Using Indicators to Maximize Results in Agriculture

The agricultural sector presents several characteristics that distinguish it from the other sectors of the economy. These include:

  • the land being a “participant” in production
  • climate dependence, determining selection of crop variety, species and planting times
  • dependence on biological conditions, and
  • incidence of risks, as agriculture is affected by issues arising from climate, pest attacks, and price fluctuations on the international market.

It can be said that agriculture is based on four elements: nature, technology, labor and capital, the last of which is the consequence of the others. Nature influences what can be cultivated, but the final determination also depends on the technology, capital and labor available. In this sense, technology may attenuate the unpredictability of nature, but in the face of global competition it does not suffice; people are the differential!

These elements, alone or in combination, can bring to the business both benefits and challenges. To successfully handle the latter, the rural entrepreneur’s management of his or her business must include the performance of the property. For this, a system of indicators should be used, not only for control, but also for adding value and helping to project future performance, as part of a learning process. The indicators should be criteria-based, consistent with the organization’s objectives, economically viable, easy to understand, stable, and traceable over time. Their data should be simple to collect.

Based on the peculiarities of the sector, the following indicators are recommended:

  • Grain quality index: The objective of the business must be 100% of production with quality, minimizing waste. This goal must be approached gradually so that when the desired level is reached, it is allowed to increase and become more challenging.
  • Area productivity index: This indicates production per area in a given period, for example, the number of bushels per hectare in a particular month. The higher the result, the better it is for the business.
  • Crop sold index: This indicates the percentage of the crop that sold. In this way, the business can observe demand.
  • Production profit margin: This indicates the margin obtained in the production of a particular volume/weight of product.
  • Accident index: This shows the number of accidents occurring in a period and should have a goal of 0 (zero). Agricultural work presents occupational hazards of varying severity, such as exposure to pesticides, weather, physical wear, poisonous animals, noise, dust, heat, contact with machinery/equipment, and others. For this reason, this indicator is essential.
  • Employee productivity index: This shows how much an employee is effectively impacting the company’s production results. It can be measured in your currency of choice per employee.

Like performance indicators for livestock, the calculation period for indicators in agriculture will vary according to the business, the market, competition, and the owner’s need for information. They can be calculated per crop, annually, semiannually or monthly.

Yanne Cunha Alves Souza – yanne_cunha@hotmail.com

Annibal Affonso Neto – annibal@terra.com.br

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