FARM MANAGEMENT

2.5.1.1.1

Farm Management is making best use of farm resources e.g. land, labour, entrepreneurship,
capital etc. in order to maximize production and make more profit.
OR

This is the process of making decisions so that the use of human and material resources are planned,
organized and controlled to achieve set goals of a farm business.

2.5.1.1.2
IMPORTANCE OF FARM MANAGEMENT

 Helps to implement farm plan

 Helps to keep up to date records
 Helps to come up with the best decisions on how best to use available resources
 Helps to organize resources to effect production
 Helps to evaluate farm business in a view to make improvements
 Helps in proper planning & problem solving
 Helps in setting farm objectives
 Allows monitoring and controlling work to be done
 Helps in reducing unemployment
 Helps in using farm resources & manage them efficiently

2.5.1.1.3

DEMAND

This is the quantity of products consumers are willing and able to buy at a given price in the market.

Demand curve

Price

Quantity

2.5.1.1.4

DETERMINANTS OF DEMAND

These are factors that influence consumers to buy a certain product

1. Price of product: The lower the price of a product, the higher the demand for the product. The
higher the price of a product, the lower the demand for the product.
 2. Change in consumer income: If a consumer’s income increase, then his or her demand for
products will rise. If the income falls, then his or her demand for products will go down. i.e. The
more money consumers have, the more they will want to buy better products & the less they will
want to buy poor products.

3. Consumers’ taste & preference: If consumers prefer or like a certain product, the demand for that
product will increase.

4. Availability of a product: If consumers expect a product to be in short supply or unavailable in

the near future, then its demand will rise quickly.

5. Consumers’ expectations: If consumers expect the price of a certain product to rise in near future,
then its demand will rise quickly.

6. Change in the number of buyers: Demand for product will increase if there are many buyers.

7. Change in the price of complementary goods or product or related product: if the price of a
complementary good rise, then demand of another complementary good will fall. For example if
the price of bread increases the demand for butter will fall and if the price of bread falls demand
for butter will rise.

8. Change in price of substitute goods or products: A substitute is a different product competing

with the one we want to buy. E.g. Coca cola & Pepsi if the price of Coca cola, for instance goes
up, then the demand for Pepsi will increase.

9. Advertising: A well-advertised product will be highly demanded and its price will increase.

10. Uses of the product: The demand for products that have many uses is often higher than for
products with few uses. E.g. The demand for sugar is higher than the demand for salt.

2.5.1.1.5

Supply

Supply: Is the amount of the product that producers are willing to offer for sale at a given price.

Supply curve

Price
 2.5.1.1.6

Determinants of supply

1. Price of a product: A rise in the price of any product encourages producers to supply more of
that product. This is because suppliers are willing to sell more and make more profit.

2. Cost of production: if the cost of producing a product increases then its price will increase and
then the supply will be low.

3. Producer expectations: If producers expect the price of a particular product to go up in the

near future, they may store the product or supply less with the intent to sell more when the
price has gone up. If they expect the price to go down, they will want to sell the product as
quickly as possible before that happens.

4. Number of suppliers: If the number of producers or sellers increases then the amount of a
product offered for sale will increase.

5. Changes in the technique of production: More efficient production means lower production
costs hence leading to an increase in supply.

6. Change in demand: When the demand for a product goes up, the price will increase. Suppliers
will also offer more of the product for sale so that they can make more money. The higher the
demand, the higher the price the more will be supplied.

7. The effect of nature: When nature conditions are favorable e.g. the amount of rainfall increases,
the supply of a product is likely to increase e.g. crop yields are usually higher during good rainy
season than during drought.

8. Nature of product: certain products, such as vegetables and chickens, can be produced very
quickly if the demand increases others such as beef cannot. If the price of beef goes up and
demand increases, it will take farmers a long time before they can produce more beef.

Note: The law of supply states that “the higher the price the greater the quantity supplied; the lower the
price the lower the quantity supplied

2.5.1.1.7

PRICE DETERMINATION

Market price / Equilibrium price:

 Is the price at which a product is sold to a buyer in a market.
 Price at which the demand & the supply are equals
 Is where the demand curve & supply curve meets
 1. Demand of the product: When the demand is high, the price of a product will increase.
When demand is low, the price of a product will decrease.

2. Supply of the product: An increase in the price of a product will increase the supply of the
same product. A decrease in the price of a product will in turn reduce or lower the supply of
a product.

3. Cost of production: If the cost of producing goods increases, the quantity of the goods
produced is most likely to decrease. In turn, a low supply of the goods will result in a price
increase.

4. Type of a product: Not all products are of the same value, some products attract a higher
price than others. Luxury goods for instances, are sold at higher price than other standard
goods.

5. Change in technology: This usually leads to more goods being produced and made available
in the market. When the supply is high and the demand is low, the price of the product will
decrease.

