INFORMATION ESSENTIAL RESOURCE IN MANAGEMENT DECISIONS

ON THE FARM LEVEL

INFORMATIA- RESURSA ESENTIALA IN DECIZIILE MANAGERIALE
LA NIVELUL FERMEI
ELENA TOMA, MIHAELA CRISTINA ANDREI, ROZI BEREVOIANU*
*RESEARCH INSTITUT FOR AGRICULTURAL ECONOMICS AND RURAL DEVELOPMENT
Abstract: What types of information should farmers keep, how much should they collect, and how is the best way to
organize it? These are legitimate questions. Farm records are an important resource too often ignored and not used
effectively. Farm accounting and activity documentation are basic record-keeping functions essential to effective
information management. In other words farm information systems are essential to sound management decisions because
without accurate information, decisions are based on intuition at best. A major management challenge is to collect, sort out,
and use accurate pertinent information for decision-making, while ignoring volumes of useless, time-consuming and
erroneous information and at the same time not overlook essential helpful information. Unfortunately, decision support has
many times been either unreliable or difficult to understand. Building databases based on the relationships between input
and potential yields, refining analytical tool, and increasing agronomic knowledge at the farmer level are yet to be
accomplished.
Abstract: Ce tip de informaii trebuie ns s dein fermierul, ct de multe date s colecteze i care este cea mai
bun cale pentru organizarea acesteia? Acestea sunt ntr-adevr ntrebrile care trebuiesc puse. nregistrrile de date la
nivel de ferm reprezint o surs de informaie ce adesea este ignorat sau nu este utilizat eficient. Contabilitatea la
nivelul fermei i alte documente de eviden sunt eseniale ns pentru un management eficient. Altfel spus, sistemele de
informaii la nivel de ferm sunt eseniale pentru fundamentarea deciziilor deoarece, fr informaii corecte, deciziile se
bazeaz adesea cel mult pe intuiie. O mare provocare a managementului este de a colecta, sorta i utiliza corect informaii
pertinente pentru luarea deciziilor manageriale, de a ignora volumul de informaii inutile, consumatoare de timp si eronate
i, n acelai timp, s nu treac cu vederea peste informaiile utile. Din pcate, luarea deciziilor manageriale nu are un
suport concret sau este incomprehensibil. Crearea bazelor de date pe baza corelaiei ntre input-uri i producie,
mbuntirea continu a instrumentelor de analiz i mbuntirea cunotinelor agronomice ale fermierului sunt scopuri
ce nc mai trebuiesc atinse.
Key words: information, decision management, information management system, source of information

INTRODUCTION
Good management decisions in agriculture, as in any business, are based on good information.
Times have changed. It is no longer enough to put in long hours behind the steering wheel or in the
saddle to be successful. Todays successful operators must not only work hard but also work smart.
This requires the accurate, timely information and a commitment to spending adequate time in analysis.
While this may be difficult during down-turns in commodity prices, it is all the more important where
apparently small management decisions may have large unforeseen impacts.
Without access to good information, making good decisions is much like trying to drive down
an unmarked road. Accurate and reliable information can provide the signposts and indicators
necessary for prudent decision making.
MATERIAL AND METHOD
The term 'information system' is a general term for a system that facilitates access to
information; however, a 'management information system' refers to integrated data sources and

