Measuring farm profit
Measuring farm profit is surprisingly complicated. This paper explains the assumptions we make when calculating farm profit, and why.
At One Acre Fund, we have found that measuring farm profit is surprisingly complicated, requiring a number of important assumptions. The purpose of this paper is to outline the major assumptions we have made and the rationale behind those assumptions. We want to share this information in an effort to: (1) transparently communicate how we calculate our farmer impact numbers; (2) be helpful to others who may need to make similar decisions about their measurement methodology; and (3) ideally initiate a sector-wide conversation in order to learn from our peers and hopefully to eventually contribute to greater standardization around how smallholder farm profit is measured.