The business of agriculture is no doubt a profitable one with the ever increasing number of people who have to eat daily. This explains why demand for food items hardly reduces even when there is an increase in price, that is agricultural produce have an inelastic demand. Although, consumers might seek cheaper food substitutes to replace expensive ones in a bid to cut cost, taste preferences can be difficult to change overnight.
However, the current inflation rate of about 19.64 (NBS), has lead to a sharp increase in the cost of farm inputs like feeds, production materials, electricity bill, transportation bill etc resulting in extremely high cost of production.
The consumers on the other hand have declining purchasing power as salaries are still fixed and inflation keeps reducing the value of their money. Hence, Agribusiness owners find themselves in a situation where they cannot sell as high as they should due to the perishable nature of their goods and so have to settle for lower profit margins.
Times like this calls for strategies that can give Agribusiness owners better leverage and the negotiation power required to thrive in business.
3 ways to increase your agribusiness income
1. Processing :
The main aim of processing agricultural produce is to increase the value and shelf life of such food item in a more appealing way.
The only problem is that most times when we hear the word processing, we immediately start thinking of big factories with massive equipment that cost a fortune.
While that is true, processing can also take place at smaller level. For instance, maize can be processed to roasted corn, pap, corn flakes and so on.
One thing that stand out is that at each these products can be sold at a better price than the raw maize.
When you start processing at any level, you will have more options in the immediate and more returns in the future.
refers to all activities that can make a product stand out. From packaging, logo for unique identification, market penetration etc. It helps
Increases the perceived value of your products.
Branding is what propel us to buy less than a liter bottle of honey with an attractive packaging at five thousand naira when we can get more of it at a cheaper price.
Branding is necessary in penetrating certain markets and charging higher prices for your farm products. It increases the perceived value of your products
3. New market:
Limiting the sales of your agricultural products to your immediate environment alone may be placing a cap on your business revenues as you will be at the mercy of their buying power.
Start searching for new and bigger markets where you can sell more at a better price point ahead of time. Explore various options aside from the regular market. Approach organisations like hotels, restaurants, offices, schools and so on.