Reading the Book

This is a book for all urban farmers, and those who aim to help

them. Urban planners may find these ideas amusing, but there

are real indications out there that urban agriculture can shift our food systems for the better. To commence with this programme, we will navigate and set out the market opportunity for urban

agriculture in the next chapter. This concludes on the four fields

of action that need attention in developing an urban agricultural enterprise, and we set out the basics of a biological production regime, technology development, enterprise development and engagement systems. This is followed by a key chapter that details the techniques and technologies that you can use in your enterprise.

The next chapter talks about how you should design your products and services, and this is followed later by a chapter on how to make the most of your sales. There is a chapter on how to start, and how to mobilise the resources that you need to do so. The act of enterprise creation is not complete without a look at your compliance and the need to formalise the business, even if you plan on NOT doing so! We take a look at basic financial calculations, so that you know where you stand with profitability. We devote a chapter to technology and social media, and devote space to reading, learning and interpreting media for enterprise development.

Conclusion

I hope to, as I walked into a cooperative one day, visit a food garden in an urban settlement, that implements the ideas in this book. Such a garden will be well-planned and designed and will make the most of the sun to the north and the elevation of the landscape. It will store water at the highest point, in a reservoir

and in the soil itself. This reservoir will be filled occasionally

by manual means, as the garden uses minimal water. Soon, a solar- and wind-pump will help out. This water reservoir is connected to simple gravity-fed irrigation systems that the farmers have built, designed and maintained themself.

The design of the garden slows down the flow of water

by contours and swales laid out over most of its surface. They are planting water. I see a keyline, in addition to the swales, that brings water from the access road and surrounding houses to the garden. Right at the bottom of the site, I see a compost heap and liquid manure stations. I see several stations, and a compost extractor and aerator as well. There is a compost tea liquid manure station, a Lactobacillus reservoir, and stations for compost tea, brown liquid manure, and stations for nitrogen, calcium, potassium, phosphorous and sulphur-based liquid manures. All seem to be fermenting biological materials. Right next to this, stand several old bathtubs, full of earthworms.

I see deep trench and above-ground (or Helkultur) raised beds being constructed. I see heaps of material ready to use for this. There is a heap of animal bones discarded by a nearby butcher, a heap of sticks, from large to small, kraal manure, compost, grass clippings and leaves, all ready to be used in a deep trench bed. Next to this is a bag with charcoal dust or “biochar” for the soil. A deep trench bed is being constructed, and I can see the correct layers being laid, and enough mixing as well, in the bed. It looks like they are using biochar and kraal manure in the mix.

I see a biochar kiln, a simple fireplace that is used as a kiln. The

beds are clearly integrated with the overall layout and design of the farm, and I can see the tunnels, irrigation and cropping integrated with the bed design.

I see taller crops planted behind, at the south of the rows along the contours. In front of these are crops in descending height so that all of them receive maximum sunshine. Crops

are judiciously chosen with an evaluation system that identifies those most profitable. I see certain cops intercropped with

others, so that we use their natural abilities to deter pests and

so that plants that influence each other beneficially are planted

next to each other. I see evidence of such companion planting and intercropping, the use of legumes, and the use of non-edibles such as marigolds to deter pests. I see some simple

hydroponic systems – paint buckets filled with river sand from

nearby that makes best use of the concrete slabs on the farm. I see tower, vertical and bag gardens, with compost and simple organic matter inside them. One of the grow towers or pyramids

holds more than 50 plants and only covers 4 square metres!

I see a simple gravity-fed irrigation system for each row, and each bed is mulched and covered by small inexpensive tunnels. Everywhere, I see biomatter (old tree stumps) being used in the walkways, as low walls to arrest water, and being used as infrastructure. Every inch of soil is covered by a mulch or a plant, except, of course, in the chicken coop and the kraal for the cow.

