Various Sources Of Income Generation

Income – is the profit, earnings or returns received

Sources of Income: The sources of income for agri-business are very broad, but can be grouped into the following three categories:

• Income from crops.
• Income from livestock.
• Income from sundry farm activities.

Income From Livestock

• Livestock sales - animals sold to markets.
• Livestock slaughtered for home consumption.
• Insurance received from livestock losses.

Income from Sundry Farm Activities

• Income derived from contract work with existing surplus capacity.
• Bonus on turnover.
• Farm products sold which is difficult to allocate or of minor importance.
• Farm products sold derive from the major source of income, e.g. eggs or milk.
• Sundry income from hiring out veld.
• Income from selling homegrown materials e.g. hay.
• Income from eco-tourism if it is a sideline.
• Sundry income from a fodder crop.
• The farmer sells his skills, such as survey or construction.
• Sale of indigenous seed, plants etc.

From the list above it is obvious that there are many different forms of income-generating on a farm. It is very important to determine the demand for various products. It is foolish to produce a vast quantity of a product if there is no demand for it. This would result in a loss of time and inputs that were invested in the product. Supplying a product depends on its demand; it is, therefore, possible to create the demand by following a marketing strategy.

Agri-business is normally a seasonal business. It sometimes takes a few years or seasons for a farm or agri-business to produce the product that it set out to produce.

However – there are “inputs” needed through the growth cycle. It is thus very important to plan very carefully – so that you make sure that when you eventually start making a profit you also recoup all the accumulative expenses that you had previously incurred!