The responsibility of farmers does not end when they’ve ploughed the fields, harvested their crops or tended to their livestock. As much as farming is a passion it is also an agribusiness, with the profitable marketing and selling of the produce as the end goal.
One of the common challenges that smallholder farmers have come to deal with is keeping up the profitability of their businesses. In the third session of the fourth Annual AFASA Young Farmers Summit panellists looked at how struggling young farmers can take their agribusinesses to the next level. The discussion was led by Food For Mzansi’s co-founder Ivor Price.
Agribusiness investment strategist Thabi Nkosi shared her expertise during a panel discussion at the summit held at Leriba Lodge in Centurion, Gauteng. She said when running your own farming company, you should make sure you fully understand the key drivers of profitability, which are variable costs (higher revenue doesn’t always translate to higher profits), yields/production output, market prices and overhead costs.
Nkosi added that these drivers are different for every business and that each one doesn’t necessarily fits all.
“We often focus on production output and pricing, but an efficient cost structure can have a material impact on the bottom line and protect your business against climate and market shocks,” Nkosi added.
Changing and improving your farming strategies will boost the growth of your agribusiness, suggested panellist Tumelo Siliga, who is a commercial farmer and youth activist in the Limpopo region.
“Farming is not rocket science and it is also not a walk in the park. If you keep doing the same thing you will never get to a better yield or get efficiency. Keep learning with each season,” said Siliga, who has 13 years of experience in the poultry trade.
The end result and quality of farmers’ produce is another factor that weighs heavily on the profitability of an agribusiness. Vusi Mlambo, enterprise development manager for the fresh produce company RSA Group and also a member of the panel, said the farmer should know what it is that he wants to produce and cultivate the best quality.
“The farmer must identify the product that they are going to develop and make sure that they’re producing the best quality. Once they do that then it is easy for the farmer to fetch the average price for the product to be attained,” said Mlambo. He added that emerging farmers should also start working together to help elevate their businesses.
The director of the SAB Foundation, Bridgit Evans, shared the sentiments of Mlambo. She said her biggest piece of advice to young farmers is to work together and building small businesses.
“Forming co-operatives with similar small farms that produce the same product allows you to access better input costs and sell for higher prices. It gives you better bargaining power and allows you to learn from each other. Working alone allows you none of these benefits.”
Placing emphasis on her advice, Evans quoted the African proverb which says, “If you want to go fast, go alone, if you want to go far, go together.”