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MINISTRY OF LIVESTOCK DEVELOPMENT
SMALLHOLDER DAIRY COMMERCIALIZATION
PROGRAMME (SDCP)
SMALLHOLDER FARMERS’ GUIDE TO DAIRY
FARMING AS A BUSINESS
Programme Coordination Unit
Tel: +254-51-2210851
E-mail: [email protected] , [email protected] website
www.sdcp.or.ke
P.O. Box 12261-20100 Nakuru, Kenya.
SMALLHOLDER FARMERS’ GUIDE TO DAIRY FARMING AS A
BUSINESS
PREFACE
Farming as a business is a relatively new concept for small-scale farmers who have
traditionally farmed as a way of life to provide for their subsistence needs. Commercial
farming was previously associated with industrial crops and large-scale farms. The
current approach involves a deliberate choice of farm enterprises with an aim of
maximizing on the benefits that farmers gain from their activities. It involves a change in
the way smallholder farming is perceived. This is because farming is a profitable venture
which provides gainful employment and a source of livelihood for many people.
SDCP has an overall objective of increasing the income of poor rural households that
depend substantially on production and trade of dairy products for their livelihood. This
is being achieved through the two programme purposes. First, improving the financial
returns of market oriented production and trade activities by small operators, through
improved information on market opportunities, increased productivity, cost reduction,
value addition and more reliable trade relations. Second, enabling more rural households
to create employment through, and benefit from expanded opportunities for market
oriented dairy activities, in particular because of strengthened farmer organizations.
This guide is intended to introduce smallholder farmers to the concept of farming as a
business and outlines some of the activities they can engage in to make their dairy
farming activities more profitable.
It has been compiled by the Dairy Enterprise
Development Officer, SDCP. The contribution of Bernard Kimoro, the Dairy Production
Officer in providing livestock records and Jeff Otieno, the Assistant Monitoring and
Evaluation Officer in providing images and illustrations is acknowledged.
Lorna Mbatia
Dairy Enterprise Development Officer
Smallholder Dairy Commercialization Programme
June 2010
TABLE OF CONTENTS
PREAMBLE ...................................................................................................................ii
TABLE OF CONTENTS .............................................................................................. iii
INTRODUCTION TO FARMING AS A BUSINESS ..................................................... 1
MY FARM BUSINESS................................................................................................... 5
FARM LEVEL DAIRY ENTERPRISE PLAN .......................................................... 10
RECORD KEEPING ..................................................................................................... 13
FINANCIAL MANAGEMENT .................................................................................... 16
MONEY .................................................................................................................... 16
SAVING ................................................................................................................... 17
INVESTMENT ......................................................................................................... 18
CREDIT .................................................................................................................... 18
APPENDICES ................................................................................................................. i
INDIVIDUAL COW RECORD ................................................................................... i
GENERAL HEALTH RECORD .................................................................................. i
VACCINATION RECORD....................................................................................... iii
MILK PRODUCTION RECORD ............................................................................... iv
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INTRODUCTION TO FARMING AS A BUSINESS
What is a business?
A business is an organization that buys or sells products or services for money. It can
also be defined as an activity in which a person earns a profit from providing a service or
from supplying goods.
A business involves buying and selling something. The buyer wants to meet a need. He
therefore pays some money for the goods or services he requires to meet that need. The
seller produces products or offers services that are needed by customers. He does this in
order to meet the needs of customers and earn profit in the process. Profit is the amount