I see a sizeable seedling nursery and more trays of seedlings than the garden needs. There is a queue of farmers waiting to buy seedlings. I see a greenhouse growing seeds for sprouts as animal feed. I see seedlings of various sizes and this indicates that there is a planning system for the planting. I see a big cupboard in the office, with several pots of seeds, and a file and documentation that looks like records of seeds loaned. The seed library has a list of names, and records of many seeds loaned and received. I notice a few reference books on agriculture and a Wi-Fi router.

In the office are table and chairs and record books of every sale made. Next to the office is a small shop selling vegetables, and a few other items. There is a laptop, and someone is using WhatsApp to send out price lists of specials this week. There is a

neat file with record books and other company documents. They have just finished hosting a community education

session at the farm. Many of the regular customers and a few new ones were there. Many sales were made that day. Several scholars from the school where the farm is situated are there and they participated in the community education sessions. They all have been trained in basic agriculture at the farm, and this has enabled the farmer to build a few of the deep trench

beds. Seven-kilogram (kg) bags of potatoes were going at

low price as a bakkie trader came with a full load. A nutrition

education session was held, and this explained the benefits of

fresh vegetables as part of the diet. Eggs from the chickens and milk from the cow at the bottom of the garden were sold. 10 live chickens and 2 rabbits were also sold.

The guests received a tour of the garden and the whole permaculture design and organic production was showcased. Food safety and nutrition were explained. This was linked to the garden, the soil and the way in which food is produced in the garden. The garden has a beautiful name and there is signage advertising prices and services at the garden.

Guests were shown the food-for-waste exchanges. There is a food-for-food waste, food-for-biowaste, and a food-forrecyclables system. The farmer will take human urine in closed old paint buckets. This is used in the liquid manure system and is mixed with manure to create a liquid manure that is sold to farmers and applied in the garden. They manufacture a liquid manure with the urine, kraal manure and compost extracts that they sell at high price in old soft drink bottles.

The farmers gives a few rand discount on any second-grade food that they sell, in exchange for recyclables or biowaste of various kinds. Most people can bring at least one old paint bucket of biowaste when they shop, and this is taken to the compost heaps, which are growing every day. Old cooking oil is taken in, as this has a high price, and a reclaimer uses this to make biodiesel on site. Recyclables command a similar discount, and this is sorted after receipt, and stashed away in the “wool sacks” common amongst reclaimers. A reclaimer is in a partnership with the farmer and collects the recyclables for cash once a week. At the farm is a seamstress and an appliance repairman, and they receive clothes or old appliances and fix these on site.

The shop of the farm is neat and tidy. Vegetables are harvested upon demand, and there is no need for cooling. The farmer prefers sales early in the morning and late in the evening so that they can focus on their production.

Prices are advertised as lower than supermarkets and this is borne out by the use of a scale. Customers know that this is a good deal. However, we all know that the bunches are larger… and the farmer often gives out second-grade food for free.

The shop sells first- or second-grade foods. Second-grade foods are exchanged for wastes and first-grades are still lower-priced than the supermarket. The farmers use the third-grade food for their chickens, rabbits and the cow, but they feed them with a sprouting system where they sprout seeds for animal feed. That is why the milk and eggs taste so good. They also sell consumer items, and this contributes to revenue.

The shop sells spinach, kale and most other kitchen vegetables. Specials and bulk-selling is regularly conducted with staples. The farmer is in a partnership not only with a bakkie trader for potatoes but also with a large commercial farmer and sources maize meal from him. That is why it is so cheap.

I reflect on what I see, and realise the enterprise

development and food system innovation that these gardens

hold. How could I describe this offering to entrepreneurs,

who are mostly new entrants to the practice of enterprise development? It is necessary to approach this as a formal educational and business development opportunity. This commences with the articulation of the unique value proposition contained in this elaborate and romantic vision above. The unique value proposition for urban agriculture, as described and developed in this book, is:

The creation of a price reduction mechanism for urban agricultural produce through the local recycling and repurposing of waste.