6. Availability of a market : When there is a shortage of a product, its price will increase. When
there is a high supply of the product than demanded, its price will decrease.

Note: Any factor that affect demand and supply will also affect the price of a product or service.

2.5.1.2.1

LEGAL FORM OF BUSINESS ORGANISATION

This can be referred to as forms of business ownership.

a) SOLE PROPRIETORSHIP OR SOLE TRADER

Here the business is owned and managed by an individual. This is an easy form of a business to manage
and operate. It is a common in Botswana because we have for example shops, farms and medical
pharmacies owned by individuals. The owner of the business is the Manager and takes responsibility of
running the business. The owner takes responsibility of all failures and successes of the business.
 Advantages Disadvantages

 It is easy for the manager to operate  It requires the owner to be very

 It gives the owner freedom to run the responsible
business  The business is usually limited by the
 It reduces time for consultations when amount of money that the owner has.
making decisions  There is lack of business continuity
 Business can be terminate if the owner
dies

b) PARTNERSHIP
This is an arranged association between two or more people (usually up to 20) who share the ownership
of a business. The partners share their money and knowledge.

Advantages Disadvantages
 It makes work easy because partners can bring  It can difficult to make decisions if partners
their relatives to provide labour. disagree
 Partnership is easier because decision can be  Fraud can be difficult to detect.
easily reached than a company.  A partner may be held responsible for personal
 Written agreements provide freedom for each debts of the other partner
partner.

c) THE COOPERATIVES
A cooperative is a legally registered organization created by a group of people who share a need, then
the cooperative service the need.
In this form of ownership profits are shared according to how much each member has contributed.
For example, If in Etsha village there are farmers who produce milk that is more than they need, they
can come together to provide a bigger market or even process milk to produce either yoghurt or sour
milk.

Advantages Disadvantages
 It makes work easy because partners can bring  It can difficult to make decisions if partners
their relatives to provide labour. disagree
 Partnership is easier because decision can be  Fraud can be difficult to detect.
easily reached than a company.  A partner may be held responsible for personal
 Written agreements provide freedom for each debts of the other partner
partner.

d) The Company
The company is the largest type of a business. The owners are shareholders not individuals, this means
that the company sells shares to anybody who has money to buy them. The raised from sale of shares
will then be used to expand the business. The shareholders will then vote for board of directors who are
responsible for employing the CEO of the company who is responsible for running the daily activities of
the company. The shareholders will share the profit according to how many each one has. These profits
are called DIVIDENTS

Advantages Disadvantages
 People (creditors) who are owed cannot take  Companies are expensive to form in terms of
private property of shareholders. paying legal costs.
 Business cannot be terminated due to death  Companies requires highly skilled personnel
of a shareholder to be highly
 Professional or skilled people are hired by the  Shareholders have limited role in decision
company making.
 Money is easily sourced by the company by
selling shares

2.5.1.2.2

EFFECTIVE ORGANISATIONAL STRUCTURE IN A FARM

This is a structure which indicates how decisions and authority will be made. The most common
structure is where decisions are made from top to bottom. The manager is responsible for overall
decision making and authority. A well-structured organization will provide a framework for everyone
involved to understand the vision, mission and goals of the business.

An organizational structure is a system or plan showing how responsibilities and levels of authority to be
shared or delegated in a business. It ensures that employees continue to work as a team and the
business runs smoothly.

REASONS FOR HAVING AN EFFECTIVE ORGANISATIONAL STRUCTURE IN A FARM BUSINESS

 To ensure that the business operates smoothly and effectively

 To determine the types of jobs that will have to be carried out
 To determine how decisions will be made in the business.
 To show employees channel of communication within the business
 To make sure that every employee knows & understand his or her duties, role and level of
authority in the business
 To enable employees to make decisions within their levels of authority without having to wait
for their supervisors.

FORMS OF ORGANIZATIONAL STRUCTURE

1. Top down structure: Is where the manager or owner makes the decision and the bottom staffs
implement it.
 Farm manager

Farm assistant Farm assistant

2. Shared decision making structure: Is where authority is delegated to other people.

FARM MANAGER

CROP PRODUCTION LIVESTOCK FARM MARKETING

PRODUCTION
SUPERVISOR SUPERVISOR
SUPERVISOR

GOATS RABBIT
VEGETABLES FIELD CROPS
PRODUCTION PRODUCTION
(WORKERS) (WORKERS)
(WORKERS) (WORKERS)

2.5.1.2.3

ROLES AND FUNCTIONS OF MANAGEMENT IN AN AGRIBUSINESS VENTURE

a) PLANNING: Here the farm manger draw up a clear plan on what the farm has to produce, He / She
clearly states daily activities and assign duties to workers. He / she decide on the products to be
produced.

b) COORDINATING: Here the farm manager ensures that each unit in the farm operates efficiently and
do not lag behind. He ensures that workers in each unit has been assigned duties and carry them out
accordingly.

