Farmers profit from financial planning: Three short stories

A young farmer

Village marketplace

Vendors calling out, occasional vehicles passing by, general hustle and bustle

A few years ago, I wanted to grow a new type of high-yielding cotton. I understood from other farmers that I could make more money. So I was interested. But I was also cautious. I didn’t want to risk a lot of money. So I bought just enough seed to plant a small plot with the new cotton variety. Then I kept financial records.

How did I do that, you ask? It was quite simple. Every time I spent money on this new crop, I wrote it down. I wrote down how much I spent on seed, on pesticides, on transportation to market … everything I could think of. And I also wrote down how much money I received for selling the cotton.

After selling my crop, I had two big lists. One list of all my expenses and one list of all my sales. I added up the two lists and compared them. I was surprised to see that my costs were much higher than my income. I had lost money by growing the high-yield cotton. It’s a good thing I didn’t plant more land with the new cotton! Otherwise, I could have lost much more money. I saved money by keeping records and experimenting with my new crop on a small plot.

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Woman farmer

Farmer’s field

Roosters, birds, other noises of the countryside

Hello. I’d like to introduce myself. I am not a rice farmer! I am a financial planner!

I say this because every other farmer in my village grows rice, but not me. I don’t grow rice because I make more money growing cassava and maize. I discovered this fact when I made a budget. I’m happy to tell you more about this.

Five years ago, I tried an experiment. I grew cassava and maize on one half of my farm and rice on the other half. I kept records for each crop. I wrote down everything I spent on the rice: how much I spent on seed, how much on pesticides, on hired labour, and on fertilizers. I even recorded the time I spent weeding … I wrote down everything. And I did the same thing for the cassava and maize field. At the end of the season, I sold my crops.

Then I sat down and completed my records. I added up all the costs for all the crops. Then I added up all the money I received for selling the crops. I was surprised to find out I made more money from growing cassava and maize than I did from growing rice. So I switched to cassava and maize. Now I am a cassava and maize farmer, and not a rice farmer. (Laughing) I am also a richer farmer! And keeping records made me richer!

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Middle-aged woman farmer with a proud and confident voice

Outside in the fields.

Workers in the field, talking, singing and laughing

Ten years ago, I was a good farmer. But the rains in our area were unpredictable, and my crop sometimes failed. In order to have a steady supply of water I decided to build a rainwater storage system. But I didn’t have enough money at the time. So I went to the bank and asked for a small loan.

At first, I don’t think the bank manager took me seriously. Then I pulled out a bag full of papers and placed the papers on his table. The papers showed my farm records for the previous ten years. With these records I was able to show the manager that I had carefully and constantly improved my profits over the last ten years. They showed him that I had made many wise choices when planning my budget. And they showed him that I was a smart and serious farmer.

The manager was impressed. I received a small loan. I bought the necessary materials and constructed a rainwater storage system. It worked well, and I was able to pay back the loan ahead of time. I was taught by my parents and grandparents to work hard. But you need to be smart too. And doing a budget is smart.