A lot is being said these days about farmers becoming ‘entrepreneurs’. But what is entrepreneurship? What does it take to be entrepreneurial? How can an entrepreneurial behaviour be created and sustained? How can entrepreneurial skills be developed? How do entrepreneurial farmers respond to the changing farming environment? What strategies do they use? What actions do they take? And how can extension workers help farmers develop entrepreneurial capacity? There are two parts to entrepreneurship. The first is the managerial skills needed to start and run a profitable farm business. The second is ‘entrepreneurial spirit’. Both are important. Managerial skills can be taught, but an entrepreneurial spirit cannot be taught. Many modern farmers in Kenya are already excellent managers and many also have some of the spirit of an entrepreneur.
What is entrepreneurship?
Entrepreneurship is a key factor for the survival of smallscale farming in an ever-changing and increasingly complex global economy. But what is entrepreneurship in agriculture? How does it relate to small-scale farmers who operate on the edges of the economy?
Farmers as entrepreneurs
Farmer-entrepreneurs see their farms as a business. They see their farms as a means of earning profits. They are passionate about their farm business and are willing to take calculated risks to make their farms profitable and their businesses grow.
Entrepreneurship dynamics
But beyond this, successful farmer-entrepreneurs in Kenya are technically competent, innovative and plan ahead so they can steer their farm businesses through the stages of enterprise development – from establishment and survival to rapid growth and maturity. However, there are many challenges that these farmers face: social barriers,
economic barriers, regulations, access to finance and information, and their own managerial capacity to cope with risks and changes and to seize opportunities.
Entrepreneurial Characteristics
There is a difference between farm business management and entrepreneurship. Farm business management is about better planning, implementation, control and managing risk. Entrepreneurship is about looking forward – identifying opportunities, creating a vision of how the business will grow, innovating and taking risks.
Entrepreneurs have some special qualities or characteristics that set them apart from the average farm manager.
Some ‘typical’ characteristics of a farmer- entrepreneur are shown in the figure below. They can be grouped into six categories: core values, problem-solving, flexibility, drive, competition and confidence.
It is the characteristics shown in the figure above that enables entrepreneurial farmers to seek-out business opportunities, conceptualize and initiate new business ideas, gather the physical, financial, and human resources needed to start the business, set goals and guide the farm and all it resources to accomplish those goals.
Not all farmer-entrepreneurs have all of these traits to the same degree. But they will have all of them to some degree. Without their core values of trustworthiness and honesty, their problem-solving nature, their flexibility, their drive, the sense competition and their confidence, they would not really be entrepreneurs.
In order for good farm managers to become truly entrepreneurial, they will need to develop these characteristics.
Knowledge
Entrepreneurs need more than just their personal characteristics. They also need a range of competencies and abilities that can be learned or developed through training and experience – with the support of the extension.
An essential and important part of any competency is knowledge. Knowledge is a key factor in successful farm business management. Knowledge allows farmers to make informed choices. It puts them in a better position to compare the current practices being used with alternatives.
Levels of education (especially literacy and numeracy) may influence developing and using knowledge. Farmers who have less formal education can still be effective learners and acquire and use knowledge to make their farms more profitable. They may have to work very closely with extension workers and other sources of information to make sure that information is presented in a way that they can understand. A successful entrepreneurial farmer takes command of his or her own learning.
Farmers obtain knowledge in a number of ways. They learn through experience and observation and from written, verbal or visual information. Some of their knowledge has been handed down from their parents and grandparents. Many farmers also obtain their knowledge from listening to and learning from other farmers, observing how things are done and then practising it themselves. Extension workers are another source of knowledge. Whatever source they use, farmers, like most people, learn best through experience, by doing.
Information and its communication is an important aspect of knowledge creation and accumulation. The problem is that in many countries information is not widely available and information systems are poorly developed. Where information is available, farmers find it hard to use. For example, market prices are often expressed as average prices for a region or nationally and may be very different from local prices.
Farmers need knowledge in each of the key areas of farm management: planning, implementing and controlling. They need information about their direct functions – primary production, harvesting, processing, wholesaling and retailing. They also need information about their support functions – input supply, financial services, transport, packaging, promoting and advisory services.
Each farmer handles knowledge in a different way. More traditional farmers tend to cling to the knowledge they learned from their fathers. Market-oriented farmer- entrepreneurs actively seek new and reliable information that will help them decide how to make their farms more profitable. How farmers handle knowledge is a good indicator of how serious they are about making profits and being an entrepreneur.
Entrepreneurial Competencies
There are nine key entrepreneurial competencies for a farmer-entrepreneur: initiative, ambition, focused problem-solving, creative thinking, taking risks, flexibility and adaptability, interpersonal abilities, networking and readiness to learn.
With these competencies, farmers will be more able to compete in the changing environment and better able to make profits by taking advantage of new market opportunities.
These abilities can be developed and refined through practice and experience. They can also be strengthened through training.