c) ORGANISING: Here the farm manger ensures that resources are available and workers know exactly
what to do. If workers do not have the right skills he organizes training for his workers.

d) STAFFING: The farm manager ensures that the right workers are employed for the work to be done,
the farm manager ensures that the workers employed have the right qualifications and receive
adequate training for their specific duties.
e) SUPERVISION: Here the farm manager ensures that the duties allocated are carried out as specified.
In order to supervise or control the supervisor must know the job that is being done so that he/she can
see whether the right job is being done.

f) DIRECTING: Directing means taking charge of people. The manager must ensure that workers are
satisfied and can identify with the business and help achieve the objectives of the business.

g) REPORTING: Farm manger must make good records to show how the business is performing. Good
reporting will help to identify weak points and strengths of the business. The manager must record all
aspects of the business such as workers employed and profits made.

2.5.1.2.4
QUALITIES OF A GOOD MANAGER

The Manager is the person who is in charge of the operations or activities of the business; he leads and
makes decisions which will drive the objectives of the business.

The qualities of a good Manager are as follows:-

He/she should be:-

 In good health(healthy)
 A hard worker because farming is a demanding work
 Ready to take risks when making decision because farming involves risks
 Self-confident, that is should have good self-esteem and believes in themselves.
 Honest with themselves and with others
 Reliable and lead by example
 Should inspire, control and supervise others
 Should be prepared to listen to advice and make good business decisions
 Should be creative and innovative
 Should have good communications skills
 Should be knowledgeable and experienced in their job.
2.5.1.2.5

FACTORS CONSIDERED BEFORE STARTING AN AGRICULTURAL ENTERPRISE

 Availability of a market
 Knowledge & experience
 Type or nature of business
 Costs involved in the business
 Competition in the business
 Location of the business
 Availability of qualified staff
 Return on investment
 Possible customers available
 Suitable climatic conditions
 Availability of a suitable land
 2.5.1.2.6-2.5.1.2.7

PROBLEMS EXPERIENCED BY COMMERCIAL FARMERS IN BOTSWANA AND

THEIR SOLUTIONS

PROBLEMS EXPERIENCED SUGGESTED SOLUTIONS TO THE PROBLEMS

BY COMMERCIAL FARMERS
1. Unreliable rainfall and low  Collection of rain water and drilling of boreholes for irrigation
rainfall water
 Farmers should grow crops that are drought resistant or that
mature early
2. Outbreak of pests and diseases (  Regular vaccination
for crops and animals)  Controlling livestock movement
 Resistant crop varieties must be used and
 Practicing early planting

3. High cost of production  Use of government funding schemes such as CEDA to get loans
and other financial institutions such as Commercial banks
 Government should provide loans to farmers at low interest rates
to cushion them against high inputs costs
4. Lack of capital  Use of government funding schemes such as CEDA to get loans
and other financial institutions such as Commercial banks
 Farmers should form partnerships so that they are able to raise
more funds for their businesses
5. Poor soil quality  Addition of fertilizers to improve soil fertility
 Use of the right methods of farming which do not impact
negatively on soil like crop rotation

6. Lack of technical skills and  Farmers must be trained to acquire skills on modern farming
knowledge methods.
 Providing services such as electricity at farms to ensure that
young people settle and work in farms

7.Unfavourale weather conditions  Grow the right crops at right time

8. HIV and AIDS  Behavioral change towards HIV AND AIDS – People must go for
testing and those infected must enroll for treatment.
 People must support those infected and stop stigmatization.
 MARKETING PROBLEMS

These are problems which affect accessibility and availability of agricultural products to
consumers.

Problems Suggested solutions

1. Long distance to markets  Farmers must acquire land nearer major markets like in the
periphery of cities and town.
2. Perishability of agricultural  Proper storage facilities like refrigerated storage and transports
products must be availed.
3. Lack of proper markets  Government should help with establishment of proper markets
for farmers
4. Seasonal pattern of production  Farmers must produce products all year round to ensure
regular supply of products.
6. Shortage of storage facilities  Government should help with establishment of proper markets
for farmers with good storage.
6. Tough competition from  Government must control importation of locally available
foreign producers products from outside the country.
7. Poor roads and transportation  Government must intensify establishment and maintenance of
infrastructures like roads.

2.5.1.3.1

MARKETING AND MARKETING CONCEPT

MARKETING
 This is the performance of all business activities involved in the flow of goods from
production to the consumer. It involves all activities in which sellers satisfy the needs of
their consumers in return for value of their products.
 The process of buying and selling goods and services in a market.
 The process of transferring goods or services from a producer to a consumer
 Is any activity done to ensure that a product is known in the market.

Marketing activities involves the following:-

 Designing the product through market research
 Promoting and advertising the product
 Setting a price for the product
 Packaging
 Distribution
 Selling the product and satisfying the customers
 Public relations
 THE MARKETING CONCEPT

 Is the marketing idea that businesses analyses the needs of their consumers and make
decision to satisfy those needs and wants.
 Is where sellers focus mainly on the customer’s needs so as to satisfy them. The main
concern is to keep the customers by availing a quality product that they need in order to
win their loyalty.

