Agricultural Extension, Economics and Farm Management
This domain tests extension methods, adoption behaviour, farm cost concepts, profitability and market economics. Expect definitions plus small farm-budget calculations.
Core concepts
- Extension methods include individual, group and mass contact; diffusion of innovation classifies adopters as innovators, early adopters, early majority, late majority and laggards.
- PRA and participatory methods involve farmers in problem diagnosis; FPOs improve collective bargaining.
- Cost concepts: fixed cost, variable cost, total cost, gross margin, net income and B:C ratio.
- Gross margin = gross income − variable cost; net income = gross income − total cost.
- B:C ratio = gross income ÷ total cost. Elasticity measures responsiveness of demand or supply to price.
Worked example
Gross income = ₹2,00,000; variable cost = ₹80,000; fixed cost = ₹40,000. Gross margin = ₹1,20,000; net income = ₹80,000; B:C ratio = 2,00,000 ÷ 1,20,000 = 1.67. Reason: B:C ratio uses total cost, not variable cost alone.
Traps
- Treating fixed cost as variable.
- Using gross margin as profit.
- Dividing by variable cost in B:C ratio.
- Ignoring depreciation and family labour.
- Confusing adoption categories with extension methods.