We live in an era where more and more people of different areas, with totally different backgrounds, ages and education levels seek to change their lives, by moving to the countryside and start a farming business.
Since it is not that easy to become a farmer without any experience, this guide will help you to clear things out and understand the basic steps you have to take.
First of all, it is very important to understand what -in fact- farmers do.
What Does a Farmer Do?
As a farmer, we define anyone who makes income by working in the primary sector, raising living organisms either for food or for raw materials (for instance cotton). Farmers are believed to be people closely connected with nature, spending most of their time outside in the field, either growing plants or raising animals. This is partly true. However, contemporary greenhouse farmers may be closed in their facilities all day long and not be able to have access to sunlight. In all cases, farmers do not have specific working hours. They deal with living organisms and this often creates a mess in their personal schedule. It is not that easy to have a structured work schedule. Some of them do not have vacations or days off. Farming requires total dedication, love, and passion in order to succeed.
Step 1: Decide What to grow and in which specific field – Can I get a profit?.
Choosing the right crop
First of all, you have to decide what you are going to grow. Although this may sound like an easy procedure, in fact, this is the most complicated decision. The type of plant (or animal) you are going to choose is perhaps the most crucial decision you are going to make.
Farming is divided into categories depending on production. The main categories are:
Arboriculture (commercial fruit trees), Vegetable and Fruit Farming, Wood production, Biomass production, Grain Farming, Forage Crops, Herbs Farming, Grapes Farming (Viticulture), Berries Farming, Special Crops like Cotton and others. Most of these crops are established outdoors. Some of them can also be established indoors (greenhouses) with soil or air/water as a substrate medium.
In this category, we have farmers who raise animals mainly for their milk, meat, or eggs. Some examples are cows, sheep, goats, pigs, and poultry farming (chickens, ducks, etc.), etc. Some Authorities do not consider Poultry Farming as Livestock, but rather as a separate category.
Farmers raise snails, either for their meat, or their “jelly” excretion.
This is a special type of farming where farmers grow worms in order to use them for the conversion of waste to organic fertilizers.
Before you start, it is crucial to do extended research on your desired crop or livestock. Once you have selected 3-4 potential crops, you shall consider contacting local producers and agricultural scientists, so as to be informed about the type of plants and varieties that thrive in this particular area.
Match the crop to the market
First of all, you have to define your client, for a selected crop. Who is going to buy your products? What is the number of prospective buyers in your region for the crop you will choose? At what price do they buy other similar products? Do they pay cash or on credit? When do they buy the product? Do you need storing facilities so that you can have more time to negotiate a better price? Can you export your product (find buyers from another country)? Is there a real demand for the product you choose?
A frequent mistake of new farmers is that they start their crop establishment without taking into consideration any of these. If there is no demand for your product, you will probably end up broke, although you may have produced an excellent product. Thus, you can start with your crops checklist and start to examine potential markets for each one of them. You may have to exclude those crops that you are not sure if you can sell the production. In some cases, beginning farmers join a group of local farmers (association), so that they can have synergies. In many countries, farmers (who grow a specific crop) form an association. The association creates a Marketing Department and employes a group of people responsible for finding markets for the products. In this way, all the farmers pay a fee and actually outsource sales and marketing activities. Thus, they have more time to invest in core activities. But even in this case, you must always have a basic understanding of the market that your products target, so that you will always be ready to find an alternative.
Choosing the right field for this Crop
The topography of the area, type of soil, environmental conditions, and climate are very important factors that all potential farmers should know, before starting any other activity. The location of your field can dramatically change your business plan and your daily routine. For example, livestock farmers in areas with rich and diverse flora may rely more on pasture for feeding their animals. On the contrary, livestock farmers in areas with no flora will have to buy foodstuff, something that will surely increase costs.
Without a field, you cannot start your farm business. There are two scenarios when it comes to field selection. In case you own the land, things are easy. But in case you do not own land, you will have to rent or lease someone else’s field(s), and here is the point where the problems start.
You should have in mind that there are some plant categories you may have to avoid in case you do not have your own land. Perennial plant categories may be not suitable, for many reasons. First of all, the cost could be really high in case you wish to rent a field for many years. Moreover, when it comes to commercial fruit trees, for example, you have to know that most trees do not produce fruits earlier than 6-7 years. Thus, you will have to pay rent without having any revenues for some years. Moreover, there are legal issues. Although you may sign a contract, according to which you are allowed to occupy the land for 30 years or more, the legal framework may change in such a long time. Thus, you may be enforced to destroy your crop and leave, and in some cases without receiving any compensation. In case you and your family do not own land, you may consider avoiding crops of long term engagement. Perennial herbs crops last 6-12 years. Grape vines and fruit trees normally mature 7-8 years after planting and can continue to give a good yield for 30-60 years or more. You may consider avoiding those categories. On the contrary, most vegetables can be harvested (and thus produce revenues) 3-5 months after transplanting or seeding. These crops may be more suitable for a new farmer.
