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Farming Entrepreneurially

Farming Entrepreneurially

New opportunities for emerging small farmers.

Small farming used to be a wait and see game. The farmer would plant something and then wait and see what came up and then wait and see how much he was able to harvest. Then, as the true victim of circumstances way beyond his control, the farmer would then wait and see what he would be able to sell and wait and see what prices he would be able to achieve.

There would be much sucking on teeth and wringing of hands and plaintive exclamations about how tough it is to be in the hands of the gods.

You did your best, and well, the rest was up to luck or fate (depending on your perspective)!

Traditionally the small farmer provided for the needs of his family and was perhaps lucky enough to be able to sell a bit of surplus to earn a bit of money to be able to buy a few things and then continue the cycle again.

This traditional cycle, handed down from parents to their children has continued since the beginning of time.

Attempts to boost the efficiencies of these cycles by enthusiastic interventions have often been met with mild disinterest and things have soon drifted back to the old ways of doing things.

The divisions between traditional and commercial agriculture have tended to get bigger and bigger as science, management and technology have led the surge towards more efficient operations and bigger yields. Commercial agriculture has moved far beyond wait and see into factory-like food production systems.

Recent developments in South Africa have seen conditions changing to provide a unique window of opportunity for small farmers to be able to step up to commercial production.

The AgriBee process is not only looking at ownership of the agricultural process continuum, but also from where retailers are sourcing their supply. This creates the opportunity for small farmers to grow their operations to be able to supply the major retailers. The market suction process has long bypassed them as a potential source of supply because they were simply not up to market expectations in terms of reliability of supply, consistency of quality and credibility as partners.

In the present circumstances, the conditions are now favourable for emerging small farmers to have some of the market suction directed towards them. Frankly, any emerging small farmer that can show that they can produce a good supply of reliable quality, will be receiving serious interest from the buyers.

Can the emerging agricultural sector rise to the challenge? This is the major question. Certainly there are no soft options and fronts to hide behind. In other sectors, some emerging businesses have got away with persuasive talk and a compelling profile. In the Agri sector it will be the quality and consistency of supply and delivery that will talk. There is simply no room for a learning curve. The rules of the market are merciless. Deliver or Bust!

The present circumstances have given rise to a number of innovative strategies and niche opportunities. For example, small producer groups are banding together through a common packhouse to supply organic produce in sufficient quantities to interest retailers.

The learning has to be fast and focussed. No more wait and see here. Farmers are now required to commit to contracts, specifying what they will undertake to supply at harvest time, with these decisions signed and sealed at the time of planting. For example a small group of women farming together can sign up to deliver 200 cabbages in 12 weeks time. With 10 to 15 groups like this working together, it is possible to smooth some of the production glitches and work towards a steady dependable supply.

The key ingredient that moves producers from wait and see to commercial production is planning. As soon as producers begin to see their land as a source of sustainable income rather than solely as a source of food (if the rains come and the gods smile!) the whole system moves into future focus mode.

The lessons are practical and experientially learnable. After going through the one- week AgriPlanner course devised by the South African Institute for Entrepreneurship, groups of growers have had their vision of how agriculture works transformed. One group in Khayelitsha outside Cape Town have sat down together and planned their vegetable growing cycles for the entire year in advance. They have worked out the times, input requirements and harvest dates for each of their planned crops. They have also worked out what their probable yields and sale prices will be and have constructed an income and expenditure budget for the year. They have shifted from wait and see to plan and produce and the changes are dramatic. The light bulb has flashed on and there is no turning back now.

For too long the focus of the emerging farmer has been predominantly on the planting and growing activities, now the focus is swinging to looking at market alternatives. Many emerging farmers are shocked at the prices they are offered for a bulk harvest. The price in their minds is often the retail price and to be offered so much less is deflating. For many “the market” is a whole new experience. Their previous interactions with “buyers” have mostly been reactive when someone from the neighbourhood leans over the fence and wants to buy for their own household. If nobody came to buy, little was sold.

Farmers are realising that there is a huge market of food consumers within their own community who are already paying retail prices for their food. Groups are learning the value of working at winning the consumers on their doorsteps in a far more proactive way. Many of them are finding that is possible to nurture relationships with hundreds of local consumers who are relatively easy to switch into regular loyal buyers. For many groups this will be a big enough market to mop up all their excess production. The most obvious market of “selling to a shop” is certainly not always the easiest or most lucrative outlet.

As producer groups and emerging farmers move from wait and see to plan and produce we are likely to see a whole range of innovative new approaches that will catapult traditional growers into sophisticated market suppliers. Watch this space!