Making Big Decisions: to Rent or to Buy Farm Machinery?
A few decades ago, farming seemed like a simple job. World hunger was a fairly unknown problem and farmers were able to produce enough food to feed the entire global population. Due to the rapid increase in population, the situation has drastically changed. Today, world hunger is affecting 815 million people, which is 11% of the global population. Besides that, the climate change is seriously affecting natural resources, thus interrupting the process of food production.
Faced with world's most pressing problems, farmers are challenged to produce more food with fewer resources. This is the point where a simple crop production turns into a complex business that requires efficient and sustainable farm management.
In order to be productive, profitable, and at the same time sustainable, farmers have to carefully manage even the slightest detail in crop production. This also includes making big farm management decisions; for instance, whether to rent or purchase farm machinery, production facilities, farming implements, and other types of farm equipment that require serious investments.
Adequate Machinery Is Half of the Work
Farming is not an ordinary job. It's a way of life. However, farming requires a lot of sweat and hard work. For this reason, adequate farm machinery and equipment significantly facilitate every farm practice. Today, farmers can use various machinery, production facilities, farming implements, and many other types of equipment, during the entire farm season; for instance:
Soil preparation; plows, discs, and harrows
Sowing or planting; sowing or planting machines
Crop protection; agricultural sprayers
Crop nutrient management; fertilizer spreaders
Crop maintenance; mowers, soil cultivators, irrigation system, protection nets, hail protection technology
Crop and field monitoring; weather stations, yield mapping, sensors, drones, satellite imagery
Harvest; harvesters and combines
Post-harvest management; machines for hay raking, packing machines, storage and processing facilities, transport equipment
Besides aforementioned farm equipment, tractors and trailers are an integral component in almost every crop production.
Since all of this costs a lot, purchasing farm equipment is a serious commitment of capital, which can have a major impact on a farmer's business. In some cases, it's safer to rent farm machinery than to risk high and long-term investments. However, both purchasing and renting have their own advantages; for example:
How to Make the Proper Decision?
When making big decisions in farm management, one of the most important things is to completely be aware of your situation. Therefore, the choice of purchasing or renting farm machinery will depend on the following questions:
How much will it cost to purchase or rent certain machinery, production facility, farming implement or some other type of farm equipment?
What is your current financial situation; can you afford any investment?
Do you need certain farm machinery during the entire farm season or periodically?
Are you ready for maintenance and service when it's needed?
Do you have the ability to operate the machine?
Do you really need that machine, facility or equipment on your farm?
Is there a possibility that you will no longer need this type or size of machinery, facility, or equipment?
Every farmer, as well as every crop production, is unique. For this reason, it's hard to give a unique recommendation whether a farmer should purchase or rent farm machinery. However, keeping in mind advantages of both purchasing and renting, as well as being aware of your own situation and needs, is definitely a good way to make a good decision.
On the other hand, there are many farmers who already have certain farm machinery, whether it's purchased or rented. For them, it's important to track machinery utilization in order to decide whether their original decision was good enough.
One powerful tool that can help a farmer in making big decisions is Agrivi farm management software. It allows farmers to track complete utilization of their farm machinery per crop productions, seasons and related farm activities. In doing so, a farmer can see total work hours of each machinery, as well as used fuel.
Besides that, Agrivi farm management software provides insight into machinery costs as well.
Having a clear insight into farm machinery usage and costs, a farmer can easily decide whether to continue with renting or purchase farm machinery, as well as decide whether to keep purchased equipment or sell it and then move to renting.
If you have any troubles with making this big decision, sign up in Agrivi and clear all your doubts.
Text sources: WHO || The Pennsylvania State University