BUSINESS SKILLS TRAINING GUIDE

FOR POTATO ASSOCIATIONS

Expanding Utilization of Roots, Tubers and Bananas and

Reducing Their Postharvest Losses

Johnson Nuwagaba & David Ojara Okot

SELF HELP AFRICA

0
This training guide is an output of Expanding Utilization of Roots, Tubers and Bananas and
Reducing their Postharvest Losses (RTB-ENDURE) project implemented by CGIAR Research
Program on Roots, Tubers and Bananas (RTB) with funding from the European Union and
technical Support from IFAD.

The CGIAR Research Program on Roots, Tubers and Bananas (RTB) is a broad alliance led by
the International Potato Center (CIP) jointly with Bioversity International, the International
Center for Tropical Agriculture (CIAT), the International Institute for Tropical Agriculture
(IITA), and CIRAD in collaboration with research and development partners. Our shared
purpose is to tap the underutilized potential of root, tuber and banana crops for improving
nutrition and food security, increasing incomes and fostering greater gender equity,
especially among the world's poorest and most vulnerable populations.

1
Table of contents

INTRODUCTION ...................................................................................................... 3
About the Training Guide ...................................................................................... 3
Who is the guide intended for?.................................................................................... 3
Using the Training guide ............................................................................................ 4
How the guide is organized? .................................................................................... 4
PART A - Training Approach ...................................................................................... 5
PART B - Preparatory Activities ............................................................................... 10
PART C – Training Modules ..................................................................................... 14
MODULE 1: LEADERSHIP AND GOVERNANCE ......................................................... 14
MODULE 2: FARMING AS A BUSINESS & ENTERPRISE ANALYSIS ............................. 23
MODULE 3: BUSINESS PLANNING ........................................................................ 34
MODULE 4: RECORDS & STORE MANAGEMENT ...................................................... 38
MODULE 5: MARKETS & MAKETING ...................................................................... 42
MODULE 6: SAVINGS & RESOURCE MOBILISATION ................................................ 62
MODULE 7: FINANCIAL LITERACY ........................................................................ 69
ANNEXES ............................................................................................................. 94
ANNEX 1. BUYER/TRADER INTERVIEW GUIDE ...................................................... 94
ANNEX 2. SUB-SECTIONS OF A BUSINESS PLAN ................................................... 98
ANNEX 3. MARKET & PRODUCTION SURVEY QUESTIONS ....................................... 99
ANNEX 4. RECORD KEEPING TEMPLATES ........................................................... 106
ANNEX 5. POTATO ASSOCIATION (PA) ENTERPRISE DEVELOPMENT CAPACITY
ASSESSMENT QUESTIONNAIRE ......................................................................... 108
ANNEX 6: ENTERPRISE DEVELOPMENT PERFORMANCE TRACKING TOOL ................. 113

2
 INTRODUCTION

About the Training Guide

The guide is designed to train farmer associations or groups in business skills. It focuses on
developing holistic capacities of a farmer association in:

1. Leadership and governance

2. Enterprise Analysis

3. Business Planning

4. Record Keeping and Store Management

5. Markets and Marketing

6. Savings and Resource Mobilization

7. Basic Financial Literacy

The guide follows the Family Life Module (FLM) principles of training approach. The Family
Life Model is a localized way of presenting the relationships between the aspirations of families
and the linkages to resources that they can exploit to meet these aspirations. The family’s
aspirations considered in the model regard income generation through agribusiness
development. Important among these are other factors like how decisions are made in the
household. Research shows that if women are empowered and have influence regarding
decisions made at household level, more of the income is spent on reinvestment, education,
health care and other household needs which increase the standard of living of the household.

The basic concepts of “Basic Financial Literacy” on personal financial management and
sound financial decision-making regarding enterprise analysis are applicable in this training
guide and hence should be emphasized throughout the trainings. The recognition that RTB-
ENDURE project does not give out hand-outs but builds the capacity of households and
community associations to harness their skills and opportunities around them to undertake
profitable farming as a business is emphasized. This training manual is aimed at helping
farmers make sound business decisions in a consistent manner.

Who is the guide intended for?

This guide will be used by RTB-ENDURE Project Potato Association Committee members, RTB-
ENDURE implementing partners and other partners in similar projects to conduct trainings to
the farmer groups/association members so to have their business skills built to a level of
making sound decision making regarding different business options in potato or other
enterprises. The strategy is to allow the business principles and concepts to be developed at
association level but also allow practical application at household /family levels. This way RTB-
ENDURE Project will achieve its aim to develop entrepreneurial and agribusiness skills for the
selected actors (men, women and youths) in specialized ware potato markets.

3
Using the Training guide

A good number of the potato association members have low literacy levels. This guide is meant
to stimulate them to become engaged in the training process and is composed of short sessions
that provide just enough information for the association and household to make sound business
decisions. The training process and structure of the guide uses an approach that helps families
use the existing farming experience to gain knowledge and skills that help transform potato
farming/trading into a profitable undertaking. Local language, tools and materials should be
used as much as possible. Adult learning methods, other than those proposed in this manual,
can be used as trainers find appropriate.

It should be recognized that successful learning needs a motivated learner. It is important to

establish an atmosphere that is conducive to learning for participants and create harmony with
the facilitators in order to prepare participants for better learning. The farmer association
leaders (who are the trainers) should value participants (fellow members) and also
acknowledge the fact that they probably have more practical experiences, which should be
drawn from.

How the guide is organized?

The guide has three sections, with Section 1 providing a general overview of the various
participatory training approaches that can be used in delivering the training, Section 2 covering
pre-training activities that are needed before a training is commenced and Section 3 covering
the detailed training modules.

4
 PART A - Training Approach

The participants of the business skills development training are farmers and farmers are adults.
Therefore, to facilitate a training it is important to understand:

1. how adults learn

2. the role of the facilitator in this process
3. the different participatory learning techniques that can be applied

Adult learning

Adult learners normally go through some phases of a learning cycle. These phases are
experiencing, analyzing, processing and generalizing (Figure 1).

Adults have a wide experience and have already much knowledge and skills. Learning
something new (experiencing) is not just achieved in an instant. Referring back and making
use of the knowledge and skill is the basis of the adult learning process. It may sometimes be
necessary to break apart and review the existing knowledge/skill (analyzing) as well as test
the new ideas. The new learning will have to be internalized (processing) by making it relevant
to one’s self. It may have to be shared with other people as part of the process. Only after this
can the learning be applied when confronted with a similar situation (generalizing).

Figure 1: Adult learning cycle

Experiencing

Generalising Analysing

Processing

Role of the facilitator

The role of the facilitator and his relationship to farmers contrasts significantly from that of the
instructor or trainer. The instructor imparts knowledge to farmers who adopt a passive role of

5
merely receiving information. In contrast, a facilitator creates conditions for farmers to learn,
by arranging opportunities for the farmers to observe and interpret differences in conditions
and crop performances, to carry out simple tests and exercises, and through discussions. The
facilitator encourages farmers to adopt an active role in the learning process.

The main features of the attitude and role of a facilitator:

1. To accept that there is no monopoly of wisdom or knowledge on the part of the facilitator
2. To listen to participants and respect their knowledge, experiences and perceptions
3. To give farmers the confidence to share their knowledge and experiences
4. To create suitable conditions and activities from which farmers can learn
5. To be responsive to farmers’ needs and flexible in organizing the course
6. To increase farmers’ knowledge, skills, problem-solving ability and capacity for
innovation so that the facilitator becomes redundant.

Facilitation & Learning techniques

Different learning techniques are used in the discovery-based exercises used in the Farmers'
Training. Descriptions, advantages and disadvantages of the different learning techniques
are presented below.

Plenary Introduction
A Plenary Introduction is normally the first activity to start a new training session. Its main
objective is to introduce the subject and to allow participants to familiarize with some basic
concepts by referring to familiar and related topics.

Procedure (Steps)
1. Attain a relaxed group atmosphere. Exercises can be used to introduce the participants
to each other and to create a sphere for group work.
2. One participant, who was assigned for this in the previous training session, gives a
review of the previous training session: objectives, exercises and major findings.
3. If a group task (whole group or small groups) of the previous training session had to be
finished, the results are presented and discussed.
4. Explanation of the specific objectives and expected output of today’s exercise by the
facilitator.
5. Eventually the characteristics and terminology of the topics of today’s exercise can be
explained and discussed briefly.

Advantages
The outcome of the previous training session is again clear to everybody. Everybody knows
the meaning and expected outcome of today’s training session. Terminology and characteristics
of today’s topics are clear to everybody.

Disadvantage
Participant may not be familiar with giving a short presentation. May be time consuming if not
only the major issues are discussed.

6
Brainstorming
The main objective of a brainstorming session is to introduce new topics and to discover new
ideas and responses very quickly by having the group describing the topic or idea by listing
an exhaustive list of related characteristics and conditions.

Procedure (Steps)
1. Ask the group to appoint a recorder who will not participate, but merely record the
ideas
2. Ask the group to think of issues, topics and questions that they want to tackle in
relation to a particular issues
3. Encourage the group to think adventurously. Everything must be included, even the
most outlandish and wild idea
4. Encourage quantity rather than quality: the more ideas the better
There are two options for brainstorming:
5. People call out their ideas and the facilitator/recorder writes each idea up on a
flipchart. No comments and evaluation can be made, it must remain a free flow of
idea
6. Each member of the group writes down a series of issues, topics or questions on
small bits of card. These are fed back by sticking them to the wall
7. After the ideas are written down - they can be discussed further and evaluated, for
example listing the best options in a systematic way
8. Ideas can be grouped (exact duplicates removed) and analyses so that they belong
to the group rather than individuals (the group must agree on how the carts are to
be clustered into theme areas).

Advantage
 A good way to get or bring out ideas.
 The focus is on generating as many ideas as possible without judging them.
 The list of issues, topics and questions use the collective insight of a group. All ideas are
given equal credence (weight).
 Participants are encouraged to let ideas flow freely, building on and improving from
previous ideas.
 Brainstorming can fully exhaust an idea by focusing specifically on that idea. Generated
ideas usually lead to a very animated and energizing session.
 Reserved participants may feel bold enough to contribute.
 Brainstorming sessions can work well with a large group and take less time.

Disadvantages
 It can be difficult to record the points accurately
 If people do not know the subject - it is difficult to brainstorm.

Small group discussions

Instead of discussing one subject with the whole group, more subjects can be discussed
by using small groups. The main objective is to give every participant a way to actively
participate in the discussion.

Procedure (Steps)
1. The plenary discussion can break into sub-groups to discuss one or two specific

7
 questions or issues.
2. One member of each group can report its findings back to the plenary.
3. Depending on the numbers, the groups can be made up of 3, 4 or 5 people.
4. Facilitators watch time and manage feedback.

Advantages
 Everyone can express his or her opinion - it is participatory.
 Exchange and sharing of ideas (interaction) and draw on their wide collective
experience. Facilitators can gauge the mood by listening to some of the discussions.
 It changes the pace of the session.
 It encourages participants to reflect on what they have learnt and how they might apply
it in their work.
 Groups can be mixed with different types of stakeholders in each group. The facilitators
can also learn from the small group discussions.

Disadvantages:
 People may not be familiar with the use of group work.
 It takes time - in particular to get all the feedback from each group.
 You need leaders or facilitators within each sub-group, though care has to be taken
that one person does not dominate.
 Need to arrange tables and chairs in a way that allows for quick easy discussion

Advantages
 Participants learn through practicing.
 Encourage participants, who do not feel confident to speak in a group, to participate
in a practical way.
 Close to real live situations.

Disadvantages
 Time consuming.
 Need for good planning, material, timing, and place.

Note: In order to save time in presenting ideas after the group discussions: one group presents
all their ideas, and the other groups only contributing new ideas, avoiding any repetition.

Plenary discussion / presentation

The plenary discussion can follow directly after small group discussions, but does not need
to do so. The objective of the plenary discussion/presentation is to synthesize the ideas of
the participants about a (new) topic or information that is discussed within the group. A
training session using the method of plenary discussion may split up in small groups (for
step 5 of the procedure described below) for small group discussions and continue with a
plenary discussion for the formulation of the conclusion.

Procedure (Steps)
1. Introduce shortly the topic.
2. Ask the participants a number of pre-prepared questions related to the topic.
3. Discuss the answers with the participants.
4. Introduce brief and in an easy to understand way the new technology (topic) /
additional information.
8
 5. Discuss with the participants the positive and negative sides of using the new technology
(topic) / additional information.
6. Try with the participants to reach a conclusion on the topic.

Advantages
 Participants are often familiar with plenary activities.
 Does not need to (re)organize the participants.

Disadvantages
 Difficult to obtain full participation from all participants. Only a few participants will
express their opinions.
 Does not encourage participants to reflect on what they learn.

9
 PART B - Preparatory Activities

Prior to the training and to ensure that the training is more effective, a tailored training
programme/curriculum has to be developed to address the training needs of participants.
Therefore, there is need to do a participatory training needs assessment to determine the level
of skills, knowledge and experience of farmers in key potato business success factors. The
details of this is covered in the following section.

Enterprise Skills Needs Assessment (ESNA)

The objectives of the Association Capacity Assessment is to:

1. Identify structural and governance characteristics of the association/enterprise group

as a fundamental functional pillar for a successful agribusiness
2. Identify business skill gaps and appropriate actions to improve association formal
engagement in specialized potato business
3. Identify and agree on capacity building priorities and action plans tailored the
Association or group.

The ESNA is done using Participatory Rapid Diagnosis and Action Planning approach. This
involves the following. A pre-developed questionnaire is used to guide the participatory
diagnosis interview process. The questionnaire is structured to assess 7 business success
priority areas including

1. Governance and structure of the group/association

2. Business orientation
3. Resource mobilization/Business financing
4. Access to inputs/production resources
5. Markets
6. Marketing strategy and
7. Consumer feedback

The participatory diagnosis process has to be facilitated by a competent facilitator well

conversant with participatory techniques in marketing and business development service.

Following the ESNA, a training curriculum is developed indicating the objectives of the each
module. The curriculum needs to address the gaps identified in the key skill areas such that
focus is put on the areas with which the group/association has weakness. The table below
shows a typical training curriculum developed for training four potato associations in Eastern
Uganda under the framework of the RTB-ENDURE project. The curriculum has been developed
based on the results of the capacity need assessment presented in Annex 5.

