Introducing Activity-Based Costing in Farm Management: the Design of the FarmBO System

Recent research points out that farm managers do not rely on adequate informative supports in their decision making processes. We propose a model of a Farm Management Information System which integrates Activity-Based Costing approach. In describing the design and development of the \“FarmBO\” system, we provide a detailed functional requirements definition and the description of a working system prototype. The solution is designed to show the impact of general costs on the different crops, allocating them on the basis of the production cycle complexity. It includes a report section directly linked to the database which provides crop balance sheets and simulations in terms of what-if analyses. The system allows farm managers to 1) analyze deviations between budgeted and actual costs; 2) compare crop balance sheets across different years; 3) perform sensitivity analyses. We account for prototype validation in two farms and discuss results and possible developments.