Richard Nunekpeku’s thoughts….Top 10 things to know before deciding to go into farming

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Your conclusions may be varied after reading this article. I may have reinforced your belief in the prospects of your intended investment(s) or may have heightened your fears. Regardless, my intents are clear and simple – to provide practical signposts you cannot avoid in making that investment decision, big or small.

This list is not conclusive, but highly representative of the issues/opportunities you must consider.

  1. Land

The complexity of Ghana’s land tenure system is a signpost you cannot ignore in your search for farming land. You must be thorough and diligent. Written or oral assurances are never enough guarantees of legal interest in any land capable of any transaction. Ideally, seek to secure land from stools/skins (as the Lands Commission will be involved in the process). Alternatively, engage with government agencies with agriculture mandates as they may have secured lands in anticipation of private sector investments.

Your search checklist must anticipate the immediate or future needs of your farm. Closeness to city centres, access to water for irrigation purposes, available social amenities, road infrastructure among others should be a must-tick. Land is a valuable asset for any purpose, but farmlands do not generate the same interest for any funding leverage. The last option should be offering to buy outright farmlands in large tracts. Financial investments into such acquisitions cannot be leveraged for lending when the business needs it.

Negotiate innovative lease agreements with payment terms fixed at intervals over a long period of time. Such agreements must cater for the financial interest of all beneficial interest owners of the land over time. Most lands won’t be vacant, so make arrangements for the payment of compensation for crops to those currently using it. If in doubt, seek help!

  1. Expertise or technical capacity

Labour is abundantly available. Your ability to engage and retain will be influenced by your wage structure & incentives. If you are unlucky and find yourself in an enclave of other big farms, then you will be required to pay extra to get your required labour. Be warned: mostly, this labour is bereft of the science of farming – having only the art.

Farming is both an art and science. Over the years, we have focused greatly to the detriment of science on only the art – clearing land, getting any type of inputs, praying for the rains, planting and waiting on the Lord for a good harvest. Quite differently, farming involves the science of testing and knowledge of soil type and its nutrient position – including acidity level etc., land development protocols dependent on the type of crop, planting timing, appropriate agrochemicals and fertilisation protocols based on the soil test etc.

Even some persons with agriculture-related certificates do not possess this know-how. So, do not be too confident it is that type or this type of crop-growing area so skilled labour will be available; or that you have engaged a certificate-based farm manager.

Invest in your own knowledge of the sector, crop etc. Learn by practice, sign up for self-growing programmess and develop some capacity. Deliberately engage persons with practical experiences to lead. If possible, bring them from outside the immediate community and develop a plan for technology transfer – they must become the trainers of trainers. If they prove to be beneficial, you run the risk of losing them to other farm projects; hence, your retention plan must be top-notch – your bottom line depends on this.

It is a sad reality, but – if you can afford it – bring at least a technical lead from outside Ghana. If you do, look toward countries with the same climate conditions as Ghana.

  1. Capital or money

Zig Ziglar’s money quote of “Expect the Best. Prepare for the Worst. Capitalise on what comes” should never be lost on you. In expecting the best, you must invest wisely. Investment decisions must be driven by functionality & operation optimisation. Aesthetic investments must never be considered during the first five years, unless you are operating with deep pockets. Technology & mechanisation must lead in this decision-making process.

Whether you prepare for it or not, the worse will come. When your production yield expectations are not met, you can be confident the next may be better. However, by the time you institutionalise such improved yield expectations, your losses will have outrun your pocket. Yield performance remains a factor of several issues – mostly things not within your immediate control.

Your debt accumulation rate will become high or you will keep funding as equity. At this stage, what source of money you capitalised on will become important. If it is your personal savings or money from friends & family (even that) you may have a breather. In the unlikely event it is loans or private debt arrangements, then you may just have sold your peace of mind.

So, be warned. Pursue the use of personal funds, patient capital or partnerships involving a mix of capital and technical investment. Loans from financial institutions should never be the first option when deciding on your investment. Remember to limit your liability overreach by using the instrument of a registered company.

  1. Time

Time, they say, is money. So if your money is in, your time must be too. Time in this context includes your physical presence, your involvement in the farming activities, the ability to learn quickly and provide leadership with your acquired knowledge.