left after subtracting the cost of giving a service or supplying goods from the amount paid
for the service or goods by the customer who buys them, i.e. Profit = Income – Expenses
Similarities between farming and other businesses
Farming is similar to other businesses that we are familiar with. In our local market there
are businesses like kiosks, furniture shops, tailoring and others. These businesses help us
to get what we need. They provide their owners with income and provide employment to
those who work there.
Dairy farmers on their part supply consumers with milk and milk products. They invest
in land, cows, capital, animal feeds and labour so that they can provide their families and
other consumers with milk. They must however earn profits from their activities if they
are going to operate as a successful business.
For farming to be carried out as a business the farmer must plan how he is going to sell
the milk so that he can get a good price and a reliable market. Like other businesses he
will need information about the price, availability of milk products, buyers, competitors,
input suppliers and other factors that affect his business. He will also carry out marketing
activities such as value addition, transporting milk to the collection point and selling.
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Like other businesses farming is affected by seasonal patterns. Business like tailoring
and carpentry are also influenced by seasonal patterns such as demand for school uniform
and desks at the beginning of the year and demand for new clothes during the Christmas
season. Likewise a farmer must plan knowing that there are seasonal variations in
availability of feeds and other seasonal patterns such as high supply of milk in the wet
season. He may conserve feeds for the dry season to ensure that his cows have enough to
eat and produce milk throughout the year. He may also choose to have a contract with
those who buy from him so that the amount of milk sold and the price are determined
beforehand.
Importance of business
There are many benefits that businesses bring to a community and individuals. Some of
them are listed below.
1. A business is a source of employment for the business operator and his employees.
2. A business is a source of income. This helps in meeting the needs of the business
operator, his/her family and those who depend on the business.
3. A business helps in meeting the needs of the community through providing goods and
services close to where they are.
Tuiyo Mosop Multipurpose Group’s agro-vet shop in Kapsaret assists farmers to access inputs nearby
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4. Businesses promote economic development and promote the welfare of the
community.
5. By creating employment, providing income generating opportunities and promoting
development in rural areas, businesses help in reducing rural-urban migration and the
accompanying problems such as mushrooming of slums.
Importance of farming as a business
Subsistence farming involves producing just enough for consumption by the farmer and
his family. Farming as a business on the other hand involves carrying out farming with
the aim of making profit. It involves planning and choosing farming enterprises that will
enable farmers to earn profit. It also involves having the market in mind when making
decisions about what and when to produce.
In order to engage in farming as a business the farmer invests so that he can make more
money. He may spend money to buy good quality animals, use A.I. services, provide
better feeds, engage in good husbandry practices and add value to what is produced
because these help him to earn more income.
Investing by providing enough quality feeds raises milk production and profit
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Record keeping is an important business practice because it helps the businessman to
know how the business is performing. Farmers ought to keep records to help them assess
if they are making profit from their activities. The records also provide them with useful
information for decision making.
Besides farm records, the farmer will need to seek information on the opportunities
available and how best to carry out his business so that he can get more profit from his
farm. He can get information on how to improve on his farm business from extension
officers, field days, radio programmes, agricultural shows, magazines, brochures and
booklets.
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MY FARM BUSINESS
Now that we have seen that dairy farming is a business like any other there is need to
consider how the business is performing and what we can do to improve it.
Example
Sotet farm is on a 3 acre plot and has 2 cows which are in milk and a calf. One of the
cows produces an average of 5 litres and the other 3 litres of milk per day. The family