Initiative
The initiative is a willingness to work. Entrepreneurial farmers are eager to get moving. They do not wait for others to start. Entrepreneurial farmers lead the way and are the first to act when a new opportunity comes along. They know what needs to be done and can create and express their vision for success.
| Initiative | Willingness to work |
| Knowledge | Understand what is required to succeed |
| Skills | Create and clearly express a vision for success
Set realistic but challenging goals |
| Behaviour | Willing to take the first step
Work well independently (without supervision) Keep working until the job is done |
Ambition
Ambition is a strong desire and will to achieve goals. Entrepreneurial farmers are very focused on achieving their goals. They are highly motivated and are not discouraged by setbacks.
| ambition | Strong desire and will to achieve goals |
| Knowledge | Understand the challenges to be faced |
| Skills | Have strategies to cope with setbacks |
| Behaviour | Highly motivated to achieve goals
Do not easily give up; not put off by setbacks Patient copes with stress |
Focused on Problem Solving
Farmers have to be good decision-makers and problem-solvers to be effective managers. But as entrepreneurs, they must be focused and conscientious. Entrepreneurs have a strong desire to solve problems and to seize opportunities. They actively look for solutions.
| focused on problem solving & decision- making |
Strong desire to solve problems and seize opportunities |
| Knowledge | Understand the decision-making process
Understand the problems the farm business faces Understand the opportunities that arise |
| Skills | Identify problems and opportunities
Locate, gather and organise data relevant to the problems Generate, evaluate and choose alternatives Implement and monitor the chosen alternative |
| Behaviour | Actively look for effective ways of solving problems |
Creative Thinking
Farmer-entrepreneurs see the big picture. They understand the farm business as a system. They understand the problems and opportunities that exist. They recognize and realize business opportunities. They are always thinking of new and different ways of doing things and come up with creative and innovative ideas and solutions. These are then tried and tested.
| Creative thinking | Come up with creative and innovative ideas and solutions |
| Knowledge | Understand the farm business as a system
Understand the problems facing the farm business Understand the opportunities that arise |
| Skills | Generate new ideas Find relevant information
Match information and ideas to opportunities and problems |
| Behaviour | Diagnose the farm business and its parts Identify opportunities
Assess the options Select the most appropriate Develop actions for implementation |
Taking Risks
Farmer-entrepreneurs are actively willing to take risks. They understand risks and how to evaluate them. They can weigh up the potential costs and the benefits. They are not afraid of failure and regard it as part of learning; a way to improve the farm business.
| Taking risks | actively willing to take risks to achieve the goals of the farm business |
| Knowledge | Understand the risk for each decision Know how to evaluate risks |
| Skills | Analyse and weigh the risks in terms of costs and benefits
Develop risk management strategies |
| Behaviour | Calculate the risks involved Pursue risk mitigating measures Learn from failures or mistakes
Adapt to risks and adopt new strategies |
Flexibility and Adaptability
Farming is in a constant state of change. Farmer-entrepreneurs readily adapt to these changes. They are aware of the changes and are quick in finding ways to meet them and take immediate action. They are not put off by setbacks.
| flexibility & adaptability | Readily adapts to new and changing situations |
| Knowledge | Aware of the changes affecting the farm business |
| Skills | Generate creative ideas
Analyse situations and develop coping strategies Locate new sources of resources and information |
| Behaviour | Highly motivated to achieve goals
Do not easily give up; not put off by setbacks Patient, cope with stress |
Strategic Thinking
Farmer-entrepreneurs have a vision of their business and strategies for achieving its goals in a sustainable way. They are aware of the importance of meeting longer-term objectives – not just address immediate problems.
| flexibility & adaptability | Readily adapts to new and changing situations |
| Knowledge | Aware of the changes and risk affecting the farm business |
| Skills | Analyse situations and develop long-term strategies
Find ways of realising the goals |
| Behaviour | Create a vision of the farm business Set goals
Develop strategies to achieve them |
Interpersonal Abilities
Farmer-entrepreneurs understand that their success often rests in the hands of other people. So they recognize the need to work with others. They are good communicators; they openly share information, and they actively listen to those around them. Above all, they are honest and trustworthy when working with others and in all their business dealings.
| Interpersonal abilities | The ability to work with others; especially those who are different. |
| Knowledge | Understand people and how they work
Understand relationships and when they are strong or weak |
| Skills | Open two-way communication
Share and encourage others to share |
| Behaviour | Work well with people of all kinds Honest and trustworthy |
Networking
Farmer-entrepreneurs are good at establishing effective partnerships and other relationships. They know who the key stakeholders are in their farming business. They are good at maintaining contact with them and can negotiate and make deals.
| Networking | Establish effective partnerships and relationships |
| Knowledge | Know who the key stakeholders and partners are |
| Skills | Negotiate and make deals
Maintaining contact with partners, markets, suppliers, etc. |
| Behaviour | Trustworthy and honest in all dealings |
Readiness to Learn
Farmer-entrepreneurs actively look for new knowledge and skills. They are always ready to learn. They know how to learn. They take command of their learning. They keep themselves informed of learning (and training) opportunities and they learn from mistakes.
| Readiness to learn | actively looks for new knowledge and skills; learns from mistakes |
| Knowledge | Know how to learn
Keep informed about learning opportunities |
| Skills | Set learning goals
Analyse and identify when new knowledge or skills are needed |
| Behaviour | Take command of learning Curious |
Source: Fao
