Entrepreneurship

Second-tier 
organizations should 
emerge once primary 
organisations 
realise the economic 
opportunities and 
social benefits of 
coming together again

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Extension support for developing entrepreneurial capacity 
109
TIPS foR SUPPoRTINg PRoDUCER gRoUPS 
foR DEvEloPINg faRmER-ENTREPRENEURS
•  Farmers should lead the forming and 
strengthening of producer organisations. 
•  Be sure farmers can see and realise clear social 
or economic benefits.
•  Formation should be voluntary; potential member 
farmers need to be aware of the pros and cons 
of being part of the group and then decide for 
themselves whether or not to join.
•  Membership should be small enough for face-to-
face contact among members, but large enough 
to be able to benefit from collective action.
•  Members must see that forming local 
organisations will further their own objectives and 
respond to their needs.
•  Ensure there is no domination by powerful 
members.
•  Encourage groups to evolve at a pace that is 
comfortable for the members.
•  Farmers need to agree on lines of authority and 
responsibility; leaders must be held accountable 
to the members.
•  Groups should run on democratic principles 
and function within a set of formal rules and 
procedures.
•  Protect farmer-entrepreneurs’ instincts to explore, 
experiment and reflect. 
•  Ensure there is good and transparent 
communication between members.
•  Ensure that leaders have the technical and 
management skills required for effective 
performance.
•  Management training for both leadership and 
members should be part of group formation.
•  The extension worker’s plan for the formation and 
development of a producer group must also have 
a clear exit strategy so that the group is able to 
take charge.

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110                                                  
Entrepreneurship in farming
aCCESSINg fINaNCE
Farmer-entrepreneurs often require access to finance to 
develop their farm business. This is a common concern 
of  smaller-scale  farmers  who  need  money  to  expand 
production  or  engage  in  value-adding.  Increasingly, 
such farmers find it difficult to raise capital -- especially 
women, the landless and youth.
 
When  farmers  have  few  financial  options,  they 
cannot purchase inputs, or invest in new farm enterprises. 
This limits their ability to take up new opportunities that 
arise. In short, it inhibits development of entrepreneurial 
behaviour. 
 
Many farmers rely on informal sources of credit, 
but  as  farmers  become  more  entrepreneurial  they  will 
need  to  find  more  formal  credit  sources.  Extension 
workers have an important role in facilitating this process. 
 
Access  to  credit  also  helps  increase  the 
effectiveness of training. A successful training programme 
should  increase  entrepreneurial  capacity  and  increase 
desire  to  act.  But  after  completing  training,  some 
farmers discover they do not have funds to implement 
their new ideas. When developing training programmes 
it is important to take this into account and incorporate 
access to credit into the training programme.