What has changed?

July 2017

We live in a world that is for ever changing and the tempo of change is increasing. You may find this a strange topic to discuss but bear with us, there is method in the madness. One may even ask the question ‘Are things changing?’ Unfortunately, or fortunately things are changing – sometimes for the better, sometimes for the worse.

Let’s consider a few changes that affects the farming environment. The changes mentioned is by no means a complete list and neither in order of importance.

Information
The amount of information and availability has changed dramatically – to such an extent that it can be mind boggling. The development of electronic technology is the major driver of the amount and availability of information.

Technology
As discussed in our previous articles mechanical and digital technology is continuously changing and improving.

Climate
It is now more or less an accepted fact that the climate is changing due to the mostly negative influence we as human beings have on the earth. The temperature is increasing, and the occurrence of hailstorms, thunderstorms and flooding, hot and cold spells – are on the increase and becoming more severe.

Marketing
The marketing of agricultural products has changed dramatically from a controlled system to a free market system during the late 1990s. As of late different markets, each with its own challenges, are opening to our farmers.

Consumer preferences
Consumer preferences has also changed dramatically with the emphasis on high quality products produced in an eco-friendly and animal friendly manner. And they want to know where the products come from – traceability.

Economy
The latest change regarding the economy is the downgrading of our country to junk grade which will have negative effects on all of us. The downgrading is the result of a poor economic growth rate and the increase in unemployment. Interest rates will increase and the value of the Rand will decrease. Because of this the prices of inputs will increase, especially those that are imported. The one advantage for exporters is when the Rand decreases they earn higher prices for their products.

Transport
The face of transport has changed tremendously in South Africa. In earlier days, most of the transport activities were by rail, especially bulk transport. Today trucks are congesting our roads and transport has become more expensive.

Government support
It is a fact that our farmers receive very little support from government.

Theft
Even the face of theft is changing in our country – there is a higher incidence of theft that cost our farmers a lot.

What about this?
We have briefly mentioned a few of the changes that have taken place over the last couple of years. You may now ask the question “What about this?” Let’s look at these changes from a management point of view.

First, you must gather information regarding the changes and then identify the effects the changes will have on your business. Will the influence be negative – such as increasing costs, reducing your production, or will the influence be positive – such as increasing income, or increasing the quality of your products. Then you must manage these changes. You will be able to manage the effects of some of the changes and some not. They must then be managed as a risk.

In previous articles, we have explained that a farming business is one of the most difficult businesses to manage. This statement stands true and these changes makes it even more difficult. Should you wish to survive as a farmer, you must take note of these changes and keep abreast of all changes by managing their effects.

The irony of these changes is, the negatives of these changes affect small farmers in relative terms more than the bigger commercial farmers. Vice versa, as far as positives affects from these changes are concerned, the bigger farmers experience greater benefits than the small farmers. The nett result being that there is more pressure on the small farmer to manage his business properly to survive. The only way you can manage your business is to be properly informed. To be informed you must gather information, read the information, digest it and decide how you are going to react.

We have also previously stressed the point that to stay a successful farmer your farming business need to improve and advance every year. Somebody said ‘when a farmer does not improve his business every year, he will stagnate and when something stagnates, it eventually dies.’

For the small farmer – stick to the basics. Manage your business, including the effects of changes, as best as you can by proper planning, organisation, implementing and control, using all the information you have gathered. Ensure that the information, both from internal and external sources, are reliable and correct.

Have you, for instance, already started managing (or at least done some planning) for the next drought?

Article submitted by Marius Greyling, Pula Imvula contributor. For more information, send an email to mariusg@mcgacc.co.za.

Publication: July 2017

Section: Pula/Imvula