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1. Budgeting is adaptable to individual farm situations. 



2. Budgeting is a framework for dealing with prices, costs and ! 

 yields and can be used to analyze the effects of changes 



in any of these economic variables. 



3. Budgets can be adjusted to reflect the differences in 

 managerial ability. 



4. Budgeting enables the comparison between alternatives. 



5. Budgeting can be used to analyze the impact of a specific 

 adjustment (partial budgeting) or changes affecting the 

 entire business (complete budgeting) . 



Budgeting Applied to an Orchard Situation 



Before budgeting begins, it is necessary to select the alter- 

 natives for which budgeting is to be conducted. In the hypothetical 

 example illustrated in this paper, we wish to evaluate the economic 

 consequences of full row spraying for pest control versus alternate 

 row spraying. This is an excellent example of a decision where 

 partial budgeting is appropriate. 



Partial budgeting is used when considering a change in only one 

 aspect of the operation. The focus is on only those things that will 

 change as a result of the decision. Thus, the information needs are 

 identified as those changes. Identifying the nature of the changes 

 that will occur is the first step. In the problem of evaluating the 

 impact of alternative row spraying, we can identify the following 

 factors : 



(1) Spray materials 



(2) Tractor and sprayer time 



(3) Labor time 



(4) Fruit damage 



(5) Yield 



There may be other factors that could be relevant but are non- 

 quantifiable or involve information that is not available. For 

 example, reduced soil compaction may be beneficial while increased 

 mite or aphid populations may have a long run negative impact on 

 vigor and yield. However, at present information is lacking on 

 these impacts and one must, therefore, assume they have no effect. 



" Quantifying the Effects of the Alternative " 



The next step in the analysis requires the estimation or projection 

 of the magnitude of the effects on each of the factors. This step 

 can be illustrated by the following set of questions: 



