FARMER FOCUS: We should aspire to add value to produce
I do not have any formal agricultural training, but I do have a couple of degrees in economics. My economic textbooks proclaimed the person who runs the risk should be rewarded for taking that risk.
That law of economics is certainly not applicable to farmers, because they are the essential risktakers and yet they are not rewarded accordingly. I maintain this is because the farmer does not add value to a product by processing it and selling it as far as possible into the value chain.
I was obsessed, when I started my small dairy, to process my produce and to sell it as far as possible into the market.
It started very small with cream being sold to a few coffee shops. Eventually organic milk, butter, cream and six types of cheese were sold to two chains of coffee shops and three major retailers. The product was distributed over long distances using three trucks.
What I did not learn from my text books was economics of scale are crucial. To meet this requirement as an organic farmer is virtually impossible, because you cannot increase production overnight.
I survived the setback and still sell butter and cheese under my own brand name. But this represents a small portion of my milk production; the bulk goes to a processor that uses it to produce organic yoghurt.
I still stand by my point: Farmers should aspire to add value. I have a plan to produce many more products under my brand name – the market is certainly there. But this time I will not do all the processing, distribution and administration.
Danie Schutte is an organic Ayrshire dairy farmer who also processes dairy products on his 90ha farm near Pretoria, South Africa
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