2.5.1.3.2

REASONS FOR MARKETING

 It helps producers to decide on which products to produce and when.

 It leads to satisfaction of consumers and high return to the producers
 It helps build customer relationship
 To sell the product brand
 Helps build value in your products
 To improve its competitiveness
 To make a market breakthrough
 To find out the needs of customers
 To improve sales of the product
 To find out the needs of customers
2.5.1.3.3

MARKETING MIX

 This is a promotional plan that a business can use to influence the buyers response within a
marketing environment.

 It is a combination of elements that are used to effectively market a product. The elements of
marketing mix are Product, Place, Price and Promotion usually called the 4P’s. 4P’s
influence the buying habits of the customers.
1. Product
 Marketed product must meet the needs or demands of its customers
 It must be of high quality or attractive enough to buyers
 Must also offer better benefits than that of your competitors.

2. Promotion
 It is done to influence the behavior of customers so as to end up buying the product.
This can be done through advertising, word of mouth and sales promotion.
 Ensuring that the product reach its customers and are informed about it.
3. Place
 Customers should have easy access to your product at all times.
4. Price
 The price & quality should correlate or match.
 The price set for the product should be competitive or reasonable if you want to
increase your sales

2.5.1.3.4

METHODS OF MARKETING AGRICULTURAL PRODUCTS

1. Personal selling-This involves a salesperson visiting individual customers and convincing

them to buy a product. This method is often necessary when the product is new because the
salesperson can demonstrate how it is used.

2. Sales promotion-This is when products are sold at a reduced special price or giving away
free items with a purchase. The main aim of this method is to attract customers from other
sellers.

3. Advertising-In this method the business pays for spread of information about its products to
attract more customers. The business can advertise on radio, television, newspapers,
magazines or even internet.

5. Direct marketing-This is when the business contact customers directly by calling them on
their phones, sending an SMS, sending messages through the post office or by placing flyers
and any promotional material at their homes.

6. Agricultural shows and fairs-This is where farmers exhibit there products for spectators to
see and know about their products. During the show their products will be shown on
Television and even newspapers. Farmers in Botswana have been involved in agriculture
shows for many years.

7. Road-side boards-They advertise products that are for sale and where they can be bought.
The distance of the place from the main road is also shown

8. Internet marketing- Is whereby suppliers have a website where they post information about
a particular agricultural product they are offering for sale and those visits the website can get
to know about the product being marketed.

9. Well labelled and addressed packaging material-As much as possible packaging for a
product should include a label with an address, so that customers can easily contact the
supplier of the products and place orders.

10. Using well known wholesalers or retailers-When selling products to well-known

wholesalers or retailers, paying a commission could help sell their products because many
people go to those big shops for shopping and will see the products on display.
11. Using attractive and good packaging material-Using quality packaging material that is
also attractive will help farmers promote their products.

12. Direct contact with buyers- a farmer can visit or directly contact members of the public to
make them aware of what he or she wants to sell to them. It is common practice in rural areas

13. Open auction system-An auction system is a process where people buy and sell goods by
offering them up for a bid and selling them to the highest bidder.

14. Government marketing agencies-These include Botswana Meat commission (BMC) and
Botswana Agricultural Marketing Board (BAMB). BMC provide a market for livestock
while BAMB offers crop producers a market for their crop products .Any interested farmer
or producer of agriculture product can sell his or her produce to these organisations.

15. Co-operatives-Co-operatives are made up of a group of farmers or people sharing common

interests and want to do business together. These co-operatives can sell and buy agricultural
products on behalf of its members. The co-operatives will look for buyers, negotiate better
prices, sell the produce, and pay the members for their produce.

2.5.1.2.5

THE UTILIZATION OF INFORMATION COMMUNICATION TECHNOLOGY (I CT)

TO PROMOTE TRADE IN THE AGRICULTURAL SECTOR

I.C.T stands for Information Communications Technology

The use of ICT in marketing of agricultural products includes the use of computers (internet,
websites and e-mails), mobile phones (conversation and sms/messages) and landline telephones
(conversation and faxes)

HOW DOES THE USE OF ICT HELP IN THE PROMOTION OF TRADE IN THE
AGRICULTURAL SECTOR?

 Provide farmers with information about prices of farm products in the local and global
markets. Through the use of television, radio, internet or using the website.
 Helps to improve access to the markets by linking buyers with suppliers of the products
directly.
 Allows fast advertising. E.g. using internet i.e. farmers can advertise and sell their
products online to people that they never had access to before easily.
 Helps to make farmers aware of new and potential market opportunities and condition as
well as changes in consumer’s needs and wants.
 Allows buyers to compare prices.
 Helps to make bank transfers for selling and buying products.
 Helps in keeping proper records on the computer for all farming enterprises.
 FARM RECORDS

 Refers to systematic entries or statement of various farm activities and transactions in

suitable books.
 Is any recorded information about the activities taking place in the farm.

