Did you know that, globally, farmers only receive 28% of the retail value of their farm produce? In South Africa only 16 or 17% of the price that consumers pay, end up in the farmer’s pocket.
Dr Naudé Malan, senior lecturer in development studies at the University of Johannesburg, used these shocking numbers as a starting point when he spoke about how young farmers can find new opportunities by commanding the value chain.
He was a speaker at Food For Mzansi’s Pan-African Summit on Youth in Sustainable Agriculture and added a word of caution to young farmers. “Youth must watch out for us. We can lead you astray and we can very easily empower you into the wrong value chain and the wrong system. There’s a reason why farmers don’t get the value of their produce. It has to do with the complex food processing, distribution and retail system that we have constructed.”
If young farmers don’t change the system themselves, they will not achieve sustainability.
“What can you do? Engage with your value chains as a farmer. If you don’t engage, you are selling everything at the absolutely lowest price possible for your produce. Especially if you’re a small farmer – that price will be lower than your production cost and those prices are determined by large producers… and they don’t even have to be in your country. They determine the price you get for your stuff.”
Malan said the only way to escape the scenario, is to start commanding the value chain and to create new opportunities for youreself as a farmer.
1 Create a local market
Try to bypass distributors. Create your own value, from milling to packaging, for instance.
Start seeing your farm as a poly-farm with multiple crops and processes instead of producing a single crop which you’ll sell for the lowest possible price in the end.
Start creating an ecosystem of enterprises and entrepreneurial activity around the farm and sell local niche products to the people around you who need to eat.
2 See yourself in a circular economy
Think about your farm within a circular economy and turn to regenerative farming to bypass costly inputs. If you are overly dependent on fertiliser, for instance, you are dependent on a global value chain as South Africa imports 80% of its chemicals for fertiliser.
Use opportunities in ecology and regenerative farming systems to escape that and to increase sustainability at the same time.
Regenerative farming will also change your product and create opportunities to market and sell differently.
And create a retail presence within your own community – and don’t be afraid to use social media!
3 Bank on the waste economy
Don’t miss the opportunity in “non-standard food” which can be processed. “Why are you only thinking of selling stuff to the biggest buyer? It’s important to know where the waste in your own farm lies and how you can productively turn these externalities around.
“Stop thinking that you can only grow food at high volume and sell it. Process your food!”
He mentioned solar drying as an example. “Solar-dried tomatoes command a huge price in SA, almost the same as meat.
Food waste is also high in nitrogen, so township and peri-urban farmers can exchange food for waste through recycling and further processing.
4 Don’t miss the small opportunities
Other opportunities are to use alternative available technology, to use social media as a means to illustrate impact, to have a unique value proposition for your farm, to start a new business that can be a new revenue stream, to do a good analysis of your cash flow (are you paying too much for the input costs – and you probably are – and can you not substitute those with something else).
“You as the youth – you have to create business models where we can establish the business based on the design of the ecological processes. Once that is intact, only then will you make a true profit.”
Find the full presentation in this video:
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