10
Potato Association Training curriculum

1. LEADERSHIP & GOVERNANCE (LG)

OBJECTIVES By the end of this course, participants are expected to know the basic administrative and
functional structure of business Associations
ACTIONS Associations members are expected to agree on a governance structure of choice and elect
administrative and functional leaders democratically
OUTPUT Basic functional committees elected and know their roles and responsibilities
SESSIONS
1 Leadership & Characteristics of good leaders
2 Role of good leadership in business
3 Governance & the 8 Characteristics of good governance
4 Role of good governance in business
5 Governance structures for Associations
6 Functional Structures, roles & Responsibilities
2. ENTERPRISE ANALYSIS

OBJECTIVES By the end of this course, participants are expected to analyze and select sustainable profitable
enterprises
ACTIONS Association members are expected to conduct cost-benefit analysis of different enterprises
based on profitability and intervening factors
OUTPUT Select viable enterprise & product
SESSIONS
1 Qualities of an Entrepreneur (Commercial Farmer)
2 The 4 basic business functions
3 Acreage Determination
4 Yield and Yield potential
5 Productivity of ware potatoes
6 Cost of production computation [Traditional Vs Improved]
7 Using Unit cost of production for production planning & Determining minimum Selling price
8 The 3 Considerations for increasing profitability
2. BUSINESS PLANNING

OBJECTIVES By the end of this course, participants are expected to set business goals and develop business
plans
ACTIONS Association members are expected to develop individual production projections and a
consolidated business plan for each of the 4 Associations.
OUTPUT Individual and Association business plans with clear projections
SESSIONS
1 Setting business targets (Goal & Strategy)
2 Production cycle planning & Activity calendar
3 Costing & Budgeting
4 Monitoring Plan
5 Marketing Plan
6 Projected Income statement (PIS)
7 Profit utilization

11
3. RECORDS & STORE MANAGEMENT

OBJECTIVES By the end of this course, participants are expected to understand the basic Association records
& effective store operations management
ACTIONS Associations will develop operational plans using the provided guideline and open business
records
OUTPUT Store Operational plans & Business records
SESSIONS
1 Basic store management principles
2 Managing Inventory Entry & Basic records [Date, Source, Qty, Qlty, Price]
3 Managing In-Store movement of potatoes [Partitioning, Coding, First in-first out]
4 Managing Inventory Exit & Basic records [Date, Destination, Qty, Qlty, Price]
5 Managing Store security
6 Process Management-Role of Store Manager, Quality Control team & Marketing team
7 Quality in-store management to minimize loss
8 Stock Counting & replenishment planning for optimal use
9 Developing Store Management plans
10 Business records [Production, Sales, Receipt, Assets, cashbook, cash-flow ,income statement]
4. MARKETS & MARKETING

OBJECTIVES By the end of this module participants will have understood what marketing is, how to conduct
market research, demand & supply forces, customer analysis & customer feedback mechanism,
strategies, segmentation, product differentiation & marketing information
ACTIONS Associations will conduct a market survey & identify and profile potential customers
OUTPUT Marketing strategy & customer database
SESSIONS
1 What is marketing
2 Marketing Strategies-The 4Ps [Product, Price, Promotion, Place]
3 Market Intelligence & Market Information
4 What is Participatory market research and why is it important?
5 Conducting Participatory market research-The 4As [Availability, Affordability, Acceptability,
Accessibility]
6 Market chain, demand & supply
7 Customer Analysis-The 2Cs [Consumer & Competition]
8 Customer feedback analysis
9 Market segmentation & Product differentiation
10 Practical: Conducting market survey
5. SAVINGS & RESOURCE MOBILISATION

OBJECTIVES To promote internal saving and access to external credit to finance potato enterprise
ACTIONS Associations will agree on internal and external sources of finances for supporting their business
OUTPUT Resource mobilization strategy/plan
SESSIONS
1 What is saving
2 Internal Savings-the best source of capital for starting a business
3 Borrowing for business expansion
4 Sources of credit and requirements [Individual money lenders, VSLAs, SACCOs, MFIs, Commercial
banks]
5 Starting and operating shares in Associations-Guiding principles
12
6. BASIC FINANCIAL LITERACY

OBJECTIVES By the end of this module participants will learn the benefits of personal money management as
well as transfer of skills for behavior change.
ACTIONS Association members will analyze their income sources and expenditures and make spending
decisions
OUTPUT Personal financial budgets and spending plans
SESSIONS
1 What is financial literacy?
2 Setting financial goals
3 Examining personal money management
4 Importance of budgeting in financial literacy
5 Making budgets (For literate & Illiterate)
6 Making spending decisions & staying with your budgets
7 Keeping records to manage your money
8 My money and someone’s money: managing the difference
9 Good loans/Bad loans and cost of borrowing
10 Dangers of defaulting on loans & identifying predator lendors

13
 PART C – Training Modules

MODULE 1: LEADERSHIP AND GOVERNANCE

1. LEADERSHIP & GOVERNANCE (LG)

OBJECTIVES By the end of this course, participants are expected to know the basic administrative and
functional structure of business Associations
ACTIONS Associations members are expected to agree on a governance structure of choice and elect
administrative and functional leaders democratically
OUTPUT Basic functional committees elected and know their roles and responsibilities

Leadership

Leadership is a process whereby an individual influences a group of individuals to achieve a

common goal. It is also the influence process of leaders and followers to achieve organizational
objectives through changes. Leadership is thus about unlocking potential, whether individual
potential or that of a group, company or organization. It is not about telling people what to do
but inspiring them to be what they are capable of, then, helping them get there. A leader is
the one who helps others do and become more than they ever thought possible.

Qualities of a good leader

 A good leader must exhibit exemplary character. The leader must be trusted and be
known to live their lives with honesty and integrity since true authority is born from
respect for the good character and trustworthiness of the person who leads.
 A good leader must be enthusiastic about his/her work or cause and about his/her role
as a leader. Thus must have passion and dedication for work given and be a source of
inspiration, be a motivator towards the required action or cause. He/she must be afraid
to roll up their sleeves and get dirty.
 A good leader must be confident so that he/she inspires confidence in others and draw
out trust and best efforts of the team to complete the task well. He/she must convey
confidence towards the proposed objectives.
 A good leader must function in an orderly and purposeful manner in situations of
uncertainty and familiarity. This enables people to find reassurance and security in the
leader due to confidence and positive demeanor portrayed.
 A good leader must be tolerant of ambiguity and remain calm, composed and steadfast
to the main purpose. This is important because storms, emotions and crises are part of
the journey, which come and go and so the need for the leader to keep cool when such
happen.
 A good leader must be committed to excellence. He/she must not maintain high
standards only but also be proactive in raising the bar in order to achieve excellence in
all areas.

14
  Self-knowledge - This is necessary when faced with challenge or ethical issues,
communicating with those who have different ideas, making decisions, and identifying
sources of satisfaction. A leader must have values, priorities and preferences and must
articulate what he or she wants, develop benchmarks, and make better choices. There
is also need for willingness to take on responsibilities.
 Commitment- Commitment is necessary in that it enables one to do their best given the
knowledge and available resources in an organization. Furthermore, members in an
association may look for a mentor, someone who prompts to be their best, someone
who cares and listens, someone confident in his/her beliefs and is willing to be there.
 Willingness to look to others for support - Believing that an effective leader is one who
knows it all is one of the most dangerous misconceptions about leadership. So while the
ultimate decision and responsibility may lie within an individual, it is incumbent upon
him/her to gather information and trust others’ points of view before developing a plan
of action.
 Open to change- Change is one of life’s most obvious factors, yet remains one of the
most strongly resisted. Hence good leadership must be open to change that is beneficial
for the organization.
 Desire to go the extra mile- Good leadership must portray such things as extraordinary
encouragers, strong organizers, good persuaders or charismatic speakers in the leaders
of respective organizations.
 A good leader must think analytically in that a situation faced by an organization must
be broken into subparts for closer inspection. This helps to put forward manageable
steps to come out of the situation.
 A good leader must be approachable.
 A good leader must be readily available when needed.
 A good leader must be a very good time manager.
 A good leader must be principled.
 A good leader must be morally upright.
 A good leader must be impartial.

Brainstorming session

1. Discuss and agree on the first five key qualities that should be exhibited by your leaders
2. Rank them starting with 1 for most important and 5 for least important ( of the selected
five)
3. Document these qualities well and they would be used to remind members in future
when they are going to elect office bearers.

Good Governance

The concept of “governance” is not new. It is as old as human civilization. Simply put
“governance” means: the process of decision-making and the process by which decisions are
implemented (or not implemented). Since governance is the process of decision making and
the process by which decisions are implemented, an analysis of governance focuses on the
formal and informal actors involved in decision-making and implementing the decisions made

15
and the formal and informal structures that have been set in place to arrive at and implement
the decision.

Government is one of the actors in governance. Other actors involved in governance vary
depending on the level of government that is under discussion. In rural areas, for example,
other actors may include influential land lords, associations of peasant farmers, cooperatives,
NGOs, research etc.

Good governance has 8 major characteristics i.e. it is participatory, consensus oriented,

accountable, transparent, responsive, effective and efficient, equitable and inclusive and
follows the rule of law. It assures that corruption is minimized, the views of minorities are taken
into account and that the voices of the most vulnerable in society are heard in decision-making.
It is also responsive to the present and future needs of the society.

Participation

Participation by both men and women is a key cornerstone of good governance. Participation
could be either direct or through legitimate intermediate institutions or representatives. It is
important to point out that representative democracy that not necessarily mean that the
concerns of the most vulnerable in society would be taken into consideration in decision
making. Participation needs to be informed and organized. This means freedom of association
and expression on the one hand and an organized civil society on the other hand.

Rule of law

Good governance requires fair legal frameworks that are enforced impartially. It also requires
full protection of human rights, particularly those of minorities. Impartial enforcement of laws
requires an independent judiciary and an impartial and incorruptible police force.

Transparency

Transparency means that decisions are taken and their enforcement are done in a manner that
follows rules and regulations. It also means that information is freely available and accessible
to all those who will be affected by such decisions and their enforcement. It also means that
enough information is provided and that it is provided in easily understandable forms and
media.

Responsiveness

Good governance requires that institutions and processes try to serve all stakeholders within a
reasonable time frame.

16
Consensus oriented

There are several actors and as many viewpoints in a given society. Good governance requires
mediation of the different interests in society to reach a broad consensus in society on what is
in the best interest of the whole community and how this can be achieved. It also a broad and
long-term perspective on what is needed for sustainable human development and how to
achieve goals of such development. This can only result from an understanding of the historical,
cultural and social contexts of a given society or community.

Equity and inclusiveness

A society’s well-being depends on ensuring that all its members feel that they have a stake in
it and do not feel excluded from the mainstream of society. This requires all groups, but
particularly the most vulnerable, have opportunities to improve and maintain their well-being.

Effectiveness and efficiency

Good governance means that processes and institutions produce results that meet the needs
of the society while making the best use of resources at their disposal. The concept of efficiency
in the context of good governance also covers the sustainable use of natural resources and the
protection of the environment.

Accountability

Accountability is a key requirement of good governance. Not only governmental institutions

but also the private sector and civil society organizations must be accountable to the public
and their institutional stakeholders. Who is accountable to who varies depending on whether
decisions or actions taken are internal or external to the organization or institution. In general
an organization or an institution is accountable to those who will be affected its decisions or
actions.

LEADERSHIP, GOVERNANCE & ORGANIZATION STRUCTURES

Learning Objective:

By the end of the session participants should:

 Understand the organization structure of a typical association – roles and responsibilities

of the different committees.
 Understand, value and respect decision making process in a collective way.
 Understand good governance and the qualities of a good leader.
 Understand the major characteristics of good governance.
 Elect members of the committees.

17
Importance of being in as association:

 Farmers can share experience and learn from each other.

 Farmers can bulk and market their produce collectively at a premium price.
 It eases access to agricultural inputs at fair / subsidized prices.
 It eases organizing demonstrations.
 It is easier to organize saving and credit for farmers.
 It simplifies interpersonal communication among members.
 Powerful in changing behaviors, attitude and values.
 It can be used for decision making, negotiation and bargaining.
 It is a door for new innovation.
 It facilitates a broader coverage when implementing developmental activities.
 It is easy for farmers to produce higher quantity and quality of the produce.
 It is easy for farmers to link to development partners and access government
programmes.
 An association can provide employment to its members in the long run.
 Improves on the welfare of an individual due to the related benefits.

Challenges

 It can be time consuming for instance in decision making.

 Responsibility can be ambiguous.
 Can brood jealousy in case some of the members are progressing faster than others.
 Possibility of members being negatively affected by pressure from other association
members.
 Can lead to loss of focus on an individual since there is a band wagon mentality.
 Rumormongering amongst members
 Poor time management which leads to poor performance.
 Conflict of interest amongst leaders/members.

Farmers Association internal organizational arrangements, leadership and teamwork

As much as possible, all essential functions and responsibilities of the enterprise should be
shared among the members of the association on the basis of capability and interest. If certain
essential skills are not available within the group membership, the enterprise may consider
hiring and paying for persons with such skills.

Someone must be made responsible for each activity in the enterprise. These persons will carry
out or supervise the necessary functions and report on them. The respective responsibilities
and duties of the members must be fully understood by everyone in the association. Once
someone is put in charge of an activity, he should be given the authority to carry out the
required functions in consultation. As much as possible, there should be an even distribution
of tasks and responsibilities in the association (see figure below) in order to avoid
overburdening few members or the leader with many duties. This is even more important where
members may not expect to be paid for the association tasks they perform. The nature of
cooperation among the association members will be the key to success of the business. The
members should cooperate with each other in sharing work.

18
Organizational structure of a typical farmer association

An organizational structure shows the hierarchy of management and the reporting structure in
an association. The organizational structure should be as easy as possible such that it is easily
understood.

Table 1: Basic governance structure

Board

Executive Committee

Production and Finance Marketing Store Management

Internal Quality
Control

The Board/General Assembly

Executive/Management committee
Finance committee
Marketing committee
Production and quality control committee
Store management committee

The above figure shows an organizational structure of some of the associations. The variation
in the organizational structures of associations is brought about by the level of growth among
them; for instance those at the level of a registered cooperative have the board at the top
while the farmer associations have members at the top. However a typical association has four
main committees: the executive committee, the finance committee, production and quality
control committee, the marketing committee

Roles and responsibilities

Board members / The General Assembly: These are selected/appointed members who should
oversee the activities of the association. This is the supreme governing body of the association
that makes major and binding decisions. The general assembly normally meets once a year
unless there is an urgent need. The general assembly performs the following functions:

19
  Approves annual budgets and work plans and reviews accountabilities of the association.
 Receives audited accounts showing the performance of the association in the previous
year.
 Elects the management /executive committee members and working committees.
 Offer advice to the association.
 Take action in case a committee or a member on any of the committees acts contrary
to what is expected of him/her.
 In cases such as embezzlement of funds, they advise the association accordingly.
 Participate in the Assembly General Meeting (AGM).

Executive committee

This is the group of people who are ultimately responsible for running the association. The
Executive Committee’s composition is determined by the Annual General Meeting which elects
its members. It is normally composed of 5, 7 or 9 members who must serve a term of two
years renewable for two terms only. The members of the committee normally include the chair
person, vice chairperson, general secretary, Treasurer and committee members. In general the
roles of the Executive committee are:

 Defines mission /vision, strategic objectives and policies of farmer group and ensures
that plans conform to them (setting the direction of the association).
 Reviews and approves business plans & budgets before presenting to AGM.
 Supervises management in the execution of approved plans.
 Mobilizes resources for the association businesses on behalf of the members.
 Appoints, appraises and disciplines management.
 Meeting regularly.
 Guiding the activities of the association.
 Managing the finances.
 Agreeing on the budget and a fundraising strategy.
 Ensuring that members are kept informed.
 Monitors the activities of the sub-committees.
 In some cases together with the staff, draws up long term and annual plans.
 Making sure that the association operates in accordance with the law.
 Developing policies in areas such as equal opportunities, health and safety and
recruitment, induction and supervision of volunteers and employees.
 Managing volunteers and employees and making sure that they are treated properly.
 Monitoring and evaluating performance.

Finance committee

The overall responsibility of the committee is to mobilize and manage association finances and
oversee the savings and credit scheme of the association (if any). The specific roles are:

 In charge of keeping association finances from both internal and external sources.
 Work as loans committee to approve loans.

20
  Prepares an inventory of all the physical assets.
 Monitors members with loans and reminds them to pay.
 Budget reports – review income and expense. The finance committee chair should
prepare monthly verbal or written reports to the executive/management committee if
there are significant discrepancies and / or concerns.
 Review budget prepared by the management committee, forward comments to the
management committee.
 Reports farmer association performance to the Executive committee.

Production and quality control committee

The general role of the committee is to coordinate production and capacity building of the
association members. The specific roles are;
 Assesses the association seed requirements for each member and makes
enquiries/books in advance before the start of the season and orders the seed in time
and at the same time to ease collective marketing.
 Coordinates the purchase and delivery of the seed from authorized
providers/institutions. Ensure reliable supply of inputs to farmers.
 Organize and coordinates training programs about agronomic practices to farmers.
 Monitors and inspects farmers’ production fields and offers advice where necessary.
 Prepares and keeps records of planting every production season.
 Keeps record of the different cycle activities like planting time, date and frequency of
weeding, inputs used and quantities, volumes produced, trainings received etc.
 Together with the marketing committee, coordinates bulking and physically examines all
potato delivered to the association store by members to ascertain purity and trueness
to type.
 Makes seasonal and annual production plans for the association’s activities based on the
potential market and storage inventory established by marketing committees.
 Establish quality product standards to meet market requirements.
 Prepares monthly, quarterly and annual progress reports to the executive committee.