TYPES OF FARM RECORDS

1. Inventory
2. Farm diary
3. Production records
4. Financial records
2.5.1.4.1

REASONS FOR KEEPING FARM RECORDS

 Helps to determine whether the business is making a profit or a loss.

 Helps in planning and making informed decisions
 Assist farmers in securing or acquiring loans
 Helps in budgeting
 Shows strong and weak points of the farm
 Allows the farmer to farmer to compare production on yearly basis
 Allows the farmer to compare his/ her projects
 Assist in preparing income tax
 Helps determine profit or loss of the farm
 Assist in culling animals

2.5.1.4.2

PRODUCTION AND FINANCIAL RECORDS

1. Production records
 These records show the quantities of the inputs used and outputs obtained but not
their values.
 These are records or written information showing what the business is producing.

Examples: milk production record, egg production record, mortality record, livestock record,
crop record, vaccination record

Example of broiler production record

Date Number in stock Number of died broilers Number of sold broilers

14/01/19 200 broiler chicks 0 0
04/04/19 185 15 0
10/04/19 100 10 75
15/04/19 0 0 100
2. Financial records (Accounts)
 Are records of expenses and income in a farm in farm business.
 Is a record showing the monetary transactions of the farm or business. It shows
money coming in (Income) and money going out (Expenses/ Expenditure )

Examples: Creditors account, Debtors account, Receipts and Expense accounts, Sales accounts,
Purchase account, Capital account, Depreciation account, Assets and Liability account, Profit
and Loss account

Example of a Profit and Loss account of a broiler production enterprise

Income / Revenue Costs / Expenditure

Items Amount Item Amount

P t P t
100 broilers @ P37.00 each 3700 00 100 day old chicks @ P3.50 each 350 00

Chicken manure @ P200 200 00 6 bags broiler starter mash @ 510 00

P85.00 each
10 bags broiler finisher mash @ 800 00
P80.00 each
One 500g stress pack @ P22.00 22 00
Total Income 3900 00 Total Costs 1682 00
Profit/Loss: P3900.00 – P1682.00 = P2218.00

The enterprise has made a profit of P2218.00

2.5.1.4.3

PREPARATION OF DIFFERENT TYPES OF RECORDS USING RELEVANT

SOFTWARE PACKAGES

The common method of keeping records is to write the information you want in a book or paper.
Modern record keeping involves the use of computers & computer software packages or
programs such as word processing and spreadsheets.

The table below shows some of the word processing and spreadsheet programs that you can use
to prepare production and financial records.

Word processing programs Spreadsheet programs

 Microsoft office word  Microsoft office excel
 Microsoft office publisher  Lotus 1-2-3
 Microsoft office access  Open office sheet
 Windows  Symphony spreadsheet
 Word perfect  Pastel
 Word processing programs are used for writing letters, preparing and editing reports, and for
other basic production and financial records.

Spreadsheets are commonly used when preparing budgets, profit and loss accounts and
statistical data collection during research projects. If the information you want to record involves
the use of many calculations, spreadsheets are the solution. You can add, subtract, multiply and
divide accurately & faster when using spreadsheets.

A sample of profit and loss account prepared using Microsoft Office Word 2007

Costs Returns
Date Item Amount Date Item Amount
13/01/18 Vegetable seeds P400.00 11/10/18 Sale of cabbage P1120.00

16/01/18 3 bags of LAN @ P83. P249.00 12/10/18 Sale of Onion and P975.00
each Rape
16/03/18 1 bottle of Malathion P38.75 13/10/18 Sale of cabbage P600.00
5%
16/03/18 Tools P800.00

Total P1487.75 Total P2695.00

Determine whether the enterprise has made profit or loss.

Profit / Loss = Returns – Costs

= P2695.00 – P1487.75
= P1207.25

Therefore the enterprise has made a profit of P1207.25

2.5.1.4.4

INTERPRETATION OF DIFFERENT FINANCIAL RECORDS

Interpreting financial records involves reading the financial figures and trying to get meaning out
of them. For instance, if the financial records show a loss in the business, one has to find out
which areas of the business contributed to the loss & why? Even when a profit has been made,
interpreting the records would mean finding out what areas contributed to the profit. For
instance, it is because the costs where low or that the products were sold at a high price?
 2.5.1.5.1

BUDGETING

 Is the process of estimating the future expenditure, income and profit of a proposed plan
of a farm business.

BUDGET
 Is an estimate of the future expenditure, income and profit of a proposed plan of a
business.

