Farming for a long time not been taken seriously in Kenya. The manner in which it has been carried out would be described more of a hobby than a business. A look at the more developed countries such as the USA, Israel, Netherlands etc shows the clear picture of how much of a big business venture agribusiness can be. We compiled a least of things farmers should look at in order to exploit the full potential that farming has as a business.
Having a business plan gives you the agri-prenure and your agribusiness a sense of direction. It is like a road map to success highlighting the turns that you will take to get there. Hence it need to be done before starting the venture. A business plan will also come in handy when looking for financing. It will give the lenders more confidence in you and your venture. First and foremost you will need to have goals and objectives. This is important because as a farmer, you need to know what you are working towards. If it is growing your herd of cattle or increasing your vegetable production, you need to know.
The plan should contain the resources you have and the ones you need, the market analysis data, execution plans etc. I know this sounds like a lot to a farmer but don’t overthink it. Here’s an example, available resources may be land that you own or a pick-up truck. Needed resources may be a water pump, drip lines, greenhouses etc that you need in order to achieve your goals.
Having a market analysis also helps. There has been a rise in cases where farmers are talked into farming crops only to realize that they have no market afterwards. For example, a farmer shouldn’t jump into flower farming if he doesn’t know how to get the flowers to the market abroad. A logical step would be to first establish a path to the market eg Talking to the already establish flower exporters for contract farming. That way you don’t have to worry about getting the flowers to the market as they would handle that for you. This is why I encourage farmers especially new ones to go for crops with ready local market e.g Tomatoes, capsicum etc.
In a farm setting, there are several types of records that need to be kept. I wil take a dairy farm agribusiness as an example. A farmer would need to have milk production vs consumption records for each cow. This will allow you to calculate the overall profitability of an individual cow. After determining the profitability, you can then make a business decision of selling it off and purchasing a new cow, retaining it and getting more of its breed, increasing its food intake to increase production e.t.c
Cow details such as lactation number and medical records also come in handy. This has been facilitated with the increasing prices of cows as buyers would want to know absolutely everything about a cow when they purchase it for prices as high as ksh200,000.
Financial records in a farm will help you to plan ahead, make investments or even gain financing. A profit and loss statement may give you a clear picture of how the farm is doing. Many farmers make losses but do not realize it because of poor record keeping. This eventually leads to financial problems that would have been avoided by having good records.
This is one issue I stress to every farmer I meet. Farmers have the tendency of having everyone do everything even when a level of technical expertise is required. For example having your soil tested and applying only the deficient fertilizer instead of applying fertilizer randomly would save a lot of costs and prevent spoilage of the soil. Soil testing services are offered for between ksh200-ksh1000. This is not a lot of money considering the benefits it brings.
For dairy farmers, having a nutritionist consultant visit the farm once in a while would save you a lot of problems later. Many animal diseases are caused by poor feed management. A nutritionist would also assist in recommending feeding ratios for optimum milk production. If you are spending more on animal feeds than you are making from milk sales, it’s time to get a nutritionist.
Just like any other business, taking out cash as soon as it comes in cripples you. It is important to have good cashflow especially considering that farming can have its fair share of surprises.
At the end of a season, you should go back to your business plan and look at the resources/assets you had identified and look at how to obtain it. The best type of farming is that where you are always growing and improving. Use the money to find easier and more efficient ways of doing things. E.g getting a milking machine as you increase the size of your herd or employing a more skilled person to handle an operation in the farm. The point, don’t get greedy, grow first.
Kenya has a lot of agricultural professionals that can save you and your agribusiness venture alot of expenses.
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