There is a current craze of people, especially those in the formal sector, going into farming as another alternative source of living or income. Many of these people joining farming represent a new vision of dynamic and hopeful generation that is helping to change the face of agriculture in Uganda. Farming is becoming attractive for people who have been working in formal institutions. There is a rush for arable land in many parts of the country.
However, starting an agricultural enterprise, like other businesses, has its own challenges and risks. Agribusinesses are complex enterprises that integrate agricultural production, value-added processing, packing, distribution and marketing activities. All these entail greater risk than the simple subsistence farming and require specific skills and experience. But the rewards for farming are immense especially with the current high demand of food in the country and the East African region.
So the big question is, are you really making money from your farming enterprise? Are you actually making a living from the farming enterprise? Can you afford to pay for household utilities, health care, school dues etc.? Can you pay your labor a living wage? Since you started the farming enterprise, aren’t you draining most of your savings? Aren’t you keeping your farm afloat with income from other means and yet it should be sustaining itself as a business unit? Are you feeling like you are trying to fill a bathtub when its drain is open?
These are questions many of us who are practicing farming should begin to serious ask ourselves. Are you wondering how other farmers are actually making a living? To make this clearer, let me try to define what constitutes a living in this context;
- When a farmer is paying himself/herself a weekly wage that equals what a person working full-time would make on a minimum wage.
- When the farmer is abiding by the labor laws, meaning all his/her workers are paid for all the essential farm tasks.
- When the farmer is earning his/her income from farming which means that nonprofit farms that survive on grants and donations should not be considered here, neither the farms that sustain themselves on outside income sources.
I have talked to many friends who are into farming and most are working outside jobs to keep their farms above water. They are not looking at farming as a serious business that should offer a living. It’s not all about loving what you do. Many farmers are seen to be enjoying what they do, but ultimately they should understand that farming should be taken as work, an occupation, a means of making a living that must fulfill the basic function of a job; to be able to provide you an income!
Here are some points that can help to prove that you are farming for a profit and not just as a hobby:
- You operate your farm in a businesslike manner. As a farm owner, do you have a business plan, have you set goals, do you keep records?
- The time and effort you spend on farming indicate that you intend to make a profit. Do you actually spend sufficient time and energy on attaining this goal or you are a “weekend” or a “telephone” farmer?
- You depend on income from farming for livelihood. Here, full-time farmers have an advantage, but the income issue relates more to the farmer's need for deductions than his or her dependence on farm income. Farmers having off-farm jobs to supplement their income depend on their farm income, too.
- Your losses are due to circumstances beyond your control or are normal in the start-up phase of farming.
- You and your advisers have the knowledge to carry on the farming activity as a successful business.
- You made profit farming in other years and can document how much you made.
- You can expect to make a future profit from appreciation of the assets used in the farming activity.
We need to make a decision to begin farming for profit rather than “just for fun”. So are you planning retirement? Are you in a state of uncertainty at the workplace due to increasing number of layoffs? Are you among the many employees who have become disenchanted with employers who are normally quick to let or their peers go when the times are tough? You can use your current employment to mobilize savings, and together with the real world formal experience, you can begin to plan joining farming which has enormous benefits and potential especially helping you in making a living. But this can only be achieved if farming is taken serious as a business.