REASONS FOR BUDGETING

 It helps in controlling the farm expenditure

 It shows progress of the project
 Shows the weak and strong points of the business or project
 Shows the profitability of the project
 Helps to focus on the project
 Helps to properly use scare resources
 It is a requirement for obtaining loans from money lending organization such as Barclays
Bank and National Development Bank

2.5.1.5.2

PREPARING A BUDGET FOR A CHOSEN ENTERPRISE

Example of a budget for a chicken production enterprise (Broiler production)

Estimated costs Estimated Returns

Item Amount Item Amount
100 one day old chicks @ P1.65 P165.00 94 broilers @ P18. each P1692.00
each
5 bags of starter mash @ P81. P405.00 300 kg of manure @ P3. per kg P 900.00
each
11 bags of finisher mash @ P968.00
P88. each
Drugs P115.00
Labour P450.00
Others P 95.00
Total P2198.0 Total P2592.00
0

Estimated Profit / loss = Estimated Returns – Estimated Costs

= P2592.00 – P2198.00
 = P394.00 (Profit)
2.5.1.5.3

INTERPRETATION OF THE ABOVE PREPARED BUDGET

Therefore the proposed enterprise is expected to make a profit of P394.00 which means the
business will be viable if properly managed.

FUNDING AGRICULTURAL ENTERPRISES

2.5.1.6.1

INSTITUTIONS, ORGANISATIONS OR AGENCIES ASSISTING AGRICULTURAL

ENTERPRISES

1. CEDA (Citizen Entrepreneurial Development Agency)

2. YYF (Young Farmers Fund)
3. NAMPAAD (National Master Plan for Arable Agriculture and Dairy Development)
4. ISPAAD (Integrated Support Programme for Arable Agriculture Development)
5. LIMID (Livestock Management and Infrastructure Development)
6. Banks such as National Development bank, Bank Gaborone, Barclays Bank of Botswana,
Standard Chartered Bank, and First National Bank of Botswana also provide funds in the
form of loans to farm businesses.
7. LEA (Local Enterprises Authority)
8. SLOCA (Services to Livestock Owners in Communal Areas)

2.5.1.6.2-2.5.1.6.3

APPLICATION PROCEDURES AND CONDITIONS ATTACHED TO FUNDING

1. CEDA (Citizen Entrepreneurial Development Agency)

It was established in August 2001
Objectives:
 Promote citizen economic empowerment through development of citizen owned
businesses.
 Provide subsidized or low interest loans to businesses owned by citizens and
citizens in partnership with non-citizens.
 Provide training in business management, monitoring, mentoring and other
relevant support services to projects it has funded.
Size(scale) of Loan limits Interest rate Repayment period Who qualifies to get the loan
business charge
project
Small P500.00 to 5% 60 months 100% citizen owned
P500 000.00 companies only.
Medium P500 001.00 to 7% 120 months for loans 100% citizen owned
P4 000 000.00 up to P2m and 180 companies but can be also
months for loans up to given to citizen companies in
P4m partnership with non-citizen in
exceptional cases.
large P4 000 001.00 to Prime linked 180 months 100% citizen owned
P30 000 000.00 interest rate companies but can be also
given to citizen companies in
partnership with non-citizen in
exceptional cases

Condition attached to CEDA funding

 Must be a citizen of Botswana aged 18 years and above.
 Must have a viable business proposal or be running a viable business.
 Must submit a detailed business plan to prove that the business is viable
 Company must be legally registered with the registrar of companies.
 Must have a trading license for the business you want funded.
 Must have secured a place where the business will be operating.
 Must share the risk with CEDA by contributing something towards the cost of the
business.
 If the project has no fixed assets, you must provide security or personal guarantee for the
loan if approved.

Application procedure for CEDA funding

 You must get an application form and a check list from CEDA offices. The check list
gives you a list of things that will be required or should be brought along with the
application.
 Prepare a business plan to be submitted together with the application forms.
 Read, complete and submit the application form together with the business plan and other
materials such as copies of Omang, certificate of incorporation, trading license.

2. YFF (YOUNG FARMERS FUND)

It was established under CEDA to give young people loans to start agricultural businesses.
Objectives:
 To encourage the youth to take advantage of opportunities in agriculture by
developing viable businesses in the sector.
 To create employment opportunities for young people by encouraging them in
commercial agriculture projects.
 To reduce the movement of young people from rural areas to towns in search of jobs.
Assistance provided under YFF:
 People are given loans at low interest rates to develop viable agricultural businesses.
 People are provided with training in the management of their businesses as well as
monitoring and mentoring services.
 People are provided with insurance to cover drought and natural disasters.

Conditions:
These are similar to those of CEDA but in addition to that:
 You must be 18-40 years.
 You must also manage the business or get someone with the qualifications to do so.
Application procedure for funding:
The same procedures as those outlined under CEDA must be followed.