In the pages that follow, we will re-articulate and build on this

core proposition for urban agriculture, as practiced in the Global South and in developing contexts, can offer to the world.

Chapter Two

The urban agriculture vision: Informing the market analysis and enterprise creation

The intentions of this market analysis are to enable an entrepreneur to identify lucrative opportunities and critical

inefficiencies in the current structure of the food market, and to

respond to these with novel solutions. In most cases, we will be selling food, but it is how it is packaged as a product or service, and the features of it, that makes the sale. The last chapter ended with a description of how such an urban agricultural enterprise could function in society. This rough material is up for grabs. We now have to “reverse engineer” our enterprise

vision to create new solutions to the critical inefficiencies in the

food system.

The unique value proposition (UVP) of urban agriculture goes beyond the mere provisioning of food and affects all aspects of the enterprise. We articulate this UVP in such a way that it would structure our thoughts and actions in developing this enterprise.

The creation of a price-reduction mechanism for urban agricultural produce through the local recycling and repurposing of waste triggers a circular enterprise form, in that the wastes and by-products of systems, processes, plants, animals and humans in this enterprise, create opportunities for subsequent systems, processes, plants, animals and humans. This regenerates the resources that the enterprise needs to function. This enterprise form and the way that it interfaces with society creates new opportunities, and this chapter will identify these.

In conducting this analysis, we will identify strengths and weaknesses in this enterprise model. However, the model flows along the lines of the vision set out in the last part of the previous chapter. This vision should guide you in making adjustments and developing your enterprise, but keep an eye out for new opportunities not spotted in this book.

The urban food system

Townships and under-served settlements export value away from local areas, as people often shop outside the township or in malls with globalised supply chains, and often work outside

the immediate area. Life is made difficult by public health

impacts like dumping and a neglect of waste removal, and all of this has negative impacts on new enterprises. The “market

failure” that we witness in townships (particularly in secondary and smaller towns in developing countries) must be addressed

by enterprise development models and pathways that will create and accumulate value in local contexts. It is this value that needs to be “translated” to better incomes, higher value products and more secure livelihoods for entrepreneurs and their customers in the townships.

Building local economies in new settlements should revolve around the capture and accumulation of value in local contexts. Urban farmers are primary producers of value, and we need a systematic means by which this value can be translated to value for the farmer, customers and society. Customers produce unrealised value in the waste that they generate and the social patterns that they uphold.

At the level of new, emerging, and “informal” enterprise, we should see sustainability as a competitive advantage in establishing a new venture, and this suggests a new business model for under-served economies. In a sense, the dearth of waste removal in townships, the lack of proper planning and existence of open space, and the (high) supermarket prices of food, create economic opportunities. A programme of sustainable development for emerging enterprises would have to exploit these gaps in our society, and in a sense, fill them with enterprises that deliver net positive value. The value that is lost in these gaps in the system, is the value that needs to be translated to a viable sustainable business. It is these circular processes that give advantage: they substitute for buying expensive chemical inputs, they substitute for marketing and branding, and they build constituencies of customers that ensure the longevity of the enterprise.

A method of analysis should enable any entrepreneur to understand the markets that they are aiming to create and develop. Opportunities for urban agriculture are created by the place of urban agriculture in the global and domestic economy, and its relation to conventional agriculture. We will find opportunities in the inefficiencies of supermarkets, and we will react to these with innovative alternatives. We begin this analysis by looking at the customer of urban agriculture, and this itself reveals several opportunities.

We analyse the key features of urban agriculture, to see how these features can translate to product and service design. The exact way in which we design our products and services will determine what the markets look like in which they will feature. In all these cases, the “market” is not REALLY there, but only comes about when we introduce the product and service to society. The design of the product or service thus creates the market (which exists only at the moment that the product or service is available).

