20/02/2024
HOW A NIGERIAN IT PROFESSIONAL GREW HIS AGRI-BUSINESS TO EXPORT CAPABILITY
In our GREAT AGRICULTURAL RETHINK conversation today , as promised. In order to demonstrate a practical example of all I have been saying about the difference between Subsistence Farming and Commercial Farming MIND-SET, I will share a recent experience we had with a Nigerian Plantain chips manufacturer, who was referred to us.
He required our assistance in gaining access to retail stores in South Africa such as Pick 'N' Pay, Spar, ShopRite,Woolworths etc. I share his story, as it not only illustrates the difference in MIND-SET of a subsistence versus a commercial farmer but also shows the transition in mind-set, when applying BUSINESS PRINCIPLES to Farming.
When asked how he wanted us to assist him, he said this; I have grown my agri-business and wish to expand my market, through EXPORTS and EARN much sort after FOREIGN EXCHANGE. Once we sat down to discussed, he shared his agricultural journey, one I happily share with you today.
This Plantain Chips Manufacturer has an IT Company, he only ventured into agriculture as he was concerned with the fast rate at which technological innovation occurs within his industry. He realised that innovation, though good, will in the very near future make his services obsolete. Agriculture seemed like an obvious choice for him because, as he explained, “I realised people will always need food to eat. That food production is a business that will never run the risk of becoming obsolete”.
He decided to plant plantain because he did this as a child in the village. (NOTE mistake one of a subsistence farmer mind-set. He solely based his decision to plant plantain, as it was what he knew how to and not for an already secured market that would ensure him profit)
Since he knew how to grow plantain, the production process was fairly easy. His plan was to go and sell at the local market and work with an agent. When harvest time came, he had not spent much time on marketing nor approached hawkers nor wholesalers that might sell his produce at the market. Secondly the agent offered him a ridiculous price which was (too late to start shopping around for better pricing). He did not want to sell at the price, but after a week he had no alternative but to sell.
Because the risk of post-harvest loss, was too high. The agent ended up offering him even less. He basically sold all of them at a LOSS. (Note, the second characteristic of a substance farmer. They are more often than not, PRICE TAKERS versus fair priced supply contract negotiators)
He noted, that if it was not for his IT business, He would not have been able to recover from the losses incurred from his first production cycle.
(Now observe the birth of a commercial farmer.)
Armed with experience of a full production cycle and the painful loss of profit. He considered what he could do to prevent the same from happening.
He started researching the Plantain industry. After completing a feasibility and profitability study of the various options. He decided that it is better to process plantain chips than sit with produce quantity that he either sell at loss or produce that spoils over a short period (NOTE, he invested time for research, a characteristic of a commercial farmer. Like the Singer FLAVOUR'S song says, if you know, you know. If you don’t know you don’t.)
Fortunately, He had a well-established IT business, from which he could get capital to purchase chip manufacturing equipment.
To cut a long story short. He took the lessons learnt from only one production cycle and improved his business, so much so, that he has built capacity that enables him to start exporting his product. I will pick up on the export part of his story in another post, which will extensively cover the subject of exportation.
I close todays post with this thought.
This man, farmed Plantain for one production cycle. He took the lessons learnt, applied and not only performed better but will soon export to a formal retail market in another country.
So I ask you dear farmer that have been farming for a longer time: why are you repeating your mistakes. My personal opinion is this. The majority of our farmers are characterised with those that intentionally depend on substandard inputs such as seedlings, etc. Thus when they don’t succeed, they have lost everything. Creating a perpetual cycle of stagnation and regression.
In my next Great Agricultural Rethink conversation post, I will continue with the Business of Farming series. Stay tuned and don’t miss out.
