None of us have unlimited money, time or energy. That is why Tshepiso Mametja, owner of Maswele Farming, shares her responsibilities and her dreams with her family. Her mother, Constance, and her father, Rex, farms with her all the way. She brings the new innovative plans, and they support her with years of experience in farming with vegetables.
Lindiwe Sithole, host of African Farming Season 2, visits the Mametjas in Limpopo to find out more about what makes them such a successful team. “They are definitely a close-knit family, sticking together but also learning a lot from one another,” she says.
Farming is complex. Every decision made by a farmer could send ripple effects throughout the system. Praveen Dwarika, managing director of Lemang Agricultural Services, says one such an important decision is to make offtake agreements with retailers, just like Tshepiso did.
Offtake agreements allow farmers access to a sustainable market. It is an arrangement between a producer or farmer and a buyer to purchase portions of the producer’s upcoming goods and is normally negotiated to secure a market and revenue stream for a retailer or factory.
“Tshepiso actually has the best of both worlds, as she has secure agreements with retailers, but she also sells her product direct to the local markets,” Dwarika says.
Having off-take agreements can be beneficial, he adds, as it guarantees you an income and can help you grow your business, because you are sure that your produce will be taken even if you produce more. On the other hand, though, these agreements leave little room for negotiation, especially on price. “This means that you will not be able to take advantage of the markets and will not always be able to compete for the best price.”
According to Dwarika, farmers taking this approach should be a little bit more creative and negotiate better terms on their contracts, like invoice discounting. “I like Tshepiso’s approach: she has a good balance between these two options. This could go a long way in helping her with cash flow management,” he says.