consumes 3 litres while the other 5 are sold through New KCC Ltd
Below is a statement showing the income and expenditure of the farm in the year 2009.
Sotet Farm
Income and expenditure of dairy enterprise for the year 2009
Kshs.
Income
Sale of milk to New KCC (5 lts @ 21/-*300 days)
Sale of manure (24 bags @ 600/-)
Milk consumed at home (3 lts*365 days*21/-)*
Gross Income
Expenditure
Labour (1 farm hand paid 2,500 monthly)
Dairy meal (2Kg*2cows*300days/90kg*1,800/-)
Minerals (100g x 365 x2)/1000g*100/Hay (3 bales*120days*200/-)
AI services (4 *900/-)
Veterinary costs
Dipping charges (15/- per head per week)
Milking salve
Deworming
Transport for milk to cooler in the town (3/- per litre)
Maintenance costs
Stationery (for records)
Depreciation
Total expenditure
Profit/(Loss) for the year
Kshs.
31,500
14,400
22,995
68,895
30,000
24,000
7,300
72,000
3,600
5,000
2,340
1,200
1,000
4,500
5,000
500
2,500
158,940
(90,045)
The dairy enterprise did not make profit during the year. Instead it made a loss of
Kshs.90,045.
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With a total expenditure of Kshs.158,940 the farmer would need to sell at least 7,569
litres of milk at 21/- to avoid making losses. This is an average of 21 litres per day
throughout the year. The amount at which the business does not make a profit or a loss is
referred to as the break even point. The farmer needs to operate above that level in
order to make a profit.
Income
Expenses
There are actions that the farmer can take to change this so that the dairy enterprise can
give him profit.
In order to increase profit he can
i.
Increase income without raising costs by the same amount
ii.
Maintain the same level of income while reducing the costs
iii.
Increase income and reduce cost at the same time
Increasing income
A dairy farmer can increase income by
i.
Increasing the amount of milk sold.
This involves increasing milk production and reducing milk losses. To increase milk
production he can feed his cows on better feeds and apply good management practices. If
the cows are of low genetic potential the farmer may replace them with cows that yield
more milk.
The farmer can improve the quality of his herd by using artificial
insemination (AI) services and select the qualities that are desirable for the offspring.
Milk losses can be reduced through hygienic milk handling to prevent contamination and
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spoilage. Losses can also be reduced by using appropriate containers to avoid spillage
during transportation.
Investing in quality cows and good husbandry practices for increased profit
ii.
Selling where prices are higher.
Farmers can identify alternative markets that can pay higher prices without them
incurring transport and other marketing costs that are equal to or in excess of additional
income to be earned at the alternative market. Through bulking milk farmers can collect
large volumes that give them bargaining power when negotiating for better prices.
iii.
Preparing and selling high value products e.g. mursik, mala, cheese and yoghurt.
This enables farmers to earn more income after converting the milk into other forms that
are sold at a higher price. The demand for such products should be assessed and how they
will be marketed determined before starting such processes. There are additional costs
including licences, culture, flavour, packaging, energy, transport and labour. These costs
should not exceed the additional income earned if the business is to make profit.
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iv.
Selling by-products.
Farmers can sell manure and other farm by-products that other people require and are
willing to pay for. Farmers can produce surplus hay which they can sell during the dry
season when animal feed is in high demand and fetches high prices.
Reducing cost in order to increase profit
Another approach is to identify the respective costs and consider what can be done to
reduce them without reducing the level of milk production. In the previous example the
farmer can reduce costs by growing high quality feeds on the farm to reduce the
expenditure on dairy meal. He can also conserve feeds to avoid buying hay in the dry
season. Farmers who do not have sufficient land to plant fodder could buy hay when
there is plenty of feed because the prices are significantly lower and store it for the dry
season.
Timely heat detection can be used to reduce the number of repeats in AI service.
Similarly improved husbandry practices can lower the incidence of management diseases
and thus reduce the cost of veterinary services. Transport costs could be reduced by
bulking the milk with other farmers and using economies of scale as a means of reducing
the transport cost per litre of milk. Farmers can come together to purchase inputs in bulk
