Farmers who are diversifying
Diversification. Added value. De-coupling. Commodity pricing. How many times have you heard these words used? The pace of change in agriculture and food production has never been greater.
The mismatch between prices and costs, and the changes in central funding mean that every farmer and grower has to review their operations. But what does it mean in practical terms?
Diversification – put simply, doing something different, spreading your net wider. Great idea, but couple of problems –
- This will inevitably take you into new areas – where you won’t have the expertise.
- Other people are probably doing the same thing, so you have to be better than them to succeed.
Added value – makes great sense. Increase your share of the value of what you produce. Changing what you produce and selling direct are the keys to this – but you’ll only make more money if you decide to produce the right things and then get the right people to buy them at the right price.
Sounds easy, put like that – but how much do you know about what people want? And how to produce it? Then get them to buy it – not just once, but again and again. This is how the big consumer goods companies make their money – and you can too if you follow the same principles.
- Who is going to buy, and what are they going to do with it?, What purchase is it going to replace? – until you get this clear, you won’t know how much you can charge.
- Product costings – difficult to do with a complex operation like a farm. But not impossible. And if you would like to make more money in your new venture than you made out of conventional farming, it’s critical that you understand these.
- Explain what you’re offering, why it’s different from the competition and why they will delight in it. And do this in a way that makes them want to buy.
- How do you want them to remember you? – you need to think through the identity of your business, so that not only do your customers remember you exist, but they’re quite pleased you do, too.
You are the expert in farming and growing – but with some help and guidance in marketing, the return you get from this expertise will be more assured
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