The human being, has always looked for the way to be able to feed itself or to be self-sufficient, through hunting, fishing and sowing. He quickly realized that he possessed an essential resource for life, because he could generate food through the use of the Earth, which with a little work, food for great seasons, without much physical exertion; This is what we now know as agriculture.
Later, in addition to cultivating the land, they would begin to domesticate animals, not only to consume them, but also to cross them to maximize their use, thus producing livestock. Little by little each of these techniques, sciences or arts have evolved, to the point of allowing you not only to satisfy your own needs, but at the same time to be able to negotiate or exchange your products or crops, for money or other products that you needed. With the commercialization and marketing, a tool had to emerge that would allow to accurately quantify the income and expenses that were being incurred in order to exchange or sell said products or services. In this case accounting was born, which allows through some processes or steps, know the costs and expenses necessary for the production or provision of services, and thus determine whether it would generate some utility or on the contrary if we would have a loss. For no one is it a secret that before the oil exploitation since 1926 in Venezuela, we were recognized as one of the countries with the largest agricultural production in Latin America.
The majority of the income came from the export of this agricultural and livestock sector. This is because we have some of the best soils for this type of activity worldwide, which do not do acts for this type of activity. For that date crops like Coffee, Onion, Tomato, Banana, Sugar among many others were produced, reason why it had to count on a suitable system that allowed to know in advance to these Venezuelan agricultural producers how much it would cost to produce and how much would be the profit of the same, that is where what we know today as agricultural accounting begins in Venezuela. It must be indispensable for the Venezuelan population to know as much as possible about the agricultural, agricultural, and forestry and fishing activities, in order to avoid the process of transculturization in the country's food and work habits, and to promote the development of this economic sector, since they represent an important source of resources for the Venezuelan country's finances.
In spite of all this in Venezuela, it is not a common practice to have an accounting management in the production units, because most of the producers carry the few information registers in a very rudimentary way and in a non-technical way. In most cases the information is only based on the so-called ordinary income and a few production expenses without separating or differentiating which sector each belongs to. What brings as a consequence that decision-making is done experimentally, with which success is usually only achieved through luck, and if so, production could be very questionable. Ignorance of the importance of keeping accounting records can be one of the main causes that limit the adoption of agricultural accounting in agricultural production systems.
Venezuela is a diamond in the rough, in terms of agricultural accounting; What does this mean? Due to the lack of fiscal control that is applied to the production units, they do not see or feel the obligation to keep an agricultural accounting in all its extension. But on the contrary they only handle it in a very superficial way. By being applied in the right way, it would be a decisive information point for the achievement of the objectives of the production unit, while generating better benefits or profits. Little by little, Venezuela will have to evolve and change the economic model, which will reassess the production activities of the country, sectors such as agriculture and mining, will benefit while the oil sector will fall to the detriment of the previous ones. It is for this simple reason that it is the obligation of each accounting student and accountant to graduate, have the duty to prepare in the most appropriate way, through practical and academic studies to bring the best control of the information of this type of activity in order to become in an essential branch of the new economic generation of the country. The public accountant is that person who not only handles the income and expenses of the company, it must be the confidant, advisor and analyst of the information so that it can reach its destination, and be of help to the production unit .
So much talking about agricultural accounting makes us think, What is Agricultural Accounting? It is a type or branch of accounting allows a broader and more accurate understanding of the results obtained economically speaking, and thus analyze whether it is feasible to continue with the crop or production process or otherwise change it always with the aim of improving and maximize revenues. Agricultural accounting is not something that can be handled lightly, the accountant must know basic concepts or terms related to the field, to make an appropriate use of it and thus have a starting point of production processes . This type of accounting is exclusive to the agricultural sector and whoever manages it must have special skills in terms of livestock management and movement, planting periods and land management.