information systems, which meet the particular needs and requirements of planning and decisionmaking.
In an ideal case, the major objectives of this kind of system are to:
reach an understanding of the relevant processes on the basis of the available historic
information. This element forms the basis for the development of models, required for
forecasting and simulation.
provide information on the current situation, especially for early warning purposes, for
instance related to issues impacting on food security, water resources or pest and disease
status.
forecast changes and impacts, either natural or man-made, as an element in vulnerability
assessments.
forecast the consequences of policy decisions and measures before they are implemented in
reality. This implies evaluating options for several given scenarios based on the possible
results and predicted consequences, and selecting the most acceptable alternative.
But the existing information systems consist of isolated data sets (soil type, climate, land, water,
forest and fisheries resources) and systems, aimed at management of specific resources: water, land or
forest; they hardly reach the second objective mentioned above. This is due to the fact that the
countries, in addition to operating within serious financial and human constraints, must grapple with
inter-institutional competition, limited agreement on harmonized standards, formats or quality
assurance and legal constraints.
In view of the broad scope and wide variety of planning and decision-making tasks, a
management information system can generally generate a range of outputs or results. These can be in a
textual (report) or graphical (curve, graphic) form. A number of desired outputs can be generated
automatically and periodically (daily, weekly) and transmitted to the relevant users in a printed or
digital form. These outputs generally serve as a check on the situation and the developments in the
field. A second group relates to specific, dedicated outputs, to assess the possible consequences of
certain measures or activities.
At the internal level of institutes and organizations, mechanisms for access to agricultural
information include: printed form (books, reports) or digital form (CD-ROM) through the library or
documentation centre; through the local network and internal website; through the local network and
Internet
Although Internet access is improving and expanding worldwide, the place of development in
most countries is not as fast as had been anticipated. Internet access is available mainly in the capital
and cities. The bottlenecks for Internet access are various: political: in some countries access to certain
(groups of) websites is blocked; technical: slow telephone or data lines, unreliable connections, much
interference; economical: access to Internet is too expensive.
While the Internet has become the preferred tool for distribution of rapidly changing and timesensitive information and data, print and CD-ROM still are effective carriers of more stable (reference,
historical) information and data. In this way, the user is less dependent upon the availability and
continuity of an Internet connection. Therefore, in addition to a moderate use of the Internet (where
possible), the printed form and CD-ROMs will remain an important channel for information
distribution in the years to come. A popular way to distribute information to a large group of experts in
the same discipline via the Internet is by mailing lists. These consist of a number of e-mail addresses
where information can be sent using just the name of the mailing list. Examples related to agriculture
are: the European Community's Agriculture News Digest. Mailing lists are a very useful tool to keep
abreast of what is going on in a certain field, or to ask a question to a worldwide expert audience. This
method is practical even with low-end access to the Internet.

Much valuable agricultural information residing in organizations and institutions never reaches
the Internet, either because the holders do not care to make their information available, do not wish to
do so, or do not have the necessary means or resources.
The need for up-to-date information implies the need for continuous collection, analysis and
dissemination of agricultural data on a regular, well standardized basis: monitoring. The information
collected should be relevant for all stakeholders: from the policy makers to the local population, to
ensure the relevance, quality and continuity of the process. It should be collected in compatible
formats, in minimal time and with minimal cost. Monitoring is also useful to detect possible negative
impact on existing agricultural systems, but for this purpose baseline data should be available as a
reference on the original situation.
As indicated previously, planning and decision-making in agriculture and rural development
require the integration of different types of information relating to different sectors and sub-sectors. To
adequately manage such an impressive variety of information, to allow transversal consultations and
interaction, and to ensure efficient, integrated access on a continuous basis, a number of steps need to
be taken at national and institutional level, such as: identification of all available data holdings and
monitoring activities, through compilation and regular updating of institutional, national and regional
metadata inventories; standardisation of data, information and tools, data and information from
different sources should be compatible and comparable, in order to be merged for larger geographic
coverage, or be compared to search for changes and trends; in a few cases, international standards exist,
in most cases they still need to be developed; establishment of a legislative framework in the form of a
data/information policy for agricultural data, who has access to the information, and at what cost and
conditions? This issue has received increasing attention over the last few years, but there is still a lack
of generic, international procedures and guidelines; ensuring the continuity of the ICT infrastructure,
this includes aspects like: regular maintenance and upgrading of hardware and software, availability of
spare parts; the main issue here is the investment in trained staff, software and equipment; maintenance
of (digital) archives - how long should (digital) archives be maintained? Which information is essential
for the organization or country? Who is responsible for their maintenance? How often should backups
be made and where should these be kept? The main issue in this case is to make these decisions and
allocate the required staff resources.
An important issue for users is the reliability of the data used for generating information
products. The quality of decisions depends on the quality of the underlying information. In several
countries the current threats to the natural resource base stem from poor and/or inadequate information,
amongst other causes including lack of an enabling policy environment. Information that is available
on the Internet is not necessarily 100% accurate. Often it is not clear what procedure the provider
applied to generate the information provided from basic data. In some cases, information may have a
cultural, political or strategic bias, which is difficult to detect. In some cases it is known that the source
can be trusted, but in other cases, not enough is known and therefore the information must be used with
great care. One way to better estimate the quality is to compare information from different sources, if
available.
Romanian scientists have a very important role to play in developing and validating
management information systems based on reliable data sets if they are to enhance their contribution to
the socio-economic advancement in our country. Lessons can be learned from experiences of more
developed countries. The need for the systematic integration of agricultural and socio-economic data to
improve policy and decision-making in our country cannot be ignored.
RESULTS AND DISCUTION
Once the decision has been made to develop or improve a farm information system, one might
ask what information should be recorded. At first this question may appear to have a simple answer,

