Is it profitable to engage in farming and what do you need to start? What are the risks? How to make sure your business won’t be a flop? Expert advice for those who want to have a mini-farm.
Vasyl Obraztsov, the head of the Farmers and Land Owners Association of Kharkiv, says that the experience of people shows that, despite difficult conditions of leading the business, corruption and an unbalanced legal framework, farming can be and often is a very profitable business.
An absolute majority of farms in the region are engaged in plant growing. First of all, in the cultivation of technical crops, which bring the greatest profit in our conditions.
As for animal farming, in particular, milk production, it is not profitable for a small farm. Farmers are less interested in this sector. Will the situation change in the future? Recently, the Ministry of Agrarian Policy and Food of Ukraine has fixed the lowest price for milk – 2.5 hryvnias per liter for private households and 4.5 hryvnias per liter for industrial producers.
A farmer says, “No. In any case, as long as small animal farmers don’t merge into cooperatives that would allow private traders to provide the quality of milk according to the standards of the industry manufacturers”.
Here’s another important point that highlights the first problem of farmers-beginners: future farmers concentrate on the production, not sales.
Vasily Obraztsov explains, “It is not a problem to grow something today. The problem is to find the market and establish sales channels. That is, before manufacturing a product, you need to understand to whom and how you will sell it later. It is this crucial mistake that many businessmen-beginners make, and it costs them not only investments but sometimes the business itself “.
Therefore, we will look at our hypothetical farm business project, from the “end” – that is, we will look the markets and sales channels first. Are there any unoccupied sectors a farmer-beginner can develop and be the leader? According to Vasily Obraztsov, there are none. Ukraine produces almost the whole range of foods, drinks and raw materials. We import what we don’t produce for a relatively small price. Yes, there are unoccupied sectors (for example, growing vegetables unconventional for our region – Brussels sprouts or asparagus), but they are not popular. Their development and advertising require money, time and resources that a small farmer usually cannot afford.
However, this does not mean that farmers-beginners shouldn’t even consider currently unpopular unoccupied sectors. It’s just that traditional ways of doing business are not what you need in this case. Creating a profitable business in an unpopular unoccupied sector requires creative approach, long and difficult search for a consumer, development of sales channels, establishing personal contacts with media. Be prepared for the fact that you will have to works not only in farming but also in marketing, PR, and trade. Also, be ready to see your first profit only in a few years. On the other hand, you won’t have competitors. Only for a while, though.
An example of a successful realization of a project is a hazelnut garden of Sergiy Karaptan from Kegichiv district. Several years ago, he took a risk and planted nut trees on the area of 10 hectares. Last year his hazelnut garden fully bloomed for the first time and had begun to reach its maximum capacity. His competitors’ gardens are only starting to develop. As one can see, time and unique business sense are important in farming.