The budget below shows the estimated financial aspects for an animal production enterprise for the 2016/2017 financial year - NSC Agricultural Management Practices - Question 3 - 2017 - Paper 1

The farmer is targeting the following possible markets:

1. Livestock auctioning
2. Farm gate marketing
3. Manure retailers

To calculate the profit or loss, we need to determine the total income and total expenditure.

Total Income:

• Livestock sales at auction: R350,000
• Livestock sales at the farm: R120,000
• Manure sales: R7,500

Total Income = R350,000 + R120,000 + R7,500 = R477,500

Total Expenditure:

• Veterinary/Medicine: R10,300
• Feed: R22,345
• Labour: R24,500
• Electricity: R13,308
• Feed maintenance: R15,555
• Pesticides: R18,756
• Feed supplements: R8,800

Total Expenditure = R10,300 + R22,345 + R24,500 + R13,308 + R15,555 + R18,756 + R8,800 = R113,564

Profit/Loss Calculation: Profit/Loss = Total Income - Total Expenditure = R477,500 - R113,564 = R363,936. Therefore, the farmer has a profit of R363,936.

To increase income, the farmer could:

1. Find more markets to sell their products to, expanding their customer base.
2. Add value to the products by processing them or offering better packaging.

The section of the business plan addressed in this scenario is related to Financial aspects/Budgeting. This involves creating a budget to project income and expenses.