The study of economics is all about the allocation of scarce resources among the unlimited wants in society. It requires constant interrogation, experimentation, intervention and diversification of practices. However, for the majority of small scale farmers, farming is a way of life that is unchanging and has often never been interrogated deeply enough. More so, it tends to be tradition bound and therefore does not allow frequent experimentation with other types of farming. Unfortunately, over time, as the land has become more and more scarce, this traditional approach to farming has continued to result in less and less productivity.

The goal of this module is therefore to transform the traditional farmer’s mind set from that of a farm owner to that of a firm manager. To do so, several pertinent economic fundamentals of a firm will be covered in the context of farming and in contrast to traditional approaches, so as to demonstrate the need for a paradigm shift.

This sub-module defines the concept of economics, provides an overview of the concept of a firm and explores the centrality of profit in its models.