BARRIERS TO ENTREPRENEURSHIP

It cannot be assumed that every enterprise will be successful. It needs the right environment. But often there are barriers outside the control of the farmer that limit success and make the environment hard for new businesses. This environment is affected by government policy and the level of investment in agriculture. The environment is different in every country; it varies greatly–even within countries. To create and maintain an environment that encourages profitable, market-oriented farm businesses, policy makers need to address the following barriers:

Poor or absent infrastructure: Often, what is blocking starting and growing profitable farm businesses is basic infrastructure. Simple things, such as poor roads leading to markets, inadequate storage and market facilities, and even irregular supplies of electricity create very real and practical barriers to developing farm businesses.

Unsupportive laws and regulations: Governments need to have a positive view of entrepreneurship in farming. Land tenure and ownership, banking laws, trading regulations, business law and tax law are some of the more common barriers that help or limit the development of successful farm businesses. The ability to buy, sell and hire land, the legal status of women, the complexity of business regulations and the extent of bureaucratic procedures, all affect the environment in which new farm businesses must operate. Countries need to look very carefully at laws and regulations to make sure that they make it easier for small-scale farmers to develop their farm businesses.

Lack of financial support: A major stumbling block for many farmers to expand production or diversify into new high value enterprises is lack of access to finance. Farmers who are starting new enterprises often face difficulty raising investment capital.

Social barriers: There are also social barriers to entrepreneurship that farmers face. The concept of entrepreneurship is not common to every culture or society. The fear of failure can be a barrier. Creativity and innovation are not always valued traits. Some countries have social systems that create dependence and hopelessness. Women in business are often not

supported or are even discouraged. In some cultures communal enterprises may be more acceptable than individual businesses. Extension workers will need to be aware of these social barriers and help farmers deal with them.

Lack of training facilities: To have a healthy farming sector, training facilities and support must be easily available to farmers. Effective institutions need to be developed to provide education and training at the right time, in the right place, and with the right balance of

technical knowledge and practical skills.

Lack of support services and trained extension staff: Farmers advancing through the five stages of development will need information, advice and support. Services are needed to advise, and support farmers in identifying, preparing, designing and implementing efficient farm businesses. Advice and support to farmers must cover areas beyond the traditional production-led services. The support needs of farmers are much wider– covering all aspects of running a profitable, market-oriented farm business.

In many countries, there is a general lack of farm management advisers to deal with the range of issues and questions faced by farmer-entrepreneurs. Further, support services are often inadequate and inefficient,particularly in remote rural areas. The public sector has an important role to play in servicing these areas and in ensuring that the full range of information, advice and support is available.

Marketing constraints: When running a farm business, production must always be linked to a

market. Access to markets is often constrained by a number of factors. These include poor communications, infrastructure and marketing facilities, lack of reliable and timely market information, limited purchasing power and even negative attitudes of buyers.

It is the responsibility of government to address these barriers and to provide an environment that supports farm businesses. However, with or without this assistance, farmers can take the lead by recognizing the qualities they possess, get training and think and act as entrepreneurs.

The "Way Of Life" of a Farmer-entrepreneur

The ‘way of life’ of a Farmer-entrepreneur

• Freedom in making decisions about the business and the relationship with family.

• Control over what has to be done, when and in what order.

• Working alone often in solitude.

• Coping with a wide range of managerial and ‘day to day’ tasks.

• Lives with uncertainty; if you can’t generate profit you may not survive in the future.

• Risking personal assets and security.

• High level of responsibility and risk of failure.

• Lives with an inability to control the actions of stakeholders upon whom the success of the   business depends.

• Develops trust and alliances with other stakeholders where mutual benefits exist.

• Works long and irregular hours to meet demands.

• Closely interwoven family and business life.

• Social status is linked to the success of the business.

• ‘Learns by doing’ under pressure from stakeholders, by solving problems, experimenting,      seizing opportunities, and learning from competitors.

Entrepreneurship In Farming

There are two parts to entrepreneurship. The first is the managerial skills needed to start and run a profitable farm business. The second is ‘entrepreneurial spirit’. Both are important. Managerial skills can be taught, but an entrepreneurial spirit cannot be taught.

Entrepreneurship

Entrepreneurship is a key factor for the survival of small scale farming in an ever-changing and increasingly complex global economy.

Farmers as entrepreneurs

Farmer-entrepreneurs see their farms as a business. They see their farms as a means of earning profits. They are passionate about their farm business and are willing to take calculated risks to make their farms profitable and their businesses grow.

The entrepreneurial environment

Farmer-entrepreneurs operate in a complex and dynamic environment. They are part of a larger collection of people including other farmers, suppliers, traders, transporters, processors and many others. Each of these has a role to play in producing products and moving them through to the market – through the value chain. Each one needs to be an entrepreneur. They also need to respect each other and work together to make the whole system work better and be more profitable.

Entrepreneurship dynamics

But beyond this, successful farmer-entrepreneurs are technically competent, innovative and plan ahead so they can steer their farm businesses through the stages of enterprise development – from establishment and survival to rapid growth and maturity. However, there are many challenges that these farmers face: social barriers, economic barriers, regulations, access to finance and information, and their own managerial capacity to cope with risks and changes and to seize opportunities.