how ever further consideration will show that the answer depends on the managers need for
information. It makes little sense to collect and record information that management has no intention of
ever using. On the other hand, many times it is the uncollected information that is most useful in
making complex management decisions.
A major management challenge is to collect, sort out, and use accurate pertinent information for
decision-making, while ignoring volumes of useless, time-consuming and erroneous information and at
the same time not overlook essential helpful information. Unfortunately, decision support has many
times been either unreliable or difficult to understand. Building databases based on the relationships
between input and potential yields, refining analytical tools, and increasing agronomic knowledge at
the local level are yet to be accomplished.
What types of information should farmers keep, how much should they collect, and how is the
best way to organize it? These are legitimate questions. Record keeping is not particularly exciting
work. In fact, it is usually quite boring. It is time consuming and has few immediate tangible benefits.
The benefits come from being able to make correct decisions based on credible, documented
information.
Any analysis is only as accurate and strong as the information used to support it. Farmers
typically concentrate on activities exhibiting tangible results. It is the role of the agricultural
professionals to provide technical assistance where needed, enabling the grower to perform the analysis
and make the decision. For example, only the insurance agent can provide the necessary rate and
policy information needed to make the crop insurance purchase decision. Lenders can provide interest
rate and repayment requirement information. Many record-keeping and accounting software packages
are commercially available. Typical features include double entry accounting, preparing enterprise
budgets, generating complete coordinated financial statements, and calculating the financial
performance measures. These packages are relatively inexpensive. Moreover, professional assistance
is available from a multitude of private companies and institutions that specialize in helping farmers
with their record-keeping and accounting activities.
But the information needed for management decisions may be obtained from many other
different sources. Generally the best source of information, if available, are records kept by the farmer
himself. These records are generally more accurate and up-to-date than the information available from
other sources. When available, an operations own accounting records are usually the most helpful
source of financial information. If the farm uses an accountant to prepare tax returns, this may be a
good starting point for a financial records system. In addition, banks generally require financial
statements and budget information before any loan is made. In addition, information may be available
from the research institutes, universities or local farm management association on the financial
structure and costs of production for farms in specific areas. While keeping records accurate and up-todate can require a large commitment of time and effort, it is the analysis of these records that makes the
struggle worthwhile. Some of the uses of farm records include: legal and institutional uses, financial
control and budgeting, and whole farm analysis and management. A complete, accurate set of records
will provide the necessary information. Agricultural managers should be concerned even with cash
flow management. It is an important tool, not only in determining when and how much to borrow, but
also in deciding when and how much to repay. Preparing a realistic cash flow budget should be
regarded as a vital component of the annual record-keeping process. Preparing such a budget can help
the manager work through various strategies on paper before it actually happens as the year unfolds,
thus avoiding costly mistakes.
Perhaps the most important and often overlooked use of a farm record system is for analysis. A
record system that meets income tax reporting and credit application needs provides virtually all the
information needed for evaluating business performance. For example, good records provide the
manager information on what variable and total costs of production are and whether the goals of the
marketing plan and cash flow budget are being met. A thorough analysis of such records can supply

information on strengths and weaknesses of the business, changes in business operations that worked
and did not work, profitability of the business, and the financial position of the business. All of this
information reflects on the performance of the farm unit.
If records have been compiled for limited or critical resources, a whole farm analysis can be
performed. Such an analysis can describe whether the sources are being over or under utilized. This
may also help management identify new opportunities for income. For example, if the forage resource
was under utilized, there may be opportunities to lease out forage or to lease additional cows to harvest
the excess. On the other hand, if forage was in short supply, perhaps the manager should consider
strategies for obtaining additional forage, reducing the number of cows, or intensifying the
management of the resource through rotational grazing. Thus, long term productivity of the resource is
protected from damage caused by over use.
Without a system for maintaining complete and accurate records, management decisions must
be based on many different methods that are available for collecting resource information. There is a
number of options from paper forms to be filled out by hand to computerized systems that store
everything electronically. The best system is one that records, organizes, and reports the information in
a timely manner in a form that is meaningful and easily analyzed. A system that is easy to use or is
user friendly is even better. Financial records may have the most options for tracking and
management. Systems for maintaining financial records extend from simple checkbook type hand
record systems for cash expenses to sophisticated computer-based double-entry accounting programs.
New graphics-based computer operating systems and software that runs can help ease the way
to adopting the double-entry accounting. Furthermore, many software packages designed for the typical
household or small business can be a valuable tool in an agricultural setting. The primary consideration
when attempting to choose a record keeping system is whether the system will supply the information
needed by the manager. Many easy-to-use software packages collect only basic accounting information
information easily obtained from a checkbook register. Taking the time and effort to enter the
information into the computer does not automatically mean the software will supply the information
needed. On the other hand, if cash records are what management requires, it makes little sense to invest
a lot of time and effort entering details that no one will use.
One of the attractive features of a hand record system is that it can be modified to fit a particular
situation or can accommodate additional records without the high cost of purchased software or the
requirement of learning to run a new computer program. In fact, for those who do not have a clear idea
of the types of information they need, a hand record system is an inexpensive way to experiment until
those needs are discovered. If an accountant is used to prepare tax reports, they often have valuable
insights into what will work best for their information needs. Finally, bankers, consultants, and other
agency personnel can be helpful in identifying record systems to satisfy specific needs.
In respect to those mentioned above, in present the Research Institute for Agricultural
Economics and Rural Development coordinates two research projects to provide help to Romanian
farmers for keeping a clean, up-to-date and practical database regarding the most important production
information.
The firs projects objectives are looking for: the efficiency growth of the agricultural
exploitations and adopting of the managerial systems for the requirements of a society hading for
knowledge and access to information, the creation of a informational base needed to found and/or to
develop the agricultural exploitation, the consolidation of the best mechanize systems on module of
exploitation to correspond to the cultural/growth technology which the system involves, the growth of
the technological performances, the efficiency of the mechanization and automation, the quantitative
and qualitative growth of the productions, the labours productivity growth and last, but not least the
decreasing of environment pollution. The specific objective targets are: for vegetal production: the
establishment of a structure specific to the cultures, on exploitation module, the agrotechnical demands
of every culture and the economical necessities at zone level, the agricultural works which are made on

