Financial Management For Smallholder Farmers

Its time for Farming As Business (Ulimi Ndi Bizinezi).

Signature tune up and fade under presenter.

The time to learn and the time to share agricultural knowledge is finally here on Malawi Broadcasting Corporation Radio 1. This is the Farming As Business program. My name is Andrew Mahiyu. (Pause)

Harvesting time is over. Most of you farmers are busy grading and selling your crops. Have you started planning for the next farming season? How do you manage the proceeds from crop sales? Who makes the decisions on how the money will be used? Is it just the man, or do both husband and wife contribute to these decisions? We will learn more about this from our colleague, Mr. Harold Kaliramake of Chikwatula Association in Ntchisi, this afternoon.

In our vernacular language, there is a saying: “An owl respects a tree he sleeps in.” Have you ever heard this before?

(Editor’s note: the following quote is part of the interview to come) “I am urging my fellow farmers to always think of their work. An owl respects a tree he sleeps in.”

Please stay tuned in, because I will take you to Ntchisi district in Malawi where we will learn something from this saying. We will meet one of the hard-working farmers there. We will also have a guest from the National Smallholder Farmers’ Association of Malawi later in the programme. Once again, stay tuned.

Musical or advertisement break.

As I mentioned earlier, I am taking you to Ntchisi. There we will meet one tobacco farmer. He will tell us what he does after selling his tobacco crop. Let’s get on board. We are lucky – Ntchisi road has just been constructed, so it won’t take us long to get there.

(Sound of car starting, then sound of motor for two seconds, then fading out. Two seconds later, sound of car fades in, hold for two seconds, then stopping).

We are finally here in Ntchisi. Let us go to Chikwatula Association. (Short pause as presenter walks to the field) The farmer in front of us is Mr. Harold Kaliramake, wearing his gumboots, a black pair of trousers and a white shirt. He is busy uprooting tobacco stalks. And some 100 metres from him, the lady in a red dress and a camouflage wrapper is his wife. She’s busy collecting firewood, while singing a traditional song.

Hello, Mr. Harold Kaliramake, and welcome to our program this afternoon. What are you doing here?

Thank you very much. Sorry, we will not shake hands – my hands are dirty, as you can see. I am uprooting tobacco stalks.

Why are you uprooting the tobacco stalks?

After uprooting them, I put them upside down in heaps. These stalks harbour pests and diseases. If you leave them standing for the rest of the season, the pests and diseases will be transmitted to the nearby tobacco crop next season. So I uproot the stalks soon after reaping, and put them upside down. As the stalks dry, the pests die as well. When the stalks are completely dry, I burn them here in the field.

I understand that you are now selling your tobacco crop. This is the time of year when most farmers have money. Why do many farmers fail to buy seed that is certified by researchers, and then distributed to the shops? Is the seed expensive?

This certified seed is not expensive. The reason is that I don’t think these farmers treat their farming as a serious business. One packet of seed – which is enough for a hectare of tobacco – costs 50 Malawian kwacha (Ed. Note: about $0.36 U.S.). Some people might spend more than 1400 Malawian kwacha ($10 U.S.) for beer in one day, and fail to buy seed. That is not taking farming as a serious business. They do not respect their work.

I am urging farmers to take farming seriously as a business. In our vernacular there is a saying: “An owl respects a tree he sleeps in.” In this case, tobacco is our tree, and we need to respect it. We need to do all that we are expected to do. This will lead not only to a better crop, but also better prices on the trading floors.

Musical or advertisement break.

You are listening to Farming as Business programme, and we are here in Ntchisi with Mr. Harold Kaliramake. We found him uprooting tobacco stalks. He has told us why he is doing that. Then he told us about the importance of buying certified tobacco seed.

Mr. Kaliramake, how should a farmer spend the money from crop sales? Should the farmer just relax and enjoy?

First and foremost, a farmer should look at the crop records and see whether there is a profit or a loss. Then the farmer will know what to do next. If you have made a profit, the first thing to do is call your spouse. Show your spouse what profit you have made after selling your crop. Talk about whether you have any outstanding bills to pay – for transport, for labour or other costs. Then, you need to think of the next growing season. Ask yourself questions. For example: what will we need next season as far as our farming is concerned? You may need things like fertilizer, seed, chemicals, labour, and you may need to construct sheds and barns. Ask yourself how much each item will cost. If you do this, you will have your budget. Then you can put aside the required amount of money for those items. If you have some money remaining, you think of family needs: school fees for children, clothes and many more things. If you do not own a radio, you may want to buy one so that you can learn new agricultural technologies through the radio. You might want a bicycle for easy transport, or an oxcart or any other item that is important to the family. The farmer should list whatever is needed and wanted on a piece of paper so that he or she can refer to it when visiting the shops.

I thought that this was the time to enjoy oneself in pubs and trading centres with friends. When is the time for that?

After I have bought the things I mentioned! And when I say enjoying, it means I should include my wife and children. This is because they are the ones who assist me in producing a good crop. We buy enough sugar for tea, at times we buy rice and soft drinks, and we enjoy them at home. We are guided by how much money remains after the agricultural budget. Then we say: “Let us now come and celebrate.” (Laughter)

There are some farmers who sell their tobacco, then say to their wives, “I am going to withdraw some money from the bank. I will come home soon.” But once they go, they spend their money drinking beer, messing around with sex workers, and spending nights in rest houses until the money is finished. When they come back home, they say that they have been robbed. What can you advise these farmers?

Let me start by saying that whenever I want to withdraw money from the bank, from our tobacco proceeds, I do not go alone. I go together with my wife. So my advice is that they should take their spouses along when they make a trip to the bank.

