Diversification helps farmers avoid putting all their eggs in one basket and risking their entire business on just one commodity.
Speaking about various diversification strategies at the Mzansi Young Farmers Indaba, Arne Verhoef, who is a biologist, fly farmer, and chief technology officer at Nambu, defines diversifying as being composed of a variety of different elements. Nambu is an insect protein company that turns food waste into nutritious, environmentally friendly feed for chickens, pigs, fish, and pets.
“Putting all your eggs in one basket gets you a really dodgy omelette,” he said during the Indaba. “Diversification on the farm simply means you widen your scope and broaden your range of activities and inputs to achieve certain goals. It is a very resilient strategy, not a chain but a web to protect you against potential negative impacts.”
Risk management
The biggest reason for diversification is actively avoiding risks through risk management. Resource integration, soil health and sustainability, and pest management are among the important reasons highlighted by Verhoef for diversifying.
He further explained that for a farmer there are few key elements to ensure economic stability. These include; spreading your risk, understanding different activities related to farm funding; exploring ways to make money; and avoiding market fluctuations.
“By having a diversified operation, you inherit flexibility and the ability to take advantage of opportunities as they arise. My favourite reason is a passion for paychecks; we all need to make sure that our economic bases are covered, and by approaching diversification, you can slowly mould your enterprise to what you want to be doing. This is a very fundamental part of future farming.”
Be careful though
Furthermore, Verhoef mentioned that diversification can offer a broader income range, which further leads to market opportunities. Despite the numerous benefits that come with diversification, Verhoef also highlighted a few potential dangers to be aware of when diversifying.
“Chasing too many things at once can cause you to end up failing in all of them. To avoid danger, know what you are looking for and what your market demands are. Do not just chase the money; first, get the quality, so you can deliver consistency.”
“Be careful what you get into and know if you can comply with whichever rules and regulations exist for it. Also, do not lend your ear too much to people selling bright new plans that require you to give a lot of money. Do seek advice, but look at things objectively,” he emphasised.
Importantly, Vernoef encouraged that through research, knowing what you need, asking for advice, starting small, learning, and adapting, farmers are enabled to explore many different ways of incorporating diversification into their agri-enterprises and find out which works better for their climate and market.
“Know what you are trying to do and stick to that core. Always try and keep diversification simple; cater for what is needed and where you see opportunities,” he concluded.
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