Entrepreneurship

access to finance and credit
To  change  a  home  consumption  farm  into  a  market-
oriented farm will require finance. There may be a need 
to upgrade equipment, hire transport to get to market, 
expand production or add processing. All of these require 
finance. The farmer can first check his own resources, 
but if he does not have sufficient funds of his own, he will 
need credit.

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20                                                  
Entrepreneurship in farming
Progressive farmer diversifying into nursery production - Jordan
©F
AO/ 
Roberto Faidutti/ 18982 
Entrepreneurial farmer examining the quality of honey as part of a marketing 
strategy - Tajikistan
©F
AO/ 
Vasily Maximov/ 
24710_8229
There is considerable potential for entrepreneurship among women – a farmer 
specializing in floriculture growing – Sri Lanka
 ©F
AO/ 
D. Kahan
Entrepreneurs  
are innovators 
who take risks  
and respond to 
new opportunities;  
they are  
creative people

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Understanding entrepreneurship in farming 
21
A farmer group receiving training on how to cultivate vegetables using micro-garden 
techniques - Senegal
©F
AO/ 
J. Koelen/ 
221
10
Farmers organized into a cooperative to  market their produce collectively - Lesotho 
©IF
AD/ L. Rosa
But the challenges of modern agriculture often 
call for collaboration. Farmers are coming 
together to form groups, associations and 
organizations and to manage group enterprises
Group action provides them with support to 
better cope with risks and an environment that 
encourages innovation. Entrepreneurship can 
also be carried out by groups.

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22                                                  
Entrepreneurship in farming
 
Access to credit is another major challenge faced 
by  farmer-entrepreneurs.  Reputable  moneylenders 
often  do  not  service  rural  areas  where  farmers  are. 
Farmers are often unaware of sources of finance or are 
trapped into using local moneylenders who may not be 
honest. If  they are aware of reliable credit sources, they 
often cannot get credit because they lack the required 
collateral (because they have few assets), they have no 
credit history and their incomes are too low.
 
Access  to  credit  alone  is  not  enough.  Farmer-
entrepreneurs also need a clear understanding of how 
credit  works  –  particularly  repayments  and  interest. 
They need to understand the difference between credit 
for longer-term investments (such as for equipment and 
machinery) and for operating capital for production inputs 
and other seasonal production costs. 
 
They also need skill and experience in negotiating 
fair contracts to ensure that they protect their interests 
and  are  not  taken  advantage  of  or  caught  unawares 
about longer-term implications of using credit.