Steve Mapfumo
Years of experience as an agronomist have exposed me to many issues in the agricultural sector of this country. Travelling around the country, interacting with livestock, horticulture and field crop farmers has exposed the ills of our once so vibrant agricultural sector. If one listens to the vast praises heaped on the former land owners in this country, one wonders what really went wrong.
The land is still the same, the people working on that land are to a greater extent still the same people. Has the Government of Zimbabwe neglected its farmers that have been given land? The most honest answer to this question is a big no.
Farmers have received vast support and some of the support given had ridiculously low interest rates or no interest at all in some cases. The biggest enemy that has come out though is the lack of knowledge and appreciation that farming is a business.
For someone to start a business, they need to plan and it is fascinating to note that the Government of Zimbabwe, since independence, has embarked on many programmes specifically targeted at equipping the Zimbabwean farmer to appreciate farming as a business.
Knowledge has also been imparted on new technologies that are meant to improve production on our farms. The current situation prevailing in Zimbabwe is quite worrying because many beneficiaries of prime agricultural land have not discovered how much wealth they possess when it comes to the land they got from the Government.
They have received inputs year in, year out but unfortunately because they do not appreciate farming as a business, they are still looking for support.
When one makes an investment of capital into a business, it is expected that their business will multiply the money and the business will grow.
Once a business grows, it pays back the money borrowed from whatever source and then it will be able to sustain itself without any further borrowing. If you are a farmer who is found queueing for input support every year then the truth is, you do not appreciate farming as a business.
There are different sources of capital that can be used to start farming as a business and these are:
a) Own savings, meaning that one can save money while working so that they can later invest that money into farming.
b) Bank loans, in this case, a farmer can approach a bank for money which they will payback with interest after a certain period of time.
c) Contract farming in which a company offers to give a farmer resources to produce commodities which the farmer will sell to the company and in the process be able to pay back the borrowed money. This method is quite common in the tobacco industry at the moment.
d) A farmer can also get money from money-lenders so that they can invest into farming. This method is the least recommended because of the high interest rates charged.
Gone are the days when there was no clear line between the activities of the farm and the daily running of the family. Farming should be taken as a separate entity from household activities in which all activities are run professionally.
Another important aspect is capital investment in the business. Often farmers would want to enjoy profits within a short period. They want to compare themselves with those who have been in the industry for a long time.
They want to spend like those people, live and drive the same cars with well-established business people. Usually, farmers divert proceeds from farm sales to other activities not related to farming. This takes money away from the business consequently making our farmers seasoned defaulters when it comes to loan repayment.
Aspects to take note of
The market: Before going into full-time production of anything on the farm, farmers need to know who is going to buy their produce, where it is going to be sold and the price at which it is going to be bought. Farmers also need to understand market trends of the product they intend to produce and their competitors.
A business plan is always needed so that the farmer knows the direction in which their business ought to move.
Source of capital: This is very important because it helps the farmer to make correct forecasts on payment plants.
Labour requirements: This will help the farmer to avoid employing more employees than are needed or less than are required. It also helps the farmers contain production costs. The farmer has to learn to employ the right skilled employees rather than cheap unqualified employees.
Infrastructure requirements: lack of investment in infrastructure or over investment will affect the profitability of farming as a business.
Farming requires discipline and the profits from the early stages need to be reinvested into the business to keep the business running, establish and expand on the farming activities. In the long run, for those who are patient enough to invest, the rewards are good. Farmers are also not good at record keeping.
This is one of the greatest challenges that keep holding farmers back because they do not know where they are coming from and hence cannot forecast.
Some have even gone for many years doing farming but they don’t even know where they started, how much have they been harvesting and getting in terms of money, whether it’s profitable or not therefore cannot plan properly.
Farmers will have a sense of direction only when they start keeping records on every activity that has to do with their production on the farm.
For the record, any farming business that is successful today has its success attributable to investment, good record management and treating farming as a separate entity.
It is high time farmers treat farming as a business lest we continue having old farmers performing like new comers in the industry. Farming has the potential for better returns compared to any other business if handled as a business.
Steve Mapfumo is the Head of Operations at the ZANU-PF Youth League and Lasch Enterprises P/L Joint Venture. The Joint Venture Management can be contacted on 04-668773 or info@laschjv.co.zw ; Website: www.laschjv.co.zw