Introduction to Agricultural Business and Financial Management
Agricultural Business also known as AgriBusiness is the study of the operating techniques and business skills used in the modern food and fiber industry. This program builds student knowledge and skills needed to manage small and medium sized business in agriculture and allied industries. This is true whether the business is directly involved in production, value-adds to raw agricultural products, or provides support services including the distribution, processing, packaging, and marketing of agricultural products.
Agribusiness is the business of agricultural production.
Financial management refers to the efficient and effective management of money (funds) in such a manner as to accomplish the objectives of the organization. It is the specialized function directly associated with the top management. The significance of this function is not seen in the 'Line' but also in the capacity of the 'Staff' in overall of a company. It has been defined differently by different experts in the field.
The term typically applies to an organization or company's financial strategy, while personal finance or financial life management refers to an individual's management strategy. It includes how to raise the capital and how to allocate capital, i.e. capital budgeting. Not only for long term budgeting, but also how to allocate the short term resources like current liabilities. It also deals with the dividend policies of the share holders. Financial management includes adoption of general management principles for financial implementation. The following may be said as the related aspects of financial management raising of funds, using of these funds profitably, planning of future activities, controlling of present implementations and future developments with the help of financial accounting, cost accounting, budgeting and statistics.
Agricultural Business and Financial Management involves study of efficient and effective management of money (funds) and operating techniques and business skills used in the modern food and fiber industry.
Scope Of Agric Business and Financial Management
Agribusiness is the business of agricultural production. The term was coined in 1957 by Goldberg and Davis. It includes agrichemicals, breeding, crop production (farming and contract farming), distribution, farm machinery, processing, and seed supply, as well as marketing and retail sales. All agents of the food and fiber value chain and those institutions that influence it are part of the agribusiness system.
Within the agriculture industry, "agribusiness" is used simply as a portmanteau of agriculture and business, referring to the range of activities and disciplines encompassed by modern food production. There are academic degrees in and departments of agribusiness, agribusiness trade associations, agribusiness publications, and so forth, worldwide.
Scope of Financial Management
Some of the major scope of financial management are as follows: 1. Investment Decision 2. Financing Decision 3. Dividend Decision 4. Working Capital Decision.
1. Investment Decision:
The investment decision involves the evaluation of risk, measurement of cost of capital and estimation of expected benefits from a project. Capital budgeting and liquidity are the two major components of investment decision. Capital budgeting is concerned with the allocation of capital and commitment of funds in permanent assets which would yield earnings in future.
Capital budgeting also involves decisions with respect to replacement and renovation of old assets. The finance manager must maintain an appropriate balance between fixed and current assets in order to maximise profitability and to maintain desired liquidity in the firm.
Capital budgeting is a very important decision as it affects the long-term success and growth of a firm. At the same time it is a very difficult decision because it involves the estimation of costs and benefits which are uncertain and unknown.
2. Financing Decision: While the investment decision involves decision with respect to composition or mix of assets, financing decision is concerned with the financing mix or financial structure of the firm. The raising of funds requires decisions regarding the methods and sources of finance, relative proportion and choice between alternative sources, time of floatation of securities, etc. In order to meet its investment needs, a firm can raise funds from various sources.
The finance manager must develop the best finance mix or optimum capital structure for the enterprise so as to maximise the long- term market price of the company’s shares. A proper balance between debt and equity is required so that the return to equity shareholders is high and their risk is low.
Use of debt or financial leverage effects both the return and risk to the equity shareholders. The market value per share is maximised when risk and return are properly matched. The finance department has also to decide the appropriate time to raise the funds and the method of issuing securities.
3. Dividend Decision:
In order to achieve the wealth maximisation objective, an appropriate dividend policy must be developed. One aspect of dividend policy is to decide whether to distribute all the profits in the form of dividends or to distribute a part of the profits and retain the balance. While deciding the optimum dividend payout ratio (proportion of net profits to be paid out to shareholders).
The finance manager should consider the investment opportunities available to the firm, plans for expansion and growth, etc. Decisions must also be made with respect to dividend stability, form of dividends, i.e., cash dividends or stock dividends, etc.