Any entrepreneur should be able to analyse any possible market and develop a product or service appropriate to it, as this will occur throughout the life of the enterprise. To do this, you have to understand how markets work (and I “deconstruct” supermarkets to show how), and these markets do not “work” simply by setting prices and exchanging goods. Markets work because behind a product or service is a pyramid of supply, and here, we can see how the whole industry behind a market “works”: the food industry works by using current technology, availability of finance and materials, and current patterns of behaviour. Urban farmers, seeing that they are creating new markets, need to understand how they can assert themselves as rightful entrepreneurs who can structure these patterns of society.

Below, I emphasise injustices and disadvantages in such a way that we can overcome them. We need a critical but opportunistic analysis, if we want to identify real opportunities for growth in urban agriculture. We conclude by looking at how we should think about sustainability to make it work for these enterprises, as sustainability gives a reason to imagine new possibilities for enterprise development.

Township and new small food businesses and urban agriculture in the South African and global economy

Small-scale farmers constitute the majority of farmers in the

real world. To build viable enterprises where small farming and urbanisation meet, the terms of engagement with the producer, from production to retail, needs to change. Townships, and outside South Africa, urban areas in fast growing towns have been marginalised, but the apartheid and global marginalisation of such settlements has created fertile ground for the localisation of our current “informal” food and economic systems.

We will find, particularly in developing countries, urban areas under-served by global food marketing chains, and a dearth of formal fresh food retailers. Waste management may be insufficient, and we can expect significant quantities of waste being generated in such areas or settlements, and only an emerging and partial supermarket system. This is a very

significant opportunity, as there are many dysfunctions in this

system, and many urban farmers worldwide will see similarities in the market analysis that follows.

Food marketing globally and domestically

The global food marketing system has its roots in colonialism, but these days, it really is a system of food trade that can guarantee the seamless movement of food across borders. The fresh produce markets are at the heart of this system and are

effective at trading large quantities of food from large producers

or aggregators like marketers, across borders. Supermarkets piggy-back on this system and are able to source in large quantities from fresh produce markets, or directly from farmers. They can handle the bulk although relatively small quantities

can be bought from the floor of fresh produce markets (one layer of a pallet – about eight bags of potatoes, and note this for your own bulk-selling specials that are discussed below).

However, this affects prices, and in ensuring global food

security, volumes matter.

Supermarket prices: a deconstruction

Fresh produce markets and their prices condition the way that the supermarket and the systems that support it is designed. Competition amongst producers contributes to structuring this system, but there are important critical insights here that every entrepreneur needs to understand.

When all players in a market sector use the same technology, the same buildings and infrastructure, the same labour and they buy from a common pool of input suppliers (farmers in the case of the food system who all operate in the same way), then their own enterprises and their costs and benefits that they are able to receive, start to become the same. An equilibrium is reached that makes it hard for players to differentiate themselves, except on size. Size matters and that is why both supermarkets and farms have historically tended to grow to the large mega-sizes that we see today.

Supermarkets differentiate themselves from each other, and market size starts to matter. However, there is a lot that is the same in all supermarkets, and this makes it hard for any one of them to offer a price better than the others. The competition and contestation amongst them, and the features of the supply chain, enable them now and again to buy lower than others, and these are the “specials” or reduced prices that a supermarket will claim to offer. The reality is that these things change every time they buy, and no one can control or predict this. Over time, prices, products, services and supermarket identities become almost the same, and deeper processes like fuel prices or global crises, really determine what prices they can offer. An urban farmer with a locally based enterprise, can avoid many of these costs.

Prices reflect the background systems of the supermarket. These systems stretch from the farmer and the farmgate point of sale, to the fresh produce market, and the logistics and distribution systems of the supermarket. The farmer pays for transport to the market, the agents’ fees and the fee to the municipality. The supermarkets buy the food, but the farmer has to pay for the transport, storage, waste, agents and municipal

fees and these do influence prices. These costs are absorbed

by farmers worldwide. Urban farmers can immediately save these costs, and urban farmers need to know how their rural counterparts operate and beat them at this point in the system.