3. NAMPAAD (NATIONAL MASTER PLAN FOR THE ARABLE AGRICULTURE and

DAIRY DEVELOPMENT)

Objectives
 To help improve food production and security in Botswana.
 To encourage farmers to use modern methods of farming so as to increase yields.
 To encourage farmers to treat crop and livestock production as viable businesses.
 To increase employment opportunities for many Batswana.
 To provide training to farmers on how to manage their crop and animal businesses.

NAMPAAD focuses on three areas:

a. Rain-fed crop production
Here NAMPAAD encourages the growing of crops as a business and the use of modern methods
of farming such as row planting, controlling pests and diseases, soil testing, applying fertilizers
to the soil and the use of high quality seeds. Farmers are also encouraged to use farm machines
to plough, plant cultivate the soil, spray and harvest.

b. Irrigated agriculture
Under irrigated agriculture, the crops grown are those that need to be watered regularly in order
to grow well or survive. These are mainly fruit trees and vegetables. It encourages the growing of
fruit trees and vegetables as a business. NAMPAAD has demonstration farms at Dikabeya,
Palapye and Gaborone (Glen Valley). Here farmers are equipped with the skills, knowledge and
experiences in modern fruit and vegetable production.

c. Dairy production
NAMPAAD encourages the development of commercial dairy farms in the country. It provides
training to those intending to run dairy farms. Trainees can also get help on how to develop
business plans that they can submit to CEDA when applying for loans.

How to get help from NAMPAAD and the conditions attached

 Visit the agricultural offices in your area and discuss your intentions and needs.
 The officer will discuss with you your needs and determine how to help you.
  Courses will be arranged for you to attend and learn more about production and
management. You will not be charged any fees for the courses attended.
 There are no conditions attached to receiving help from NAMPAAD. Everyone who is
interested in starting a dairy, field crop, fruit and vegetable production business can get
training assistance from NAMPAAD.

4. ISPAAD (INTERGRATED SUPPORT PROGRAMME FOR ARABLE

AGRICULTURE DEVELOPMENT)
It was started in 2008 to replace ALDEP III (Arable Land Development Programme III).
Objectives
 Help improve food production and security.
 Turn agriculture into businesses by introducing the use of machinery.
 Improve extension services.
 Enable crop producers to have access to farm inputs and finance.

Components or areas meant to assist farmers.

Components of ISPAAD Assistance provide Conditions for providing assistance

a)cluster fencing Farmers are assisted to fence Farmers are expected to form cluster
their crop fields. A goat and management committees, have a
electric fence is provided where constitution, fence and destump the land
necessary. within one year. The cluster committee
should draw plans showing the area to be
fenced.
b)provision of drinking water Boreholes are drilled, equipped Cluster Management committee must
and given to the cluster agree to operate and take care of the
management committees to borehole. Water is to be used for domestic
operate. purposes only.
c)provision of seeds Farmers are given high quality Inform the extension staff about the type
seeds of crops such as maize, and amount of seeds needed and where
sorghum, millet and cowpeas. they will be planted.
d)provision of fertilisers Farmers are given fertilisers to Farmers should plant in rows, have
use on 5ha of crop land and is to fertilizer applicators and be able to buy
be applied at 200kg/ha fertilisers at approved and licensed
suppliers only
e)access to credit or loans Farmers are helped to get loans  18 and above with Omang
from NDB; the loans are used to  Must have access to land,
buy seeds, machinery, machines and implements.
fertilisers, transportation and to  Attach all documents necessary to
pay labour costs. acquire a loan.
f)Establishment of Farmers are helped by Register with the extension officer.
Agricultural Services ploughing, planting, can hire Destump fields on which machines are to
Centres(ASCs) implements at a fee and are also be used.
taught how to use and care for
farm machines
 Procedures followed to get assistance
 Register with the Extension Officers in their respective areas.
 Prove that they have access to crop fields which they can plough.
 Be aged 18 years and above and have Omang or residence and work permits

5. LIMID (LIVESTOCK MANAGEMENT AND INFRASTRUCTURE

DEVELOPMENT)

It was started in April 2007 as a merger of Services to Livestock Owners in the Communal Areas
(SLOCA) and Livestock Water Development Programme (LWDP).
Objectives:
 To improve livestock management and production.
 To improve food production and security in Botswana.
 To help reduce poverty by providing the poor with the means to survive.
 To help provide facilities to improve cleanliness or hygiene in processing poultry
products.
Seven components or areas of LIMID

