University of Maryland Extension

Setting income goals

Dale M. Johnson, Extension Specialist, Farm Management

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Income is dependent on the amount of each agricultural product that you plan to produce and sell, as well as the market price for those products. So as you plan production and marketing you should also be setting your income goals. A good systemized approach for doing this is outlined in the book “The Organic Farmer’s Business Handbook” by Richard Wiswall. Farmers are encouraged to get this book which goes into much more detail than can be covered in this chapter.

Restricted funds: a special kind of income

Sometime income comes with restrictions on how it may be used. For example, most grants are awarded for specific purposes (specified in the grant proposal). If a grant is administered on a reimbursement basis, you will need to make the approved expenditures and then submit records of the expense to the granting agency for reimbursement. If the grant funds are entrusted to you, at the end of the grant period you will likely need to return any funds that cannot be shown to have been spent on the approved expenses. For examples of how financial statements can be modified to keep track of restricted and non-restricted funds, see the additional resources at the end of this chapter.

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