The supermarket can only buy in bulk from the market

(or the farmer directly) and this bulk purchase carries costs of

transport, storage and cooling, and immediate processing and packaging because of the bulk nature of their purchases. These activities cannot easily be carried out at a single supermarket, necessitating a logistics system; another cost. Urban farmers need to note this. From the processing and distribution hub, food is taken to individual supermarkets. There may be more than one logistics stop in this chain, and often packaged foods are transported in bulk over long distances and distributed to more than one point.

These distribution systems are a risk for supermarkets, and this creates a niche for urban farmers. These have impacts, on prices and on emissions and sustainability, and urban farmers can emphasise the local nature of their produce as an alternative. Below, we speak of a bulk-selling retail strategy, and this is a response to supermarket challenges with logistics. You, as an urban farmer, can innovate above this supply chain of supermarkets by the way in which you further develop your products and services. You may be selling the same potatoes, but the way they are sold, and the price accompanying them, is the key way that your product design can attract customers. This develops the enterprise, in systems and processes, and brings revenue and builds clients. It makes the enterprise stronger, and with that, its ability to withstand shocks and consistently deliver benefits.

The focus on volumes in supermarket value chains is

the first inefficiency that urban agriculture can exploit. These

volumes necessitate transport, storage and processing, like packaging. These costs add up but are brought forwards to the consumer. Included here are the costs of advertising, branding and sales. As you can see, supermarkets expend more money on fresh produce than they can bring in at most times. Most of

them make almost no profit on their fresh produce sales and

use it as a means to sell more expensive manufactured products.

The urban farmer can offer a much more compelling value proposition. The produce itself will not only be fresher, but access is much more convenient. The produce also incurs lower costs to society, as there are no transport costs or emissions, and the food may be produced in environmentally friendly ways. The differentiation of urban agricultural produce from mainstream produce is a key issue in its marketing, and below, we aim to exploit this fully!

Only with these critical insights would an urban farmer

be able to offer different products and services, and in this way,

gain access to the market. These products and services will be the same vegetables, but the way in which they are marketed,

produced and presented to the public is different, and this is

where the niche market for urban agriculture emerges.

The customer of urban agriculture

Urban agriculture takes place mostly amongst the poor. Their customers are most often food-insecure, and all are searching for good value in food markets. They will be served by underdeveloped food systems and often have to travel long distances to the nearest markets or supermarkets. They are not served by waste management systems and would receive only fragmented urban services.

These customers are poor, but they can be expected to shop much more discerningly than richer customers. They will be most responsive to low prices and will be open to good deals. These customers are often not included in advertising and marketing messages, as these aim at middle-class and modern consumers. These clients are likely to be open to the cultivation of indigenous crops and foods, and their consumer habits are a blend of Western and traditional habits. They will shop at both formal retail outlets and also from informal sellers and will be open to a blended approach to food provisioning.

These customers reside near or next to the farm, and they will appreciate convenience and low prices. They would be familiar with both the supermarkets and the informal sector and are open to experimenting with new ways of consuming foods.

These customers experience a lack of education and information and may have free time on their hands. They can be trained in agriculture by local farmers, and this can expand the labour pool for urban agriculture and bring more producers into the mix. They will be open to training, open to buying seedlings and inputs, and can offer labour for training in lieu of being able to pay cash for this.

In South Africa the “food poverty line” is defined as R760 per month (in 2023) . There are other metrics that also measure it, but this indicates how much money anyone would need to spend on food purchases. As an urban farm would mainly focus on kitchen vegetables, we can assume that up to 40% of this food basket, R304, is available per person per month. Should you be serving 1,000 consumers in your immediate vicinity, you are looking at R304,000.00 as your maximum turnover. Realistically, you would have to create a shop or market for fresh vegetables in your area, and how people will spend here is up to you to determine. Now you can start to calculate how many people you could supply from your farm, and now you can start to see how many consumers you can serve and what the maximum income could be. Now you have a horizon of income that you can start planning for. Now you can see what customer

base you could potentially supply!