Cereals (wheat, barley, corn) and cotton can be harvested 6-9 months after seeding, but these crops are considered commodities. This means that their price is mostly determined by the processor – buyer according to the local demand and supply. This is a very competitive landscape, and a new farmer can rarely have a profit by growing commodities during his/her first years of engagement. However, every case is different, and yes, in some cases, it can be financially wise to start a commodity crop in some areas.
In any case, the field you are going to choose should be suitable for your selected crop. It is your responsibility to do your research about the field structure, pH level, and crop history. Collecting 3-4 soil samples from different spots of the field and sending them to a laboratory is essential. A local licensed agronomist can let you know if the soil is suitable for this crop. You can also get advice on any corrective actions you may have to take, so as to restore soil fertility.
Finally, you have to examine your region’s annual precipitation levels as well as the dates that the first and last frost usually appears.
Another important factor is whether the field has access to water. Most of the commercial crops need irrigation in order to give acceptable yields. In case you choose a field that has no access to a water source, you will need to use water tanks transferred from the closest resource. In order to transport water tanks, you will need to find tractors. The cost and effort are going to be high.
Examine the Total Costs versus. Total Projected Revenues. Will I make a profit?
By now, you will have ended up with a limited number of alternatives on your list. It is now time to make a small business plan, by examining the potential income you are going to receive from each of the alternatives, based on the revenues and the projected costs. The way to do so is simple. Try to contact successful farmers that have years of experience in the crops you consider to grow. These people, given that they are honest and willing to share details, are the best source of information concerning market prices and actual costs. However, for a more scientific opinion, agricultural advisors – experts could also help you by taking into account all the parameters and creating a business plan for you.
You may think, “what could be the cost for crop farming?” In fact, depending on the type of farming, the cost could vary from some hundreds to some millions of dollars per year. Costs include :
- The installation cost. For example, when it comes to greenhouse farming, the cost can be really high, as a lot of expensive equipment is required (skeleton, covers, fans, heaters, lamps, etc.).
- Soil preparation cost: Plowing, Leveling or Restoring Soil Fertility
- Seeds / Plants purchase cost
- Irrigation cost: Most plants need irrigation in order to grow and produce an average yield. Thus, for commercial farming, in most cases, you may need to install an irrigation system.
- Protective nets and covers: Some plants may be more sensitive than others, and farmers need to protect them under specific environmental conditions.
- Fertilizers or Manure cost: Most plants, when grown for commercial use, need to be “fed” in order to produce an acceptable yield.
- Crop protection substances: Growers that practice conventional farming may need to buy agrochemical products, that protect the crop against pests and diseases.
- Labor cost: One of the most important costs is labor costs. It is almost impossible to work all alone; you will have to hire people for helping you, at least during critical stages of the crop (for example, harvest).
- Machinery cost: Some crop types need special machinery in order to be seeded or harvested.
- Storage cost: For products that are not transferred to the market the same day they are harvested, farmers may need to build special areas where they will store the products. In most cases, these areas are equipped with sensors that control the temperature, moisture, and CO2 levels.
- Transfer cost. This can also be an important fraction of the total cost. Where is your buyer located? In many cases, farmers pay for transportation fees.
- Crop Insurance cost.
- Fees of various experts and scientists that will give you advice.
As far as projected revenues are concerned, we normally need 3-4 inputs. First, we need to calculate the total surface of our cropland. Secondly, we need to make a research about the average yield of our crop in our region. By multiplying these two, we can get our projected total yield. For example, let’s suppose that we want to grow eggplant and our field is 8 hectares. We know that the average eggplant yield per hectare in our region is 25 to 40 tons per hectare. Thus, we have to multiply 8 hectares X 25 tons = 200 tons of eggplant. Finally, we need to make a research on the market price of the eggplant in our region (not the retail price, but the price the farmer gets). Suppose that farmers report that this price is 100$ per ton. Then, our projected revenues will be 200 tons X 100 $ per ton = 20000 $. Keep in mind that we picked the lowest possible yield (25 instead of 40 tons), because beginning farmers are not supposed to produce the maximum or even the average yield. Very often, the average yields reported online can only be obtained by successful farmers after many years of experience. Moreover, there can be significant deviations from all these numbers. For example, not all varieties of eggplant can be marketed at the same price. Vendors may also buy your products at a much lower price, claiming that your fruits are not uniform (this is a frequent problem of beginning farmers). But even in this case, we can have a general view of our projected revenues for this specific crop.
Examining and documenting all these costs and projected revenues is essential in order to figure out if you will have a profit when your crop matures. Many people are very tired of their city lifestyle. They just want to get a new life by engaging in agricultural activities in the country. However, getting into farming without doing this kind of research will surely lead to your personal economic disaster.
