In an economy where the main industry is agriculture expansion is vital. Farmers can expand at individual level as an overflow into the rest of the country
By Wadzanai Manyore
To address the current state of stagnancy in this sector, Zimbabwean farmers need to approach agriculture from a business point of view. Farmers create wealth by producing something of value from materials that are relatively cheap.
A farmer is an entrepreneur whose products have a cash value in the local market and also in the international market.
By exporting agricultural produce the country gains wealth that can be used to finance all its development plans. However for the business of exporting agricultural commodities to be lucrative, we need to consider expansion seriously.
From a business point of view a farmer is an entrepreneur. A person who is innovative is looking to do new things or existing things in a better way for profit and expansion.
Our farmers need to have the technical knowhow as they embark on various activities of beneficiation and value addition.
Expansion in agribusiness entails an increase in the economic and industrial activity on a farm. But how do we increase the economic activity on a farm?
It is by simply intensifying production so that we earn more. We refrain from limiting our operations to production only but also to processing.
This is where the concept of industrialization comes in. Through processing we venture into grading, packaging etc and do away with selling our produce in their raw form.
This is also what is being referred to as value addition or beneficiation. Lastly after producing and processing our products are we able to distribute it.
Who is our target clientele, are the goods we are producing meeting the demand, is the level of the quality suiting all our targeted markets in terms of local consumption and exports. Is the product meeting the standards of a given target market?
Advantages of registering our farms as companies
When a farmer decides to venture into agribusiness and expand, it will be wise to register his farm as a company. This ensures that the product is traceable and when this happens the product will gain market share on the world market and even locally marketing won’t be difficult.
Most supermarkets and the rest of the marketing institutions prefer reputable goods with well labeled packaging to those that are just random.
Registering our farms as companies attracts investors and increases our chances of expansion.Futhermore this is what indigenisation is truly about. The reason why raw products always fetch a low market price. Because when these are bought they still need further processing and them getting a low price is very justified.
However this is the major drawback in farming and the reason why most farmers are falling to make a living out of agriculture let alone pay off their debts. By registering our farms as companies we will be legitimizing our operations and at the same time yielding to our government. This will increase the income produced by our financial investments.
Farmers are still experiencing the rotting and expiring of their produce because of lack of the proper facilities. It is time for the Zimbabwean farmer to invest in technology and machinery.
On our production sites which are the farms there is need for infrastructural development. Investing in the construction of storage rooms like cold rooms especially for those into horticulture, dairy etc.
This gives them an allowance of selling their goods properly without them rushing into exhausting their reserves in order to avoid decaying. Most farmers end up in desperate compromising situations because they do not have the facilities to preserve their produce as they sell it for profits.
Also storage facilities ensure that production takes place all year round and our consumers never lack e.g. their favorite vegetables so in a way storage facilities deal with gluts and shortages on the market in an excellent manner. In addition to the above the country does away the concept of importing when certain commodities are out of season.
When certain commodities are imported because they are scarce locally, they usually go for a higher price which will be unfavorable for the consumers not to mention it opposes the economic blue print Zimasset.
Moreover in expansion productions means have to be reliable and modern in order to keep up with demands of the ever rising population. There is need to invest in irrigation equipment on our farms for all year round production.
Most time of the year vast amounts of land are lying idle whilst the population both in urban areas and on the farms languish in hunger and poverty. Farmers still fail to repay their debts whilst their biggest asset, land lies idle half of the year waiting for the rains.
This is retrogressive to the agricultural sector not to mention to the economy. Farmers are supposed to exploit this resource and produce for local consumption and exports so as to boost the economy and balance the BOP.
Horticultural goods have a very high water content which makes them highly perishable if not taken proper care of. And when they are sold almost bad they fetch a poor price which comes back to haunt the farmer. So as we think of distribution let’s talk of refrigerated vans to procure our produce fresh healthy for consumption.
Expansion might look like a big word and very intimidating, but this is the new direction we are looking at as a sector to fulfill the economic blue print of Zim asset. Whether it is appreciated or not yet, the reality will always be constant.
We need to work together as a country to eradicate poverty and food insecurity. And our role as farmers in this is to produce more, expand and create employment. To curb food insecurity from as low as the societies we live in, measures to produce more should be put in place.
Make full use of our biggest resource land and the idle water bodies all year round. This is the new direction in agriculture which is to produce for our huge storages, silos etc. This is the core of indigenization and black empowerment. For the production of any commodity there is need for intensifying the activity in order to get more.
Problems addressed by expansion
Farmers are still realizing low margins. The goods being sold are only in their raw form, they are not processed which is why they fetch a low market price. Zimbabwean farmers are still limited to production only, they cannot process let alone distribute.
Failure to adapt to new technologies
The failure to adapt to new technologies. In most cases a farmer has something to save when they realize more profits. The marginal propensity to save only arises when a farmer gets extra funds after consumption, taxes, loan repayment and other personal expenditures. Like I have mentioned earlier on, expansion improves a farmer’s remuneration which will eventually lead onto the need to save.
The issue of farmer desperation during the marketing season. A farmer who has expanded usually is guaranteed more disposable income, which makes it very convenient for him. He can never be taken advantage of when it comes to marketing his produce.
He knows when to walk away from a low unreasonable market price because he is not desperate. That type of a farmer does not have pressure exerted on him, the pressure to pay employees, pay for operational costs e.g. electricity, water etc. He is not in a hurry to sell off his produce; he is in a position to withhold his commodity until the market price is favorable for him.
Sadly most of the Zimbabwean farmers are still limited to production. They are falling to process and distribute. The core of agribusiness lies within the processing and distribution.
Processing can be in the form of grading, packaging etc. Whilst distribution is when one allocate their produce to its respective destination.
In every activity a choice exists, we can cling to the past and forge on with traditional agricultural production methods which have a high probability of yielding less or we can embrace the inevitability of change and allow a brighter future to unfold before us.
An era of food security awaits us and we are the key players as farmers. Either way a new day is coming whether we like it or not. The question is can you control it.
Wadzanai Manyore is an agricultural oriented character who writes in her own capacity. She seeks to empower the Zimbabwean farmers intellectually. This article was published by Afrostain Farmtech Magazine. For views and comments are mostly appreciated she can be contacted on 0772 807 506 or email her on email@example.com
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