choice is made. Example: if a farmer plants Irish potatoes instead of wheat on a plot, the opportunity cost is the wheat (and its value) he could have grown there.
A plot can give either 2,000 kg of Irish potatoes or 400 kg of wheat. How many kilograms of potatoes are given up for each kilogram of wheat?
Solution: 2,000 ÷ 400 = 5 kg of potatoes per kilogram of wheat.
Explain why growing beans before maize is described as a complementary relationship.
Solution: Beans are legumes whose root nodules fix nitrogen. This nitrogen stays in the soil and raises the yield of the maize that follows, so producing beans increases maize output.
Why can a supplementary enterprise become competitive if it grows too large?
Solution: At first it uses only idle or waste resources. Once it needs more than those (bought feed, land or labour taken from other work), it starts to reduce the output of other enterprises, which makes it competitive.
Summary
Sources and credits
The Rwandan examples, worked examples and practice questions are written by Ganzaa.
This lesson adapts CC BY-SA material and is shared under CC BY-SA 4.0.
