Journal of Resources Development and Management www.iiste.org ISSN 2422-8397 An International Peer-reviewed Journal Vol.8, 2015 86 A Critical Review of the Challenges of Budgeting in New Agricultural Business Enterprises in Kano State ABDULLAHI, SADIQ RABIU Department of Accounting, Bayero University, Kano, Kano State ORINYA, JOHN OGBU Department Of Business Management, Federal University, Dutsin-Ma, Katsina State AJAWUIHE, CLETUS M.SC. Management Student, Department Of Business Administration, Bayero University, Kano, Kano State Abstract Budgeting involves a systematic business analysis and projection of an enterprise’s activities in a manner that specific objectives to be achieved in a defined time frame subject to certain resources are clearly established. Established businesses tend to ride on existing data and experiences to plan the future. This paper focuses on how new entrants in the agricultural business would overcome the peculiar handicaps of dearth of historical data to enjoy the rich benefits of effective budgeting. Thus, the paper explore the context of new agricultural business enterprises to determine how far their peculiarities impact on the companies’ budgeting processes. Guided by information from the review of relevant literature, the researchers analysed data from a survey of selected farm holdings in Kano; that is, those farmers that have been in business for not more than three years. The results show that farmers acknowledge the relevance of good budgeting for their business success, but they experience budgeting frustrations in the earlier years of operation, especially within the first three years, than in later years. When the business activities of these farmers are paired with budgetary information of more established firms, the researchers found that carefully selected market information of established competing firms can greatly enhance the budgeting success of new agribusinesses in Kano. Keywords: Budgeting, Agribusiness, Enterprise Budgets, Budget Evaluation, Strategic Fit. 1.0 Introduction Agriculture is an all for all business in Nigeria and in many countries of the world. From year to year there has been growing emphasis, albeit the eulogies of politicians in Nigeria, with a crescendo on the strategic relevance of a robust agricultural industry for the Nation (Atofarati & Monye, 2013). Notwithstanding this boisterous acclamation, a great proportion of the Nation’s foods, feeds and raw material resources from agriculture are imported or smuggled into our markets (Manyong, Ikpi, Olayemi, Yusuf, & Idachaba, 2003); while the Nation’s teaming youths languish for want of crested city jobs, and the expanse of arable land from North to South, East to West, lie forlorn for want of an enterprising transformation, an asset robbed of its blessed fortitude to feed and enrich generations untold. Many of those that are taking up the gauntlet and adventuring into exploring the richness of nature are fraught with many challenges. The lot of the neophytes in the business is an admixture of benign hope fraught with frustrations. One of the more common challenges new farmers face is coming up with reliable numbers to use in their financial projections. Without a prior history of commercial production where do you get figures and how do you know whether they are trustworthy (Peabody, 2007). In recent years there has been an explosion of enterprise budgets available on the internet. Several of them come with spreadsheet templates that allow users to input their own numbers to get a customized enterprise budget for their situation. While the availability of these enterprise budgets is a good thing it is important to understand a little about the information they provide, to be aware of their limitations, and to be able to evaluate their usefulness to a particular situation (Arxis Technology Incorporation, 2013). Successful agricultural business, as in any other businesses, requires effective planning and disciplined commitment to achieve desired goals and objectives (Manyong, Ikpi, Olayemi, Yusuf, & Idachaba, 2003). Planning for Agribusiness must acknowledge the environmental dynamics and competitive forces that impact on the industry (Wells, 2012). Agribusiness is affected by political and legal forces, economic and climatic conditions, sociocultural factors that alter the structure of demands for agricultural products, technological advances such as improves in seed technology, soil management, chemical versus organic processes (Nchuchuwe & Adejuwon, 2012). The FGN and other key stakeholders develop policies to stimulate agricultural production from year to year; obviously agriculture is a crucial part of the Governments transformation agenda (Atofarati & Monye, 2013). Factoring all the variables into the business plan is by no means an easy task, especially for new venturers into the sector. There may be need for some prior orientation and consultation to learn the rubrics of