at a lower cost per unit in order to reduce the cost incurred.
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Planning
The first step in running a successful business is to have a plan. Planning involves
identifying one’s goals and the necessary steps to achieve them. The farmer should plan
his farm to cater for the enterprises chosen in a way that will optimize the production.
The farmer will identify opportunities available based on market demand for various
products and consider the activities he will implement to take advantage of them. The
resources required to carry out the activities are then identified. The farmer plans for
how the resources will be availed and provide a timeframe for the implementation. A
plan is an important management tool because it guides what is to be done to achieve the
goals set and helps to monitor progress made.
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Below is a sample farm plan
FARM LEVEL DAIRY ENTERPRISE PLAN
BACKGROUND INFORMATION
Name of farmer: Mfugaji Bora
Date: May 15, 2010
District: Mashariki
Location: Katikati
Farm size: 3 acres
Gender: M
Description of general features of the farm:
 Structures
Farmer’s house: Semi-permanent
Housing for cattle: None save for enclosure with barbed wire fence
Fencing: Barbed wire fence surrounding entire farm
Paddocks: None
Water harvesting and storage: None
 Slope – gentle slope
 Soils – loamy clay
 Water availability: Water is fetched from a stream 500 metres from the farm
Current farm sketch
Existing enterprises
Enterprise
Unit
1 Dairy
Cow
No. of units
2
Gross margin
(90,045)
Remarks
8 lts / per day. Costs
are more than income
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2 Maize
Acre
1.5
12,300
therefore the farm is
making a loss
18 bags/acre
Opportunities identified for improvement of dairy enterprise
Measures to increase income
1. Adoption of good husbandry practices
2. Increasing the herd to 4 dairy cows
3. Replacing the current herd with higher yielding cows
Measures to reduce costs and cut losses
1. Fodder establishment to reduce amount spent on feed purchases
2. Baling of hay and silage making for dry season feeding
3. Investing in proper milk handling equipment to prevent spillage and spoilage
Proposed activities
Opportunity
Action
Adoption of
good
husbandry
practices
Establishment
of zero grazing
unit
Acquiring
high quality
breeds
Scouting for
and purchasing
good cows with
the assistance
of livestock
extension
officer.
Sale of current
herd
Land
preparation
Acquisition of
planting
material
Planting
Fodder
establishment
Feed
conservation
Baling of hay.
Silage making.
Resources
required
Wood
Iron sheets
Cement
Sand
Murram
Blocks
Labour
Transport
Funds for
purchase
of cows
Cost
5,000
8,000
4,000
1,400
5,000
6,000
5,000
200,000
Labour
Planting
material
Manure
1,000
-
Hay box
Sisal twine
Polythene
tubes
Molasses
400
150
2,000
300
Source of the
resources
Savings and
sale of farm
produce.
Wood from
farm
Time frame
Proceeds
from sale of
herd –
50,000.
Loan from
Bidii
Microfinance
155,000.
Loan
processing –
Sept – Oct
2010.
Acquisition of
cows
December
2010 – January
2011
September –
October 2010
Cows to be
bought after
zero-grazing
unit is complete
Target is cows
producing a
minimum of 25
lts daily
December
2010
Activity
depends on
readiness of
material for
conservation
Planting
material from
SDCP
supported
bulking plot.
Manure from
farm.
Casual labour
to
complement
family labour.
Wood for hay
box from
farm. Others
to be bought
from sale of
farm produce
Remarks
October to
November
2010
Planting to
coincide with
short rains
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Opportunity
Action
Proper milk
handling
Purchase of
milk equipment
Resources
required
Buckets
Milk cans
Sieves
Towels
Cost
1,000
15,000
100
500
Source of the
resources
1,600 from
savings, cans
from milk
sales
Time frame
Remarks
January 2011
Cans will be
acquired from
Society and
paid for on
check off
Proposed farm plan
Live fences of fodder trees will be planted to provide complementary feed. Sorghum,
oats, lucerne, desmodium and napier grass will be planted in the former grazing field.
The enclosure will be replaced with a zero-grazing unit. Maize and beans will be grown
for the family’s food. Farm residues from the beans and maize plots will be used as
animal feeds.
Expected/target performance following interventions
Enterprise Unit
No. of units Gross margin
1 Dairy
Cow
4
360,640
2 Maize
Acre
1
26,300
3 Beans
Acre
0.25
7,500
4 Poultry
Number 100
25,000
Remarks
Average 25 lts per cow per day
Target is 25 bags at 2,000/
For home consumption
From sale of eggs, live birds
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RECORD KEEPING
Introduction
Recording keeping is an important practice for any business.
Records are written information about what has been done, bought, sold, etc
Importance of records

