“….for this to happen, we must change the approach to agriculture on the continent. Agriculture is not a development or social sector, neither is it a way of life: Agriculture is a business”.
This was stated by African Development Bank President, Akinwumi Adesina at High –level conference opening speech on feeding Africa: An action plan for African Agricultural Transformation.
It however conversely takes more than a thought and even words to turn agriculture around with commercialisation. More even, with regard to Poultry farming which is one of the lucrative enterprises with high turnover and quick return on investment, proper financial literacy is key for farmers to realise profitability and optimal performance on the farm. There is however an interesting but sad disconnect between production and finance management in prospective projects with failures serving as clear indicators and practical illustrations of mismanagement and uncalculated risks looming in emerging poultry farms.
Smallholder poultry farmers are seen as major contributors in the acceleration of agricultural growth globally but at the same time, they are economically marginalised to fulfil such realized potential. For this reason and many more, there are many initiatives aimed at capacitating poultry farmers on poultry farming.
Although major strides and milestones have been accomplished in developing and empowering a poultry farmer in terms of technical areas of production, little emphasis has been put on the aspect of monetising poultry projects. Farmers need to understand the synergy and correlation between production and finance, otherwise in all efforts to develop more sustainable commercial poultry farms, regression to subsistence will always be a bitter outcome.
Commercializing poultry farming is such a profitable and sustainable initiative at a glimpse but it takes more than a thought to lay a solid ground work for good performance. It therefore needs a holistic approach to arrive at an optimum level of achievement hence financial literacy very essential.
What is financial literacy to a farmer?
Financial literacy is defined as a combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial wellbeing (The OECD International Network on Financial Education, 2011).
Farmers are bound to make financial decisions day in and day out in running of their enterprises. Without financial awareness and knowledge, bad decisions can unknowingly be taken, impacting negatively on the business. With little or no risk resilience, emerging farmers can be forced to retire before they even started. Bad or good decisions in relation to finance can break or make poultry enterprises and it is imperative for farmers to be equipped with basic but key information in managing their businesses with greater weight put on money efficacy with regard to production efficiency and profitability.
It becomes a major challenge when farmers are equipped with all knowledge on technical aspects of production but neglecting the key component to their financial breakthrough. for a good course, trainings in poultry production are conducted by relevant stakeholders time and again to capacitate farmers with knowledge and skills in general management but little effort is directed on monetising such projects developed. In the name of commercialisation, financial literacy cannot be overlooked or be side-lined.
The core aspect of monetising poultry farming entails mainly empowering emerging farmers on financial literacy. Unlocking farmers’ potential in poultry farming lies in good calculative decisions in place in relation to finance management. The unfortunate narrative about commercialization is that, it has never favoured leaps of faith. There are risks lurking everywhere and farmers are prone to any misfortune that might surface at any time.
In the entire value chain, financial literacy is central and farmers who are aware in this area are set for financial capability, which is a major outcome resulting from famers being able to monitor and spend in a more economical sense whilst not compromising on the output. Making decisions on what feed or veterinary drugs to buy is one example of managing resources effectively ad cutting unnecessary costs on the farm.
Farmers ultimately reach financial well-being which is characterised by the ability to control day-to-day finances, and gradually becoming resilient thus, being able to bounce from a major shock or risk on the farm. Since they are not risk immune, at this level of financial well-being farmers are able to avert crippling risks and minimise impact in a case where they are affected.
Financial literacy paves way for improved budgeting, risk assessment and management, sound decision making, profitability and more importantly sustainability of a poultry farm. Commercialization of poultry farming is seen a major breakthrough in economic and inclusive growth of the nation, from smallholder famers and welfare economy of agrarian communities. With the 3 levels attained – financial literacy, capability and well-being, poultry farms can now be bankable projects and farmers are automatically given a lifetime ticket to expand horizons and ultimately enjoy the benefits that come with commercialization.