One common misconception in farming is that one always has to go bigger to reap the best results. My experience has taught me otherwise; it is not as clear cut as that. In any business undertaking, growing it and bringing such business into the mainstream economy is often viewed as success. I have however found that this is not necessarily the case in farming.
My take is that there is a place under the sun for both small-scale business and large scale agribusiness. While it is not a bad idea to grow your business, such growth should take a natural transition and not be induced as it could spell danger for your agribusiness. When it’s time to really grow the business, you will know.
A small-scale crop producer in the informal market based in Omusati or Zambezi region might currently be doing well for his business. He produces just enough to meet the market needs, manages to sell all his produce and nothing goes to waste.
He has a tight budget, but one that is aided by low input costs as his family helps with the harvesting and other parts of the business. Such a person would have an established base of customers that eagerly await delivery and they pay handsomely for that.
Or, a livestock farmer in Omaheke or Otjozondjupa might be balancing his needs with what he gets from livestock farming. He might not have a hundred herds of cattle, but the few that he has are able to give him sufficient milk and enough calves to sell at the weaning stage for profit. He is not rich but does well as he is able to feed his family, get all his basic needs settled and still have time to enjoy a cup of tea under the great camelthorn tree as the midday heat takes its toll.
So, let’s say conventional wisdom - as it’s often referred to - urges these two farmers to expand their business so they make more money. That means our small-scale crop producer in the north will now be forced to get in more labourers in order to plant more, harvest more and probably sell more.
It does not end there; as a supplier to many big shops at a time, his old but reliable Toyota Hilux will not do. He needs a newer and faster car that gets the produce to the shops on time. That would mean buying another vehicle or renting one at regular intervals, which is even more costly.
Our livestock farmer will be told that he needs to work on the quality of his livestock more than concentrating on the quantity. That will force him to try his hand at stud farming. To do this, he would need to sell half his kraal in order to buy the quality he needs. Not a bad idea, except for the fact that he will be sacrificing his main mode of survival. His stud farming enterprise might be worth more, but that will take years of constant nurturing to even get back his investment.
What is the point, you ask? Well, every business is bound to grow but that cannot be forced upon it. Allow your agribusiness to grow with time. Don’t be fast to discard the informal economy that has kept you alive simply because you think you have become too big for it.
Rather expand your operations in the same sector; that way you are growing your business but keeping overheads and production costs low. Bring out the farmer in you and keep making adjustments as you go, but remain with both feet on the ground.