Marketing committee

The overall responsibility of the committee is to connect markets and buyers with the
association to ensure business growth. The specific roles are;
 Advise the association on setting season’s production targets.
 Look for markets on behalf of the association and negotiate with buyers for a good price.
 Communicate with the members to bring their products to the store as well as with the
buyers to buy the potatoes and ensuring that information concerning market issues
reach farmers at the appropriate time.
 Coordinate the bulking of potato from all members of the association to the store or
collection centre.
 Calculates the profit of the enterprise and shares the results with the association.
 Market intelligence i.e. do market research on behalf of the association.
 They make marketing visit reports and presents to the rest of the association.
 Looks for quality inputs (e.g. seeds) and organizes buying as an association.
 Lists contacts and locations of all customers and keeps such records.
21
  Together with the production and quality control committee, checks the produce quality
(e.g cleanliness, packing, grading) after harvest and before delivery.
 Ensure that storage and packaging facilities for the produce are in place.
 Collects and handles money obtained from the buyers.
 Monitors the standards, markets, prices etc.

Store management committee

This is responsible for the routine operations of the store; this committee comprises of (i) Store
Manager - responsible for the overall activities in the store, ensuring that the store is clean,
ensuring that the store is put to good use by the farmers; (ii) Quality control/records keeper –
responsible for the quality aspects of the potato kept in the store in addition to keeping the
relevant records; and (iii) Sales/marketing person – in collaboration with the marketing
committee ensures that the potato is sold at the right time and at the highest price.

NOTE:

Setting up of committees

The executive committee is exclusively democratically elected where as other committees

either can be elected or appointed. Relevant skills and experiences should be given key
attention to when selecting or electing a member to be on such committees. Members on these
committees work on a voluntary basis but the group should have an operational cost budget
to facilitate such committees in implementing the activities of the association.

22
 MODULE 2: FARMING AS A BUSINESS &
ENTERPRISE ANALYSIS

2. ENTERPRISE ANALYSIS

OBJECTIVES By the end of this course, participants are expected to analyze and select sustainable profitable
enterprises
ACTIONS Association members are expected to conduct cost-benefit analysis of different enterprises
based on profitability and intervening factors
OUTPUT Select viable enterprise & product

Understanding farming as a business

Just like any activity that a person undertakes to earn an income, farming must also be taken
seriously as a business. We therefore need to first understand what a business is.

What is a business?

A business is an enterprise that one of more persons do to make profit. A business involves
the identification of a need in society and then coming up with creative solutions to that need,
and offering a service or product at a price that is acceptable to the market and profitable to
the business.
Farming is a form of a business. The farmer sees a need and attempts to provide a solution in
the form of food, meat, milk or whatever products are produced on the farm. The farmer must
ensure that he provides that service or product at a price that is not only accepted by the
market, but also profitable to his farm business.

Four Basic Business Functions

Each and every business has four functions whether small or big.

23
 Marketing

The Business
Framework: Production /
Finance The Business Operations
Functions

Human
Resources &
Management

A farmer must realize that his activities on the farm also fall into these four business functions:

Marketing
The farmer must realize he has a market that he should aim to satisfy. The farmer has to
produce products that are required by the market, in the right quantities demanded by the
market, with the right quality standards and a price that is competitive but also profitable to
him.
Production / Operations
The farmer must organize his production processes in such a way that it is cost-effective,
efficient and profitable. The farmer has to properly plan his farm activities just like any business
person would plan their business.
Human Resources and Management
A business needs human resources to effectively operate. The farmer must also identify and
deploy the right kind of human resources that will enable him achieve the best results.
Finance
The farmer should aim to make a profit at the end of the sales of his farm produce. To achieve
this, the farmer should properly account for his expenses. He must keep proper records of what
he spends on farm inputs as well as any other costs incurred on the farm. The farmer must
calculate his total expenses and charge a price on his produce that does not only cover his
expenses, but also bring him a profit.

24
WHO IS A COMMERCIAL FARMER?

 A commercial farmer is the one who

A commercial farmer must
achieves profitable yields and takes know:
farming as a business.
 Commercialization or “Farming as a  Acreage
Business” basically means taking
farming as a viable profit-making
 Yield
venture. It involves:  Yield potential
o Accurately knowing your costs of  Productivity
production
o Knowing your margins
 Cost of production
o Understanding how to maximize  Profitability
profits  Risk analysis / management
o Lowering the cost of production
o Increasing the yields.

Determining the right acreage

1. Why should a farmer know the size of his land?

This is very important for the following reasons:

 Planning accurate input requirements
 Forecasting potential production and income
 Evaluating performance

The land is the main capital for your business enterprise therefore it must be used
optimally. These are very fundamental important aspects of commercial farming
planning.

2. How do you determine the size of your land?

Most farmers do not know what an acre of land is!! They call any garden an acre!
1 acre = 4000 meters squared. See examples below

100m x 40m = 4000m2

40m

100m

80m x 50m = 4000m2 50m

80m

25
 200m x 20m = 4000m2 20m

200m

Farm Yield and yield measurement

Yield is output per unit of production, thus it can be:

 Kilograms per acre

 Bunches / acre
 Bags per acre
 Eggs per hen
 Litres of milk per cow
 Kilograms of honey per hive

You can only know your yield if you know your land size / production unit and weigh / measure
what you harvest.

What is Potential Yield?

Yield Potential should be
This is the maximum yield you can achieve assuming all factors
of production are favorable. It is determined by Seed /
your target at planting.
Production potential as specified by Breeders / Scientists who
Your management and
develop it.
input use will determine
Example
the deviation from the
Seed Variety Yield Potential potential.
 Upland Rice Superica II = 3000kg/acre
 Groundnut ( Serenut 5 & 6) = 1200kg/acre
 Beans ( climbing beans) = 1400kg/acre
 Maize longe 5 = 3000kg/acre
 Maize longe 2H = 4000kg/acre
 Coffee Clonal = 20kg dry berries / tree
 Irish potato = 10,000 to 15,000kgs/acre

Productivity

This is the yields the farmer is achieving in comparison to the yield potential of a particular
variety.

26
Note: It is recommended to maximize your productivity before considering expanding the
acreage.

Cost of Production & Projected Income Statements

Cost of Production is the total cost of all activities and inputs used in a farming enterprise.
Below is an example of determining the cost of production of various technologies (Irish potato
example).
Traditional Improved High Input
Technology (HIT)

Land opening

Secondary cultivation

Seed

Planting

Application

NPK17:17:17 Fertilizer

Application

Weeding

Labour for 1st weeding

Labour for 2nd weeding

Fungicides

Pesticides

Pre-harvest Total costs

Harvesting

Transporting

Storage

TOTAL COST OF PRODUCTION

Yield kg per acre

Farm gate price per kg

Gross income/Turnover

Net income/Net turnover

27
Unit Cost of Production (UCOP)

Cost of producing 1 unit of the commodity (e.g. a kg, a bag, etc.)

UCOP = Total Cost of Production / Yield per Acre

Example for Irish potato by technology

Level of Technology Traditional Method Improved Method

UCOP (Ush / kg)

Note: Using higher level of technology and inputs may reduce the Unit Cost of Production.

How do we increase profitability?

To be able to increase profitability a farmer MUST reduce his/her Unit Cost of Production and
increase yield per acre.

 ↓ Reducing cost of production

 ↑ Increasing yield per acre
 ↑ Price

1. Reducing Cost of Production (where possible)

 Use of income enhancing inputs like fertilizers
 Improved practices
 Reduce labour costs e.g use of herbicides
 Proper timing of activities ( e.g weeding)
Note: But it should be noted that use of income enhancing inputs like fertilizers may
increase your total cost of production but reduce the unit cost of production due to
correspondingly greater increase in yields.

2. Increasing Yield
 Appropriate practices e.g. appropriate timing of farming activities
 Use of inputs e.g. organic or inorganic fertilizers

3. Market at Higher Price

 Store ware potatoes to sell when prices are higher
 Ensure higher quality.

Cost Benefit Analysis (CBA)

 This is a systematic process of evaluating the total anticipated cost of an enterprise

compared to the total expected benefits in order to determine whether the proposed
implementation is worthwhile.
28
  If the results of this comparative evaluation method suggested that the overall benefits
associated with a proposed action outweigh the incurred costs, then an enterprise is
most likely to be chosen and the implementation then follows.

Purposes of a CBA

 To determine if it is a sound investment/decision (justification/feasibility),

 To provide a basis for comparing projects. It involves comparing the total expected cost
of each option against the total expected benefits, to see whether the benefits outweigh
the costs, and by how much.

Parts of a Cost-Benefit Analysis

 First, all potential costs that will be incurred by implementing a proposed action MUST
be identified.

 Second, the entrepreneur MUST record all anticipated benefits associated with the
potential action.

 Finally, subtract all identified costs from the expected benefits to determine whether the
positive benefits outweigh the negative costs.

How do we identify the costs?

 The first step is to identify and quantify all costs associated with a proposed action. In
order to successfully identify all potential costs of a project, the entrepreneur must follow
the subsequent steps:-

1. Make a list of all monetary costs that will be incurred upon implementation and
throughout the life of the enterprise. These include start-up fees, licenses, production
materials, payroll expenses, user acceptance processes, training, and travel
expenses, among others.

2. Make a list of all non-monetary costs that are likely to be absorbed. These include
time, lost production on other tasks, imperfect processes, potential risks, market
saturation or penetration uncertainties, and influences on one’s reputation.

3. Assign monetary values to the costs identified in above. To ensure equality across
time, monetary values are stated in present value terms. If realistic cost values
cannot be readily evaluated, consult with market trends and industry surveys for
comparable implementation costs in similar businesses.

4. Add all anticipated costs together to get a total costs value.

Identifying Benefits

 The next step is to identify and quantify all benefits anticipated as a result of successful
implementation of the proposed action. To do so, complete the following steps:

1. Make a list of all monetary benefits that will be experienced upon implementation
and thereafter. These benefits include direct profits from products and/or services,
increased contributions from investors, decreased production costs due to improved
and standardized processes, and increased production capabilities, among others.
29
 2. The next step is to identify and quantify all benefits anticipated as a result of
successful implementation of the proposed action. To do so, complete the following
steps:

3. Make a list of all monetary benefits that will be experienced upon implementation
and thereafter. These benefits include direct profits from products and/or services,
increased contributions from investors, decreased production costs due to improved
and standardized processes, and increased production capabilities, among others.

4. Add all anticipated benefits together to get a total benefits value.

Evaluating Cost and Benefit

 The final step when creating a cost benefit analysis is to weigh the costs and benefits to
determine if the proposed action is worthwhile. To properly do so, follow the subsequent
steps:

1. Compare the total costs and total benefits values. If the total costs are much greater
than the total benefits, one can conclude that the project is not a worthwhile
investment of company time and resources.

2. If total costs and total benefits are roughly equal to one another, it is best to re-
evaluate the costs and benefits identified and revise the cost benefit analysis. Often
times, items are missed or incorrectly quantified, which are common errors in a cost
benefit analysis.

3. If the total benefits are much greater than the total costs, one can conclude that the
proposed action is potentially a worthwhile investment and should be further
evaluated as a realistic opportunity.

30
Risk Management

We define risk as “the perceived extent of possible loss”. Different people have different views
of the impact of a particular risk – what may be a small risk for one person may destroy the
livelihood of someone else.

When we speak of risk in agribusiness, we normally refer to two types of risks (though there
may be others). There are risks of crop failure (due to erratic or attack by disease and/or pests)
and market price failure (when the price you are planning on turns out to be lower than
expected). Also when a farm is in debt to a bank or a money lender, lowering these risks is
essential.

The strategy we use to manage risks in agribusiness is common sense and diversification. The
first and foremost, “grow what you know” i.e. to work with crops and animals / or products
which one is familiar with. Experience is a valuable risk-management tool. Diversification, the
second strategy: - undertaking different business activities and different types of business
activities (again with which one is familiar).

Diversification ensures that if there are minor or major failures in any single activity, there is
likely to be a success to offset that failure. Note that the common sense approach of “grow
what you know” is not meant to preclude innovation. E.g. with good access to both extension
services and a market for improved seed and fertilizer, a farmer should not be discouraged
from improving her performance on a crop like maize with which she is familiar.

Risks and consequences

• Crop failure risk: The possibility that due to weather, ineffective crop management,
insects, birds, rodents, diseases etc., the expected yield at harvest will be lower than
the anticipated. It may fail altogether. Consequences: Inability to repay credit, inability
to save, food shortage, cash shortage etc.

31
 • Market price risk: The possibility that due to too much output (e.g. potato) arriving in
the market at the same time, the demand for that output is low and the price for that
output is lower than expected. The profit is therefore lower than expected.
Consequences: The inability to repay credit, the inability to save, short-term to long-
term cash shortage, etc.

• Note: Of the two types of risk, the market price risk is more of a serious financial
(business only). Crop failure risk poses both a financial risk and, depending on the level
of crop failure, a life threatening risk to the household.

Risk minimizing strategies

1. Plan your business using Projected Income Statement (PIS): There is always need to
plan business in advance, i.e. before spending one shilling, try to identify everything you
will need for your production and what it will cost. If you are not sure of the cost of an
item, over-estimate its cost. When planning expected income use an average price or a
lower than average price for the market value of the output. This limits the possible
negative effects of market price risk.

2. Grow what you know: Grow crops that you are familiar with and access technical
assistance to help you to improve what you already know how to do. Trying new crops
with potentially good profits should be encouraged, but should be done first on a small
scale (with limited investment), then on a larger scale when you have confidence in
anticipating costs, market price and possible problems.

3. Use extension services and the best agricultural techniques possible: Extension agents
should be aware of the best techniques, types of fertilizers, seeds and pesticides to use
and how and where to get inputs. If your cash is limited, it may be better to grow a
quarter acre of maize using improved seed and fertilizer than growing an acre of maize
using traditional techniques.

4. Plant several types of crops: The business planning and PIS model can be used for any
crop to decide the best profit options. Instead of choosing only the most profitable
option, plant several types of crops. The advantage is that if one crop fails, another is
still likely to succeed. Similarly by diversifying your choice of crops you also minimize
the market price risk. If the price of one crop is too low, others may be unusually high.

5. Set aside profits from each season as savings: Savings can lower costs and enhance
profits. Investing savings instead of borrowing means that your obligation is only to
yourself. If unfortunately your crop fails, no bank or money lender can chase after you
for repayment. None of your hand-earned possessions can be confiscated.

6. Keep records of costs, prices, profits, planting times, harvesting times, etc. to maximize
business efficiency: Quality record keeping is a key strategy to managing risks. By
keeping key information, farmers can follow trends in costs of inputs (is it cheaper to
per kg to buy 50 kg of fertilizer or 100 kg?). Farmers can also follow trends in output
prices (is it better to sell my maize at harvest, a week before, three months after
harvest?). With record keeping, many of the unknown elements of business planning
can be more accurately estimated.

32
7. Store some of your harvest to speculate on price changes: On the basis of record keeping
and drawing PIS, you may be able to predict an upward price trend after harvest. By
planning before planting to have more output than you need to cover costs and by saving
and not incurring large debts, storing becomes an interesting market price risk
management strategy. Storing is a “value adding” activity.

8. If possible, undertake some non-agricultural profit generating activity: While this may
not always be an option, having a business income outside of agriculture is a sound risk
management strategy at the level of household. Alternative income sources that are not
sensitive to the weather, like brewing, bicycle repair, brick making etc., provide low
profit but consistent cash flows in the household.

