As an agripreneur or farmer, you are concerned about increasing your livestock count, or your crop field size. You want to make sure your land has the grazing capacity, that you have met the livestock vaccination targets and have made sure your employees are paid and you can feed your family.
However, have you as an agripreneur given enough thought to your finances? Are you making a profit on all your investments? Are you recording all the necessary financial data, or are you making losses? Or like most of us, aren’t sure what is happening with your finances and are just going on day-by-day spending and losing your money.
There is a need for Farm Financial Management (FFM) beyond the regulatory and compliance requirements of a farmer. FFM encompasses recording financial data, analysing and interpreting the financial information to allow for planning, budgeting, control, and decision making.
It is believed that most farmers do not see accounting and finance as their favourite pursuits. Additionally, most farmers make use of the accountant’s services merely for compliance, loan applications, and tax assessment. However, these reports are little more than tax regulations which the farmers tend to quickly look at and then file away.
The financial reports compiled for compliance purposes may not necessarily add value to decision making in farming investment activities.
As a farmer myself, who has been watching my father over the years, I have come to realise the importance of FFM and its contribution to the economies of scale of farming operations.
Agriculture is one of the most significant sectors in Namibia, with the majority of Namibia’s population reliant directly or indirectly on the industry for their livelihoods. Nonetheless, the global economy has reached a recession state, which consequently has had a negative impact on the livelihood of Namibians.
Food, fuel, and all the other commodities have become more expensive, and this curve is said to continue for a while. It is thus imperative that farmers count every cent and that they ensure they invest all their money where it matters most to ensure sustainable farming enterprises.
For farmers to develop sustainable farm enterprises and informed financial decisions, FFM must be brought to the forefront. The area of financial management beyond compliance in agriculture has been given little attention compared to other concepts of farming.
Perhaps, emphasis on FFM may provide a starting point for formulating a more profitable strategy and encourage farmers against deeming farming as a hobby but a more profitable sustainable farming enterprise.
As reported in the New Era newspaper: https://neweralive.na/os/posts/opinion-turning-farming-from-a-hobby-into-profit-making/