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Morris Mpala, MoB Capital Ltd
IN Africa farming has always been about feeding one’s immediate and extended family. The concept of communal farming was about food security for each household until the following season.
Since food is fundamentally a basic human right, thus, the need to provide for those dependent on you becomes not a chore but a responsibility that cannot be delegated to third parties.
As family grew, economic challenges prevailed, climate change kicked in and responsibilities grew. So did the need to derive a sustainable income from the small holdings, both communal and peri urban.
The farmer had the skill (not all) but faced challenges on how to really commercialise his/her farming initiatives. Chief among the challenges has been the start up capital and working capital for their farming pastimes though some had made it a full time business. What do small holder farmers have to do to access funding through formal and informal channels?
Mindset change, seek expertise
Farming is a business and it has to be treated as such. This is crucial starting point when it comes to easy access to funding. Acquire the art of farming. The skill is the knowledge to farm otherwise let’s forget about it. Trading is revolutionary, so please get trained in appropriate skill, technology.
Marketing networks
Tell who ever cares to listen about your produce and its benefits. Invest a bit in research and development to maximum utilise that small piece of land. It must not cost much to get to know what you want to do or already doing.
Pooling resources together
Pool resources together then avail the funds to each other one farmer at a time until all the farmers have benefited and if necessary continue the process changing dynamics as farmers get bigger or require more funding.
Adopt a farm
As a group with limited financial resources get a farm and work as a team. Meagre resources pooled together form initial capital or adequate working capital without challenges. Upon being incubated properly then each farmer can look for their farm to operate independent from the initial group members.
Borrow as a group, forward contracts
Where there are homogenous belongings get funding as a group and co-guarantee each towards funding availed. Or a sum total of little individual collateral gives a lender peace of mind and avail funds required. Sell your produce now and deliver later to would be buyers especially wholesalers. Utilise the prepayments as capital.
Borrow from lenders
Get yourself organised and get a business plan to approach all funding players on the market. Monies are available to organised farming business people and you don’t get a lot of money as capital for agriculture. Seek crowd funders among a group of farmers’ friendly investors. You can also sell a stake of your business to would be investors. Owning half an elephant is better than owning the whole ant.
Savings, family and friends
Pure basic savings from your produce income releases the much needed capital for future production. Approach relatives and acquaintances for cost effective funding or ask to invest in your dream through equity. Or ask strangers as long as you agree on favourable terms and conditions.
Grants, input credit schemes
Research on grants but those mandated to so and their grants vary according to their terms and conditions. With some conditions you will be required to return the resources (financial or otherwise) to the giver of grants. Some companies offer credit on inputs and you will be required to pay upon harvest. It’s a bridge to finance but just make sure the terms and conditions make economic sense.
Lease agreements, contract farming
It’s smart way of getting farming implements. Utilise these while you pay off your sources of funding. The implements become your collateral just show up as it were with smoke farming knowledge.
You may have an off taker providing all the necessary inputs, raw materials and the farmer’s responsibility is to be productive.
At the end of the cycle you get paid. Your net proceeds has worked well in poultry, although debatable on its effectiveness in financial freedom attainment by producers.
Join an established concern
Work, save and start your own through an already existing establishment for a planned period of time.
Freebies
Though this at times is detrimental to one’s business mindset, you can still go via this route to kick start your farming operation. You can ask for donations join Command Agriculture schemes and Presidential Inputs schemes, seed houses schemes and participate as it is cost effective.
Work smarter not harder. Above all be smart about it. Infuse technology in your business, turn waste into raw materials, preserve your farming environment, go green, use solar tech, amalgamate and do it like you are doing it for passion, pride and with a smile of ubuntu. Small has to be the piece of land one is working from not the dream nor the production nor the production systems.
IF YOU LIVE IN BULAWAYO PLEASE CONSERVE WATER
IF YOU LIVE IN ZIMBABWE PLEASE USE ELECTRICITY SPARINGLY SWITCH OFF SWITCHES (SOS)
IF YOU LIVE ON PLANET EARTH PLEASE PRESERVE THE ENVIRONMENT
Morris Mpala is the managing director of MoB Capital, a Bulawayo-headquartered micro-finance institution with footprint across the country.
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