Allow me to invite your wife. We need to verify your claim! (Laughter). Please call her for me.

(shouting) Make mwana? (Child’s mother?)

(off-mic) Bambo? (Yes, father?)

(shouting) Tabwerani. (Come here.)

Welcome to Farming As Business programme. My name is Andrew Mahiyu, and I am here to learn how you and your husband manage your finances. But before we talk about that, what is your name?

My name is Mekilida Banda.

How long have you been growing tobacco?

We have been growing tobacco for 10 years.

This means you have wide experience in tobacco farming. Please tell us, after selling your crop, when the money is in the bank, who is responsible for the withdrawal of the money from the bank?

We are all responsible. We go together to the bank, so that we can all witness what we have reaped from our work. He loves me and I love him. If there are families who do this separately, they have a problem.

Sometimes the husband says that he is going to withdraw the money and he will be back soon. What do you say to a situation like this?

No! That is not good. My husband always says let us all go and witness together. We grow the crop together. We make budgets together, and we see the first and last coin or banknote together.

Why does he not go out to enjoy with friends, and spend nights there?

He says that if he goes there, he will drink, and he will be enticed by sex workers, and he will catch the deadly disease AIDS. The result will be that he spoils his life, his children’s future, and our farming. He will also transmit that virus to me. In short, the whole family will be affected and or infected. He doesn’t want this to happen to us.

Apart from agricultural inputs, what do you intend to buy this year?

This year, after buying farm inputs, we are planning to buy iron sheets for our house. We built a big house last year, but we did not have enough money for iron sheets to thatch it.

Thank you very much, Mrs. Kaliramake, for accepting my invitation to speak on the program this afternoon.

Thank you.

Mr. Kaliramake? Where are you? (He is some distance away, collecting uprooted tobacco stalks).

(He approaches, laughing) I wanted you to talk to that faithful wife.

We have heard from your wife that what you said is really true. She says you don’t spend nights out. How dangerous is it to spend nights enjoying yourself in pubs?

It is very dangerous. Firstly, you may be robbed. Secondly, if you are drunk, sometimes you don’t think properly. You continue spending money without controlling yourself. The next day you find your pockets empty.

Musical or advertisement break.

We have been speaking with Mr. Harold Kaliramake and his wife Mekilida. They have taught us the importance of uprooting tobacco stems after harvesting tobacco, the importance of making a budget for the next season after a crop is sold, and, furthermore, the importance of working and budgeting together as a family, both husband and wife.

Just a reminder – this is Farming as Business programme, coming to you from Malawi Broadcasting Corporation Radio 1.

I also have a guest on today‘s programme. He has some important information just for you, which will add to what you have heard from Mr. Kaliramake. Please keep listening.

Good afternoon, dear farmers, wherever you may be this afternoon. My name is Felix Sichali. I work as a retail manager for the National Smallholder Farmers’ Association of Malawi. This afternoon I want to emphasize that you should take your farming seriously as a business.

I know that most of you are now selling different crops, including tobacco. How do you intend to spend the proceeds? Did you remember to budget for the next farming season? Otherwise, where do you think you will get your farm inputs from? My advice this afternoon is that you should start preparing for the coming season now.

Now I will talk about fertilizer. Fertilizer is very important when it comes to budgeting for another season. There are some crops that do not do well without fertilizer. So I urge you to make good budgets now when you are selling your crops. Ask yourself these questions: What type of crop will I grow next year? If it is tobacco, how many acres or hectares should I grow? How much fertilizer will I need?

After you have sold your crop, this is the time to take part of your income and buy fertilizer in advance. If you buy your inputs now, you will have peace of mind. You do not need to struggle to buy now, unlike when the rains come. During the rains, a lot of people fight for fertilizer at the shop, and some types of fertilizer are scarce at that time. Also, you should know that fertilizer prices fluctuate. You can buy fertilizer at a lower price before the rains, and at a higher price during the beginning of the rains. This means that you can buy more bags now than during the rains when the prices rise.

If you keep cash in your house or bank, hoping to buy later, you may face problems that will need money. Definitely you will use that cash for those problems and your farming will be affected.

So I urge you to buy farm inputs soon after you sell your crops. There are some farmers who think of buying something big after selling their crop – a luxury. They don’t properly plan for next farming season. They might buy a second hand vehicle without properly consulting a good mechanic. Yes, it is important that a farmer should own a vehicle. And it can help a smallholder farmer. But if the car breaks down after a few months, the farmer will not be able to afford to pay for repairs. The farmer has made a big loss. So I urge you to think before you buy any luxurious items. Think of how that item will assist you, and for how long.

Let me go further by thanking the government for introducing the Fertilizer Subsidy Program. This program is a great benefit for smallholder farmers. You can purchase fertilizer at a low price. But you should remember that you can only buy two bags of fertilizer with this program. And most of you use more than two bags of fertilizer per season. So please buy extra fertilizer now. When the program is running, you can supplement the fertilizer you have already purchased. Let us work together with the government, and let us do our part by purchasing part of our requirements. Then, later, we can appreciate what the government has provided for us.

I wish you all the best this crop marketing season.

Musical or advertisement break.

That was Felix Sichali, a retail manager from the National Smallholder Farmers’ Association of Malawi, reminding us how to manage our finances after crop sales. Of course, this applies to many crops, not only tobacco.

My advice is to take extra care when you are selling your crops. Make good budgets for next season, don’t forget to pay your labourers, and remember your children’s school fees, clothes, and other important items needed at home. Lastly, do not sell your crops together with your lives.

On that note, we come to the end of our Farming as Business program for this afternoon.

From me, Andrew Mahiyu, it’s good bye!