One of the terms that the accountant must manage when it comes to agricultural accounting, would be that of agricultural activity that is nothing more than that which has to do with land, labor, capital. The earth is the superficial layer that surrounds the planet, it generates life and is the indispensable factor for agricultural activity, without it this activity would not exist. The work is all the tasks that are done to the land to adapt it or adapt it to the type of planting or productive process that we are going to apply, that is, it is that manual or mechanized work to improve our land. To carry out each of these activities the producer needs to have an indispensable economic or financial element called capital. Each of these factors mentioned above is handled by a person in charge of its correct distribution and application for the maximization of the results which is known as Agricultural Entrepreneur. When talking about livestock activity, we refer to the production of cattle, whether cattle, sheep, goats, pigs, poultry, among many others. That is to say, we no longer sow but we raise to produce.
Now, one of the greatest needs for which an agricultural accounting is applied is to know about production costs. But what are costs? Are those expenditures or outflows of money in order to produce or generate a product or service. Then with the above mentioned we can analyze that a cost from the agricultural point of view, is not more than the acquisition of the inputs and products necessary for agricultural production such as seeds, animals, machinery, labor.
Of course for a better understanding, agricultural accounting should separate each of these costs and group them according to their nature or sector where they were necessary. For example, costs related to land, such as leasing or acquiring land, when land is not owned, this is essential because, as mentioned above, without land there is no production. Expenditures for labor, whether temporary or permanent, go directly to labor compensation costs. Other costs that must be divided are those related to the means of production; the durable ones like the acquired machines and facilities that could be used by more than one production process. And the consumed ones that are not more than the seeds, fertilizers, herbicides, among others. Finally, within these costs we have externally contracted services such as the transport of material or animals and operating costs, which, as the name implies, are necessary to carry out production activities such as electricity, fuels, etc.
The calculation of agricultural costs is not unique for all products, which means that depending on what we want to produce we will have to apply a different method. When we talk about annual crops, that is to say, crops started and finished in a period of no more than a year, and whose productive life is exhausted within this same period, we must separate these costs into imputed and monetary ones. When referring to permanent crops we talk about crops whose productive life will continue for more than 1 year of production, crops that are planted and after a relatively long time reach the productive age but which would generate important costs before receiving the first income.
When it comes to livestock, it must be related to agricultural activity because animals feed on grass and grass products of agriculture, but at the same time you can use animal power to serve agricultural activity. The livestock of a production unit can be very varied. This can go from the Cattle, like the cows and bulls, that can be bred for the fattening, the production of milk or for the young. This can also be used for the dual purpose, that is, for the fattening of the animal and the production of milk at the same time. In other cases they can also be used as working animals and even as breeding animals only.
When we refer to Equine cattle, we refer to horses, mares and foals. Its exploitation goes from the procreation and sale of the same. Porcino, for its part, refers to pigs that are mostly exploited for fattening. The sheep, sheep, essentially this type is exploited for its wool. And the Caprino, which includes the goats, exploits its milk and meat.
Other less used types of livestock exploitation are Fish farming, which refers to fish as cachamas, Coporo for breeding and sale, Beekeeping as bees for their honey. Poultry, like chickens, ducks, turkeys.
Although the agricultural accounting belongs to or is a branch of the accounting, it has unique procedures and very different from that of general accounting; therefore, their administrative management are different from those of other activities, this being motivated by the fact that it is used in production systems. The agricultural activity belongs to the primary activities, so called, because it is from there that the basic or primary products for our consumption or use come, for example agriculture, livestock, fishing, logging, are just some of the activities of this branch.
The aforementioned activities can be exploited individually, although there is a pair that can coexist efficiently and is widely used, such as agriculture and livestock, which together or interrelated production process turn into agricultural production. This is no more than that part or surface of land that is dedicated, not only to the production of agricultural products, but also livestock products are also obtained. This is managed as a single productive unit called the Agricultural Production Unit. This mode of production allows a more adequate use of land, and in the same way you can take advantage of the income of agricultural activity to strengthen or enhance the activities of livestock, or vice versa.