9. Work with other farmers to reduce costs and increase profits.

 Buy inputs in bulk and sell collectively to enjoy the benefits of large economies of
scale.
 Add value to your crops with jointly purchased capital assets
 Increase operational efficiencies (land preparation, weeding, sowing, fertilizer
application, harvesting, sorting, grading and packaging, market information etc).
 Access alternative markets.

33
 MODULE 3: BUSINESS PLANNING

2. BUSINESS PLANNING

OBJECTIVES By the end of this course, participants are expected to set business goals and develop business
plans
ACTIONS Association members are expected to develop individual production projections and a
consolidated business plan for each of the 4 Associations.
OUTPUT Individual and Association business plans with clear projections

Brainstorming session;

1. “Why is planning important?” e.g. planning an event.

2. “What do we plan for?’

3. Who does the planning? And when?

Planning of an agricultural enterprise is thinking of what will take place and when, what inputs
will be required and when, how the business will be managed; and the roles of different players.
It allows good organization of all activities and resources. Business planning helps one to
identify the required resources needed to start and operate a sustainable and profitable
business.

What to plan for:

Activities: What will be done when? The time for land preparation, planting, weeding, spraying
etc.

Inputs: What inputs will be needed, and when. This will ensure easy access of quality inputs.
Know where to get any inputs that may not be easily available in the village, thinking of the
transport costs and the time required to access these.

Budget: How much will it cost at the different parts of the year (production cycle).

Funding Strategy: Where will the funding needed at different times come from? Do you have
all the required cash: if not, make a decision where to borrow and when.
Roles and responsibilities: Who will do what? E.g. Who will do the land clearing, planting in the
nursery, watering, weeding, etc.? What will the children in the HH do?

Market: Who will do the marketing, etc.? When? What price shall we charge? What value do
we add? When we do the marketing to optimize the quantities sold but also the prices? How
much to sell and how much to keep for home?

Use of profits: They should think of how funds should be used:-for continuation of the
business; savings; and for use in meeting the family needs.

34
Key steps we go through when planning:

(The sub-sections below form a business plan so long as each is addressed accordingly)

I. Background information (Business name – group/individual name, physical address,

Tel. no, Nature of business)
II. Setting goals for the farm enterprise (every business should have goals)
III. Setting a strategy
IV. Activity plans and scheduling
V. Costing and budgeting
VI. Projected income statement (PIS)
VII. Marketing plan
VIII. Putting up a monitoring plan
IX. Use of generated profits

Business goal:

A business must have clearly set goals. The goals must follow the SMART principle.
 Goals must be Specific: The business should set very specific goals.

 Goals must be Measurable: You can only manage what you can measure. A goal that
is not measurable is difficult to manage.

 Goals must be Achievable: The business goals must be challenging but achievable

 Goals must be Realistic, Recorded and Reviewed: Goals that are not written down
are nothing but wishes.

 Goals must be Time-Framed: The business owner must clearly decide when he
expects to achieve certain results. This will help him to properly manage time.

A business goal is one where you define the [amount of crop to grow or [number of] animal[s]
to keep; the amount of money they expect to earn from the enterprise in the year.

Case study:

A group of 15 people decided to run a business that grows passion fruits. They have never
grown it before, but learned at the demonstration garden that it could be profitable. They learnt
from the Agriculture Officer that a half an acre could get them 100 kg per week for period of 3
months. The prevailing price is UGX 2,500/= per kilogram. They plan to grow on a quarter of
an acre and intercrop groundnuts or beans during the cropping season.
1. What enterprise have they decided to undertake
2. What would be the goal of such an enterprise?
3. What strategy would they have?

35
Answer:
For instance the objective of growing passion would be “to grow a quarter of land with passion
fruits (can specify the species) and earn about UGX 2,500,000 per week for 3 months from it”.

A strategy

A strategy is a methodological way of doing a particular thing. The farmer must decide what
he needs to do in order to achieve his set goal. A strategy defines the approaches you will use
to achieve your goal. In this case it defines the size of land to use; the species of passion fruits
to grow; whether you will be making your own seedlings or buying; whether it is organic or
not; etc.

Seasonal calendar/Activity scheduling

The purpose of this activity is to plan when different activities take place and estimate inputs
and money that is needed at the different times. In business it is important to have enough
money when it is needed.

Examples of agricultural activities through a crop cycle include: land preparation, planting,
weeding, pesticide/herbicides application, harvesting, [storage], and marketing.

Key inputs include labor (who does what), tools/equipment, seeds, manure/fertilizer,
pesticides, drying facilities, transport, lunches etc,

Main sources of money will include: Savings? Sales of farm produce? Hire out labor? Money
from relatives living in Kampala?

Show/give a sample of seasonal calendar

Divide participants into groups of 8 to 10 people.

Ask them to make a seasonal calendar for their enterprise chosen in SESSION 3 and making
the following decisions.
 Which activities and when is each activity done?
 When and what inputs are needed at each stage?
 How much money is needed at the different stages?
Allow time for groups to walk around and see what other peers have.

Costing and budgeting an enterprise

A budget helps estimate the amount of money you may need to run the enterprise. It is also
important to plan the sources of the inputs and the money. At this stage all the possible costs
are estimated and a budget made. (This is similar to the calculation of cost of production) –
refer to notes - who is a commercial farmer?

36
Projected Income statement (PIS) or Profit and Loss Account (P&L)

Please refer to the cost of production calculation in the notes on who is a commercial farmer?
After getting the total cost of production, one continues to get the estimated yield, in case
there are some post-harvest losses these are subtracted from the total yield, farm gate price
is got and then estimated / projected income/revenue and profit is got, then this will now
represent a projected income statement – i.e what a farm is expected get as profit at the end
of the season.

Monitoring the progress of the enterprise

What to monitor?
 Are we applying the right technology (using the right seeds, fertilizers, pesticide?)
 Are we doing all the agronomic practices at the right time (land preparation, planting,
weeding, spraying, etc).
 Are we producing the right amount per acre/plant
 Are we getting the right amount of money?
 Are we making the expected profit?
 Do we have enough money to pay for the activities?

Marketing plan:
 When to sell?
 Where to sell?
 Whom to sell?
 What price to sell at?
 What product quantity and quality to sell?
 How promote the products so that they are known by customers?
All these questions and other related questions must be answered to have a clear marketing
plan.

Use of generated profit

The generated should be used

 Re-investment into the same business

 Savings
 Family needs

All these three options should be given appropriate percentages but a bigger percentage should
go to re-investment.

37
 MODULE 4: RECORDS & STORE MANAGEMENT

3. RECORDS & STORE MANAGEMENT

OBJECTIVES By the end of this course, participants are expected to understand the basic Association records
& effective store operations management
ACTIONS Associations will develop operational plans using the provided guideline and open business
records
OUTPUT Store Operational plans & Business records

Session objective:
By the end of this session, participants will appreciate the relevance of record keeping;
understand different forms of business records and how to use them for decision making

RECORD KEEPING

Any business person must keep records in order to know what his outflows (payments) and
inflows (receipts) are. The difference between the two figures will inform the farmer if he has
made a profit or incurred a loss. Farmers must learn from past successes and mistakes if they
are to grow as a business.
Good records can be used to calculate whether the farmer is making profit or not. Calculating
profit and loss is the most important part of record keeping.

Record keeping can be easy and enjoyable. Recording involves preparing a record of what
activities they have carried out, the amount of resources they have used, e.g. land, labor and
inputs e.g. seeds, pesticides, transport, equipment, etc. and services received. Records indicate
the amount of money that comes into a business/farm and the amount of money that is spent
(or just simply money IN and money OUT).

Keep records of costs, prices, profits, planting times, harvesting times, etc. to maximize
business efficiency. Quality record keeping is a key strategy to managing risks. By keeping key
information, farmers can follow trends in costs of inputs (is it cheaper per kg to buy 50 kg of
fertilizer or 100 kg?). Farmers can also follow trends in output prices (is it better to sell my
irish potato at harvest, a week before, two months after harvest?). With record keeping, many
of the unknown elements of business planning can be more accurately estimated.

Farmers cannot learn what has worked well and what has not if they do not keep accurate
records.

The different kinds of records include the following; Cashbooks (combine business expenditures
and income records), savings records, credit records and marketing records. Records can be
written or not. They are a means of remembering what you have done, spent and earned. They
also help in monitoring progress towards the business goals and for planning the business the
following season.

Records should give enough information for sound business decision making. Records are to
help in making sound decisions.

38
The form below can be copied into a simple exercise book. With this simple form a farmer can
track his cash inflows and outflows. Keeping these simple records will inform the farmer about
how to adapt his planning process in the future.

Income and Expense Record (Cash Book)

A Cashbook is a good simple record every farmer should have. It simply records all the money
(cash) that comes in the business and the money that goes out of the business.

A Cash Book

RECEIPTS ( from sales) PAYMENTS ( for purchases)

Date Particulars Amount Date Particulars Amount

A record of activities should complement the record form above – that shows when a task was
performed and how much time it took.

Field Operations Record/ Activity Record

Start Activity / Task Completion Comments

Date Date

The information compiled in the two simple forms above will inform the farmer about the
performance of his business during the period for which the records are kept.

39
NOTE:

- Business record keeping is “key” to proper planning and management of family business
and decision making.
- Our memory is limited so it is important to keep records.
- Records help/assist us know if we are making a profit or not.

STORE MANAGEMENT

A store is a structure or place where we keep goods for future use. A store can be a big
warehouse and that means a commercial building for storage of goods. Management implies
looking after something, caring for something, overseeing, keeping among others. Store
management therefore means the process of organizing, coordinating, planning, controlling,
directing, supervising, and making decisions about a business, department, or an organization
in order to achieve defined objectives.

Types of stores

There are three types of store;

 Private – individually owned

 Public – association and cooperative
 Bonded – government

Importance of stores

 Keeping goods for future use

 Help one to wait for better markets
 Keeping surplus goods
 Help to regulate prices
 Help to regulate supply
 Facilitate packaging, processing and grading
 Minimize risk of damage by bad weather

Principles of store management

Demand forecasting - This helps in predicting future demand and enable one to set profitable
but realistic target selling prices, such information helps one to determine how much to store
and when to replenish, sell out part or all of the stock.

Stock / ware house flow – sorting, setting order, systemic cleaning, standardizing, and
sustaining the discipline ensures that no money is lost due to poor processes, disorganization
costs money.

40
Inventory turns / stock rotation – defining the success level for the stock rotation is critical
to analyzing ones demand forecasting and warehouse flow.

Cycle counting – this helps one to measure the success of your existing processes and
maintain accountability for potential error sources, this helps in maintaining accurate inventory.

Process auditing – proactive error source identification starts with process audits, audit early
and often. This is supposed to be done at each step. The processes include; inspections at all
levels right away from production to storing, harvesting – ensuring that mature potatoes are
harvested, normally dehaulming is supposed to be done two weeks prior to harvesting, sorting
is also supposed to be done right away from the garden during harvesting up to when the
potatoes are stored, transport means should be appropriate to ensure that the Irish potatoes
are not damaged / bruised, weighing, recording, labelling are also supposed to be done
appropriately, then storage is done either in sacks or open crates.

41
 MODULE 5: MARKETS & MAKETING

OBJECTIVES By the end of this module participants will have understood what marketing is, how to conduct
market research, demand & supply forces, customer analysis & customer feedback mechanism,
strategies, segmentation, product differentiation & marketing information
ACTIONS Associations will conduct a market survey & identify and profile potential customers
OUTPUT Marketing strategy & customer database

What is marketing?

Learning objective:

This session will introduce participants to marketing. It will show why marketing is important
for businesses. It will also explain why marketing is very important even to farmers.

Marketing is:
 Working to supply what customers want and doing it profitably for both the customer
and the firm supplying the product.
 Finding out what customers want and supply to them at a profit.
 A series of services/activities involved in moving a product from point of production to
point of consumption.

Marketing is linked to
 Planning what to grow –doing business planning and analyzing profitability
 Storing to maintain quality of the produce.
 Maintaining quality of the produce during production
 Packaging, sales and transport to sales point

Importance of marketing
 Marketing helps in finding out what customers want.
 Enables you to produce and sell the things that people want.
 Provides information in letting people know about your products/services.
 Marketing provides information which will enable you to sell your products in the right
places and also setting the right price so that people will buy your products.
 Packaging materials costs money and smaller packs will in the end cost more than the
bigger packages.
 Marketing helps provide information on how to make your products / services unique
and more attractive than other similar businesses.

42
Collective marketing
Is bulking your products as a group and selling them together. There are different ways of
marketing and if you are producing say 0.5acres of Irish potato you cannot reach larger buyers
since you will not have enough to offer and therefore it is better to bulk your produce with
other farmers and later sell collectively.

Notes:

 Collective Marketing activities for farmer associations start as early as the end of the
planting period. Others start earlier especially for those with contract farming facility.
 Farmer associations are not allowed to buy and sell produce. Usually it is not practical
to say that farmers will sell their produce to organizations, only should they sell on behalf
of farmers.
 Level of participation by farmers in these activities should be a rational decision based
on time and resources.
 Farmers should be involved as much as possible in the process in order to facilitate skills
transfer and local empowerment.
 As rule of the thumb, farmers will decide which part they would like to play in the value
chain.

Market plans

 A simple survey is carried out by marketing committee to identify several potential

market options. These should be prioritized according to the market type e.g. local,
national and export. This will depend on the level of value chain farmers are participating
in a given enterprise.
 Map all potential buyers, contacts and their prices. All prices both retail and wholesale
are displayed on the information board at every information point in the zone.
 Potential buyers in this exercise refer to the corporate organizations like wholesalers,
processors and exporters of produce. Small middle men and wholesalers are discouraged
as they cannot offer a significant price

Transportation and storage

 Transportation is twofold, (a) Transporting produce from farm to the store of the
organization, (b) Transporting farmers produce from organization’s store to the real
market; say exporter’s store.
 Transportation is always organized by the farmers or the buyers in most cases, and
storage expenses are borne by the FA. Where the area covered by FA is big, the routes
for transportation should be defined in the territory for efficiency.
 Where FAs have storage facilities, it is ideal to bring all the produce to the store and
farmers are given bulking receipt.
 The FA with storage facility or without storage facility should make sure that they are in
charge/control of all the produce ready for sale. Short of that, the process can be
distorted especially where farmers keep committing their words and not the produce to
be sold through the organization.
 If the cost of transport is projected to be low, farmers should organize their own
transport.
43
Bulking
 The Marketing committee collects information from the individual farmers and groups
basing on what they are likely to commit to the organization and record it in Projected
Business volume record for FAs.
 Interface meeting is organized between buyers and farmers to actualize their market
plan.
 Farmers bring their produce to the central store, weighed and all records updated as and
when they bring the produce. Records are taken by the secretary for production and
marketing.
 Where there is no central store, produce is put in central places in villages as agreed
upon by all members.
 When farmers bring their produce at the agreed place they are issued a receipt to show
evidence that he/she has brought the produce and the commission is also indicated.
 The quantity collected is communicated to the buyer immediately to arrange for the next
step.
 Sometimes packing bags are sent in advance by the buyer or the price of packing bags
is agreed upon.
 Money from the buyer is received and receipted by the treasurer of the FA and not
directly by the farmers.
 Loading, grading are also taken care of by either FAs or the buyers.
 After calculation of commission farmers are paid through their accounts or other records
as agree upon by all members.
 All the business done on behalf of the farmers is recorded in the Business Performance
Record.
 Buyers should pay for produce before it is taken or when there is an assurance that it
will be paid on delivery.
 It is be better if all payments are done by cheque in the names of the farmer
organization.

Note

 More people confuse bulking with holding, bulking takes place when farmers bring their
produce together, while holding takes place when farmers keep their produce in store
waiting for prices to increase.
 It is important to mention commission and other charges as early as possible to promote
transparency.
 The accumulated commission is shared by only those who sold their produce through
the organization, however part of it may be retained to be reinvested.
 FAs with enough share capital may advance to farmers with urgent cash needs.
 Farmers will remain owners of the produce till point of sale.

