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Home / Finance insight with Mekupi Kambatuku - Part 2: Transitioning into commercial farming

Finance insight with Mekupi Kambatuku - Part 2: Transitioning into commercial farming

2024-04-16  Correspondent

Finance insight with Mekupi Kambatuku - Part 2: Transitioning into commercial farming

As we continue on the tips and key points to be considered when transitioning into commercial farming that we covered previously, below are a few critical steps to consider as an emerging and experienced farmer seeking to go commercial.

Before we dive into more tips, let’s quickly emphasise the most important aspects of the transition such as financial analysis, research and creating a strategic plan, which must take precedence before putting anything into action.

As we have reiterated many times before, farming businesses must be treated as seriously as other businesses if they are to thrive, be profitable, and be sustainable. And yes, we understand the challenges in farming businesses, but we equally believe there are solutions to most of these challenges.

As we continue where we left off in our previous column, here are more tips that will help guide your transition and operations. To start off, it is important to analyse and seek sufficient funding. After having done your financial analysis and developed your cash flow projections, you may now assess the financial requirements of your commercial farming business.

There are several options you may consider for funding, and not immediately jump to the chance of loans; the options are grants, cooperative crowd-funding, investment partnerships, loans and many others. You will need these funds for costs such as startup costs, operating expenses, and contingencies.

You will also need to prioritise investing in infrastructure and equipment. You will need to make sure that you invest in the infrastructure, equipment and technology that are important in supporting your commercial farming operation and the transition.

Consider equipment for farming activities like land preparation, irrigation systems, farming machinery, storage facilities and general processing equipment.

Prioritise productivity and efficiency. Make sure that you pay special attention to maximising efficiency and productivity in every aspect of your farming business.

Utilise sustainable farming practices, technology and automation as much as possible, and streamline operations to minimise costs and maximise yields and resource efficiency.

Risk management is another important component. That’s why it’s important to develop a plan to identify potential risks to your commercial farming business. As we all know, our country has been hit by continued phases of drought, hence the importance of determining strategies to adapt to drought in such a way that we are no longer shocked by the recurrences.

We should also consider other risks relating to weather-related disasters, crop diseases and market fluctuations. You may consider insurance for protection against unforeseen circumstances.

I must also emphasise the growing importance of control and monitoring performance, as well as adapting. It’s important to always monitor the performance of your commercial farming business, and ensure that you adapt your strategies based on the responses and changing circumstances in the market.

Most importantly, ensure that you stay informed about industry trends, changing business environments, and innovations for your business to stay competitive.

As stated previously, transitioning into commercial farming, especially from communal farming, requires dedication, hard work and careful planning to ensure profitability and sustainability.

We have been receiving positive feedback from our esteemed farmers and readers, and we would like to hear more from you on what other burning issues you would like us to cover under this column. Please kindly send us feedback or queries to the below email. Let’s catch up again in next week’s column.

*Mekupi Kambatuku is the managing consultant at Simpli Business Advisory. She can be reached at


2024-04-16  Correspondent

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