Building a resilient farming business
Farmers in Namibia face numerous challenges including climate change. This is evident in the form of erratic rainfall, recurring droughts, and crop and livestock losses, which have continuously led to financial losses for farmers across the country.As we navigate through the early days of 2024, farmers are encouraged to create resolutions that can transform their farming businesses into resilient enterprises.
With livestock farming being the predominant business in Namibia, it is crucial to implement coping strategies that are resilient to climate change and other challenges faced by farmers, even at the household level. At the communal level, farmers can venture into cultivated pastures where they can each dedicate 2 500 m² (0.25 ha) to grow perennial grasses such as Wool (Anthephora pubescens) and Blue Buffalo (Cenchrus ciliaris) grass. This can serve as a reserve base for a farmer’s most valuable group of livestock.
As bush encroachment expands on the communal grazing areas in Namibia, exploring the concept of bush thinning for fodder production can be beneficial for livestock groups such as goats that are browsers. This will allow grazing areas to naturally recover grazing values.
Diversification
Secondly, farmers must realise the importance of farm enterprise diversification.
Diversification offers a farmer multiple streams of income that can be used to sustain the main business enterprise (in the case of Namibia, livestock farming is facing challenges such as drought). This offers a way to generate additional income and reduce the risk of relying solely on one source of income.
Suppose a farmer has a herd of 50 cows and 2 bulls. Additionally, he has 100 layer hens and a small vegetable production enterprise. The proceeds from the vegetables and eggs can be used to purchase feed for the cattle herd during drought spells.
The other way for one to build a sustainable and resilient farming business is to always put some money aside for rainy days. During prosperous years, farmers often fail to plan their finances and end up spending their profits on non-business-related expenses, instead of reinvesting them into their farms.
Suppose a livestock enterprise on a commercial farm produces about 90 to 140 weaner calves in a year. It is essential to keep 60% of that revenue saved up for years when the enterprise will be at its lowest.
As a crop farmer, during years with a good harvest, it is possible to save some of the profits from selling maize grains and reinvest them into the business. One way to do this is by purchasing machinery that can improve production efficiency. Ideally, at the beginning of each year, farmers must review their production and financial records. This review process will help them plan for the income generated in the previous year and determine how to allocate their funds towards key production objectives.
By doing so, farmers can ensure that their businesses can thrive regardless of any unforeseen circumstances.
Finally, the best way to build a resilient farming business for a farmer is through the constant acquisition of knowledge and skills that can be integrated into the farming business to ensure productivity is maintained. Always check market trends for you to establish a farming business venture that can address market needs and this way you will have a business that remains resilient even during trying times.
* Hanks Saisai is AgriBank’s Technical Advisor: Crops & Poultry.
** Opinion pieces and letters by the public do not necessarily reflect the opinion of the editorial team. The editors reserve the right to abridge original texts. All newspapers of Namibia Media Holdings adhere to the Code of Ethics for Namibian Media, a code established jointly with the Media Ombudsman.