Pricing

However, much variance in prices of different communities and markets, farmers will
appreciate relatively high prices.

Three prices are always taken into consideration:

44
  Open market price – This is a price offered by middlemen at farm gate in a given
community
 Farmer association’s price - A price negotiated by the farmer organization from identified
buyer. It is always higher than the open market price
 Price of the farmers - This is the price charged by the farmer organization when it sells
for farmers, this should be lower than organization’s price but higher than the open
market price. Price of the farmers = FAs price -commission.

Sharing of accumulated commission

 After an agreed period, usually one year, during the Assembly General Meeting members
are obliged to share on the contribution they made towards the growth of the
organization. Usually those who contributed much should share much; this will increase
member’s patronage. Records should be well maintained to show members contribution.
 Farmers after marketing period should review the process and come out with lessons
learnt and make way forward.

Conditions for successful bulking

 Mutual trust
 Clear and enforceable by-laws
 Informed members
 Members having stake in their organization
 Active participation at all meetings
 Zero tolerance for corrupt, unaccountable and undemocratic leadership by members
 Strong business ethics among members
 Committed and dedicated leaders
 Democratically elected leaders
 Visionary and transparent leadership
 Regular meetings between leaders and members
 Proper and updated records

Collective marketing of farm products

Commodity Unit of Qty Open Price of Farmers Total Commission
measure market FA price Revenue
price
(1) (2) (3) (5) (6) (3x6) (5-6)x3
(4)

1. Increased bargaining power

2. Better quality Higher prices
3. Dealing with large trader

Higher Lower Production 45

price costs Higher profit
Importance of collective marketing

 You can negotiate better since you have more to sell (a trader listens to you easier since
you have a lot).
 You save on transport and handling costs since you can bring your products to the
market together.
 You can control quality better. All farmers deliver the same quality. Traders like this.
 You will produce more because markets will become better.
 You can get loans easier.
 You can get trainings from organizations.
 You can buy quality inputs at a cheaper price (e.g. seed, tractor hire etc.) and have
lower production costs

Note: It is important for the farmer groups to select marketing committees to help them with
marketing their products as a group and also looking for markets. The facilitator will also list
some of the roles and duties of the marketing committees.

Marketing strategies/(The Marketing Mix) - 4 P’s?

Marketing is the most critical factor that determines the success of your business. Effective
marketing starts with a considered, well-informed marketing strategy. Developing a marketing
strategy development in businesses needs to be based on trainings such as customer analysis
and the participatory market research that should be conducted before the marketing strategy
development training. The marketing strategy comprises of the four Ps (Product, Place,
Promotion and Price (also referred to as the marketing mix).
Your marketing strategy affects the way you run your entire business, so it should be planned
and developed in consultation with all the members in the group team.
It is a wide-reaching and comprehensive strategic planning tool that:

 Describes your business and its products and services.

 Explains the position and role of your products and services in the market.
 Profiles your customers and your competition.
 Identifies the marketing tactics you will use.
 Allows you to build a marketing plan and measure its effectiveness.
 Allows the group to assess the risks involved and the how they can be mitigated.

A marketing strategy sets the overall direction and goals for your marketing, and is therefore
different from a marketing plan, which outlines the specific actions you will take to implement
your marketing strategy. Your marketing strategy could be developed for the next few years,
while your marketing plan usually describes tactics to be achieved in the current year. It is
developed so as to be able to sell the best and mainly desired product by the customer at the
preferred location and price.

46
The fours Ps (Marketing mix)

Any marketing strategy comprises four basic elements referred to as the 4Ps’ namely product,
place, price, and promotion.

Product:
A product is what a business presents to the customer or the value proposition that is meant
to solve the customer’s problem at hand. Thus this dictates how the customer will require the
product. It is important to ensure that the product fully meets the needs of the customer. From
an angle of industry analysis, it is necessary that the product is unique and in this way, your
business as a firm or an individual will enjoy competitive advantage. These can be quality
attributes, branding, packaging etc.
To sell your produce, you must assess effective demand for it and what your customers would
like or may not like about it. You should compare your produce with that of other suppliers and
justify why customers would prefer your produce over those of your competitors.
 What will be unique about your produce? (e.g., type of varieties should be the preferred
one by buyers, quality status should be standard)
 Do some value additions i.e. sorting, grading.

Step 1: List the different attributes that the target customers specifically look for in your
product.
Step 2: Assess the current level of customer satisfaction in line with the product you are
providing to them.
Step 3: What can be done to improve the product so as to meet the customers’ priority
needs?
Step 4: Identify the risks that are involved in trying to improve the product and their
management measures. These are the strategies or actions to be taken depending on the
outcomes of steps 1 and 2.

Place:
Place is important in meeting two main market aspects namely; availability of the product to
and accessibility of the product by the customer. Thus it is important that the product is found
in an easily accessible place or location and should also be readily available to the customer at
the time of need. It is important that this time factor be planned for in any business. Businesses
such Irish potato production need to know exactly where their profiled customers want to find
their produce and at what time in the cropping cycle. Effectiveness and efficiency of the
distributional channels used must be considered as well. The relative locations of the production
fields, storage facilities, and the sales points are important in terms of transportation costs and
access to customers.

Price:
Price is one of the important market aspects in the seed businesses. A good price is seen in
the profit a business earns after selling its products. When selling Irish potato, a competitive
price needs to be set and this varies from customer to customer. A number of factors are
considered when setting price but mainly two of these are most important: the cost of
production and the market price. It is important not set the price so high that the business will
fail to sell its products and it should not be set too low that the business may not break even.

47
The price of your produce will be based on your production costs, the willingness of your
customers to pay as determined by prices charged by other suppliers, and your perceived profit
margin. This may depend on the nature of the Irish potato and the demand for it.

Promotion:
It is important to know that before the customer buys the product, he/she must hear about
the product or see the product or have experience of the product. These will stimulate him/her
to think about your product and probably he/she will eventually make the decision to buy
product. This depends on how the product is presented to him in terms of features such quality,
packaging and labelling, yield potential, and maturity period (say if seen during a field day
exercise).
You should use a variety of methods or strategies to inform different categories of customers
about the Irish potato you offer and convince them to buy. These can be through the following
ways:

 Personal sales of your product to your intended buyers.

 Conducting sales promotion - say the first ten people to buy 1000kgs of our Irish
potato get 10 kg for free.
 Promotions can be done through trade shows and exhibitions on field days.
 Through word of mouth promotions.
 Advertisement through radio shows.

However the farmer group can use marketing mix strategy to distinguish themselves from
other competitors through:

 Modifying products.
 Changing pricing and strategy.
 Offer Irish potato variety that others do not sell.
 Use different promotions and promote distinctiveness.

Summary of the Marketing Mix

Questions on the 4P’s

Product:

48
  Q: What product is needed in the market vis a vis the product you intend to take to the
market?
 Q: What quality is for sale?
 Q: What quantity requirements does the market require?
 Q: What will make your produce unique so as to attract potential customers?

Place:
 Q: Where are you going to sell it? At farm gate? At the market?
 Q: How will your products reach the market?

Price:
 Q: What price will you obtain?
 Q: How are you going to relate the quality of your produce with the price?
 Q: How will the customers pay for the product (Terms of payment)?

Promotion:
 Q: How are you going to promote the product?
 Q: How are you going to convince traders to buy from you?

Market information

Market information includes all kinds of information business people (including farmers) need
in order to market their products and produce for the markets.

The 4C’s of market information

 Customers – Association’s target client. Who are they? What do they do? How many of
them are there? Where are they located? What will they pay?
 Cost – Association’s Costs. Operational costs, Administrative costs, Manufacturing costs,
Selling Costs, transportation costs.
 Commodity – Association produce for the market. What are you offering? What is the
gap in the market? What are the benefits of your commodity? Is it there demand for it?
 Competition - Other business targeting same market. Who are they? Where are they?
What are their prices? How do they promote their product?

Benefits of market information

It allows better decision making at the time of production. It helps you decide on:-
 What to plant, quantities, methods, what to finance.
 It allows better decision making at the time of selling. It helps you decide on:-
 Where to sell, when to sell, to whom to sell, price.
 It attracts traders by informing them about the quantity and quality of produce you have
available.

49
Note: Most farmers produce before collecting marketing information on what the
market/customers really wants from them. However from this session one lesson learnt is that
it is very important to know what the market wants and prices offered before engaging in any
kind of irish production to avoid being disappointed after harvesting your products.

Marketing information is a very useful element in business and it is not free. It has costs
attached to it to enable the association source for market information.

Questions on market information;

 Q: What is market information?

 Q: What market information do you use?
 Q: Where do you get the information from?
 Q: How do you gather it?
 Q: How do you make sure all members of your group get this information?
 Q: What do you do with this information? How do you use it?
 Q: What challenges do you have with getting market information?
 Q: Can you think of any other sources of market information that you could get?
 Q: Do you use this information? How?
 Q: If you don’t use, could this information be useful to you? How?

Group work

In two groups, farmers come up with information that they think is useful for their Irish potato
businesses - let one person per group present this to all members
Each group thirty minutes to answer the following questions:
 What information does your group need to improve your business?
 Where will you get the information from?
 Who will collect this information?
 How will you use this information?
 How will you make sure this information is reached by all group members?
 What support do you need? (e.g. notice board at the sub-county HQ)

15 minutes for each group to present and discuss. Time for questions, feedback and
clarifications

Note: Market intelligence and market information are used together because it is through
having market intelligence that we can get market information.

What is participatory market research and why is it important?

Here farmer associations themselves conduct market research to identify and analyses
profitable markets and enterprises. For the association to be successful and grow we need to
know what customers want, understand customer behavior to treat them well, deal with other
Irish potato growers, create demand, promote the potato, package the potato and transport it
to the point of sale. The process of getting information on these issues is called market
research. The main purpose of a market research is to assess and understand the 4As
(Availability, Affordability, Acceptability and Accessibility) in rural marketing.
50
  Availability: Is there scarcity or excess?
 Affordability: How is the price compared to farmers’ purchasing power?
 Acceptability: Is there any positive or negative perceptions about your produce?
 Accessibility/ Awareness: Can customers be able to reach your store with ease? Are
they informed about your crop or variety?

In addition to these, other important purposes of market research are:

 Knowing your customers

 Understanding customer behavior
 Understanding your competition
 Knowing your input suppliers
 Estimating demand and understanding demand trends
 Understanding preferred Packaging
 Identifying most effective promotion methods
 Assessing available modes of transport
 Identifying the marketing risks.

How to do market research?

There are three ways of conducting market research: formal enquiry using questionnaires,
informal enquiry, and observation.

a) Formal enquiry: anonymous standardized information, large volumes, costly and needs
someone who can analyses the information. This is used to get general demand trends and
market behavior.

b) Informal enquiry: subjective, smaller area of operation, to collect sensitive information

such as prices from competitors, but also in relation to packaging, transport, promotion, input
suppliers.

c) Observations: to see the behavior of your competitors in terms of how they treat
customers, the type of customers and quantities of seed a customer normally buys.

For all the methods it is important to think of how many people to interview and what kind of
people so that you get information from different types of people e.g. individual big buyers
(like - hotels, schools), retailers, wholesalers, etc.).

Then we develop relevant questionnaires and get set to go and carry out market research,
after which we see how to use the market information got.

Customer feedback

Learning objectives
At the end of this session participants shall understand:
51
  What customer feedback is.
 How important consumer feedback is to a farming business.
 The various mechanisms used to ensure proper customer feedback.

Customer feedback is a message got from your customers regarding the quality of your services
and products. Small businesses need to have an effective customer feedback mechanism in
place. This is not only to maintain or improve customer satisfaction but it also feeds you with
information such as what do your customers want from you.

There are 5 effective customer feedback mechanisms

Step 1: Welcoming feedback

You must be willing to listen to your customers if you want them to submit their feedback to
you. Some traditional ways of welcoming feedback include placing a suggestion box on the
help desk, conducting customer satisfaction surveys, having a complaint section on your site
and so on. First time customers’ feedback: It is extremely important to know whether a new
customer enjoyed their experience with you in Irish potato marketing. Thus, tracking feedback
from first time customers is a must.

Step 2: Rank and prioritize

If you have a large customer base in Irish potato production, you are probably going to get a
lot of feedback. Rank them according to the degree of improvements required, the amount of
benefits that an improvement will reap as well as the interest of that particular customer
submitting the feedback. For example, you definitely do not want to delay the processing of
feedback submitted by long time loyal customers. Also, pay particular attention to problems
that are brought up by multiple customers.

Step 3: Solving the highlighted problems

Customer feedback may be positive or negative. Of course, it is always good to receive a
positive one, which means that a customer is satisfied with the Irish potato sold by your
business. However, for a negative feedback, you need to quickly rectify the issues specified by
your customers as soon as possible. If there are no suggestions included in the feedback and
you, as a small business owner, have no idea how to deal with the problems, you can always
contact the customers to get some input.

Step 4: Follow up with customers

Once a problem has been rectified, notify the customer who submitted the feedback about the
improvements made and invite him/her to do business with you again to see whether if the
previous problem still persists.
If they had a bad experience with you previously, incentivize them to try out your irish potato
again. Often, because you are being perceived by a business that cares, customers will provide
more suggestions for improvements in the future. They might even tell people around them
that you actually took notice of their feedback and there you go, free word of mouth marketing
love!

52
Step 5: Notify others about improvements
It is always good to let your target market, prospects and customers know that improvements
are constantly being carried out based on customer feedback. Not only will this help to create
a buzz around your market, it will also showcase your business as one that is constantly
improving and listening to the needs of your customers. With that, more people are going to
be doing business with you in the long run.

Share your stories on customer feedback

Do you have a customer feedback mechanism for your own small business for Irish potato
production? If yes, can you share with us some tactics that you think might be a good add-on
to the steps above? What are some of the amazing things that have happened to your business
just because you listen to your customers?

Businesses cannot survive without satisfied customers. For instance, farmers who receive high
quality seed from you consistently and conveniently will become your loyal customers and will
tell other farmers how satisfied they are. This will cause your business to grow.

Note: If a good customer feedback mechanism is developed then the local seed producers will
be in position to know what is actually on ground and find ways to solve the problem and avoid
tarnishing their images.

The different ways of getting customer feedback include:

 Through surveys conducted;
 Face to face interactions;
 Telephone calls;
 Farmer field day;
 Ask buyers;
 Ask sub county NAADS.

Customers can give feedback to their producers through use of mobile phones.

Plenary discussions on who are potential customers?

Q: Where are the major customers located? How far do they generally want to travel?
Q: Will most of my customers be retailers or wholesalers (retailers and wholesalers may want
to buy different quantities?
Q: Will the majority be new customers or repeat customers?
Q: What is their purchasing power/income bracket? Will they pay cash or on credit? Will they
buy in bulk or small quantities?
Q: What is convenient/inconvenient for them when purchasing (distance, package size)?
Q: What attributes will be most important to my target customers (variety, size, freshness,
cleanliness, storability, taste etc.)?
Q: Are they part of a group or association?
Q: Will they want to have seen the crop in the field before buying?
Q: What are the opportunities and threats in each customer category?

53
SUPPLY & DEMAND

Supply and demand is perhaps one of the most fundamental concepts of economics and it is
the backbone of a market economy. Demand refers to how much (quantity) of a product or
service is desired by buyers. The quantity demanded is the amount of a product people are
willing to buy at a certain price; the relationship between price and quantity demanded is
known as the demand relationship. Supply represents how much the market can offer. The
quantity supplied refers to the amount of a certain good producers are willing to supply when
receiving a certain price. The correlation between price and how much of a good or service is
supplied to the market is known as the supply relationship. Price, therefore, is a reflection of
supply and demand. The relationship between demand and supply underlie the forces behind
the allocation of resources. In market economy theories, demand and supply theory will
allocate resources in the most efficient way possible. How? Let us take a closer look at the law
of demand and the law of supply.

