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Improving farmer enterprise profitability – part 1

This is June and it is the right time to determine how productive our summer (December) enterprises will be. Many of us forget that we are in business of farming. After harvesting and making money, we forget about the productive resources that gave us money. We go flat out on a spending spree without thinking of harnessing what gave us money. In business, to improve our profitability, we normally focus on reducing variable costs because we might not have control over fixed costs in the short run. This is true in farming, especially if we are selling our produce as commodities. In commodity trading, it is very difficult to vary the price of our produce because it is only a fraction of the goods on the market. This is one reason why tomato farmers cry like ‘babies’ in October because there is just too much tomato on the market. This scenario is similar for the maize, soybean, groundnuts and sunflower producers; in June to September, there is just too much of these commodities on the market such that determining a price that may be profitable for our level of production is impossible. This has been the reason we have been crying to establish the warehouse receipt system, but even then, a farmer who is producing hundred bags of maize as his total production in a year may not see the reason to deposit his maize with such institutions to wait for buyers from East Africa in January. He needs to find money to send his children to school; pay for his loans and many other immediate expenditures. Therefore, what should such a farmer do to remain in business?

When you see thrift businesses such as ZamBeef abandoning the production of maize and concentrate on going on the market to buy the commodity from farmers, know that there is something they have seen wrong with production. Of course, you may argue that they might be overwhelmed with other enterprises like wheat but that is beside the point. Dry land maize production in this country is becoming less and less profitable because of many factors. One of them is the high cost of inputs, the ever-deteriorating economic environment, the unpredictable fiscal and monetary policies, weak market infrastructure that is not sustainable and big among them all is very low productivity. These are facts of the matter and businessmen must face them head-on! You need to look at factors that you can control to improve your profitability, and from the array of problems tabulated in this article, the easiest one which we can have some control over is the low productivity. The question we need to be asking ourselves is why do we normally have low productivity? This again has a bucketful of reasons that causes it but one of them is poor management of the soils we farm on. Let’s delve into this factor and pick on others in future articles. Soil is a ‘living’ thing and it must be taken care of the same way we look after our tomato crop. Soil if not managed well, it can lead to poor harvests and many farmers have ended up abandoning their fields because soil has become unproductive. In the book, ‘A Guide to Agribusiness in Zambia: Untapped Opportunities’, we have highlighted in detail some of the reasons some land has become unproductive. You can get either a hardcopy or softcopy on this link (https://www.amazon.com/Guide-Agribusiness-Zambia-Untapped-Opportunities/dp/1796019127).

Many of us think that regardless of the fertility status of the soil, if we applied fertiliser to it, we can produce any crop. One reason we seem not to understand is that fertiliser is not taken up in the form it is applied in the soil. There are many chemical reactions that the product must undergo for it to be in the form that the plant can take it up. In the process of it being converted into the form can be taken up, the small living organisms in the soil plays a very important role. These small living organisms are very small to be seen by our naked eye. As farmers, we need to understand the environment in which we can enhance the population of these useful soil microorganisms. One of them is by allowing the build up of organic matter in the soil. This can be done by avoiding burning of crop residues that remain in the field after we have harvested our crops. This is the time of the year when many farmers practice the most detriment act of burning the stover in their fields. We should never burn the remains from maize or soybean leftover in our fields. If we see people burning our fields, even if they are looking for meat in form of mice, we should stop them and if possible prosecute them. The best way to help clear the fields off the crop remains is to allow animals to graze in our fields. Their hooves will help break into smaller pieces the remains while their droppings will help to fertilise our soils. I will not go into the details of how fertiliser is converted into the plant absorbable form because it is a bit more scientific. Let us meet next week again and discuss another factor that can help improve our profitability on our farms for various enterprises engaged in. This year we are lucky in that nature did the natural exclusion of certain farmers and our commodities are fetching better prices. The latest is that maize is currently trading at K2 per kg and by September, this is likely to increase to K3.50 per kg.

The author is the Agribusiness Development Consultant; ftembo2001@gmail.com/SM

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