Newcastle University

Aims

The aims of this module are
1 This module incorporates financial information to build on and complement Stage 1 modules which described agricultural systems and examined the way different systems used resources (land, labour, management and capital).
2 To give a basic introduction to the main methods used to combine these resources to develop profitable enterprises and farm businesses.
3 To introduce the basic elements of a set of farm business accounts (Profit and Loss Account, Balance Sheet, and Net Cash Flow)
4 To demonstrate techniques that are used to maintain financial control of a farm enterprise and business, such as cash flow budgeting, financial appraisal, and the use of management accounts.
5 To emphasis the linkage between farm business performance and support payments and market revenue
6 To give students an understanding of how important past trends in farm commodity markets are, and to initiate discussions as to how these may change in the future.

Outline Of Syllabus

Basic farming budget techniques, such as gross margins, variable and fixed (overhead) costs are calculated. Within this the importance of surplus capacity and of economies of scale, and the management challenges this brings to the development of a business.
The management of cash flow, and the recording of invoices.
The concepts and mechanisms used to calculate depreciation.
Introduction to basic farm accounts; Profit and Loss, Net Cash Flow, and Balance sheets
Students are introdued to farm budgeting software and are able to develop Net Cash Flow, Profit and Loss and Balance Sheet budgets.
The basic Common Agricultural Policy support mechanisms are introduced, including the Single Payment Scheme, agri- environment schemes, rual development policy. A review of the success of these policies is undertaken in the context of the on-going reviews of agricultural policy.
An understanding of the key variables that have affected major farm commodity markets and the likely variables that will influence their future development.

Teaching Rationale And Relationship

Lectures are designed to give students an understanding of the fundamental activities involved in managing the resources typically found on farm businesses in the UK: land, labour, capital, and management expertise.
Workshops, within lectures, give students opportunities to put into practice the main themes and topics of the lecture. These are handed in, marked and returned to be used for formative assessment.
The small group teaching gives students hands-on experience of spreadsheet work, developing their confidence and knowledge of how accounts interact with each other.
Farm based field work encourages students to develop team working and assessment skills.

Assessment Rationale And Relationship

The module is examined by two assignments (worth 10% of the module each), and an exam, worth 80% of the total marks.
The first assessment is an on-farm valuation which examines course work in the field, and team work between students (learning outcomes 1 and 2).
The second assessment is the marketing presentations which examine team work, research, fact assimilation and verbal presentational skills (learning outcomes 2, 3 and 4). The written exam requires students to integrate financial and enterprise management (learning outcome 1), and examine their ability to write coherently and concisely (learing outcomes 5).
The workshop, which requires students to work in pairs to complete a spreadsheet-based budget for a whole farm, is not formally assessed. This aspect of the module is developed in ACE3036 where it is formally assessed; this accounts in some degree for the co-requisite for this module for students studying ACE3036.