Seed production, involving procurement, processing and storage, quality control and certification. Seed marketing, taking into account marketing, market research, advertising and promotion, sales and distribution. Administration and finance. For a company planning a seed production programme the working capital needed to procure and process seed has to be assured. If it is not to be financed out of existing resources then short-term loans are required to ensure that there is sufficient working capital.
Seed held in stock at the various stages of processing also has to be financed.
This is a significant cost item and there may be serious financial consequences for a business that has high stock levels. The manner in which costs are allocated and presented will depend on the accounting system used. A simple presentation of a Profit and Loss Account demonstrates how income and costs relate, as shown in Figure 6. Costs which are common to the whole business, e.g. the central management or the fixed cost of owning and operating a breeding station and processing plant, can be allocated across products. Although some products will be more profitable than others, and will be able to bear a greater share of the overheads, it is important to cost each product as honestly as possible for management control and decision-making purposes.