THE MAKING OF FARMER ENTREPRENEURS

THE MAKING OF FARMER ENTREPRENEURS

Farming is not just a way of life, it is a business and a system consisting of various enterprises wherein the farm households allocates its resources to attain their goals be it for subsistence or for profit considering its environment. Farming, as in business, is a function of proper balance and integration of the farm’s enterprises, products, services and its resources considering the dynamic external environment (Edralin, 1998). This is where the farmer as an entrepreneur perform a major role. This paper look at the concept of enterprise, entrepreneurship, entrepreneur and how could these concept can be used to form the concept of farmer entrepreneur. The characteristics of farmer entrepreneurs and the factors for their success were also described.

What is an enterprise?

            An enterprise refer to specific undertaking, project or venture (dictionary). In a farming system, crop enterprise would mean production of specific commodities like rice, corn, fruits, vegetables and other crops. In the same manner, animal enterprise may mean carabao, cattle, poultry and  swine production. Off-farm enterprise mean other farm related activities but not done in the farmer’s farm but in relation with other farmers. Non-farm enterprise, on the other hand, refers to non-farm activities such as handicraft making, carpentry, trading and other enterprises not related to farming. The goal of the farmer entrepreneur is not only for subsistence but also for profit.

What is entrepreneurship?

            Entrepreneurship was described by several author as:

·         The ability of the individuals to perceive the kind of products and services that others need and to deliver these at the right time, to the right place, to the right people and at the right price (SERDEF & UPISSI, 1989).

·         Capacity for innovation, investment and expansion in new markets, products and techniques (Nathaniel Left).

·         Taking the risk and invest resources to make something unique or something new, new designs, new way of making something that already exist, or create new markets.

Who are the entrepreneurs?

            There are several definitions of entrepreneurs forwarded by various authors, among which include:

·         A person who takes the risk and put this ability into action for optimum profit and personal satisfaction (Edralin, 1998).

·         One who bears uncertainty, buys labor and materials, and sells products at uncertain prices (Cantillon as cited by Fajardo, 1994)

·         Who takes risks and makes innovations on the factors of production (Cantillon as cited by Fajardo, 1994)

·         Adventurer, undertaker and projector

·         Function to supply and accumulate capital

·         An innovator, does new things and does things in a new way, supplies new products, make new techniques of production, discovers new sources of raw materials (Schumpeter as cited by Fajardo, 1994)

·         Searches for  change, responds to it and exploit it as opportunity (Peter Drucker as cited by Fajardo, 1994)

·         One who shifts economic resources from an area of lower productivity to an area of higher productivity and yield.

·         A person who organizes, operates and assumes the risk for business ventures (American Heritage Dictionary)

·         People who have the ability to see and evaluate business opportunities, to gather necessary resources and to take advantage of them and to initiate appropriate action to ensure success.

·         Those who launch their own ventures from scratch. They develop scarce resources into successful business by their instinct for opportunity, sense of timing, hardwork and idea producing activity (Fajardo, 1994)

What are the characteristics of entrepreneurs ?

            Fajardo (1994) cited the description made by the Development Bank of the Philippines as to the qualities of entrepreneurs as follows:

1.    Self-reliant.  They count on their efforts and succeed by doing a good job. They rely principally on their own merits and work. Their self-reliance are founded on hard work. They have confidence and  strong faith on their abilities, optimistic, positive thinkers. These qualities drive them to work with more enthusiasm and energy to reach their goals. “If ye have faith as a grain of mustard seed …. Nothing shall be impossible unto you.”

2.    Risk-taker. They rise to the challenge and convert problems to opportunities. Their competence are indicative of their openness to new ideas, new skills and new developments. Despite setbacks and mistakes, they start all over again. The success of an entrepreneur depend on their ability to make decisions despite the risk. They gather data about the situation, analyze the data and make their decisions. Given information at hand and their experiences, ideas including hunches, they are not afraid to make decisions.

3.     Industrious. They value work and find joy in working.  They are proud of the workmanship, conscious about quality, and the value of their products. Successful entrepreneurs started with practically nothing but hardwork and determination. Poverty is not a hindrance for entrepreneurs. They strive and work for their vision. Success comes to those who think they can and work for it.

4.    Humble. They have the humility and single-mindedness of purpose.  Being hardworking, they are not ashamed to do work how lowly will it be as long as it will  contribute to the attainment of their goals. Most successful entrepreneurs started from humble beginnings.

5.    Helpful. They work with others from different fields and conscious that with their help, they can achieve more. They think about others, especially those who work for them. They know that the welfare of their staff are also the welfare of the firm.

6.    Creative. They are never satisfied. They are creative and not satisfied with things as they are and with how things are being done. They experiment. They continue to do things in a different way and create new products, method, services, markets and utilization of raw materials. Innovations result to low cost of production, higher profit, enhancement of environment, and other aspects more beneficial  not only to the firm but to the society as well.

7.    Leadership. They lead people in the conduct of their business. They plan, organize and implement. They share and lead in the business fields they are engaged with.

