Over the years, it has been difficult for farmers to transition from farming to agribusiness, even with the awareness creation and information dissemination strategies deployed by many agricultural agencies. Generally, smallholder farmers in many developing countries are still engaged in farming, even using traditional implements and tools. One of the major constraints of these farmers is the access to funding, especially patient capital. Agribusiness requires sufficient capital and resources for a specified duration in order to be successful in this century. And it is important that many smallholder farmers have access to patient capital in order to modernize farming, thereby increasing their productivity, production efficiency and increased profitability.

Every stakeholder must be proactive to ensure that farming is no longer viewed as a means to alleviate poverty but a profitable venture
Sadly, there are many factors contributing to poor access to finance for smallholder farmers. These factors include but are not limited to the following- weak social safety net, poor financial credit units of farmers, lack of appropriate database of smallholder farmers, strict regulations that exclude smallholder farmers, high interest rate, religious belief on loan facility and negative perceptions on loan facility amongst others. It is important that some of these factors are resolved through policies that encourage providing loan facility for farmers at a low interest rate and for a considerable period of time (at least 5 years), having up-to-date database of smallholder farmers in all states and districts, ensure that farmers are financially included (especially their annual production and sales should contribute to their financial credit points), and farmers re-orientation on loan facility.

Achieving food security is beyond what only farming can do, rather incorporating the business of agriculture is the surest route for food sufficiency in developing countries. This can be achieved through access to patient capital and appropriate knowledge. Therefore, every stakeholder must be proactive to ensure that farming is no longer viewed as a means to alleviate poverty but a profitable venture that those who engage in it can truly earn a prosperous living from it.

Yours-in-service

Babatunde

In his weekly column Letter to my Farmers, Babatunde Olarewaju writes about personal experiences and insights on farming, curated through working with smallholder farmers in Africa. Last week's letter is available here.