Farm Budgeting: It is a method of estimating expected income, expenses and profit for a farm business. Budgeting can be used to select the most profitable plan from among a number of alternatives and to test the profitability of any proposed change in plan.It involves testing a new plan before implementing it, to be sure that it will improve profit.
Budgeting is an essential requirement of any farm's management and is an integral component of overall farm planing. While farm planing and indeed budgeting can and is as complex and sophisticated as one desires.
Types: Generally speaking there are two types of farm plans. They are:
1. Partial budgets.
2. Complete budgets.