Some leaders try to change the economic situation of farmers by using unsustainable or ’emergency’ methods to increase their income “out of thin air”.
Such action works for a short while and creates a deep disappointment once ‘the magic’ is gone and the government stops pumping money or no longer is actively helping.
So how can we increase the income of hundreds of millions of farmers around the world for a long time and not by “single-shot”?
Well, one way would be by changing farmers’ profession.
|By large, this is what happened in the past 30 years in China that has become a leading industrialized country with strong immigration from the village to the city (BTW – similar happened in Russia after the regime changed in the ’90s).
While it offers some temporary comfort, it doesn’t improve the state of farming and farmers. Because the agri-sector is left far behind the leading agricultural countries/economies.
We can also expect that it will leave the problem of food availability as it is, or even worse.
The other option is to improve and increase the direct income of farmers from agriculture activities. This article focuses on the Stages to do exactly that.
To increase the income of farmers from agriculture we need to agree that – the land of the farmer is limited, and so, increasing the income means either:
(a) Increase the value of crops per kg.
(b) Increase the yield per hectare.
(c) And the best is to increase both Value and Yield.
Doing so we create – a sustainable growth of the agri-industry and contribution to the farmer and the country economy.
A Case-Study – Mango
Why I use mango as an example?
Because it is a common crop around Africa and Asia. It is popular and loved by most people, and therefore has high demand by food markets. Mangoes also receive a high price for high quality.
Yet, the current economic situation of farmers growing mango is bad, mainly because of fruit flies, which affect the mango quality and by that its price and availability.
So by demonstrating how we increase the income of farmers growing mangoes, is practically like saying – “Everything is possible“.
To make this into a case-study I will use real-life, field cases numbers, which represent much of the Mango industry around Africa and Asia.
Note, although the case-study represents much of the Mango industry, it may not fit 100% to the situation in your country.
However, I believe it will enable you a close and clearer view into the industry in your country, and a good comparison to other locations, plus it will give you the perspective of such an example.
Let’s start with the Main 6 Factors, which are the key factors of farm and agri-industry success – we will use our farm as an example –
* Factor 1: Farmer’s income (USD/kg) – 0.05 to 0.5. Here we use 0.2 $/kg.
* Factor 2: Yield (kg/Ha.) – 3,000 to 10,000. Here we use 5,000 kg/Ha.
* Factor 3: Fruit fly infestation – 30% to 80%. Here we use 50% fruit loss.
* Factor 4: All expenses per hecare – 900 $/Ha (I used a very low figure).
* Factor 5: Export – in most cases – zero (0).
* Factor 6: National income from mango export ($/Ha) – neglected or zero (0).
Value Creation: Current – Dark Future
Now let’s work with the numbers to see it the way the farmer see it –
* Potential Income ($/Ha.) – 5,000kg X 0.2$ = 1,000$
* Expenses and Loss ($/Ha.) – 900$ plus 500$ (due to 50% fruit fly infestation).
* Total Profit ($/Ha.) – 1,000 – 900 – 500 = -400$ (Red = Loss)
So a typical farmer is losing hundreds of $$$ per hectare, every year!
This creates strange situations where a country that is a major mango producer imports mangoes for domestic consumption.
That explains well why so many farmers abandon their Mango farms, and the others are under extreme stress of loans from banks.
Note, in reality, it is hard to know which fruit is infested and which is not. So farmers sell also much of the infested fruits and this way manage to ‘break-even’.
As a result, the ‘trust’ and general ‘demand’ for their produce is compromised and export is impossible.
Please note a part of an email I recently received, clearly presenting the magnitude of the problem…