You are looking for money everywhere to renew your land lease in Trans Nzoia county, so you can grow maize again next year. All your friends and colleagues know you are a superb farmer, you grow maize and you harvest many bags and you sell and bank the money. Look, stop deceiving yourself. You haven’t made money in quite a while and you have been pumping money only to get out less than seventy percent of your investment. It is time to take stock and re-evaluate whether this investment is getting money into your pocket or out of it.
My dad has a particularly funny way of looking at it. He says that planting maize at whatever cost is good because it provides food for the family. I disagree, why should I pump in money equivalent to one hundred bags and then just get out 70 bags, I am better off keeping the money in a bank, then waiting for the other less discerning farmers to plant, then I buy from them. I can even have this money in a fixed account earning some interest while I wait for them to toil and break their backs for nothing.
Several factors affect the returns from this investment; these include
- Land fertility rates, with an annual cultivation of the same crops, beans and maize over the last century, without the addition of manure, the soils are now exhausted.
- Farm Inputs, fertilizers, and seeds are of low quality and counterfeits abound. The authorities have been unable to deal with the myriad low-quality fertilizer imports that are stocked in the shops and even where authorities get wind of the same, corruption makes them look aside. Fake seeds are packaged by unscrupulous traders out to make quick money at the expense of our farmers and food security of this nation.
- Cultivation methods, where farmers are using the same plowing methods year in year out, leading to only the very upper portion of the land being turned, hence the inability of plant roots to penetrate deeper sections of the soils for nutrition.
- Changing weather patterns, where long rains delay and when they come they are erratic and destructive, either by being too little or too much.
Due to the above, yields have dropped significantly from as high as 30 bags an acre to a low of only 10 bags an acre, as sampled in several farms. This means that if the above factors were right, and you were an average farmer and you harvested 20bags, you would earn a cool 20 multiplied by the current price of Ksh 2800 per bag, which sums to Ksh56000 an acre. But farmers are only netting 10bags multiplied by Ksh2800, giving a total of 28000. This is a loss because the operating expenses are as below, per acre
- Renting an acre of land, Ksh 10,000.00
- Plowing the land Ksh 3,500.00
- Harrowing the land Ksh 2,000.00
- Seed, one small bag Ksh 2,400.00
- Fertilizer, DAP, two bags Ksh 7,000.00
- Planter costs Ksh 3,000. 00, this includes planting rows, and labor to drop the seeds and cover them with soil.
- First weeding Ksh 2,000.00
- Top dressing fertilizer one bag Ksh 3,500.00
- Second weeding Ksh 2,000.00
- Harvesting and shelling Ksh 3,000.00
Total costs before storage, pilferage and marketing costs Ksh 37,400.00
Net Loss (average yield of 10 bags) Ksh 9,400.00
The costings above are averages in the Kitale area for farmers tilling less than 30 acres of land which does not warrant investing in farming equipment like plows, planters and combine harvesters. This leaves them no option but to hire these services. This means that by just engaging in this activity, by the end of the year you are down by over Ksh10k an acre, and if you prorate this over ten acres, Ksh100k is too significant not to make you a pauper.
Otherworld Governments protect their farming for food security reasons and provide subsidized inputs to their farmers, however, our Government has not been effective in stemming the corruption in the enforcement of quality and counterfeits that has continued to undermine farming in our country. Unscrupulous traders pack fake seeds and fertilizers at night into genuine looking bags that have been stolen from reputable seed and fertilizer companies.
Think twice this year, do not run around borrowing money to invest in traditional maize farming without figuring out how you will mitigate all of the above factors. Your goal should be to harvest at least 20 bags per acre, which is the break-even level in this business. Being financially educated requires that you avoid obvious losses like indulging in this investment mwitu.