Jeremia Mathebula, an award-winning farmer, took some calculated risks to grow his business from a small subsistence farm to a successful commercial enterprise. Lindiwe Sithole, host of African Farming Season 2, finds out more about his journey to success during her visit to his farm.
Unfortunately many farmers live on the edge of extreme uncertainty, with some falling just below the threshold of survival, and others rising just above. There is a multitude of challenges farmers need to overcome to stand strong. Farmers like Mathebula know the importance of developing the necessary coping strategies to beat the odds.
Farming becomes increasingly risky as a farmer grows his business, therefore farmers need to understand the risks they are taking, develop their risk management skills better, and anticipate problems to reduce negative consequences. Risk affects production and, eventually, profitability.
Sithole welcomes Keneilwe Nailana, Manager: Agribusiness at Standard Bank Group, as one of her panel experts during the studio interviews. Nailana shares some valuable advice on risk mitigation. According to her, farmers need to look at ways to reduce and manage financial risk, otherwise they won’t build sustainable businesses.
“During these uncertain times, a risk mitigation strategy is crucial as farmers are bombarded with risk that could heavily impact the future of their businesses. Just think of the weather, pests, economic and political instability, changes in policies, riots and price fluctuations. “Farmers have no choice but to become more resilient to survive and it is crucial to build resilience by adapting strategies like diversification, price risk hedging and crop insurance.”
Nailana says farmers should seek out a trustworthy financial institution to talk about how they mitigate risks. “There are various financial products on the market to help mitigate the economic impact of these risk factors. Farmers should have the right tools to navigate successfully through these trying times.”