7 Tips for smallholder farmers to make more profits
Marketing is a key challenge among smallholder farmers. As a result, they get low profits and have high rates of post-harvest food losses. Farmers lack access to markets, buyers, demand and prices. Their investments in transport and processing are low. They act individually, limiting their bargaining power and influence in the market. They end up relying on brokers who they exploit them via low farm gate prices.
Small-scale farmers can improve their profits by consistent production, marketing and value addition of their goods. In this article, we outline 7 tips they can adopt to sell more commodities profitably. They include contracted farming, joining digital marketing and food processing among others.
Engage in Contracted farming
You will agree with an off-taker to buy your farm produce at a set price. As a contracted farmer, you will produce crops or animals under specified conditions. You will enjoy technical advice and access input credit using a checkoff system. Fellow farmers in farmer’s group promote quality production in a voluntary control mechanism, where they act as a unit to comply with buyers’ advice.
The buyer can be a packhouse, agro-processor, exporter or a trader’s association.
Undertake value addition
Processing your farm commodities will attract higher profits and increase their shelf life. There are many forms you can choose such as canning, deep freezing, milling, drying. The method you choose will depend on the crop or animal you grow. A cheaper value addition method for maize farmers is storing grains in hermetic bags or metallic silos. You will shun selling at low prices during harvest season and sell a few months later when prices are high.
Observe Good Agricultural Practises (GAP)
Sometimes, you attract poor prices because of your poor quality yields. You can correct this by practising GAP. This involves carrying out a soil test, suitable seed selection, and crop nutrition and pest management among others. This will ensure your product is of high quality in terms of appearance, sizes and weight. GAP will also promote hygiene and food safety production. You may go a step farther and seek ISO, Global Gap or national certifications.
Other areas you can consider as part of the GAP in your farm are;
- Organic farming, by growing ‘naturally’ to limit the use of synthetic fertilizers and toxic pesticides.
- Integrated pest management (IPM) practises limiting the use of toxic pesticides. Some options for Non-chemical pest control are timely planting, spacing, pruning and weeding.
Register with an accredited association
We find strength in numbers, individually your bargaining power is low compared to a hundred farmers. To enjoy better market terms, get membership in a farmer’s cooperative, producers group or a marketing association. Apart from accessing a ready market, and cheaper credit, you can also get a farmer’s education. Your cooperative can run an input shop where you can access animal feeds, certified seed, and other farm inputs conveniently. Some associations (Sacco) allow farmer’s savings and credit improving your financial literacy and wellbeing.
A business is as good as its reputation. As a smallholder farmer, you can brand your farm in terms of consistency, quantity and quality. This way your consumers will rely on you as a reliable supplier for their vegetables, milk or eggs. You can produce for a particular niche in the market such as the high end, tourists or informal market. Ensure you match your products to the market needs like packaging, sizes, deliveries, etc. Some ways you can earn more profits by branding are; Organic production, affordable pricing, free deliveries, free information among others. To brand your farm commission a market study to understand the prevailing market needs.
Join an online farmer’s community.
The internet is a great resource transforming how a farmer can market their produce. Online communities allow farmers to access the prevailing market prices and demand for various commodities. You will interact with potential buyers and plan on how to deliver goods. You will receive your cash via the internet or mobile banking. The community can be a Facebook page or group, webpage, or a chat room.
Effective online marketing for your farm commodities can reach millions of internet users. This works by broadcasting your goods beyond your local outreach. Some methods you can use include;
- Set a website for your farm,
- Have a marketing app for your farm.
- Use social media sites such as Facebook to showcase your farm products.
- Have an exporting model such as drop shipping to sell your goods in other countries and receiving cash.
Digital marketing is closely associated with the branding process above. As earlier outlined, carry out a marketing study to gather market insights. These results will guide in the development and execution of a marketing or a branding strategy.
Agcenture offers market research and marketing strategy development services. You can contact us today for some of these services.