Costly Mistakes to Avoid as a Namibian Farmer

Many livelihoods in Namibia rely, directly or indirectly, on agriculture, and hardworking farmers. It is important to note that a farmer’s journey entails much effort, determination, dedication and a sense of innovation.

One must be aware of the common mistakes that can lead to the total failure of an agribusiness. This includes underestimating the fact that farming is not only a business, but also a science. Successful farming requires knowledge, skill and an attitude of perseverance.

The business side of farming requires realising that when an investment is made to purchase inputs such as seeds, chicks, goats or sheep, the aim is to be able to earn additional income from the investment.

Therefore, when embarking on establishing a farming enterprise, consider the following approach:

Firstly, identify a problem and establish your farming enterprise to solve that problem. For instance, as a nation, we still import about 96% of the fruit consumed in Namibian households. So, setting up an orchard can enable you to capture this niche market by supplying a needed commodity.

Secondly, one must offer clients a benefit. For example, distance is a major operational cost for many retailers and wholesalers. Therefore, a farmer must offer the product while reducing transport costs for the buyer.

Lastly, when negotiating, it is important that farmers understand the market trends of specific commodities.

Once the business aspects are in order, a farmer must also consider a scientific approach to farming.

If one aims to solve the problem of fruit imports, is it crucial to understand the specific climatic and soil requirements of the fruit trees one aims to grow and ensure the necessary soil conditions to provide the root systems of the trees with essential nutrients (such as nitrogen, phosphorus, potassium, calcium, sulfur, magnesium, boron, zinc and molybdenum) in adequate quantities throughout the growing period. It’s also crucial to understand the water requirements of the trees and to establish an irrigation schedule that addresses this need.

The second common mistake is attempting to produce everything that appears to have a high return on investment. Before you fall victim to this trap, consider if you have the know-how to undertake this business venture? The capital to fully invest, reliable marketing channels. Consider the legal and compliance requirements to operate the venture.

Many farmers tend to run several ventures at once, e.g. livestock production, poultry production, charcoal production and crop production, with only a small financial investment made in each and a limited skill set. This scenario leads to underdeveloped ventures that fail to reach their full potential.

To achieve success, one should start small in one venture, understand it fully and allow it to become self-sustainable before investing in another. Specialising ensures you will be able to supply the market with a high-quality product in quantities that address market demand needs.

The third common mistake is the failure to allocate financial resources based on the needs of the farming business. Often, farmers fail to allocate a wage/salary to themselves.

Additionally, it is essential to understand that one will incur fixed costs and variable costs in the farming business. After production, one must determine the unit cost of the product. For example, if one ventures into broiler chicken production, one chicken will cost about N$57 for production over a 42-day production cycle. A farmer must know that if that chicken is sold at N$57, the business can break even (meet its operational costs without making a profit). Therefore, to be profitable, the farmer must sell the chicken at N$65,55 (a 15% mark-up is always encouraged at the farm gate price).

After production sales, the priority should be to honour the financial commitments of the business, pay salaries and save for rainy days.

The last most common mistake in farming is the failure to keep records, such as financial records and production records that address what activities are undertaken to produce a certain product.

One can also highlight the challenges or risks (drought, veld fires, pest or disease outbreaks) faced during production and their impact on production.

These records can then be used for comparison to evaluate business strategy and to make informed decisions on issues like reducing costs and improving production efficiencies for maximum return on investment.

Remember, your farming operation is both a business and a science, so treat it as such to achieve success. Always start small and learn vital lessons before you scale up.

• * Hanks Saisai is a technical adviser of crops and poultry.