BRIEFING PAPER ON DEVELOPING BUSINESS SKILLS IN SMALLHOLDER FARMERS AS A BASIS FOR INCOME GROWTH
Agribusinesses commercially engaging with smallholders, need the farmers to take-up services and practices that will increase productivity and secure volumes. Convincing farmers to adopt new practices or technologies is challenging. Smallholder farmers may gain a lot from adopting new agricultural methods and products, but many of them cannot afford the risk of trying and failing. Where larger farmers may lose their savings with an unwise investment, poorer farmers may lose land and put the whole family at risk. Given their vulnerability, smallholder farmers are reluctant to give up the tried-and-tested techniques that have served them and their communities in the past.
“Farming as a Business” emphasizes a shift from farming for subsistence, to farming for profit and improved livelihoods. Farmers who are able to critically examine the costs and risks related to different technologies and the benefits that accrue through improved efficiencies, are able to make better informed management decisions that better optimize available resources. Improving smallholders’ business skills helps the farmers to change the way they identify and assess the range of options for farm management and investment. Equipping farmers with the tools for this kind of income-oriented decision making, combined with strategy development to diversify income, can increase productivity, and improve profitability and better livelihoods.
It also helps companies to better understand the economics of smallholder farming systems and provide farmers with the kinds of services that are most likely to increase productivity and household food security.
For most smallholders, it is challenging to develop their farms as businesses. Most learnt farming from their families as a subsistence activity rather than as a business enterprize and they do not keep records. Field agents are often trained in production but not business management, and lack the skills to help farmers plan their enterprizes.
Training can provide farmers with appropriate-level analytical skills and business management tools which will help them to make decisions based on business principles, thereby decreasing costs, decreasing risks and increasing profits.