Why is agricultural accounting important? It is important because previously the agricultural producers did not have an exact knowledge of the economic situation of their production unit, this knowledge was generally empirical, obtained mostly by experience. But nowadays through agricultural accounting you can know exactly the economic position of an agricultural company, through scientific research, which will allow me to know the real costs necessary to obtain a profit or utility in the production process.
In other words, it will be known first hand what has been invested, how is the administrative activity and the evolution of the productive unit. As well as the records of all operations, and the classification of costs and revenues which will allow better decision making when planning new projects and plans.
Nowadays, due to the fall in oil prices, it is necessary that Venezuela change its economic model, and once again we become a country dedicated to agricultural production; Of course, this is easier said than done, because if the national government does not support small, medium and large production units, but rather is dedicated to expropriate the few existing agricultural units we will never leave this hole in the one that we have entered.
It is for this reason that we are living in Venezuela, due to the high inflationary levels and the loss of purchasing power of companies, the importance of having a correct understanding of the costs to incur necessary for the production of an agricultural unit. This with the purpose of being able to anticipate in an adequate way the indiscriminate increase of prices and lack of inputs that could paralyze the productive process of the company. However, agricultural accounting alone can not generate positive results, but we have an accountant who has the appropriate knowledge to know how to manage these costs, and can adequately separate them from expenses in order to present information that is understandable not only for him, but for the administrator and shareholders of the production unit. In the past, agricultural producers were reluctant to change their production model, because they did not believe in this scientific knowledge or mathematical calculations.
Currently, the vast majority recognizes that it is through this information collected by agricultural accounting, that decisions will be taken as to what kind of activities the company encompasses, in addition to the necessary investments and the benefits to be obtained. . New technologies and new production systems force agricultural producers to adapt, which through a good management of accounting information could facilitate this process and make it less confusing for the owner or shareholder of the production unit . It can be seen that the world has evolved, each country tries to exploit its resources to the maximum and in this way be able to compete with its own advantages and limitations against other countries. But Venezuela continues to lag in this sector, despite being one of the richest countries in the world in terms of soil, minerals and oil, we are still a monoproductive country, we focus on an oil that gradually loses value and that its time runs out quickly. When really from our point of view, we should concentrate on going back to our roots and becoming the multiproducting country that we were in the last century. Only need visionaries to support the primary sector and above all agricultural production, that the government becomes a fundamental part of this transformation, by providing credit and financing to those who want to re-boost this sector, and not only monitor that these are actually used for these activities, that is, they become guarantors of the process.
The function of the agricultural enterprise is to produce either goods or services, and this function is executed from the interaction of production factors: capital, labor and land, coordinated by the man who is in charge of defining the objective of During the development of the productive process, the company uses inputs. Agricultural accounting will become an essential tool for managers and shareholders of the production unit that wishes to be successful, but at the same time it must be carried out according to generally accepted accounting standards and principles, in addition to complying with the new International Standards. of Financial Information (IFRS) or International Accounting Standards (NIC), which for the case of the agricultural sector would be based on IAS 40 and 41. That is, in this case the accountant should not only have knowledge about the unit of production, but also must have full management of these rules for the proper presentation of financial statements. It is for these reasons, that the administrator or owner of the production unit must be very careful, when choosing the person or accountant responsible for carrying and managing this information, because their incorrect manipulation would generate erroneous calculations in the costs of production and therefore complicate the success of the production unit. It must be able to handle possible inconveniences that may arise, whether of a climatic, animal or human nature.
If agricultural accounting is the solution, to achieve the objective of the production unit. Why do not everyone apply it? Simple; applying this accounting model will generate new costs both in computerized systems, skilled labor, among many others. That the agricultural producers can consider little necessary. That's when the risk and value initiative would come into consideration; Is risk advisable ?, for us yes! As to adapt this type of accounting to any production unit we would think of an immediate future, thus ending the assumptions and therefore deal with real facts. Each unit of production must adapt to their needs according to their levels of economy and production, but if new technologies are to the benefit of productivity, in the same way agricultural accounting will always be in favor of the improvement of the production unit.