Entrepreneurship

in Farming
Prepared by:
Engr. Xymel Pearl Sombrio

Source: This lesson is based on a booklet entitled “Entrepreneurship in Farming” by David Kahan: https://www.fao.org/3/i3231e/i3231e.pdf)
 LEARNING OUTCOME

• After studying this topic, the

students should be able to:
1. Define entrepreneur and
entrepreneurship
2. Recognize the difference between
an invention and innovation.
3. Recognize the difference between
an entrepreneur and a
businessman.
4. Know the qualities of a farmer-
entrepreneur

Source: Hayes, 2021; Kahan, 2012 (link in the note section)

 LEARNING OUTCOME

• After studying these topics, the

students should be able to:
4. Understand the entrepreneurial
environment
5. Know the different barriers of
entrepreneurship

Source: Hayes, 2021; Kahan, 2012 (link in the note section)

 ENTREPRENEUR
• A person who undertakes the risk of
starting a new business venture
• The entrepreneur is commonly seen
as an innovator, a source of new
ideas, goods, services, and business/or
procedures.
• To innovate is to introduce
something new to the market,
to manipulate existing
inventions and turn them into a
product or process that is of use in
the real world

Source: Hayes, 2021; Kahan, 2012 (link in the note section)

 ENTREPRENEURSHIP
• The process of setting up a business.
• An entrepreneur creates a firm to
realize their idea, known as
entrepreneurship, which aggregates
capital and labor in order to produce
goods or services for profit.
• Entrepreneurship is highly risky but also
can be highly rewarding, as it serves to
generate economic wealth, growth, and
innovation.

Source: Hayes, 2021 (link in the note section)

 ENTREPRENEUR AS INNOVATOR

• The entrepreneur is commonly

seen as an innovator, a source of
new ideas, goods, services, and
business/or procedures
• They always look for better and
more efficient and profitable
ways to do things.

Source: Hayes, 2021; Kahan, 2012 (link in the note section)

 INVENTION VS INNOVATION
Invention creates something new, innovation creates something that sells
INVENTION
• something entirely new,
• something that has never been done
before.
• To invent something is to discover
a new thing.
A product or process is inventive if it has never
been done before – whether it is innovative
depends on whether users will get a real value
out of it.
Source: Herbert, 2016; Brown, n.d. (link in the note section)
INNOVATION
• to use a new idea or ​method.
• To innovate is to introduce
something new to the market, to
manipulate existing inventions and
turn them into a product or process
that is of use in the real world.
• In short, it includes both inventors
and those that make improvements
to existing things.
BUSINESSMAN VS ENTREPRENEUR
 BUSINESSMAN VS ENTREPRENEUR

Definition • A businessman is someone • An entrepreneur is a person

who sets up a business with who starts an enterprise
an existing idea offering with a new idea or concept,
products and services to the undertaking commercial
customers. activities.

Source: Surbhi, 2018 (link in the note section)

 BUSINESSMAN VS ENTREPRENEUR

Market • Market Player • Market Leader

Position (first to start such a kind of
enterprise.)

Market • Creates place in existing • Creates new market

markets

Risk factor • Less • Comparatively high

Source: Surbhi, 2018 (link in the note section)

 BUSINESSMAN VS ENTREPRENEUR

Methods • Conventional • Unconventional

applied for (traditional methods)
doing things

• People
Orientation • Profit (focused in essence, gives more
importance to its employees,
customers, and the public.)

Competition • Very High • Low

(as it has already existing market)

Source: Surbhi, 2018 (link in the note section)

 Can small-scale farmers become entrepreneurs? Yes.
For small-scale farmers to become entrepreneurs they need all of
these qualities and more.

• They need to be innovative and forward-looking.

• They need to manage their businesses as long-term ventures
with a view to making them sustainable.
• They need to be able to identify opportunities and seize
them.

Source: Kahan, 2012 (link in the note section)

 Can small-scale farmers become entrepreneurs? Yes.

• Some small-scale farmers do have these qualities, but they still

focus on maintaining their traditional way of life.

• Their production decisions are based on what they need -- not

on what is possible.

Source: Kahan, 2012 (link in the note section)

 FARMERS AS ENTREPRENEURS
The farmer-entrepreneur:
• produces a clear picture in his mind of what is possible and the
future he wants.
• knows that what is possible is determined by the market.
• always looking for new opportunities.
• knows that new opportunities are found in the market.
• Wants to make profits.
• knows that profits are made in the market.
• has the initiative, drive, capacity and ability to take advantage of
opportunities.
Source: Kahan, 2012 (link in the note section)
 • Farmers are fully market-oriented.
• Their primary reason for farming is to make
profits by producing for the market.
• They are interested in profits, not food
production

• Represents farmers who understand the value of

farming for the market, but are often limited by access
to finance, labor or market information.

• Farmers who have greater opportunities that allow them to

produce beyond just surviving.
• Such farmers are sometimes viewed as ‘preentrepreneurial’,
requiring support to move into a more independent
position.
• At this level the farmers are not ‘entrepreneurs’ in the true
sense and neither are they truly market-oriented.

• Often these farmers are struggling with the basic survival of

themselves and their families.
• While they may be entrepreneurial in spirit, they
Figure. Ladder of intentions and reasons for farming usually lack the opportunity to farm as entrepreneurs.
 THE ENTREPRENEURIAL ENVIRONMENT

• farmer-entrepreneurs are free

and independent, they do not
work alone.
• They operate in a complex and
dynamic environment.
• They are part of a larger
collection of people including
other farmers, suppliers, traders,
transporters and processors, each
Figure: The world of the farmer-entrepreneur of whom has a role to play in the
value chain.
Source: Kahan, 2012 (link in the note section)
 BARRIERS TO ENTREPRENEURSHIP
Poor or absent 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.
Source: Kahan, 2012 (link in the note section)
Unsupportive laws and regulations
• Land tenure and ownership, banking laws,
trading regulations, business 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 and the complexity of
business 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.
 BARRIERS TO ENTREPRENEURSHIP
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.
Source: Kahan, 2012 (link in the note section)
Social barriers
• 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.
 BARRIERS TO ENTREPRENEURSHIP
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
Source: Kahan, 2012 (link in the note section)
Lack of support services and trained
extension staff
• 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
 BARRIERS TO ENTREPRENEURSHIP

Marketing constraints

• 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.
Source: Kahan, 2012 (link in the note section)
THANK YOU!