Principles to consider when venturing into farming

A new year brings fresh opportunities for growth, learning and positive change — a hope many aspiring agripreneurs carry with them. Many venture into farming believing this new journey can be life-changing, enabling them to envision a better future. Farming offers the opportunity to be self-employed, produce food and generate an income.

However, it is unfortunate that many farmers, both aspiring and seasoned, often make critical mistakes that prevent them from achieving their enterprise goals. There are several crucial errors that beginners and emerging farmers should avoid when establishing a farming business.

The first mistake often made when venturing into farming is building a mansion on the farm. As a beginner, your focus should be on establishing solid business foundations, not on constructing a lavish home.

Initial investments should be directed towards essential infrastructure such as kraals, water systems (boreholes, reservoirs, troughs, etc.) and storage facilities. Investing in infrastructure makes farming more efficient and directly influences productivity. Over time, these assets can contribute to profits that may be used to build a comfortable farmhouse.

Prioritising production over scale

The second mistake is commonly made by ambitious new farmers who start their operations on a large scale without sufficient experience. As the old saying goes, “only the grave starts from the top going down”. Like any other business, farming should begin on a small scale.

Starting small should not be viewed as a weakness, but rather as a strategic approach that allows a farmer to make manageable mistakes and learn from them without incurring significant financial losses. At the end of each production cycle, farmers have the opportunity to assess performance. This enables them to adjust their production systems accordingly and expand sustainably, based on experience, without suffering major financial setbacks.

A common challenge many farming enterprises face is entering production without a clear target market. It is always safer to produce for a specific market than to attempt to market produce after it has already been grown.

Starting small allows real customers to guide production in terms of quantity, quality and frequency. Once the focus shifts to producing for a defined market, first-hand feedback can be obtained regarding which crop varieties and livestock breeds are in demand, their price per kilogramme and the preferred delivery format.

Furthermore, producing for a specific market provides insight into existing products and competing producers. This enables farmers to identify and develop niche markets with limited competition.

Testing assumptions and investing in expertise

Many aspiring farmers make the mistake of basing their operations on untested assumptions. This can lead to substantial budget commitments based on unreliable information, resulting in low output and negatively affecting profitability. Again, starting small allows farmers to build experience, test and verify assumptions, and make necessary adjustments.

Another challenge faced by both new and experienced farmers is employing personnel who lack the necessary expertise or qualifications to manage substantial investments. It is essential to entrust valuable resources to individuals with the appropriate skills and knowledge, as this significantly improves returns and overall performance.

It is also wise to employ individuals on terms that allow for performance-based evaluation. If farming is approached as a business, then competent and qualified staff should be appointed.

Institutions such as the National Youth Service’s Rietfontein Centre and Vocational Training Centres across the country produce trained graduates who can help ensure that production systems are properly managed. In doing so, farmers become job creators while safeguarding their investments.

Playing the long game

Finally, farming is not a get-rich-quick scheme. It requires patience and must be approached through clearly defined milestones over specific timeframes.

The primary objectives should be to break even, secure reliable markets and align production with market demand. From each production cycle, approximately 35% to 50% of revenue generated should ideally be reinvested into improving infrastructure and operations.