They help us to stay in control of resources.

They help us in decision making.

They help in monitoring performance.

They communicate about the farm business to other parties. When we are dealing
with other parties they may require information and evidence from records kept e.g.
when seeking business development assistance or when we approach financial
institutions for a loan.
Our minds cannot store all the important information which we may need to refer to later.
We may also not remember all the important information instantly as and when required
even if we have a good memory. It is therefore necessary to document information for
reference by the farmer and other parties who work with him.
3. What records should the farmer keep? Below are some records kept by dairy farmers.
There are other samples in the annex.
a. Farm plan showing homestead, partitions for various enterprises, other developments,
pathways and unused land.
b. Milk production records
Date
Morning Evening Total
Calf
Home
Sales
consumption consumption
Price
Value
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c. Inputs such as feeds and drugs, showing the quantity, value, usage, date of purchased
Input purchase record
Date
Type of input
Quantity
Value
d. Breeding and calving records
Cow identification: ………………………………………..
Date of last calving: ……………………………………….
Lactation no: ……………
Dates on heat
Service dates
AI/Bull
Breed
Pregnancy test: Date and result
Date to dry
Date to calve
e. Animal health records
Treatment record
Date
Illness/events
Treatment
Cost
Remarks
Vaccination record
Vaccine type
Date vaccinated
Date due
Date vaccinated
Date due
f. Income and expenditure records
Date
Description
Receipts (Kshs)
(Income/Cash In)
Payments (Kshs)
(Expenditure/Cash out)
Balance
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g. Activity record
Activity
Start date
Completion date
Resources used
Cost
Remarks
There are other records which a farmer can keep to aid him in obtaining information
about his business, making decisions, assessing performance and obtaining external
assistance.
These records provide information which is used to generate financial
statements such as profit and loss account and balance sheet.
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FINANCIAL MANAGEMENT
MONEY
Money is a medium of exchange. Before money was used for exchange there was barter
trade where parties exchanged the commodities they needed. Money is preferred as a
medium of exchange for several reasons:
1. It is widely acceptable.
2. It can be held in various denominations making it divisible.
3. It is easy to carry.
4. It facilitates trade in different areas and commodities.
Importance of money
Money is important because it enables us to pay for the things that we need such as: food,
clothes, shelter, school fees, medicine, utilities such as telephone and other necessities of
life. Money is used for investment e.g. plots of land, poultry, sheep, goats, dairy cows,
shares, equipment, business and rental houses. People also save money to meet future
needs and leave inheritance for their children.
Sources of money
Money is acquired through different ways. Some of them are: sale of farm produce, sale
of assets, trading, employment, dividends, interest income and loans.
The loans can be given to individuals or groups by merry-go-rounds, village savings and
loan associations, cooperative societies, banks, microfinance institutions and some
government programmes among others. Njaa Marufuku Kenya a programme under the
Ministry of Agriculture, CDF, Youth Enterprise Fund and Women Enterprise Fund are
some of the government programmes that can be approached for funds by groups.
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SAVING
A clay money ‘bank’ used for keeping savings
Purpose of saving
1.
Daily financial management: to manage and deal with day-to day expenses and
occurrences as well as emergencies.
2.
Consumption smoothing: dealing with seasonality by holding over income from one
period to another.
3.
Accumulation: building up savings to meet large future expenses such as purchase
of land, equipment, payment of school fees, etc.
4.
Insurance: building up savings to deal with irregular events such as illness, burials,
marriage, ceremonies, etc
Savings may be in the form of money or in kind e.g. livestock, foodstuff in granary, etc.
There are advantages and disadvantages of savings in the different forms. For some
people saving in the form of money may tempt them to use it for other purposes. Where
the savings are held in kind there are risks such as disease outbreaks which can affect
livestock making it disadvantageous to the owner.
On the other hand there is the
likelihood that the livestock will have offspring and the value of the herd will increase.
The farmer should choose the form that is appropriate to his circumstances such as
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income patterns and the purpose for which he is saving. The circumstances of the farmer
will also determine how frequently he saves.
When deciding on where to keep savings there is need to consider safety, ease of
withdrawal when there is need to access money, closeness to avoid high travelling costs,
high interest rates on savings and simplicity of procedures.
INVESTMENT
Investment is putting aside money in something that will increase in value or increase the
ability to earn additional income in future. People invest for various reasons. Some of
them are:

To increase income so that one is able to meet future needs and aspirations.

Wealth and employment creation.

Security for old age and to create a reserve for use in times of emergencies.

Leaving inheritance for children.
There is need to consider the feasibility of an investment. One should not put money in a
venture which will not generate sufficient returns just because someone else has invested
in the same. Get-rich-quick ventures such as the pyramid schemes result in losses and
should therefore be avoided.
CREDIT
This is one of the sources of money. It is money given by one party to another for a time
with the understanding that the party which has received it will pay it back at a later date
according to the terms agreed on.
People take loans for different purposes some of which are listed below.