4. Working Capital Decision:
Working capital decision is related to the investment in current assets and current liabilities. Current assets include cash, receivables, inventory, short-term securities, etc. Current liabilities consist of creditors, bills payable, outstanding expenses, bank overdraft, etc. Current assets are those assets which are convertible into a cash within a year. Similarly, current liabilities are those liabilities, which are likely to mature for payment within an accounting year.
Skill and Competencies Needed to Succeed in Agric Business and Financial Management
- Excellent business skills, including knowledge of accounting and bookkeeping, in order to manage financial records and client transactions
- Superb communication skills
- Employee management and decision-making skills
- Count change
- Prepare sales ticket
- Accept credit cards/checks
- Calculate percentages
- Figure sales tax
- Calculate discounts
- Order/receive merchandise
- Complete purchase order
- Balance cash register
- Check cash balances
- Calculate interest
- Computer/word processing
- Calculate profit/loss
- Program a computer
- Possess product knowledge
- Close a sale
- Maintain inventory
- Plan/create a display
- Prepare a newspaper ad
- Select advertising media
- Plan a floor layout
- Determine stock turnover
Office Equipment Skills
- Use telephone
- Use adding machine
- Use cash register
- Use micro fiche
- Operate computer
- Get along with people
- Talk to customers
- Introduce yourself and others
- Organize/present a demo
- Speak to large groups
- Customer Relation Skills
- Possess product knowledge
- Recognize/help customers
- Handle complaints
Skills and Competencies needed in financial management
You will need to show evidence of the following:
- commercial and business awareness
- excellent communication and presentation skills
- an analytical approach to work
- high numeracy and sound technical skills
- problem-solving skills and initiative
- negotiation skills and the ability to influence others
- strong attention to detail and an investigative nature
- the ability to balance the demands of work with study commitments
- good time management skills and the ability to prioritise
- the ability to work as part of a team and to build strong working relationships
- the capacity to make quick but rational decisions
- the potential to lead and motivate others
- good IT skills.
Career Opportunities For Agric Business and Financial Management Graduates
A degree in agribusiness offers opportunities to be involved in areas such as production, finance, sales and land management. Agribusiness is concerned with the financing, marketing, and management of food production. It is a growing industry that provides wide range of career options.
- Agribusiness Office Assistant
- Agribusiness Food Manager
- Agribusiness Marketing Coordinator
- Farm appraiser
- Agricultural Analyst
- Farm Manager
- Crop Producer
- Market Analyst
- Quality Controller
- Commodity broker
- Agricultural statistician
- Loan officer
- Farm manager
- Supply chain analyst
- Farm machinery sales representative
- Grain merchandiser
- Operations manager
- Landscape contractor
- Human resources specialist
- Banch manager
- Credit analyst
- Crop insurance agent
- Precision AG technologist
- Feedlot manager
- Agricultural chemical sales representative
- Real estate appraiser
- Elevator manager
Job Prospects in Financial Management
- Data analyst
- Data scientist
- Licensed conveyancer
- Management consultant
- Purchasing manager
- Retail banker
- Tax adviser
- Accounting technician
- Actuarial analyst
- Business adviser
- Chartered accountant
- Chartered certified accountant
- Chartered management accountant
- Chartered public finance accountant
- Company secretary
- Forensic accountant
- Financial Planner
- Financial Manager
Admission Requirements for Studying Agric Business in Nigeria
The O'level subject combination and requirements needed to study Agric- Business; You require;(i)Five O’level credits in not more two sittings to include English Language, Mathematics, Biology or Agric Science, Chemistry and any other relevant subjects.
In UTME, please note that English Language is Compulsory for this course. Therefore, the three (3) other JAMB UTME subject combination needed to study Agric- Business under the Faculty of Agriculture in the above University include;Mathematics, Economics and any other subject from Government, Principles of Account,Christian Religious Knowledge and Geography.
Admission Requirements for the study of Financial Management in Nigeria
The O'level subject combination and requirements needed to study Financial Management.
You require; Five SSCE credit passes to include, English Language, Mathematics, Economics and any other two science subjects from Accounting, Commerce Geography
In UTME, please note that English Language is Compulsory for this course. Therefore, the three (3) other JAMB UTME subject combination needed to study Financial Management under the Faculty of Business Studies in the above Universities include;
Mathematics, Economics and Accounting.