Dear Guo Zhang,

Choosing what crops or livestock to produce is an essential decision of any farm business. One critical factor in making that decision is the cost of producing the "enterprises" being considered. This is known as enterprise budgeting or cost of production budgeting. Enterprises are a single crop or livestock commodity that produces a marketable product. Cost of Production (COP) budgeting consists of estimating the costs associated with an enterprise and the expected revenue. This Factsheet outlines the process and use of COP budgeting for farm-level decision-making.

In economic cost analysis, the objectives of the analysis provide the standard against which costs and benefits are defined. Simply put, a cost is anything that redWhat Is A COP Budget

While the format of COP budgets can vary they typically include the following sections.

1 Revenue: the gross revenue from crop or livestock sales before any expenses have been deducted.

2 Direct Variable Costs: expenses for the production of a specific commodity. These change depending on the level of production (i.e., seed, fertilizer, pesticides and feed).

3 Indirect Variable Costs: expenses used in producing all commodities on the farm (i.e., fuel, labour and utilities). These also change depending on the level of production.

4 Fixed Costs: expenses that remain the same regardless of the level of production (i.e., property taxes, fire insurance and depreciation).

5 Net Profit (loss): revenue minus all variable and fixed costs.

Costs of Agricultural Projects

1. Physical goods

2. Labor

3. Land

4. Contingency allowances

5. Taxes

6. Debt service

7. Sunk costs

8. Tangible Benefits of Agricultural

9. Increased production

10. Quality improvement

11. Change in time of sale

12. Change in location of sale

13. Changes in product form (grading and processing)

14. Cost reduction through mechanization

15. Reduced transport costs

16. Losses avoided

17. Other kinds of tangible benefits

18. Secondary Costs and Benefits

19. Intangible Costs and Benefits

uces an objective, and a benefit is anything that contributes to an objective.

https://www.researchgate.net/publication/215524569_Energy_economic_of_small_farming_crop_production_operations?ev=prf_pub

http://www.omafra.gov.on.ca/english/busdev/facts/08-055.htm

Article Energy economic of small farming crop production operations

The above answer br Dr. Baboo is excellent and gets my vote.  I cannot compete with that.  I have a brief economic analysis I did many years ago on the costs and benefits of gully treatment in 1989 in my researchgate listing.  Maybe it would have something to apply toward your intent.  

We undertake economic analyses of agricultural projects to compare costs with benefits and determine which among alternative projects have an acceptable return. Many of the costs of industrial agriculture have been hidden and ignored in short-term calculations of profit and productivity, as practices have been developed with a narrow focus on increased production. 

I agree with Dr.Prem Baboo and invite you to study below links:

http://www.ucsusa.org/food_and_agriculture/our-failing-food-system/industrial-agriculture/hidden-costs-of-industrial.html#.V5EbTuvJvIU

http://web.stanford.edu/group/FRI/indonesia/reader/Output/gittingerreader.html

Thank you very much for your answer in detail, Dr. Prem Baboo, and for your help, Dr. William F. Hansen and Behzad Shokati.  I want to study cereal crops, including paddy rice, wheat, and corn, in China. The main production system of these crops is a small-household system in China, which introduces difficulties in this estimation at a provincial or even national scale. I'm studying the documents you offered and hope to get your further help in future.