Investment e.g. in business, plots of land, livestock, etc

Consumption purposes e.g. to buy food or household items, pay school fees, etc

Attending to emergencies e.g. illness
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Sources of loan funds
There are various places where people can obtain loans. The availability of loans varies
from place to place as well as with the circumstances of the person seeking the loan.
1. Groups which have merry-go-round where members can save and also get loans
based on their level of savings.
2. Savings and credit cooperative societies (SACCO) which give loans to members.
3. Banks. Some of the banks have specialized products to meet the needs of clients.
E.g. Cooperative bank (maziwa loan) and Equity bank (mifugo loan) for livestock
farmers.
4. Agricultural Finance Corporation (AFC).
5. Micro Finance Institutions (MFI) e.g. K-REP, Faulu Kenya, Kenya Women
Finance Trust (KWFT), SMEP, SISDO, KADET, etc.
6. Youth Enterprise Fund.
7. Women Enterprise Fund.
8. Traders who give goods and services on credit.
The different sources have advantages and disadvantages. The farmer should therefore
choose the source that meets his needs and is convenient to his circumstances.
Features of a loan

Principal: This is the amount of money borrowed

Interest: refers to the cost of the loan which is calculated as a percentage of the
principal. Interest may be charged on a fixed amount or on a reducing balance. This
will affect the total amount paid on the loan.

Grace period: This is the duration between the time a loan is disbursed and the time
that repayment begins.

Repayment period: refers to the time given for the loan and interest to be paid in full.

Instalment: Payments are divided into amounts to be paid periodically. The amounts
comprise a portion of the principal and interest.

Security/collateral: Usually the lender requires an asset that can be sold in event of
the borrower’s failure to repay the loan. The type and value of the security depends
on the loan amount and the policy of the lender. Land title deeds, motor vehicle
19
logbooks, equipment, warehouse receipts and group guarantee are some of the forms
of security which are commonly used.