types of culture and periods of work, the agricultural equipments needed for working: analyzing the
succession of the technological ways of the culture and of the energy base from the module exploitation
on periods of time; for animal production: establishing the installations and the technological tide on
raising module, the successive analyze of the technological ways and of the energy base on module; for
economical aspect: the annual assessing of the mechanization costs and nevertheless the exploitation
costs in determining the economical efficiency; the determination of budget income and expenses on
exploitation module, for different size and dimensions; the quantification of the obtained profit; the
evaluation of the development fund, special for investment in the agriculture technique. The main
purpose of the project is to create technical and economic practical guides, in written form, which are
made to assure at the level of agricultural, vegetal and animal exploitations the application of a
successful management and their economic, competitive growth. These guides for agricultural
exploitations will contain all the information needed to cultivate the land and to breed animals
(elements regarding the agricultural technologies, the optimum number of installations and equipments
used to realize these works, etc.) that will offer the best use of the production factors and capacity and
will assure also the farm efficiency.
The second projects objective is to project a computerized program to analyse the production
activities based on physical and economical indicators which, in parallel with other accounting
programs, allow farmers to keep a more analytical evidence of expenses and incomes and help them to
plan the production budget. The specific objective targets are: to establish the present information
resources; to define the indicators needed for the analyses of farm efficiency and their calculation
methods; to project the pilot program based on the correlation of the identified indicators in a logical
frame; to achieve, test and validate the programs functionality; to create a user guide and an online
demonstration of the program; to organize training sessions with the potential users. The scope of the
project is to stimulate the farmers for using the ICT applications on the farm level with the purpose of
better self evaluation regarding the production activities. The economical data will be available in
electronic and printable formats, and will contain economical information that is not found in keep
booking record, such as: production costs per unit, crop and animal budgets, variable and fixed costs,
gross margin, etc.
CONCLUSIONS AND BIBLIOGRAPHY
In conclusion, it takes time to document farm performance Farm records are an important
resource too often ignored and not used effectively. Farm accounting and activity documentation are
basic record-keeping functions essential to effective information management. The final word on farm
information systems is that they are essential to sound management decisions. Without accurate
information, decisions are based on intuition at best. More information is generally better than less.
However, information that is available when it is needed easily outweighs information that takes hours
or days to compile. Thus without access to good information, making good decisions is like trying to
drive down an unmarked road - a difficult, if not hazardous proposition.
ANA URSU, Technical-economical practical guidelines for insuring a successful management on vegetal and animal
production system, CEEX Project, ctr. 49/2005
ELENA TOMA, Software for the economical and financial analysis for economic performance of the agricultural
exploitations and efficient use of the production factors, CEEX Project ctr. 124/2006
HEWLETT, JOHN P., Farm/Ranch Information Systems, Managing for Todays Cattle Market and Beyond magazine,
University of Wyoming, 1998, pg. 1-4
CRANE, LAURENCE M., Record-Keeping: Essential to Risk Management, University of Minnesota Extension Service,
2006, www.extension.umn.edu