A. Law of Demand

The law of demand states that, if all other factors remain equal, the higher the price of a good,
the less people will demand that good. In other words, the higher the price, the lower the
quantity demanded. The amount of a good that buyers purchase at a higher price is less
because as the price of a good goes up, so does the opportunity cost of buying that good. As
a result, people will naturally avoid buying a product that will force them to forgo the
consumption of something else they value more. The chart below shows that the curve is a
downward slope.

A, B and C are points on the demand curve. Each point on the curve reflects a direct correlation
between quantity demanded (Q) and price (P). So, at point A, the quantity demanded will be
Q1 and the price will be P1, and so on. The demand relationship curve illustrates the negative
relationship between price and quantity demanded. The higher the price of a good the lower

54
the quantity demanded (A), and the lower the price, the more the good will be in demand (C).

B. The Law of Supply

Like the law of demand, the law of supply demonstrates the quantities that will be sold at a
certain price. But unlike the law of demand, the supply relationship shows an upward slope.
This means that the higher the price, the higher the quantity supplied. Producers supply more
at a higher price because selling a higher quantity at a higher price increases revenue.

A, B and C are points on the supply curve. Each point on the curve reflects a direct correlation
between quantity supplied (Q) and price (P). At point B, the quantity supplied will be Q2 and
the price will be P2, and so on.

Time and Supply

Unlike the demand relationship, however, the supply relationship is a factor of time. Time is
important to supply because suppliers must, but cannot always, react quickly to a change in
demand or price. So it is important to try and determine whether a price change that is caused
by demand will be temporary or permanent.

Let's say there's a sudden increase in the demand and price for umbrellas in an unexpected
rainy season; suppliers may simply accommodate demand by using their production equipment
more intensively. If, however, there is a climate change, and the population will need umbrellas
year-round, the change in demand and price will be expected to be long term; suppliers will
have to change their equipment and production facilities in order to meet the long-term levels
of demand.

C. Supply and Demand Relationship

Now that we know the laws of supply and demand, let's turn to an example to show how supply
and demand affect price.

55
D. Equilibrium

When supply and demand are equal (i.e. when the supply function and demand function
intersect) the economy is said to be at equilibrium. At this point, the allocation of goods is at
its most efficient because the amount of goods being supplied is exactly the same as the
amount of goods being demanded. Thus, everyone (individuals, firms, or countries) is satisfied
with the current economic condition. At the given price, suppliers are selling all the goods that
they have produced and consumers are getting all the goods that they are demanding.

As you can see on the chart, equilibrium occurs at the intersection of the demand and supply
curve, which indicates no allocative inefficiency. At this point, the price of the goods will be P*
and the quantity will be Q*. These figures are referred to as equilibrium price and quantity.

In the real market place equilibrium can only ever be reached in theory, so the prices of goods
and services are constantly changing in relation to fluctuations in demand and supply.

E. Disequilibrium

Disequilibrium occurs whenever the price or quantity is not equal to P* or Q*

1. Excess Supply

If the price is set too high, excess supply will be created within the economy and there will be
allocative inefficiency.

56
At price P1 the quantity of goods that the producers wish to supply is indicated by Q2. At P1,
however, the quantity that the consumers want to consume is at Q1, a quantity much less than
Q2. Because Q2 is greater than Q1, too much is being produced and too little is being
consumed. The suppliers are trying to produce more goods, which they hope to sell to increase
profits, but those consuming the goods will find the product less attractive and purchase less
because the price is too high.

2. Excess Demand

Excess demand is created when price is set below the equilibrium price. Because the price is
so low, too many consumers want the good while producers are not making enough of it.

In this situation, at price P1, the quantity of goods demanded by consumers at this price is Q2.
Conversely, the quantity of goods that producers are willing to produce at this price is Q1.
Thus, there are too few goods being produced to satisfy the wants (demand) of the consumers.
However, as consumers have to compete with one other to buy the good at this price, the
demand will push the price up, making suppliers want to supply more and bringing the price
closer to its equilibrium.
57
F. Shifts vs. Movement

For economics, the "movements" and "shifts" in relation to the supply and demand curves
represent very different market phenomena:

1. Movements

A movement refers to a change along a curve. On the demand curve, a movement denotes a
change in both price and quantity demanded from one point to another on the curve. The
movement implies that the demand relationship remains consistent. Therefore, a movement
along the demand curve will occur when the price of the good changes and the quantity
demanded changes in accordance to the original demand relationship. In other words, a
movement occurs when a change in the quantity demanded is caused only by a change in
price, and vice versa.

Like a movement along the demand curve, a movement along the supply curve means that the
supply relationship remains consistent. Therefore, a movement along the supply curve will
occur when the price of the good changes and the quantity supplied changes in accordance to
the original supply relationship. In other words, a movement occurs when a change in quantity
supplied is caused only by a change in price, and vice versa.

58
2. Shifts

A shift in a demand or supply curve occurs when a good's quantity demanded or supplied
changes even though price remains the same. For instance, if the price for a bottle of beer was
$2 and the quantity of beer demanded increased from Q1 to Q2, then there would be a shift in
the demand for beer. Shifts in the demand curve imply that the original demand relationship
has changed, meaning that quantity demand is affected by a factor other than price. A shift in
the demand relationship would occur if, for instance, beer suddenly became the only type of
alcohol available for consumption.

Conversely, if the price for a bottle of beer was $2 and the quantity supplied decreased from
Q1 to Q2, then there would be a shift in the supply of beer. Like a shift in the demand curve,
a shift in the supply curve implies that the original supply curve has changed, meaning that
the quantity supplied is effected by a factor other than price. A shift in the supply curve would

59
occur if, for instance, a natural disaster caused a mass shortage of hops; beer manufacturers
would be forced to supply less beer for the same price.

Market segmentation

The process of defining and subdividing a large homogenous market into clearly identifiable
segments having similar needs, wants, or demand characteristics. Its objective is to design a
marketing mix that precisely matches the expectations of customers in the targeted segment.

Market segmentation is a marketing term referring to the aggregating of prospective buyers

into groups (segments) that have common needs and will respond similarly to a marketing
action. Market segmentation enables companies to target different categories of consumers
who perceive the full value of certain products and services differently from one another

Few companies are big enough to supply the needs of an entire market; most must breakdown
the total demand into segments and choose those that the company is best equipped to handle.

Four basic factors that affect market segmentation are

1. Clear identification of the segment,

2. Measurability of its effective size,
3. Its accessibility through promotional efforts, and
4. Its appropriateness to the policies and resources of the company.

The four basic market segmentation-strategies are based on

1. Behavioral,
2. Demographic,
3. Psychographic, and
4. Geographical differences.
60
Customer demographics can include gender, age, income, household size, geographic area and
even various ethnic groups.

Note: The purpose for segmenting a market is to allow your marketing/sales program to focus
on the subset of prospects that are "most likely" to purchase your offering. If done properly
this will help to insure the highest return for your marketing/sales expenditures. Depending on
whether you are selling your offering to individual consumers or a business, there are definite
differences in what you will consider when defining market segments.

Product Differentiation

Product differentiation is a marketing process that showcases the differences between

products. Differentiation looks to make a product more attractive by contrasting its unique
qualities with other competing products. Successful product differentiation creates a
competitive advantage for the seller, as customers view these products as unique or superior.

Product differentiation can be achieved in many ways. It may be as simple as packaging the
goods in a creative way, or as elaborate as incorporating new functional features. Sometimes
differentiation does not involve changing the product at all, but creating a new advertising
campaign or other sales promotions instead.

Product differentiation is a marketing strategy that businesses use to distinguish a product

from similar offerings on the market. For small businesses, a product differentiation strategy
may provide a competitive advantage in a market dominated by larger companies. The
differentiation strategy the business uses must target a segment of the market and deliver the
message that the product is positively different from all other similar products available.

61
 MODULE 6: SAVINGS & RESOURCE
MOBILISATION

OBJECTIVES By the end of this module participants will have understood what marketing is, how to conduct
market research, demand & supply forces, customer analysis & customer feedback mechanism,
strategies, segmentation, product differentiation & marketing information
ACTIONS Associations will conduct a market survey & identify and profile potential customers
OUTPUT Marketing strategy & customer database

What is saving?

Saving is the practice of putting aside part of your current earnings for future use. It is not
done once but over a period of time. You will have to make some sacrifices of current
enjoyments to save for a better future.

“One by one makes a bundle”

You do not need much money to start saving. Whether you are a student, a farmer, a teacher,
nurse, banker, market vendor, taxi driver or a business person, you can always put a little
money aside. When you save regularly, your money will “grow” as shown in the table below.

Month 1 Month 2 Month 3 ....... Month 24 Total

Savings
John 10,000 10,000 10,000 10,000 10,000 240,000
Jolly 50,000 50,000 50,000 50,000 50,000 1,200,000
James 100,000 100,000 100,000 100,000 100,000 2,400,000

Spend less to save more

You can save by spending less. Cutting down on consumption, such as alcohol and on buying
new clothes for every function, enables you to save more money to provide for you and your
family's future.

Encourage your children to save

Parents should teach children to start saving for a purpose while they are still young. This helps
children to understand the value of money and to develop a savings culture at an early age.
You can help a child save money in a small tin or box (piggy bank)

62
Save to avoid unnecessary debts

Savings are the best way to pay for day-to-day costs like school fees, clothing and medical
charges. It is better to save for such expenses than to borrow. For example, if you start saving
for your children’s education early enough, you may not need to take an education loan or
borrow money from a friend to pay fees. While people sometimes get into “debt trouble” by
borrowing unwisely, they never get into “savings trouble”.

Always have an “Emergency Fund”

Savings are very helpful in addressing unexpected or unforeseen problems such as illness,
accidents, unemployment, robbery, drought, funerals, too much rain that destroys crops etc.
In such situations, your savings can help you as you recover. Make sure that you keep money

63
for emergencies. If you ever have to use part of your emergency fund, top it up again as soon
as you can.

Save for special events

Have a savings account or a small tin or box to save for luxuries such as birthdays, a wedding
ceremony and holidays. You can plan ahead for this and hence save over a long period of time.
For example, if you plan to have a wedding at the end of next year, you can plan to save
Shs.100, 000/= every month for 20 months. By the wedding day, you would have saved shs.2,
000,000/=. It is your right to enjoy your money if you plan and save towards such luxuries.

Choose how and where you want to save

Many times we find excuses to avoid saving, claiming that we do not have enough money or
we do not know how and where to save. Here are some options you can choose from:

 Saving in a savings account with your bank or Microfinance Deposit-taking Institution

(MDI). You can save via regular deposits or a standing order from your current account
to your savings account.
 Saving through a group e.g. SACCO, Village Savings and Loans Association (VSLA) or
friends that come together and save regularly.
 Saving some money, such as coins, in a small tin or box (piggy bank) at home at regular
intervals and then banking it when it has filled. This works well for children because it
teaches them to save and value money at an early age.

Keep your savings safe

No matter where you save, make sure that your money is safe.
 In licensed financial institutions, such as commercial banks and Microfinance Deposit-
taking Institutions (MDIs), your savings are insured up to Shs.3,000,000/= - if the
institution closes, you will be paid back up to Shs.3,000,000/=s. If you had saved more
than Shs.3,000,000/=, you may get back some or all of the rest of your money when
the institution has paid off its debts. Licensed institutions will not easily close down as
they are closely monitored by the Bank of Uganda to make sure they are reliable.

 It is only in a few SACCOs that savings are insured. When you want to keep your savings
in a SACCO, it is wise to ask other members what their experience has been before you
start saving with it. You should also make sure that you know and trust the SACCO
officers who take care of your money.

 When you save with a Village Savings and Loans Association or a group of friends, make
sure you can trust the other group members and ask for regular accountability to reduce
the risk that someone walks away with your money. Also check that the group’s money
is kept in a safe place where it cannot easily be stolen.

 Do not keep large amounts of money at home. It might easily get stolen or destroyed
by fire, insects or other animals.
64
Make the most out of your savings: with big interest and small fees

When you save with a savings account, you should be paid interest. In order to make sure you
get the most from your money, find out:
 How much interest you will get. Different institutions offer different interest rates. Some
of them pay interest monthly and some yearly. Compare it all.

 What fees and charges (if any) you will need to pay. There might be an account opening
fee, an account management fee, a deposit or withdrawal charge, etc.

 How much notice (if any) you need to give before taking out your savings and what
penalty (if any) you will have to pay if you take out your money before then.

Four steps to achieve your savings goals

Follow these four steps to achieve your savings goals:

 Decide what you want to save for and find out how much it will cost – whether it is
buying a house, land, starting/improving a business, studying or saving for your child’s
school fees, etc. Ensure that what you are saving for is realistic and not over-ambitious.
 Start saving now – the sooner you start, the sooner you’ll get there.
 Put your savings in a safe and secure place where you earn good interest.
 Keep saving regularly and over a long period of time. It’s only then that your money can
accumulate.

Savings give you financial security and control

When you save, you have some form of financial security and control. You will feel more
responsible and independent using your own money rather than borrowed money or money
given to you by others.

65
Choose to save in an institution that is easy to reach and work with. It should at least
 Be safe and secure
 Be easy for you to use and convenient
 Be easily accessible
 Have an easy process for opening an account
 Have good interest earned on savings
 Have little or no charges on your account (make sure that your monthly interest is more
than the monthly charges)
 Value and treat you well as a client.

Make use of a standing order

Sometimes you may not be disciplined enough to save regularly. You can go to your bank and
set up a standing order to ensure that you do save regularly. A standing order is an instruction
to a bank to pay a set amount of money at regular intervals from one account to another.
However, take note of the charges. If you are an employee, you can also ask your employer
to transfer part of your salary directly to your savings account.

Get more for your money - on a fixed deposit account

A fixed deposit account involves locking away a particular amount of money for a certain time
period at a fixed rate of interest. You will be charged a penalty if you withdraw this money
before the end of the fixed period. The rate of interest is normally higher than on other
accounts, so this can be a good way of keeping your savings. But only put money into a fixed
deposit account if you are confident that you will be able to lock it away for the whole of the
fixed period.

THE RULE OF THUMB: LET’S SAVE

 Save as much as you can as soon as you can. The more you save, the better off you will
be.
 Save as you earn, One by one makes a bundle.
 Try to save 10% of your income even if you do not have a specific purchase or
investment for which you are saving.
 Pay yourself first; put 10% of your earnings aside for savings before you do anything
else. If you can’t afford 10% right away, start with less, but save something.
 Calculate how your money can grow over time if you save regularly in an account that
earns interest.
 Do not carry a lot of cash—avoid temptation to spend it!

66
  Spend less to save more. Cutting down on consumption, such as alcohol and on buying
new clothes for every function, enables you to save more money to provide for you and
your family's future
 Spend carefully. If you purchase big items, consider how much you could resell them
for. Look for opportunities to save money by bulk buying of non-perishables.
 Pay off your debts. Some people recommend paying down your debt before you start to
save; others recommend saving even while paying down debt because it is important to
begin building assets as soon as possible. This choice will depend on individual priorities,
situation, and means. Total household debt should not exceed 36% of household income.
While people sometimes get into "debt trouble" by borrowing unwisely, they never get
into "savings trouble".
 Savings are the best way to pay for day-to-day costs like school fees, clothing and
medical charges. It is better to save for such expenses than to borrow. For example, if
you start saving for your children’s education early enough, you may not need to take
an education loan or borrow money from a friend to pay fees.
 Keep three to six months of living expenses in an emergency fund at all times. It can be
used in case of job loss, unexpected illness, and to meet other emergency needs. An
emergency fund will reduce your anxiety.
 Keep emergency funds in a separate account. Open two savings accounts—one for
emergencies that is easy to access and doesn’t have any penalties for withdrawal, and
one for savings for other goals that is harder to access (and therefore less tempting to
withdraw the money). Keeping some savings “out of reach” is important.
 Find savings products that match your savings goals.

ARE YOU A SAVINGS PRO?