You cannot be an absentee farmer/entrepreneur. If you feel you have earned the right to be an investor, just look for the right business to invest in – not farming. You cannot buy time with the engagement of others, no matter how competent they are. We all see things differently, and your time may help change a thing or two. It is never the concern of how you can manage your time with other things you may want to do. Farming is that one thing you can only do at a time, or with the greater allocation of your time.

Do not let the desire of “I can make time” lead you into temptation. It either you have the time or you don’t dare start it.

  1. What to grow

The sector has endless opportunities across various sub-sectors and their value-chains. Based on your interest/passion, decide what you want to invest in or grow. While making the investment decision, be guided that profitability is a factor of crop type/investment. Underlying this is your knowledge of the seasons. Timing is key. And on a commercial scale, with the right investment into irrigation, your production capacities can be managed in ways that increase during the dry season and are moderated during the major planting season.

If the local market is your target market, then your production must be all-year-round so you can take advantage of the price windfalls. Do not attempt to produce everything, specialise. Be known for one or at most two crops, and do stay ahead of others. With a strong understanding of what to grow and when to grow it, you can control prices for at least 6 months of the year and increase your profitability.

  1. Community

The community is a unique source of labour, support and problems. It will be expensive ‘importing’ labour from other communities to your growing area. So, you will count greatly on the cooperation of your immediate community. You will need to quickly get the buy-in of the community into your project. Make plans for interventions that support skill development, support for community project etc., apart from employment opportunities.

Before long, you will start receiving all kinds of letters/appeal for fund envelopes from churches, youth groups – and don’t be surprised that traditionalists may come too. These form part of community expectations for development and progress. You should be excellent at managing those expectations: if not, your project may suffer the repercussions. Engage opinion leaders, the chief or assemblyman on how to navigate these and build partnerships for the growth of your farm and the community.

Take this for granted and the risk of community agitations (all of a sudden, it may be your project that has taken over their lands and livelihoods), theft, increased destructive animal (goats, sheep, cattle etc.) activities will run in your face. Some of these associated challenges you can manage with the siting decision of your farm. You can mitigate any concern for inclusion if the community is carried along.

  1. Inputs

What you put into the soil is what comes out as fruit/yield. Inputs play a great role in determining your actual yield. A bad seed performs badly. A wrong fertiliser composition is of no value to the plant. Input sourcing is highly tricky. Nice packages and powerful brand propositions do not reflect reality. Few accredited and credible input dealers exist on the market. Establish a technical support relationship with them and leverage it for the growing process.

Let your technical team lead in any decision of purchase of inputs, and if possible run a series of tests before purchasing in bulk. You should anticipate disagreement should the inputs turn out to be below standard, so keep records in proof of your claims. Finally, buy for cash or establish a credit line – but honour the terms.

  1. Trials and trials

Practice does not only make you perfect. More practice (trials) gives you the opportunity to understand the performance of your inputs, response of the soil, climatic conditions, workers’ approach & attitude to work among others. Your scaling-up decisions will be measured if you have conducted enough trials. Less risk, more control is all you need to be successful. Be innovative at this stage. Backed by science, do the unconventional things; keep the records and evaluate the results. You may have discovered new ways of growing.

  1. Network

Learn by sharing ideas. Engage in peer-reviews with service providers, other stakeholders in the sector. Count on the expertise of others. They may have learnt the valuable lessons worth sharing. Except for your highly-guarded innovations, bring in the 3rd eye at least each month to assess your progress and give you feedback. If you operate in an enclave with other farms, visit them; see what they are doing differently, ask permission and copy where necessary.

Keep a word within your network. Let them know you are open to new ideas and looking at growing together. You may not know where your next investment in the form of a grant, equity or debt or technical support may come from.

  1. Do not believe in Microsoft Excel, reality is key!

Microsoft Excel is a great invention! It is a great productivity tool. But do not be excited about its output – projections. Farming does not obey the rules of 5 – 3 = 2. Nothing is real until it happens. Worse is the assurances of your technical team when clearly they have missed it. Expect no miracle beyond that point. There is no perfect picture moment beyond the reality you have seen.

Learn the art of managing one’s expectations. Master the skills of managing disappointments. Be Strong. Be Resolute. Stick around. You can still turn things around – but not on Microsoft Excel projections or workings.

>>>The author is a Lawyer @ E.L Agbemava Law Office and an Agribusiness Entrepreneur

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