Components of LIMID Assistance provided Conditions for providing assistance

a)animal husbandry and fodder Farmers are helped to construct Should be 18 and above with Omang
support kraals, crushes, dip tanks, spray Cattle owners should be in possession of
races, loading ramps etc. registered brands as well as livestock
identification
b)borehole drilling and Farmers are assisted with well 18 and above with Omang, Should own cattle,
reticulation support or borehole drilling they are Should be present when the borehole is drilled
further assisted to pipe the and certify that this has happened
water from the boreholes.
c)borehole or well equipping Farmers are assisted to equip Citizens aged 18 and above, should own cattle,
support the existing boreholes or wells sheep or goats
d)Co-operative poultry abattoir Helped with building of Members of the cooperative must be citizens,
facilities abattoirs, this is to help them to must be able to contribute 5% towards the
have hygienic places where building of the abattoir and the government
they can kill their chickens. will pay a balance.
e)Small stock support program Poor farmers are helped to buy Goats and sheep are not sold within the first 3
sheep or goats, a contribution years of purchase but offspring’s can be sold
may be necessary depending on
the number to be bought.
f)Small-scale guinea fowl This helps poor people to have Only citizens 18 and above, also poor families
production guinea fowls, buy their seeds, in rural and peri-urban areas get help. Should
medicine and provide other have a land board certificate for a residential or
facilities business plot and a valid license to raise guinea
fowls
g) Chicken production Helps poor people with Only citizens 18 and above, women and poor
chickens, feeds, drugs and basic families from rural and peri-urban areas
facilities that are needed to raise qualify, should have land board certificates for
chickens either residential or business plot.
Application procedures for LIMID assistance
 Get application forms from your local extension agent or district.
 Complete the forms as carefully as possible.
 Indicate the number of livestock you own at the time of application. These must be
verified with your local extension agent.
 Submit the completed application forms together with the quotations and other
documents to the Department of Animal Health and Production district offices to be
checked for compliance before they are passed on to the headquarters for consideration.
 A committee will access the application and if approved or rejected, the applicant is
informed in writing. Payment for approved applications is made after fulfilling certain
conditions based on each support program.

MARKET RESEARCH

 Is a process of collecting information about the market where a product is to be sold or

being sold.

 A market research is a detailed study of the market for the product. This involves finding
out what product the customers want, competitors and market structure.

2.5.1.7.1

REASONS FOR CONDUCTING A MARKET RESEARCH

 To determine the product demand level.

 To find out customer’s needs
 To improve the quality of the product
 Help to identify the possible customers
 Helps in marketing the product
 Find out the supply level in the market and to plan for possible competition
 To start new business
 To launch new products
 To find new markets
 To increase sales of a product
 To track changes in the market.

STEPS TO FOLLOW WHEN CONDUCTING A MARKET RESEARCH

Step 1: Purpose/need for the market research

Step 2: Type of information needed

Step 3: Methods of gathering information

Step 4: Designing data collection tool/instruments

Step 5: Collecting information

Step 6: Compiling and processing information

Step 7: Present your findings

2.5.1.7.2

BUSINESS IDEA AND BUSINESS OPPORTUNITY

Business idea
 Is a thought about a possible business one start

Business opportunity
 Is a chance of getting into the business that involves selling a product

Business idea is not tangible but a business opportunity is tangible

2.5.1.7.3

AGRICULTURAL BUSINESS OPPORTUNITIES

 Poultry production
 Piggery
 Rabbit production
 Ostrich farming
 Horticulture
 Small stock production (goat and sheep production)
 Dairy farming (milk production)
 Crop production
 Fruit production
 Beef production

BUSINESS PLAN

 Is a written document or proposal describing in detail the type of business you would like
to start or you are involved in and how it will be organized

 Is a document that describes in detail the business you are operating or you want to start
and how it is or how it will be organized

2.5.1.7.5

REASONS FOR PREPARING A BUSINESS PLAN

 Helps in getting the business started

 Helps in planning for the business
 Assist in budgeting
  Directs the business
 Shows the possible ways of improving the business
 Shows the viability of the business
 Forms a basis for acquiring a loan
 Helps to evaluate the project.
 It is a referral document to anyone who may require it
 It helps in attracting potential partners or investors
 It is a requirement for obtaining government assistance and business licenses.

2.5.1.7.6

Elements of a business plan

1. Executive summary
 It gives an overview of the overall business plan itself
2. Business description

 The name of the business

 When and where it was registered(registration number)
 Address and location of the business
 The owners or shareholders of the business
 The type of legal ownership(for instance sole trader, partnership, private company)

3. Description of product

 What the business intends producing

 Production process involved
 How different the product will be from that of the competitors
4. Marketing plan

 Description of the market situation

 Who your customers will be
 How you will promote your product
 How big your market is(size of the market)
 Who your competitors are and what their strengths and weaknesses are
 How you plan to beat your competitors
5. Business operation and organization

 How the business will be run and organized

 The facilities and equipment that will be required
 The opportunities for expansion of the business
 How you intend to get the business started and the time frame
6. Staffing and management

 People who will run the business

 Number of employees needed
 The qualification and experiences of the management team
 The organizational structure of the business

7. Financial plan or projections

 Expected expenses and earnings from the business

 The amount money that will be needed to start or run the business
 What the projected profits or losses in the business will be
 Where the money to start or run the business will come from

8. Legal plan

 Shows the proposed legal organization and points out special, relevant legal
considerations.

9. Loan request
 The application for a loan to show request money and its distribution-what to do with
money