QUIZ – ARE THE FOLLOWING STATEMENTS RIGHT OR WRONG?

1. My money is safer at home than in a bank.

ANS: Wrong – At home your money can easily get stolen or destroyed by fire, insects or other
animals. In licensed financial institutions such as commercial banks and Micro Deposit - taking
institutions (MDIs), for instance your savings are insured up to 3,000,000/=.
2. I should earn an interest rate when I save with a savings account.
ANS: Right – However you should compare the interest rates different institutions offer and
also take account of the fees and charges you might have to pay.
3. Fixed deposit accounts generally pay higher interest rates than normal savings accounts.
ANS: Right – In exchange for locking away your money for a fixed period of time banks can
afford to pay you a higher interest rate on your savings.
4. It is unnecessary to have an “Emergency Fund” because I can always get a loan.
ANS: Wrong- Remember it might take time to get a loan, you might not have enough securities
to do so and you have to pay an interest rate! Therefore it is best to have an “Emergency Fund”
to address unforeseen or unexpected problems such as illness, accidents, funerals, or droughts
immediately.

67
BUILD YOUR OWN SAVINGS PLAN

STEP 1: EARNINGS
In the next (month, 6 months, year) I will be earning: ……………………
(Note: Include your salary after all deductions, average business income, spouse’s income,
other household members’ incomes, rental income, remittances and any other sources of
income.)

STEP 2: EXPENDITURES
In the same time period I will face the following expenditures: ……………….
(Note: Include necessities such as food, housing, clothes, transport as well as debt repayments
and discretionary or optional expenditures.)
Are there any expenditures that I could cut back on in order to save more?

STEP 3: NET INCOME & SAVINGS TARGET

My net income would then be (earnings minus expenditures):
On this basis I can formulate a realistic savings target of:………………….

STEP 4: WHERE & HOW WILL I SAVE?

(E.g. I can go to the bank to deposit my savings in my account weekly/monthly. I can ask my
employer to directly deposit a part of my paycheck into my savings account.)

STEP 5: HOW WILL I TRACK MY SAVINGS?

(E.g. I can regularly check my bank statements.)

THE ABC OF SAVINGS

Interest A rate expressed as a percentage which is charged or paid

for the use of money

Financial Security Assured freedom from poverty or want

Debt An obligation to pay something to someone

SACCO (Savings and A group of people, minimum 30, who come together to save
Credit Cooperative) and lend to each other. Such a group is usually member-
owned, member-managed and member-governed
VSLA A group of people who save together and take small loans
from those savings activities. Such group has a cycle of one
year after which the accumulated savings and loan profits are
shared among the members
Commercial Bank A financial institution that offers formal banking services to
account holders in that bank

MDI Microfinance institutions which are granted a license to carry

out microfinance business and are supervised by Bank of
Uganda

68
 MODULE 7: FINANCIAL LITERACY
6. BASIC FINANCIAL LITERACY

OBJECTIVES By the end of this module participants will learn the benefits of personal money management as
well as transfer of skills for behavior change.
ACTIONS Association members will analyze their income sources and expenditures and make spending
decisions
OUTPUT Personal financial budgets and spending plans

69
70
Financial Literacy enables one to:

• Understand the key financial products you may need throughout your life

• Understand basic financial concepts like compound interest, investment return, risk, and
diversification and so on.

• Discuss money and financial issues – even if you don’t really like to talk about them.

• Make good financial choices about saving, spending and managing debt

• Respond competently to changes that affect your everyday financial well-being

71
72
73
74
75
Personal Financial Management

This involves planning and keeping track of your income and expenditures. A budget is one
major tool to manage income and expenditure in one’s life. It is a plan that lays out what you
will do with your money.

Financial Literacy enables one to:

• Understand the key financial products you may need throughout your life
• Understand basic financial concepts like compound interest, investment return, risk, and
diversification and so on.
• Discuss money and financial issues – even if you don’t really like to talk about them.
• Make good financial choices about saving, spending and managing debt
• Respond competently to changes that affect your everyday financial well-being

Three things you can do with money

i. You spend money for day-to-day needs such as food, housing, transportation, clothing,
healthcare, debt repayment, and optional expenses such as watching football, taking
alcohol, buying new shoes.
ii. You save money for unexpected emergencies, unexpected opportunities, or to meet
short- and medium-term financial goals.
iii. You invest money in business ventures to earn income over the long-term.

How do you make a budget?

i. Keep track of your income and expenses

ii. Create budget categories that are appropriate for you
iii. Set your financial goals
iv. Allocate your income across your budget categories

76
77
Ways to Cut Spending

 Consume less of non-essential items (beverages, snacks, luxuries)

 Spend less on parties and festivals
 Lower expenses on life events such as marriages and funerals
 Save enough to buy necessities in larger amounts at lower costs
 Plan ahead to buy necessities when the prices are lower
 Buy less on credit
 Carry less money or save money in a safe place; the temptation to spend it won’t be
there

78
79
80
81
82
83
84
85
What to know before borrowing

• The amount of your loan payment, including principal, interest and fees

• The sources of income and/or savings you have to make those payments

• When you will actually get the loan money in your hands (will it be before you need it?)

• That your investment from the loan generates a return which is high enough to cover
the total cost of credit and to make a profit

Questions for lenders

• What is the interest rate?

• How often must the loan principal and interest be paid?

• What is the amount of each installment?

• What amount of savings is required and how often must deposits be made?

• What fees must be paid to obtain a loan?

• What penalties are charged for late payments?

• Where are loan payments made?

• How often do meetings take place?

• How long do the meetings last?

• What are the collateral requirements?

Differentiate between borrowed money and your own money

By answering and discussing the statements below about your own money and loan
money, one will be able to understand the differences between using your own money
and using borrowed money.

86
87
88
89
90
91
92
93
 ANNEXES

ANNEX 1. BUYER/TRADER INTERVIEW GUIDE

Date: ………………………………….

Name of person interviewed

Position in market chain

Business name

Contact information

Interviewer

1. Which two products do you mainly deal in?..............................……………………………

2. When purchasing do you prefer to deal with cooperatives, Traders, Brokers, or independent
farmers? Please rank them in preference.
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………..
3. What is the advantage of the top 2 entities?
………………………………………………………………………………………………………………………………………………….
………………………………………………………………………………………………………………………………………………….
4. Do you have any other sort of formal arrangements with farmers? If so what.
…………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………….
5. Do you provide inputs? Support services? (provide details)
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................

94
 .............................................................................................................................
...........................................................................................
6. What varieties are preferred by customers and why?
.............................................................................................................................
.............................................................................................................................
.............................................................................................................................
...........................................................................
7. Do you buy potatoes from CIP project areas (Kween, Kapchorwa, Mbale – Wanale)? Where
else do you buy the Irish potatoes from?
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
………………………….
8. What are the key challenges of purchasing from farmers in the named project areas?
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………...
9. What are key suggestions to farmers so that you can buy more from them?
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………
10. How / when do you pay? Can you commit to future purchases?
…………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………….
11. What factors influence buying price?
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
12. Do you collect or do farmers have to bring to you; what do you charge for collection?
…………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………….
13. What are the current prices? …………………………………………………………./Kg

95
14. Which months of the year that have plenty of Irish potatoes on market and what is the
average price/kg during such a period?......................................................................
.............................................................................................................................
................................................................................................
15. Which months of the year that have little of irish potatoes on market and what is the
average price/kg during such a period?..............................................................
.............................................................................................................................
.............................................................................................................................
16. What quantity of irish potatoes (in bags/kgs) that you can manage to purchase in a
week?.....................................................................................................................
.............................................................................................................................
.............................................................................
17. What is the estimated average demand in this market in a week’s period of
time?......................................................................................................................
.............................................................................................................................
............................................................................
18. What is the estimated average supply in this market in a week’s period of
time?......................................................................................................................
.............................................................................................................................
.............................................................................................................................
.........................................................................
19. Is there competition between you and other buyers/traders for supplies here in the same
region? (Who are the major competitors?)
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
………………………….
20. What is the competitive advantage of this locality?
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
………………………………………
21. Do you have suggestions on how the competitive situation can be improved in the local
business environment?
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………………………

96
22. How much do you usually store?
…………………………………………………………………………………………………………….

23. For how long?

.............................................................................................................................
........................
24. Do you have any storage problems?
…………………………………………………………………………………………………………….

25. What are the preferred delivery days in the week?

.............................................................................................................................
...

26. What are the market dues pay and related dues?
.............................................................................................................................
.

Thank you for your cooperation!

97
 ANNEX 2. SUB-SECTIONS OF A BUSINESS
PLAN
1. Business background information
2. Business goal
3. Business strategy
4. Activity plans and scheduling
5. Costing and budgeting
6. Projected income statement (PIS)
7. Marketing plan
8. Putting up a monitoring plan
9. Use of generated profits

98
 ANNEX 3. MARKET & PRODUCTION SURVEY
QUESTIONS
Select from the following questions when developing survey questionnaires for various
respondents:

1. Farmer? Producer? Enterprise

2. Exporter
3. Large Buyer/Retailer/ Processor
4. Service Providers
5. Collector / Intermediary
6. District Govt.
7. Input Providers

1. Farmer/Producer/ Enterprise

- What crops/commodities do you produce? What months are they harvested in? What
months planted in? Where is the garden? What is total land under cultivation? What is
land under cultivation for the specific crops?
- Crop diversification (speciality crops? etc.)?
- What is total production volume for each crop?
- How much do you sell (what % of your harvest do you sell)? How much do you sell it for
(price)? How much was sold year by year? Volume and income earned? What have
average prices been over last specified number of years? Does the price fluctuate over
time (season or over the last few years)? Do you sell individually or through a group?
- When do you sell it?
- Where do you sell your product? Are there a number of different markets for your crop?
Specify? How far away are the markets? How do you take produce to market? Is there
any cost for this? How regularly do you go to market?
- Who buys the product? How do buyers find you (is it direct or through an intermediary)?
- How often do you meet your buyer to discuss business related matters and exchange
new information? What kind of information do you get? is it enough? What standards to
they have (quality? delivery time? reliability? health standards? production standards
etc.)?
- Would you accept credit for your produce?
- How do you determine your price? What are your 3 – 5 main cost factors (give
estimates)?
- What is the nature of the relationship between you and your buyer (formal contract?
verbal agreement? buyer dictates terms? equal rights relationship? you can easily find
another buyer? you are bound to a particular buyer? you are satisfied/not satisfied)?
- How long does it take to fulfil order – can you always fill order – are you flexible enough
to react to changing orders?
- Does your buyer or supplier provide you with certain services (loans? training?
maintenance services? equipment? marketing support? etc)?
- Challenges while producing and selling? Climatic conditions? Etc.?
- What improvements can be done to overcome these challenges?
- Do you use traditional farming methods? What farming methods do you practice? Do
you do crop rotation?
99
 - How many days does it take to perform the following practices e.g.? Land preparation?
planting? weeding? fertilizer application? harvesting? drying? grading? winnowing?
packaging?
- Do you hire labour for the tasks i.e. Land preparation? planting? weeding? fertilizer
application? harvesting? drying? grading? winnowing? packaging? How much and what
is cost?
- What is total cost of production for unit cost of crop?
- How do you store the products / are there enough storage facilities?
- Do you have access to agro inputs/credit?
- Do you have access to seed for the targeted crops (unimproved? improved? both)
- Can you afford to buy seed? Do you buy seed? What is the source of seed (recycled?
open market? others)? What is the price of seed per unit?
- Any external financing?
- What sources of information do you have (e.g. For market information? new technologies
etc.- e.g. BDS providers? extension services? media? ngos? others)? which is the most
important?
- Do you operate solely or belong to a cooperative or association? What support do you
receive from cooperative / association?
- What are your labour sources?
- How do you handle your produce?
- Do you have a mobile phone? Do you use any ICT in marketing your produce - how
- How much do you loose – pests ? diseases? post harvest
- Do you have insurance?
- Who makes the decisions m/f?
- Govt./NGOs/farmer supports in programme areas – finance? insurance? agricultural
extension? warehousing? Communication?
- If you had to evaluate your own performance? what grades would you give yourself in
terms of quality? reliability? price? design? delivery time (score 1 – 5)
- What kind of packaging materials do you use ?
- Who are your main competitors? is there competition between you for buyers? do you
know the price your competitors sell at? What makes your product different to that of
competitors?
- Labour practices: how many workers employ? sign contract? health hazards in work
place? costs of labour? satisfied with productivity
- Is there a policy / regulatory environment for the sector? what are the strengths and
weaknesses? what business support services available (including credit)/
- Are you aware of international/national standards and regulations for your field of
business (e.g. ISO norms? GAP? GMP? quality standards and laws? Etc.?) Describe
them?
- What is the competitive advantage of your sector here in this specific locality? Do you
have suggestions on how the competitive situation can be improved in the local business
environment?
- Where/who do you get your supply (raw materials? designs? tools? machines etc)? What
kind of information from suppliers? Is it readily available? What are strengths
weaknesses?

2. Exporter:

- Contact details

100
- To which countries do you export? who are your buyers there ? How do you find a foreign
buyer (they find you? personal friendship? trade fair? business platform? BDS
providers)?
- What products do you export – raw/processed? What new opportunities are there?
- What quantities of these products can you manage to buy?
- What standards to they have (quality? delivery time? reliability? health standards?
production standards etc.?)
- At what price do you buy – depending on the season?
- Are there any credit / cash payments? when? what? Terms?
- Delivery services? how do you collect/transport?
- Any value addition services?
- Where do you buy the products? source from (which regions)
- Who are your suppliers?
- Do you provide any services to your suppliers (technical assistance? equipment? loans?
market info? research and development)?
- What price do you sell the products (are there price differences based on quality?
volumes)?
- What are your 3 – 5 main cost factors?
- How do you store your products?
- Where do you export too? how does the local sector perform compared to other regions
from which the exporter sources?
- How do you package ?
- Do you sign contract (with suppliers/buyers)? Do you have verbal agreements? any
other special arrangements e.g. Collection points?
- Who are your selling to
- Challenges you face in dealing with suppliers? solutions
- Do the products from the SHA programme region meet international market
requirements (in terms of quality? quantity? price? design? delivery time? Etc.?)
- Is there a premium for organic produce? ethically sourced
- What is the minimum order requirement?
- How do you mitigate effect of exchange rate fluctuation?
- Do you accept contract?
- Main challenges for SHF?
- What problems do you face? when supplying the export market?
- Do you regularly exchange information with buyers (how – in person? phone call?
intermediary)
- What is the nature of relationship between you and foreign buyer (contract? verbal
agreement? what period? who dictates terms? you can easily find another buyer)
- How long do you get to fill order?
- Do your buyers provide you with services (loans? training? maintenance services?
equipment? market support? etc?)
- Are you aware of international/national standards and regulations for your field of
business (e.g. ISO norms? GAP? GMP? quality standards and laws? etc?) Describe them
- If you had to evaluate the performance of your main suppliers? what grades would you
give yourself in terms of quality? reliability? price? design? delivery time (score 1 – 5)
- Do you get sufficient information from your suppliers about available products? prices
and quantities?
- Who are your main competitors? what makes your product different from competitors?
what is the local competitive advantage of products from this country?

101
 - With regard to legal / regulatory framworks? have you experienced any difficulties in
growing your business? what are they?
- What services does Govt. provide to exporters?
- Are you a member of a business association? what services are available to you

3. Large buyer/Retailer/ Processor

- Contact details
- Where do you source from?
- What standards to they have (quality? delivery time? reliability? health standards?
production standards etc?)?
- what quantities?
- What price are you buying at?
- Purpose (use)? final destination / use?
- Delivery system? how do you collect / transport?
- Buying times (periods)?
- Payment terms and quality based payments?
- Is demand met?
- Licencing and minimum regulatory requirement?
- What are the products?
- Who are target customers?
- Who are your competitors?
- Do you accept contracts?
- What value addition do you do?
- Where do you sell to?
- What is the cost of value addition?
- Do you have special arrangements with producers i.e.? Collection points? contract
farming? etc?
- What are your main challenges? what are the solutions?
- What are the main challenges facing SHF?