8.    Happy. They find joy and in what they do. The satisfaction of customers are rewards of their efforts.

 The characteristics enumerated above also characterized the farmer entrepreneurs studied by FSSRI (1999). Mang Tony from Cavite was described (Labios, 1999) to have realistic outlook, industry and hard work, dedication, good planning and low aversion to risk. He participated in the actual work in the farm while giving supervision  to set good example to his workers. He was receptive enough to change. He tried in his farm the knowledge he gained from seminars. He experimented in his farm. Technical soundness of the farming systems provided with adequate market and infrastructure support contributed to successful farming system. He believed that farming had much to offer and can provide the needs of the farm household for food, education, shelter, etc.

In the case of Mang Tino from Nueva Ecija, Ferrer (1999) described him to have a  strong determination to realize ones goal and vision. He had cultivated traits like industriousness, patience, rapport, and credibility. He tested and utilized  the knowledge and skills gained thru training and experience. He directly involved himself and managed important production activities. He had a deep sense of belonging and pride for his work and achievements.

Mang Florendo in Ilocos Norte (Pascua, 1999) stands out as farmer entrepreneur being educated, financially capable, aware of the factors affecting farming and an active member of cooperative. He had adequate knowledge about his farm. There was efficiency in terms of conservation and utilization of water in a rainfed environment. He modified the recommended technologies in tomato production and got higher yield compared to other farmers. He was resourceful in maximizing the use of rice hull and composted residues and animal manure in crop production. He shared technology information to fellow farmers and contributed into the success of the Tomato Growers Cooperative.

Mr. Villarin  from Laguna recommended careful assessment of the farm and the farmer’s capability (in both knowledge and resources) and the suitability of the practice or the enterprise to the farm condition as necessary for successful farming system (Wagan, 1999). This, he did, when he started integrating fish in his rice-based farming systems. He started integrating fish pond in small part of the farm and slowly expanded according to his capability and resources. He also attributed his success to patience and industry. He had a vision and foresight. He retired in farming, but converted his farm into a fishing resort which still earn them enough income while also spend leisure with friends.

Tio Wen and Tia Belen case was a partnership for success (Bordado, 1999). Tio Wen took care of the farm work, attended seminar and organized farm activities. Tia Belen did the credit sourcing, marketing, rice milling, maintained the store, raised animals and keep records. The couple was frugal. They acquired properties given good financial management after paying for obligation and providing for household needs and children education. They helped their relatives and other people in the community by credit sourcing and providing employment opportunities.

Mang Isyo and Aling Laida was awarded as “Outstanding Family of the Year” in Antique. They attributed their success to good sense of values, industry and deligence: discipline and strong determination; good relationship within the family as well as with the community; good planning and innovativeness;  openness to new technology and above all their never failing faith  in God (Millamena, 1999).

What are the factors for the success of enterprise and entrepreneurs?

            In business, success of entrepreneurs are indicated by their longevity in business, steady growth, expansion, client, trust, industry boom  (Angodung, et al., 1997). Edralin (1998) cited Schilit (1994) in categorizing success indicators as qualitative and quantitative indicators. Qualitative indicators include customer satisfaction; company reputation, community and social responsiveness of the firm. Quantitative indicators include stability and growth of financial position in terms of  return on investment, return on equity, earnings per share, and decrease in debt-equity ratio.

            In the same manner, success of a farmer entrepreneur  can be gleaned on their achievement of goals related to farm income and farm household well-being, profit, production, asset accumulation, human resources and sustainability.

            Successful entrepreneurs and their enterprises have their own success stories to tell but they have common characteristics  as a person and as a firm in a given business environment. Edralin (1998) cited Angudong et. al. (1997) who listed the factors of  success of an enterprise to include quality product/services, product positioning, effective human resource development and management, appropriate business policies, unique value strategy, responsiveness to change, and motivation of employees.

Edralin (1998) also cited the experiences of Pastrana and Pingol  as featured in Business Focus Philippines (1997) as successful entrepreneurs who attributed  their success to low cost of production with high value of output; professionalism; continuous product development and innovation; genuine camaraderie and friendship as business partners; confidence; seeking of feedback from performance; hardwork; industry and perseverance; vision; network; technical knowledge of the product; market research; and planning on long- and short-term basis.

FSSRI (1999) identified several factors to successful farming systems among farmer entrepreneur studied. Among those factors were :

1.    Technology. Access to new and appropriate technologies contributed to the success of various farming systems. With some modification on the recommended technologies for tomato production, Ka Florendo surpassed the average yield of tomato in the community. Enterprise diversification appeared to be a good startegy among farmer entrepreneurs.

2.    Provision of support services. In most of the cases studied, farmer entrepreneurs received extension support from the department of Agriculture, State college and universities (SCUs) and other institutions. They also availed credit from existing government programs but they mostly depended on non-formal credit sources. The availability of farm to market roads were essential to have an access to market. Market was not a problem among the farmer entrepreneur studied as they were known to be producers of good quality products hence buyers usually contacted them to buy their produce.

3.    Availability of resources. While the case study farmers were already financially capable, they emphasized that they achieve it through time, at a slow pace. Land ownership was an edge but do not necessarily hampered success, as in the case of Mang Tony in  Cavite.

