Agriculture Tapuwa Mashangwa
IT’S a fact, there’s no money for free especially when it comes to loans attached with interest rates. We make the error of somewhat celebrating when we obtain agricultural loans from the European Union (EU), Brazil, African Development Bank (ADB), World Bank (WB), International Monetary Fund (IMF) or from other investor sources forgetting in the long run that the money needs to be paid back usually with interest and failure to do so only increases our national debt and ruins our reputation, which is paramount in acquiring more loans should need arise.

One of the most interesting facts about paying back loans is that the reasons are to a large extent the same regardless of country, company size, industry of operation, recipient or climatic conditions.

Failure to pay back what is owed usually revolves around the following; poor securing of a market to sell produce or poor produce selection, a lack of comprehensive research with regard to the project to be undertaken, inefficient and ineffective management, mismanagement of funds and lastly unforeseen events.

Market failure and bad produce selection are common errors made when it comes to farming. Farming is not a “Simon says game” hence the fact that another farmer said/says that agricultural produce X can be sold quickly and at a high price or because another individual is making huge profits it does not mean that one will too. Most money makers in agricultures have a predetermined and secured market, a requisite important in agriculture.

Worst case scenarios involve the perishable produce rotting away.

Poor produce selection usually leads to lower profit margins or none at all as the seller can be forced to sell at a much lower price just to try and break even or at times incurring high costs in marketing the goods, which would need to be offset by projected profits.

Consultancy and research are at times overlooked before embarking on a project. Success rarely comes out of luck or fate but more out of adequate planning and acquirement of relevant knowledge. So before embarking on anything it is necessary to know what is involved.

Ineffective and inefficient management can run down a multibillion dollar company within a year or less. When intricate and important processes like: basic check-ups of mission and objective adherence and periodic performance analysis are overlooked, there is no manner by which functionality and profits can be achieved. Acquiring an asset/assets for a project or business does not guarantee that the venture will be successful.

Posterior first class management techniques are essential and there are various management styles to select from for example, Results based management.

Mismanagement of funds is another common factor in the failure of paying back loans. A constant mistake made is the vagueness or better said, lack of clarity in definition between company funds/profits and personal funds/salaries.

Many businesses have been rundown by managers, owners or CEOs perception or belief that the money invested in a business or profits are entirely theirs and can be utilised to their own desire or choice.

Business capital/value/profits need to be clearly and continuously monitored, distributed and utilised.

Common mistakes occur as a result of overlooking basic issues and these issues limit expansion, functionality and accountability. In all it is paramount to make a business plan and to adhere to it.

It does not matter how simple the business may seem or how intricate this process may be, this is a necessary step to ensure success in business.

Every detail of the business is detailed and defined in a business plan. Aspects of importance such as: the company description; market analysis; organisation and management; service or product line; marketing and sales; funding request and financial projections are usually covered.

Nothing is impossible and it is always better to try and give ones best that not to try at all. It is our future, our green future.

• The writer is Engineer. Tapuwa Justice Mashangwa, a young entrepreneur based in Bulawayo, Founder and CEO of Emerald Agribusiness Consultancy.

• He can be contacted on +263739096418 and email: [email protected]