4. Service Providers

- Are you Govt. or private sector?

- What type of service provided?
- Cost of service per unit? What are payment terms? cash? credit? payment plan?
Insurance?
- How the service is provided?
- Who are the target beneficiaries? What regions do you operate in? Can SMEs access
service? How accessible are you to smallholder farmers?
- How do you make customers/beneficiaries aware of your services ?
- Legality of service provided?
- Location/physical address of provider?
- Conditions for receiving service?
- Competence of provider?
- How do you determine the prices for your service?
- Value for money – does price fluctuate during seasons?
- Gender lens – service altered as necessary?
- Are you registered?
- Why should one subscribe to this service and not its competitor?
102
 - Where else has this service been provided (references)?
- Who are your competitors?
- Do you do any handling?
- What are the most urgent needs of the target sector?

5. Collector / Intermediary

- What is your cut? %

- Who are you selling to? How often do you meet them – what information do they provide
you with
- What are you looking for – quality? quantity? what products are you dealing with? Do
you pay for different quality?
- Is your supply regular/irregular?
- How long does it take to fulfil the order of a buyer can you always fulfil order?
- Can you commit to future sales?
- Can you commit to the best price?
- When will you pay?
- What is the biggest challenge facing SHF? strengths of SHF supplier? What are main
strengths and weaknesses of product you source from this area
- Do you treat m/f the same?
- What is the value addition?
- What facilities are available?
- Where do you get the product from? Current mechanism for sourcing commodities
(seasonal markets? commodity aggregation centres? intermediaries? etc?)? Who are
your suppliers?
- What factors influence your buying price?
- What challenges do you face in buying and selling? What are the solutions
- What are the major costs incurred at your level?
- What quantities are you able to handle at any given time?
- What other incentives / services do you provide to the farmers?
- Do you accept contracts?
- Do you accept credit / cash?
- Do you need pre financing?
- How do you collect and transport produce? How often do you collect products from your
suppliers?
- What are the current prices?
- Do you have special arrangements with producers i?e? Collection points? contract
farming? formal contracts? verbal agreements? you are not the only one they supply?
you are satisfied/not satisfied with the relationship? etc?
- What kind of packaging materials do you use for your product (during transport)
- From which other regions do you source?
- If you had to evaluate performance of your main suppliers/shf suppliers in this area?
what grades would you give yourself in terms of quality? reliability? price? design?
delivery time (score 1 – 5)?
- Is there competition between you and other collectors for suppliers here in the same
region?
- What is the competitive advantage of this locality? do you have suggestions on how the
competitive situation can be improved in the local business environment?

103
 - Is there a policy / regulatory environment for the sector? what are the strengths and
weaknesses? what business support services available (including credit)? Are any
specific regulatory issues an obstacle for your business?
- Are you insured?

6. District Government

- How long has s/he worked in area?

- What products are commonly sold in the local market?
- Who are the buyers and suppliers?
- What are the quantities and the prices for the commodities?
- What are the minimum regulations/requirements (licenceing registration? quality) fees?
prices? Taxes?
- What tax incentives are there for the SHF?
- What are the coordinating mechanisms?
- What extension/incentives services do you provide for farmers?
- What are the typical farming practices?
- What are the yields of the target crops in the area?
- What political framework exists or developed for specific sector?
- What security structures are available/
- What is the priority of govt. Plan/
- What other NGOs are operating in your district / what do they deal in?
- Can the govt. help in business linkages to our farmers?
- What subsidies / supports/services do you provide?
- What infrastructure plans do you have?
- What are main challenges for SHF?

7. Input Providers

- Why has provider chosen this region to sell products? or if outside region – ask about
business relationship to region – under what circumstances would he supply to target
area/sector?
- Who are the buyers of inputs?
- What equipment? products? services do you sell?
- How do they sell (local shop? local agent? wholesaler through intermediaries? buyers
come from far? direct deliveries)? How frequently do you meet your regular customers?
- What improved varieties are available and suitable for farmers in the area (sorghum?
sweet potato? cassava? pigeon peas? and groundnuts)?
- What type of inputs are bought by farmers cultivating the target crops?
- What are the prices of the inputs?
- What is the yield potential of the crops being targeted by per HA?
- Are the inputs available in the area?
- How do you make customer aware of your products?
- What kind of information to do you give to purchasers (info on product? info on new
technologies? services available? how to use and maintain input factors)

104
- What costumer services to you provide to buyers (loans? training? advice? maintenance?
etc)
- What are your main difficulties in supplying local producers? Solutions?
- Where do you source your goods? Are you an importer of these goods? are there
constraints? Do your suppliers provide you with services (credit? training? maintenance
services? marketing support)?
- Who are your competitors? is there competition between you and other suppliers for
buyers in this region? What makes your product different from competitors?
- Have your sales increased in the last few years?
- Work practices? How many workers employed? Signed employment contracts? labour
costs (high/low)?
- Is there a policy / regulatory environment for the sector? What are the strengths and
weaknesses? What business support services available?
- Explain opportunities for provider to increase market share?

105
 ANNEX 4. RECORD KEEPING TEMPLATES
A. Collective marketing of farm products
Commodity Unit of Qty Open Price of FA Farmers Total Commission
measure market price Revenue
price (4)
(2) (6) (3x6)
(1) (3) (5) (5-6)x3

FA – Farmer Association.

B. Another tool for bulking and collective marketing

Date Name Amount Unit Payment Paid Payment Signature Remarks
Delivered price due date
29/09/2016 Leo 800kgs 2,000 1,600,00 1,600,000 30/09/2016 ………….. Fully
paid
29/09/2016 Julius 2200bags 2,000 400,000 300,000 30/09/2016 ………….. Partially
paid

C. Cash Book

RECEIPTS ( from sales) PAYMENTS ( for purchases)

Date Particulars Amount Date Particulars Amount

A record of activities should complement the record form above – that shows when a task was
performed and how much time it took.

106
D. Field Operations Record/ Activity Record
Start Activity / Task Completion Comments
Date Date

E. Total cost of production calculation

a) Land hire

b) Labour

Activity Unit cost Quantity Total amount

E.g land clearing,

Primary cultivation

Total

c) Inputs
Item Unit cost Quantity Total
amount
E.g Seed

Fertilizer

Total

d) Storage costs
- Transport
- Bags
- Storage cost - itself

e) Marketing costs

Total cost of production = sum (a to e). i.e a+b+c+d+e

107
 ANNEX 5. POTATO ASSOCIATION (PA) ENTERPRISE
DEVELOPMENT CAPACITY ASSESSMENT QUESTIONNAIRE
PA Business Subfactor Questions 1= Poor 2=Fair 3 = Satisfactory 4= Good 5= Excellent
Success factors
Marketing 4 Ps PRODUCT: Does The PA does not The PA knows The PA knows at The PA knows at The PA knows all
strategy the PA know the know any product only one product least two product least three the product
product attributes attribute needed attribute needed attribute needed product attribute attribute needed
needed by the by customers; by their by their needed by their by their
customers? customers customers customers customers
PRICE: Does the The PA does not The PA has some The PA has a The PA has a The PA has a
PA have a pricing have any knowledge on the pricing strategy clear plan , task clear plan for
strategy? knowledge on a pricing but does but is not using it. and responsibility price strategy and
pricing strategy not have a on pricing fully implemented
strategy in place strategy but not
fully implemented;
PROMOTION: The PA does not The PA has the The PA The PA has The PA has
Does the PA have have any knowledge but no occasionally organized and organized and
a promotional knowledge on a resources to promotes its planned planned
strategy? promotional promote its Potato but does promotion promotion
strategy. Potato; not a specific activities and the activities and the
budget. budget but limited budget with
by resources. sufficient
resources.
PLACE: Does the The PA does not The PA has a The PA has a The PA has a The PA has a
PA have a sales have a sales point sales point but sales point and sales point with sales point with
point and how but has not has not identified has identified the distributional distributional
effective are the identified the the distributional distributional channels but not channels which
distributional distribution channels. channels but is fully effective. are fully effective.
channels? channels not using the
channels

Customer Does the PA The PA members The PA has The PA knows The PA knows The PA knows
analysis know its do not know their identified few most of their most of their most of their
customers and customers and customers but is customers but is customers and customers as well
their needs fully? neither their not aware of their not fully aware of are fully aware of as their needs
needs. needs. their needs. their needs with plans to meet
the needs

108
 Market Has the PA The PA has no The PA has The PA has The PA has PA has identified
segmentation segmented its knowledge about knowledge about developed the developed the the market
potato market? market market criteria for market criteria for market segments.
segmentation segmentation but segmentation but segmentation and
has not unutilized. has started using
implemented it. it.
Unique product Does the PA The PA does not The PA members The PA members The PA has The PA products
produce and have any have knowledge have skills in planned on how are unique in
market unique knowledge on in product product to differentiate terms of all key
product product differentiation but differentiation and their products, attributes and
(variety/added differentiation? have not put in have put plans in have allocated have a brand
value)? place place on how to resources for this name.
plans on how to differentiate their
do it. products
Diversification How diverse are Limited number of Limited number of Limited number of A number of A number of
the PA products varieties and varieties and varieties and different varieties different varieties
and market products bartered products that are products that are and products that and products that
segments? and sold at the sold by members sold locally to are sold to are sold to
farm-gate in the community farmers in farmers and other different types of
and outside the buyers in the farmers and other
PA community wider local buyers all over
community the district/region
and beyond

Consumer Diversity, and How and how The PA has no The PA is getting The PA actively The PA gets The PA gets
feedback frequency of often does the PA mechanism of some feedback gets information feedback from up feedback from
mechanism getting product get feedback from getting feedback from less than informally during to 50% of its more than 50% of
feedback from customers on from customers 10% of its meetings with customers on its customers on
customers potato sold customers less than 25% of products sold products sold
(varieties, coming to them customers
qualities, and
added value)?
Remedial Does the PA The PA ignores The PA attempts The PA solves The PA also The PA has a
responses adapt/respond to the complaints to solve complaints from investigates structure that
customers complaints complainers causes of allows using
complaints? complaints (what complaints as an
did the PA do opportunity to
wrong?) improve its
product

109
Access input Irish potato Does the PA have The PA does not The PA has The PA has The PA has The PA has
and services sufficient access have access to Limited access to reliable access to reliable access to reliable access to
to quality potato? quality potato quality potato the required quality potato but quality potato in
quantities of insufficient sufficient
potato but not of quantities quantities at all
good quality times
External Does the PA No external Use of external Use of matching Access to The PA is using
Finances access and utilize sources of capital donations, in kind grants for potato seasonal credit both seasonal
external financial are used; the PA funds received production and for potato and investment
services? only uses internal from partners in marketing production and credit sustainably
capital addition to marketing
internal capital
Business What is the level Not aware of the Aware of the BDS Aware of BDS, Aware of BDS, Aware of BDS,
Development of access to BDS and the but do not understand the understand the understand the
services different sources providers understand benefits but are benefits and there benefits and they
of potato the benefits of not using them. is limited use of fully use these
business using them these services services
development
services?

Market Market study and Does the PA The PA does not The PA has the The PA carries The PA carries Decisions are
use of market conduct market have knowledge knowledge but out limited market out market study made by the PA
information study and use the on how to carry does not carry out study but does not use basing on
information for out market study market study the information for information from
decision making? decision making the market study
Demand- Market To what extent The PA has no The PA has an The PA has clear The PA has clear PA knows the
size and Niche does the PA idea of the Potato idea of Potato understanding of understanding of Potato demand,
understand the demand and how demand but with the Potato the Potato has identified its
potato demand in to determine it. no procedures on demand with demand with market niche and
the target how to determine informal formal procedures has put in place
market? it. procedures on on how to procedures on
how to determine determine it. how to regularly
it. determine Potato
demand.
Supply- quantity Does the PA The PA does not The PA meets The PA meets at The PA meets at The PA meets
supply what is supply Potato only least least 100% of the
demanded? 25% of the 50% of the 75% of the demand
demand demand demand

110
PA Governance Leadership How do(es) the No leadership The PA The PA is Leadership has Leadership has
leader(s) perform structure, leadership is operationally led been been
in terms of outsiders govern strongly leaning by one or more democratically democratically
guiding the PA the PA in the on external entrepreneurial elected by the PA elected by the PA
and its members development of a support in its farmers taking the members, and members, and
into a commercially operations for the lead in the has the capacity has the capacity
commercially sustainable development of a development of a to guide its to guide its
sustainable enterprise commercially commercially members members
enterprise? sustainable sustainable PA operationally in strategically and
enterprise the development operationally in
of a commercially the development
sustainable PA. of a commercially
sustainable PA.
Committees Does the PA have The PA has no The PA has The PA has The PA has The PA has
functional committees in committees in committees in committees in committees in
committees with place. place but unclear place with clear place with clear place with clear
Clear roles and roles and roles and roles and roles and
responsibilities, responsibilities. responsibilities responsibilities, responsibilities,
work plans and but no work work plans but no work plans and
reporting plans. repotting structure repotting
structure? structure.
Gender Does the PA have The PA executive The PA is 90% The PA is 70% The PA is 50% The PA has equal
balanced committee is not dominated by one dominated by one dominated by one gender
representation of gender (women, gender category. gender category. gender category. representation in
youths, women men and youths) leadership.
and men in sensitive.
leadership?

Business Business plan Are PAs having a The PA has no The PA has an The PA has a The PA has The PA has
orientation business plan business plan. informal business business plan but developed its developed its
(BP) which guides strategy is not using it. business plan but business plan and
their Potato is using it only for is using it fully
production and part of their and is updating it
marketing activities regularly.
activities?
Business records Does the PA keep The PA is not The PA has only The PA is only The PA is The PA records
and use business recording any rough data (often recording the recording all costs all data (including
records? data on revenues not recorded) on cash flow and revenues but land, capital and
(amounts of revenue and (revenue and has just started labor costs) that
Potato sold, price expenditure expenditure) of analyzing benefits allows a cost-

111
 obtained) or costs the Potato and profits, benefit analysis of
(inputs, labor, production and without looking at the Potato
transport, marketing return to labor enterprise and
storage, credit. activities without used of these
Etc.) analysis. data inactivity and
investment
planning
Work plan Does the PA have PA does not plan PA plans but PA have PA has PA develops work
seasonal activity and does not have their work developed work developed and plan on a
work plans? have work plans. plans orally plans but do not has the work plan seasonal basis,
agreed upon and use it but only use them fully uses it and
not documented in parts. where necessary
(inconsistent use) adjusts according
to the situation
Mobilization and Internal savings Does the PAs use The entire Production and Production and Production and The production
use of resource internal savings production and marketing is marketing is marketing is and marketing
for Potato marketing is not partly financed partly financed partly financed process is fully
business? financed through through internal through internal through internal financed by
internal savings- savings- 25% savings- 50% savings- 75% internal savings-
0% 100%

112
 ANNEX 6: ENTERPRISE DEVELOPMENT PERFORMANCE
TRACKING TOOL

Volumes Income
Commodi received from No. of Future
ty KG Sales Operating paid Ref Plans/
No. Group Name Group Type Membership (volume (value) Turnover Costs employees Period Notes
Total
Active Ranking of
Members % Turnover Coop/Assoc
(suppliers, Average Net change per Value of Loan (as per
Project Informal Coop/ taking Active Active (value Volumes price Buyers surplus/ previous farmer stock (Amount GSHA
Year Ref (e.g. CPG) Assoc. Total F M loans, etc.) F M addition) Projections Actual sold (KG) Projection Actual per kg Names Turnover loss year Active still held Fulltime Parttime Casual for data from MFI) Tool)
2014 UD1 1 ABC Assoc No Yes 45 10 35 30 10 20 Beans 10 8 100 12.5 100 -120 3.333333 220 Jan-May

113