Step 2: Examine your Financing Options – Secure your Capital
Needless to say that a farmer is not paid every month or 15 days, as an employee normally does. In the best-case scenario, a farmer is paid when (s)he sells the product. This means that -by default- farmers will have to pay first all the production expenses out of their own pocket, well before they realize any revenues. Thus, you will have to secure capital in order to buy all the inputs (seeds, seedlings, fertilizers, agrochemicals, irrigation equipment, workers’ wages, etc.) and of course to cover your own family’s cost of living for at least the next six months or so. Hopefully, there are many options when it comes to farming loans, in case you do not have the required capital. In many countries, State Agencies want to encourage new people to get into farming. Thus, they act as a guarantor so that farmers can receive zero-interest rates loans from commercial or State banks. International Institutions also give loans to new farmers in many countries. Contract farming can also be an option. This means that the farmer and a buyer (for example, a food processing company) agree on a certain price of a product before the crop is established. In many cases, the buyer covers all the expenses of the crop establishment, and of course, this amount is deducted from the final revenues of the farmer. This can also be an alternative form of financing.
Step 3: Make Sure You Have Available Inputs and Resources at the time you need them.
Another thing to consider is whether you can have available all the necessary inputs and resources when you need them and at reasonable prices. For example, farmers often hire workers to help them with some procedures (for instance, harvesting). It will be a great surprise to start your farm business and realize you cannot find workers in your area. Even if your farm does not require permanent staff, you must be sure you can hire occasional workers at the time you need them. For instance, in the case of viticulture, most grape farmers need a considerable number of workers to help during the harvest period. In case they do not find workers at that time, the grapes are going to stay longer on the plant, and their quality and commercial value will decrease significantly within a week. Even in developed countries like the USA, experienced farmers have reported that they abandoned apple tree commercial orchards because they could not find workers at the exact time that the apples should be harvested. Cotton farmers also face similar issues. The crop matures at some point and needs to be harvested urgently. However, cotton cannot be harvested by hand; it can only be harvested through tractors that cost hundreds of thousands of dollars. Can you rent such a machine at this point? If there are a lot of cotton fields in an area, and only a small number of harvesting machines, then only a fraction of cotton fields will be harvested at the right time. The rest will be left, and their quality and market price will be diminished.
Consequently, as it happens in nearly all professions and careers, being a successful farmer does not depend exclusively on yourself, but also on your local ecosystem and the network you build over the years.
Step 4: Organic or Conventional Farming? Choosing Quantity or Quality?
In a few words, organic farming involves growing techniques and methods that seek to protect the environment, humans, and animals, through sustainable agriculture. Producers of organic farming are not allowed to use anything but biological substances for both fertilization and crop protection. As fertilization methods, they mainly use manure, compost, or special organic synthetic fertilizers. As crop protection measures, they mostly use traps and predators. This farming method requires a lot of effort and money and has significantly lower yields than conventional farming. However, the organic producer can market the products at higher prices than the conventional ones. On the other hand, conventional farming does include the utilization of agrochemicals or synthetic fertilizers, only if they are used according to GAP standards.
The decision on choosing organic versus conventional farming is not easy. It is for sure that a new farmer cannot compete in cost. (S)he does not have the experience to control all the costs and produce an average product at an attractive price. Thus, many new farmers choose organic farming. In this way, they bet on quality. They plan to produce a small quantity of a high-quality product that can be sold at very high prices. Some of them are successful in this, while others are not. In any case, organic farming requires special handling, guidance, and some level of experience in order to be successful.
Step 5: Examining Storing Facilities and Logistics – Transportation
Not all products are transferred directly from the field to the market. In many cases, the crops need to be stored for some time before they are transported to the buyer’s facility. Wholesalers are often responsible for storing the products. However, many farmers do not sell their products to wholesalers. Thus, it may be crucial to have a proper storing facility suitable for the crop you produce. Different products need different storing conditions in order to be properly maintained. In most cases, storages are buildings equipped with sensors able to control and stimulate the temperature, moisture, CO2, and light conditions.
Transportation may not be a farmer’s responsibility in many cases. However, many farmers need to transfer their products and deliver by themselves, especially to local buyers. A farmer who is responsible for transportation should be equipped with a vehicle that meets the requirements of safe shipping for the product, in order to avoid the product’s contamination.
Step 6: What does a Farmer Need to do – Research, Research and again Research!!
According to the Center of Rural Affairs, “in the preindustrial economy, wealth was directly tied to land ownership. The more land you own, the more you could produce and the more money you made. In the industrial economy, the people who had access to capital to build factories and delivery systems captured the wealth. Today we are in a knowledge-based economy. Wealth is now flowing to those who know something others don’t.”