Preliminary expenses e.g. application fees, agreement fees.
When taking a loan it is important to understand the terms and conditions. It is also
important to know various costs that will be charged e.g. application fees, agreement
fees, management fees and the amount of principal and interest that are due each month.
When one takes a loan he should realize that it is not free money. It is money that comes
at a cost and which must be repaid at a future date. Failure to repay may have legally
enforceable consequences resulting in loss to the borrower.
Borrowing money as a group
There are various loans available for different purposes such as development, school fees,
purchase of shares, household items, dairy cows, farm equipment and construction of
farm structures. Loans are available to individuals and groups. A group may have a
proposed investment project but may lack sufficient funds to implement it. They may opt
to finance the project using a loan. Members are responsible for repaying the loan.
Group guarantee is one of the ways of securing money advanced to group members.
Under this method members commit themselves to repay funds owed to the lender when
the borrower defaults. The method is increasingly popular because borrowers who lack
title deeds, motor vehicle log books or other forms of security can take loans.
Managing default
When a borrower fails to pay money owed on the specified date as agreed with the lender
he is said to have defaulted. The reasons for failure to repay on time are diverse. In
event of failure to repay on time there are consequences.
1. The lender may sell the asset pledged as security resulting in loss to the borrower.
2. The borrower may be sued.
3. Where members of the group have committed themselves as guarantors they will
put pressure on the defaulter to force him to repay. In the event that he still does
not repay they may take his possessions so that they are sold and money obtained
to cover the outstanding amount.
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4. The defaulter may lose credibility depending on the reasons for default. The
guarantors may not want to guarantee him in future while to the lender the credit
rating will be negative making it difficult to access a loan in future
When borrowing one should remember that the money belongs to someone else. The
borrower should therefore be a good steward and use it for productive purposes and repay
it as agreed with the lender. If it becomes difficult to raise the instalments as agreed, the
borrower can consider the options available to him including negotiating with the lender
to accept lower instalments or extending the loan period.
With the many possible sources of credit a borrower may find himself over-burdened
with loans. The borrower should therefore protect himself by making sure that he is not
over-exposed.
When taking a loan
1. Make sure that you borrow an amount that you are able to repay
2. Consider the cost of the loan. The investment being funded by borrowed funds
should give profit that is more than the amount paid for borrowing in the form of
interest, application fees, processing fees and other costs associated with using
borrowed funds.
3. Consider the expected cash-flows and whether they will meet the requirements for
payment of instalments and leave a surplus that justifies taking the loan.
4. Know the terms and conditions of the loan. Are you ready to abide by them?
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MARKETING
Farming as a business involves production with the market in mind. It is driven by what
is being demanded by consumers. The farmer should therefore identify his market so that
he can know what to produce, when to produce and how much of it. Marketing is
important to farming as a business because it involves the processes that move products
from the farm to the consumer and translates it into income. Four key components of
marketing should be considered when making decisions. These are: product; price;
place; and promotion.
Product
The product to be sold will be determined by the customers’ needs, tastes and
preferences. The dairy farmer has the option of selling fresh milk or milk products if
there is a market for them and they can be produced and sold at a profit. The products
should be well packaged and labelled for them to be attractive to customers.
Price
The price of the product will be influenced by production costs, the price being offered
by the buyers, the level of supply and demand, the price of similar products or substitutes,
desired profit margin and the bargaining power of the farmer among other factors.
Place
This involves decisions on how the product will reach the consumer. There different
ways of reaching consumers depending on the people involved in the marketing chain.
The farmer may take milk to a collection centre or engage a transporter to carry the milk
for him, sell it direct to consumers or sell through middlemen. The decision of how the
product will reach the consumer will depend on the distance, costs involved, presence of
middlemen, transporters, processors and collection centres among other considerations.
Promotion
This involves creating awareness about a product for example through advertising and
making samples available for tasting. It is essential to the success of the business because
customers must become aware of the products so that they can buy. This is particularly
important for new products and new brands which are being introduced in the market.
Conclusion
The farmer who is engaging in dairy farming as a business should be prepared to invest in
good quality cows, proper housing, good management practices and feeding. He should
plan his business and focus on the market, what the customers want and are willing to
pay for. Like other businesses dairy farming is a profitable business if the business
farmer invests and makes the right decisions regarding his enterprise.
22
APPENDICES
INDIVIDUAL COW RECORD
TAG/TATTOO NO:
REGISTER NO:
COW
DATE BORN
HOW DISPOSED
REASON FOR DISPOSAL
NAME
SIRE
SIRE
DAM
SIRE
DAM
DAM
BREEDING RECORD
WEIGHT AT FIRST SERVICE (KGS)
AGE AT FIRST CALVING (DAYS)
AGE AT FIRST SERVICE (DAYS)
AGE AT CONCEPTION (DAYS)
HEAT
DATE OF
PREG.
DATE
DATE
DATE
CALF
DATES
A.I./BULL
DIAGNOSIS
TO
DUE
CALVED
SEX
SERVICE
DATE
DRY
TO
CALVING
NO.
REMARKS
INTERVAL
(DAYS)
CALF
GENERAL HEALTH RECORD
DATE
SYMPTOMS
DIAGNOSIS
TREATMENT GIVEN
REMARKS
i
ii
VACCINATION RECORD
DISEASE
DATE
DATE
DATE
DATE
DATE
DATE
DATE
DATE
DATE
DATE
DATE
DATE
Foot and mouth
Brucellosis
Rinderpest
Anthrax/Black Quarter
Lumpy Skin Disease
Rabies
Leptospirosis
Rift Valley Fever
Mastitis
TREATMENT (DEWORMER)
iii
MILK PRODUCTION RECORD
Time
JAN
FEB
MAR
APR
MAY
JUNE
JULY
AUG
SEP
OCT
NOV
DEC
1
2
3 4
5 6
7 8
9 10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Total
milk
Av./
day
Comment
Milk
Number of days
a.m.
p.m.
a.m.
p.m.
a.m.
p.m.
a.m.
p.m.
a.m.
p.m.
a.m.
p.m.
a.m.
p.m.
a.m.
p.m.
a.m.
p.m.
a.m.
p.m.
a.m.
p.m.
a.m.
p.m.
Year total
Lactation total
iv