Agriculture remains one of the top industries in South Africa, outperforming other sectors year on year. During 2023 alone, this industry alone contributed R 117,5 billion to the South African economy. That translates into roughly 3% of the yearly gross domestic product. Although this seems small, new entrants and smaller roleplayers can grab a share of this by leveraging the opportunities within the agricultural sector.
The agricultural sector has many challenges. Once each challenge has been addressed, it seems that another challenge arises. When it isn’t load-shedding wreaking havoc on the poultry industry’s ability to raise chicks, diseases like Food-and-Mouth Disease (FMD) make the sale of livestock difficult. For crop farmers, erratic weather patterns mean that thirsty crops dry out before the rains arrive, or hefty bills need to be paid to keep crops alive. And not to mention the ever-rising fertiliser cost that is impacted by the ongoing Ukranian-Russian war.
Even though this seems gloom and doom, it is important to be aware of the struggles this industry is facing before joining it. After all, an informed decision means you can better be prepared for the road ahead and address concerns earlier than later. This is food for thought when considering different agricultural business ideas.
Agriculture Business Idea: Agro-processing Crops Into Feed
All living things must eat. Therefore, creating a business that specialises in livestock feed is one way to join the agricultural industry. Many of the raw ingredients can be grown before being processed into pellets or bags of feed. Maize, lucerne or soybean form the basis for some feed formulations.
By working closely with an animal nutritionist, you can develop a formula for specific animals. If you have the space, you may find that you are able to grow some of the ingredients. If not, however, you can still form good relationships with suppliers and farmers to obtain the raw materials.
Your input costs will pertain to purchasing processing equipment such as hammer mills, mixers, perlitisers and bagging machines, as well as space to keep these. Packaging, electricity to run machines, labour and transportation costs are a few other costs to keep in mind.
Agricultural Business Ideas with Little Competition
A key factor in ensuring business success is to operate in an unsaturated market: An industry where there is still space to grow or capitalise on opportunities. When developing such a business, you need to consider if there are a lot of consumers who want to buy your product and if you have competition. Thorough market research will show you if your idea is profitable and has strict competition.
Don’t just stare blindly at farming practices. The agricultural value chain is long and fulfils many needs. This includes certain parts of the manufacturing-, transport- and hospitality industries.
Ask yourself, what need have you seen arise under local farmers and how can you address it?
Equipment rentals are just one example of this kind of business.
Successful Agri-Business Ideas
Agricultural business ideas that are sure to make a profit or have a low barrier to entry are popular farming practices that have shown growth recently. Among these are rabbit farming, goat farming, honey production and snail production.
Rabbit farming is known to have a quick turn-around and rabbit meat is relatively affordable. This makes it an ideal food source for low-income families that still need a source of protein. Rabbits can be sold live or butchered for their meat, and pelts can also be used to make clothing and accessories. Due to its popularity in our neighbouring countries, rabbit meat can be exported as well.
Goat meat has also climbed in popularity. The cost to keep goats is far less than that of cattle, they take up less space and reach a market weight much sooner. Some breeds are also much hardier than other livestock meaning you will spend less on keeping your stock healthy.
Recently, the demand for goat meat in the Middle East has made South Africa’s goat production a profitable choice.
There will always be a demand for honey. Therefore, farming with bees can be a great business. It is, however, important to note that the more hives – and thus space – you have, the more honey you can produce. In winter, honey production slows down, so this is also something you need to consider.
Snail production is also gaining in popularity and showing promise. In South Africa, snails are bred for restaurant production, snail mucous for the beauty and health industry, and lastly, as a source of calcium in livestock feed by grinding down their shells.
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High-Value Crops for Agricultural Business Ideas
Different crops are grown for different reasons. From fibre for clothing and fruits for food to oil and ornamental use, most things we encounter started their life in agriculture.
High-value crops are crops that are grown for higher returns per hectare due to the high price of the crops planted. Many plants and other produce may fall into this category such as mushrooms, microgreens, herbs, ground nuts, kiwis, dragon fruit and prickly pears.
Consider the climatic requirements of your intended crop as well as the fertilisation and irrigation needs. However, leveraging these crops can result in a large turnover on a small piece of land.
Agriculture has so many opportunities. You don’t need to be a mega farmer with a giant piece of land to make your business a success. Starting somewhere, even at humble beginnings, is the most important step in your entrepreneurial journey.
