Author Topic: CrowdFarming and Private Investors for Farms in South Africa  (Read 1192 times)

AgriBusinessPlans

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CrowdFarming and Private Investors for Farms in South Africa
« on: January 31, 2019, 02:00:41 pm »
Dear Shareforum readers and participants,

I am an agricultural business consultant who works with prospective and experienced farmers in South Africa. One of the areas I am looking into is assisting a client in acquiring a private investor/partner to start a poultry farm. The plan is sound and we are assisting in acquiring and reviewing the business plan costings etc in accordance with our usual practice: https://thebigbookproject.org/agri/poultry-farming/how-to-start-for-beginners/.

My, or really clients question is where can one find a private investor in SA to pitch? and not the Dragon's Den! Also have seen local increase in SA crowdfarming projects where people are funding 1 to 1000 chicks and look for returns on the meat and eggs. Has anyone participated in such a venture?

Bevan

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Re: CrowdFarming and Private Investors for Farms in South Africa
« Reply #1 on: February 01, 2019, 02:47:56 pm »
Hi there are several crowd-farming ventures in SA, following on from US and European models. I haven't participated but the idea is neat, assuming you live nearby. Very similar to CSA (Community Supported Agriculture). Here in SA we are light years behind these developments, still relying on the entrenched big farms, big logistics, big warehousing and economies of scale etc. The majors clearly have the most to lose from direct farm to consumer type ventures. However, there is an app called Khula which is trying to bring farmers and consumers together, providing the logistics. It's not a bad start. There is also the OpenFoodNetwork and several boutique farm to consumer retailers.

In terms of your insto investors, no-one is going to be interested to fund a greenfields farm in this environment. Your best bet is to know some high-net worth who wants to take a punt on poultry - brave indeed... Land Bank provides loan finance but with all the normal corporate finance / senior debt issues.

My own personal project on the backburner is to create a digital currency (or voucher) for enabling CSA. Could be a real game changer in SA. I'm happy to chat more on the various issues. You can contact me via www.thrivecentre.co.za


AgriBusinessPlans

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Re: CrowdFarming and Private Investors for Farms in South Africa
« Reply #2 on: February 04, 2019, 06:00:28 pm »
Hi there are several crowd-farming ventures in SA, following on from US and European models. I haven't participated but the idea is neat, assuming you live nearby. Very similar to CSA (Community Supported Agriculture). Here in SA we are light years behind these developments, still relying on the entrenched big farms, big logistics, big warehousing and economies of scale etc. The majors clearly have the most to lose from direct farm to consumer type ventures. However, there is an app called Khula which is trying to bring farmers and consumers together, providing the logistics. It's not a bad start. There is also the OpenFoodNetwork and several boutique farm to consumer retailers.

In terms of your insto investors, no-one is going to be interested to fund a greenfields farm in this environment. Your best bet is to know some high-net worth who wants to take a punt on poultry - brave indeed... Land Bank provides loan finance but with all the normal corporate finance / senior debt issues.

My own personal project on the backburner is to create a digital currency (or voucher) for enabling CSA. Could be a real game changer in SA. I'm happy to chat more on the various issues. You can contact me via www.thrivecentre.co.za



Hi Bevan,

That was a comprehensive round up on what is on the ground in SA. I think starting small with consistent aim at direct marketing/selling to consumers is the way forward. Do you think from scratch interest can be generated in a CSA type venture? I am visiting your site now and will reply soon.

Thanks again for taking the time to  reply

Bevan

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Re: CrowdFarming and Private Investors for Farms in South Africa
« Reply #3 on: February 04, 2019, 08:27:16 pm »
Hi Bevan,

That was a comprehensive round up on what is on the ground in SA. I think starting small with consistent aim at direct marketing/selling to consumers is the way forward. Do you think from scratch interest can be generated in a CSA type venture? I am visiting your site now and will reply soon.

Thanks again for taking the time to  reply

It's really difficult to beat the price of FMCG retail eggs. Eggs are typically  super KVI's for the big retailers i.e. they sometimes loss-lead on these items and then hope to gouge you on other stuff that you don't pay close attention to the pricing of, especially those sweets on the exit aisles. So I doubt many are going to invest in a poultry CSA to get cheap eggs. However, I expect there will be several initiatives such as www.livestockwealth.com in the near future, where people can invest in a financial product that offers a decent return, with an option to take the physical e.g. eggs or cattle. In general, with low value items you want to avoid doing logistics at all costs. Fine if the people come to the farm to pick up, but forget about offering deliveries.