Over the past two years a lot of acquisitions have been witnessed in the flower sector. This has been heavily attributed to huge cost of operations, shrinking market and freight charges; combining these issues; small-holder growers find themselves in murky waters which forces them to be bought out by the big fish. However, during a one on one interview with the Craig Oulton General Manager, Floriculture (Kisima) he pointed out small-holder growers can still manage to attract revenue and run their farms successfully when they innovate on ways to cut their costs, while practicing socially and environmentally sustainable kind of farming.
How can small-holder growers cut their costs of operations in a bid to maximize their revenue?
There are three areas which takes a lot of money from the growers; inputs, freights charges and labor. The prices of these three entities continue to escalate every year with the market prices remaining constant. This becomes difficult to survive in the industry unless you innovate ways of lowering your expenditures on inputs, freight and labor without compromising the quality of your flowers in return.
Inputs
Never compromise on your chemicals or fertilizer; give your crops what they need in the right quantities at all times. To curb the challenge of rising costs of inputs though, as a grower you have to get involved, pay attention to each and every process in the farm. First, ensure your fertilizers and chemicals are from a reliable source and are of the right quality.
Implement a scouting system which will enable you to record any pests and diseases detected on specific areas of the farm; this enables you to respond timely in spraying the affected parts but not the entire farm. Integrated pest management (IPM) is also another solution to dealing with pests and diseases, it is cost efficient and it provides consistency and what makes it special is that the program can last long; which of course can lower your costs by a larger percentage.
When it comes to your fertilizers, there is only one trick; understanding your soil. Study your soil, embrace a soil sampling program from time to time, identify the nutrients lacking in your soils. When you do this, you will give back the right nutrients required by your soil. As a grower this is the first step if you want to get it right in the flower growing business. The best way of giving back to your soils is to have a compost project in your farm; organic fertilizers are rich in nutrients and can fully rehabilitate your soil.
Additionally, institute a soil monitoring system in your farm where you regularly monitor water capacity. Deficiency of water in the soils affects uptake of fertilizers, it is advisable to constantly monitor the water levels to prevent any leaching.
Freight
You cannot cut much from this entity but even a shilling or two will still count in this business. There is only one way of innovating in this stage; understanding your packaging mechanisms.
You need to pay close attention to details by ensuring that you purchase the right box for the right variety. Freight charging system shifted to volumetric weight so this means you are charges includes the box itself. Therefore, you should choose a box with the right dimensions which will accumulate at least 250 stems and above.
Labor
Labor is a challenging entity because cutting costs at this might cause any compromises in quality or affect production. Nevertheless, you can creatively lower costs of labor without altering the quality of flowers or compromising the rate of production. Never embrace overtime, because it affects the quality of work administered by the workforce. Measure your labor by efficiencies; be sure to reward these efficiencies with incentives. For instance, have set target of flower stems every worker has to pack once he/she supersedes this, start paying them bonuses for extra stems packed. This way you will get more from your workforce without any additional hiring.
However, to get such a system working the top management level should never micro-manage their employees, allow them to grow, allow them to innovate and be there with them. Lead by example; be the first to get in and the last to get out; inspire your team to deliver value at all times.
Give any additional comments and your final remarks
There are other farming and business ethics to integrate into your farm, which can bolster success in your farming quests. Apart from innovating on cutting costs ‘of production, it is necessary to continuously create and innovate the way you operate in the farm, times changes so should you, do not cling to the old forms of managing your workforce, approaching the market or packaging. Variety selection is a critical factor, you will have this variety with you for 5-7 years; so you need to do due diligence, conduct your research; consult widely before settling for a variety. When you get it right in selecting a variety, then definitely you will have it easy in the market.
As a small-holder grower, discipline yourself to practice a socially and environmentally sustainable farming, give back to your soils, give back to your people and those surrounding your project. This way you will create a good culture for the organization to be emulated by the future generations. Finally be in constant communication with your market, open your ears wide open, listen to your customers, understand what they want and strive to provide for them, strive to satisfy their needs consistently. Invest in self-promotion and brand awareness campaigns; being in business without any marketing and advertising strategies is like operating in a dark world, get out there, talk to your customers and tell them what you offer.
For small-holder growers, the only way to survival in this business is to do things differently, you cannot afford to be ordinary and expect to survive for the next two or three years. You have to go the extra mile, create and consistently innovate. Remember cutting costs is an innovation and we should design ways to do that in order to increase our revenue.