More often than not, smallholder farmers are focused on producing high yields in order to be profitable. FarmSol boss Aron Kole says that high yields are important but also needs to be achieved in an efficient manner and balanced with the correct cost of production. Managing cost should not be interpreted to mean cutting corners or not choosing superior and high performing production inputs – but rather means every cent spent on the farm should produce a good return on investment.
In the push for producing as high a yield as possible, farmers often lose focus on what that production is costing them. For smallholder farmers, the cost of producing a tonne of grain on a hectare tends to be more expensive when compared to the costs incurred by an established commercial farmer.
This difference in cost, referred to as a cost gap, can be due to a number of reasons. One of those reasons is soil potential, where commercial farmers have the capacity to build up the potential of their soil for many years. Building up soil includes processes like adding lime and phosphate or practicing intensive soil cultivation.
What this proves is that building up your soil potential, otherwise known as soil correction, is a long-term investment.
Another reason smallholders incur a cost gap is inexperience. Many smallholders are first generation farmers and lack the background knowledge and farming skills they would otherwise have had if they been exposed to farming earlier in life. This lack of skills can lead to costly mistakes, like the use of incorrect fertiliser, chemicals or seeds which increases their overall production costs.
Smallholders often do not have the resources for critical mechanisation – tools and equipment – leading them to outsource these resources. It goes without saying that outsourcing critical mechanisation services place a huge burden on production costs, pushing up the overall expenditure per hectare for smallholders.
FarmSol’s role in closing the gap
To close the cost gap associated with soil correction, part of FarmSol’s programme includes the soil rehabilitation scheme. Under this scheme, qualifying farmers get to rest their soil and focus on soil correction. So, instead of planting in that particular year, they apply lime to the soil, lime which they can repay over a period of two or three years.
FarmSol, in partnership with South African Breweries (SAB), also offers farmers access to mechanisation at highly affordable rates, thus minimising their annual production costs. Access to mechanisation allows farmers to implement minimum tillage practices like strip tillage. More plans are underway to restructure the mechanisation programme in a way that it impacts many more farmers.
Through FarmSol’s large support network, farmers who do not necessarily have enough farming skills yet are provided with mentorship and on-farm support through the programme. FarmSol employs a large number of agri-specialists and farmer mentors, guiding less experienced farmers through their journey and helping farmers limit costly mistakes.
Finally, and crucially, FarmSol offers farmers timeous access to affordable loan funding. Timeous access is incredibly important, simply because late funding can lower productivity significantly, negatively impacting the farmer’s bottom line. SAB, and other partnerships cultivated by FarmSol, provide the required funding to farmers on the programme, ensuring that more smallholder farmers are set up for success.