This is very important for a farmer. In hundreds of cases, we see a group of farmers in a particular area growing a specific crop in exactly the same way. These farmers produce exactly the same product, but in the end, only one of them can sell it at a higher price. This grower may have done extensive research on finding overseas markets or on selecting a different packaging for his/her products. In the case of herbs, this grower may distill the product and sell the essential oil, instead of selling the floral mass at a low price. This grower will most probably be a successful farmer for many more years to come, while all the other farmers (that rely on conventional wisdom) will always complain that they do not get any profit and that farming is not financially sustainable. Farmers of 2022 and beyond must do extensive research (365 days a year if possible) on new growing techniques and new markets for their existing crops, new uses of their products, new packaging, alternative sales channels, new profitable crops that may thrive in their regions, etc.
In order to become a farmer, it is not required to have a degree. However, it is essential that you make constant online and offline research on crop-related and marketing issues. There are some subjects you may need to be trained about, so as to be capable of coping with any situation. For example, it is essential to deeply understand your crop. Farmers who have extended knowledge about their crops basic biology, life cycle, and growing stages are able to recognize possible physiological or pathological anomalies at their first stages. Thus, they have better chances to make quick fact-based decisions and produce quality products over the years. Furthermore, it is extremely important to be informed about the proper use of water and energy resources, what agrochemicals are available, and how to use them wisely according to the Good Agricultural Practices standards.
In general, although online research is absolutely necessary, there are also other sources of valuable information. The members of your local Farmers Association or your local Agricultural State Authority Office must become your best friends. They can inform you of industry updates (business and scientific), for example disease outbreaks, changes in the legal framework, new markets for your products, new potential buyers, loans intended for specific crops, etc. Of course, you have to question everything, and at the end of the day, you are responsible for any decision you make. However, good information from local experts is always welcome and can sometimes lead to wise decisions.
Step 7: Examine the Local and Universal Regulations about your field of interest.
Good Agricultural Practices (also known as GAP) are a series of methods that farmers have to apply in order to protect their own health and well-being, the health and well-being of people who consume their products and finally the environment. Standards may differ from one country to another due to different regulatory and legal frameworks, but the philosophy remains the same. The rules and principles of Good Agricultural Practices altogether create a mindset of prevention, rather than troubleshooting.
The implementation of Good Agricultural Practice starts before the crop establishment. For example, if you select a field that is heavily contaminated, even if you do everything properly, your product will most probably still be dangerous for the general public.
The implementation of GAP will certainly lead to long term income increase for farmers and at the same time, will help us consume safer food of higher quality. Finally, environmental sustainability is enforced through the implementation of the basic principles of Good Agricultural Practices. Constant training and education are essential for farmers and all people involved in the supply chain of agricultural and non-agricultural products.
In our modern, regenerated agricultural world, every professional farmer has to consider, apart from expanding his/her production, being alert and conforming with the sustainable agricultural principles and guidelines. Many agencies, food processing companies and retailers globally apply GAP standards for their suppliers, in order to increase the quality of their agricultural products. Producers who do not comply with those standards will gradually fall behind.
Globalization and international trade give the opportunity to retailers, to easily seek for new GAP certified suppliers.
Livestock is a much more complicated field than Agriculture and requires heavier financial and personal engagement. It is crucial to know that not all commercial livestock facilities are allowed in all areas. In addition, most countries have strict rules about the distance a livestock facility should have from a populated area. You must be informed about the regulations in your area before proceeding to any activity.
When it comes to animal farming, the field you are going to choose to install your facility is very important. Once again, in case you own a field at an area where you are allowed to keep animals, things are easy. On the contrary, in case you need to rent or lease land, you may increase your production cost significantly and may be forced to leave at some point. In any case, make sure to sign a reasonable contract with the owner of the land.
Installation cost is greater in livestock farming. Commercial livestock involves a heavy investment in order to build a proper legitimate livestock facility and house properly the animals. Contemporary milking equipment is also expensive. There are also other costs associated with feeding and vaccinating the animals. Conforming to hygiene standards and having a sound and documented waste management plan is essential.
Again, it is crucial to decide on what kind of livestock activity you are supposed to engage in. Not all animals are suitable for everyone. The animals you are going to raise will be part of your life and family. You are going to spend most of your day with them. Thus, it is crucial to make a wise decision. A good technique is to start by having 2-3 animals in your backyard (if this is legal) so as to examine whether you are suitable for this career.
In case you can cope with this new lifestyle, then you may start asking yourself the questions mentioned above. Who is going to buy your products? What is the number of prospective buyers in your region for your milk, meat, or eggs? At what price do they buy other similar products? Do they pay cash or on credit? When do they buy the product? Do you need storing facilities so that you can have more time to negotiate a better price? Can you export your product (find buyers from another country)? Is there a real demand for the product you choose? Can you eventually get a profit from all these (Profit = Total Revenues – Total Costs)?
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