4.    Personal traits and characteristics of the farmer entrepreneur. This personal traits and characteristics are unique to each case but they do have some commonalities. These include industry, discipline, creativity, innovativeness, frugality, patience, openness, good planning and decision making.

            Fajardo (1994) considered external factors as very important in promoting success of entrepreneurship, which include peace and order, political stability, price stability, taxation, infrastructures, education and training, public administration, production technology, markets  and financial assistance.

Can farmer entrepreneur be developed?

            The development of agricultural entrepreneurship can be approached in three interrelated perspectives – individual, farm household and community. The basic definition of entrepreneurship is related to an individual as an entrepreneur and not as a collective – farm household and community. There are indications, however that the success (and failure) of entrepreneurs in the context of small farms also lies on the collective characteristics of the farm household and the community organizations such as cooperative in the community. It is evident that external factors beyond the individual are important for an entrepreneur to succeed. Whatever are those factors, entrepreneurial qualities are challenged and entrepreneurs blossomed.

            Farmer entrepreneurs are aggressive, rational, risk-taker, creative, innovative, industrious, disciplined, frugal, open to change, patient, visionary, planner, and good decision makers. Can these qualities be learned? Bonifacio (1987) opined that it is possible but there is a need to provide adequate social and structural context for entrepreneurship to flourish. This would mean that within the social system, there should be some reorientation as to the values, roles, and attitudes that favor entrepreneurship and the formation of entrepreneurial communities.

            The farm household has a major role to play, for it is the family that values are first form. There are indications that families having entrepreneurial orientation tend to have siblings that are prepared to be entrepreneur. The social reproduction of knowledge and skills are initiated  at the farm household where entrepreneurial qualities are conveyed through family activities and apprenticeship.

There are tendencies among farm families to send their children to school and let them have profession other than farming as in the case of Tio Wen and Tia Belen. The basic reason is not to let their children suffer the hardship they experienced in farming before they became stable in agriculture.  However, if the children grow up in an environment where agriculture provide more than being employed somewhere else, then they would chose to be farmer entrepreneur as in the case of the son of Mang Tino in Nueva Ecija. Although, he had a BS Agriculture degree, He preferred to stay in the farm and continue improving what his father had done.

Through farmers organizations engaged in community-based entrepreneurship, the development of entrepreneurial values and attitudes can be enhanced. This will also help in expanding the opportunities that can be made available to the members of the community. Not everybody can be entrepreneur, but given favorable conditions, more farmers can become entrepreneur.

            With the availability of community-based support services to include research, extension, credit, inputs and marketing, farmer entrepreneur will not just be dealing with production but on value adding activities as well. They extend their activities beyond the farm into the communtiy-based enterprise as well. They are no longer just farm entrepreneur but agricultural entrepreneur. That is why I prefer to call them agriprenor.

REFERENCES

Angudong, A. R.V. Puangco, B. Tupaz and S. Valerio. 1997. The success factors and success indicators of small, medium and large businesses in Metro Manila. De La salle University, April 1997. (Unpublished)

Bonifacio, M.F. 1987. Extension and research in the context of rural entrepreneurship. In Organizationa develeopment- DA Vision. Quezon City: Department of Agriculture.

Bordado, G. 1999. Rice-based farming systems: A case in Pili, Camarines Sur. In Successful farming systems in the Philippines- A documentation. Philippines: Farming Systems and Soil Resources Institute, CA, UPLB and Bureau of Agricultural Research.

“Bright years ahead for this enterprising duo”. Business Focus Philippines. 2:1, 50-52, January 1997.

Fajardo, F. 1994. Entrepreneurship. Manila: National Bookstore.

Drucker, P.F. 1985. Innovation and entrepreneurship. New York: harper & Row Publishers.

Edralin, D.M. 1998. Entrepinoy- Path to successful entrepreneurship. Manila: De La Salle University Press, Inc.

 Ferrer, A.L. 1999. Rice-based farming systems: A case in Talavera, Nueva Ecija. In Successful farming systems in the Philippines- A documentation. Philippines: FSSRI & BAR .

Labios, J. 1999. Pineapple and Coffee-based farming systems: A case in Tagaytay City, Cavite. In Successful farming systems in the Philippines- A documentation. Philippines: FSSRI & BAR.

Millamena, A.A. 1999. Rice-based  farming systems: A case in Sibalom, Leyte. In Successful farming systems in the Philippines- A documentation. Philippines: FSSRI & BAR.

Pascua, S. 1999. Rice-based farming system: A case in Batac, Ilocos Norte. In Successful farming systems in the Philippines- A documentation. Philippines: FSSRI & BAR.

Schilit, K. W. 1996.Rising starts and fast fades: Successes and failures of fast growth companies. USA: McMillan, Inc.

Wagan, A.M. 1999. Rice-based farming systems: A case in Pila, Laguna. In Successful farming systems in the Philippines- A documentation. Philippines: FSSRI & BAR.

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Seminar paper prepared by V.T. Villancio for AGRO 199 – Colloquium in Agriculture, IAS Lecture Hall, July 17, 2000