It is important to understand how your customers will interact with you, and how many you could serve. Now you can start to understand how competition works, and where they are. Identify the competitors, supermarkets and informal trade, and you will start seeing where the customers and competition are. Note the prices paid to these traders and set your own prices accordingly.

These customers are a resource that can be used in the engagement systems detailed below. The ways in which they are integrated into the farm will decisively affect its profitability. These customers are a source of waste, a source of labour and can act as ambassadors for the farm. They will also buy seedlings, compost and liquid manure from you.

Customers in developing contexts will be open to enterprises that place their interests at heart. In South Africa, the “township” economy is determined by local considerations and interests. People prefer to shop locally and have local benefits in mind when they do. People will be able to “make” the world that they live in if the message from retail is conducive to this. An urban farmer can emphasise the beneficial effects of urban farming to their customers, and they will likely support this branding approach!

Customers are at the apex of the social systems that you need to engage with in order to create your urban farm. These customers exhibit behaviour that is conditioned and determined by the social systems that surround them. Their buying behaviour, and the benefits that they gain from it, is structured by the formal commercial systems around them. If you can influence their buying behaviour, you can influence how society perceives and supports your farm. We now turn to analyse these, and here the benefits of urban agriculture vividly come to light.

Analysing the enterprise opportunity for urban agriculture

Sustainability

Sustainability needs to become a means to enable marginalised entrepreneurs to gain a foothold in the economy and should be the basic means by which we develop a new enterprise. Sustainability is not a way to ensure that developed nations’ interests are protected in global development. There are many ways in which we can use the word “sustainability” and here, it is employed to chart a path to enterprise development that

can give durable benefits over the long run. Sustainability is

integrated and conditions the unique value proposition for urban agriculture in this book:

The creation of a price reduction mechanism for urban agricultural produce through the local recycling and repurposing of waste.

At the heart of this UVP lies the waste exchange-for-food facility. These circular relationships between the farmer and the customer are how sustainability is achieved. Eliminating waste and packaging, food miles and producing locally contribute to this, and these avoid emissions and impacts. This circular relationship, in fact, operationalises a waste transformation system that reduces dependence on resources and transforms resources so that they can be used again, realising future generations’ interests. This is a very real and substantive sense that creates a sustainability mechanism in the urban enterprise.

This is important, as urban agriculture will attract attention, and we will not be able to complete a comprehensive programme of urban agricultural development without being able to vouch for its sustainability. In a sense, there is a political opportunity for urban farmers. The resource conservation of transforming waste into productive inputs not only delivers good food but affects the wate management costs of any city. Illustrating that an urban farm can process and transform waste enables others like politicians to insert urban agriculture in the planning agenda. These wastes are not discarded but they play a role in production and the creation of wealth. By turning wastes into value, significant impacts on society can be expected, and this also concerns poverty relief and job creation.

Achieving a true sustainability will enable politicians to take up the cause of urban farming and campaign for it. For them to do so, they would need strong support and evidence from the ground up. There is a real opportunity here to make known such a way to produce food and emphasise the effects and impacts of this way of producing food.

Producing food at lower than market cost (through price-setting mechanisms and by giving discount on waste exchanges) enables poor consumers to eat more and better, and over the long term, may affect the overall health of communities. Food security is mostly affected by food prices and food prices and access to food is the key driver of food security, and not the overall amount of food that is available.

Lowering prices thus have the most immediate effect and impact on food security. Urban farms on their own are small and the food security impacts may be small and only immediate, but together, all urban farms, provided they adopt some of the suggestions here, are able to make an impact on food insecurity.

An urban farm will also create job opportunities, and create opportunities for new enterprises, like waste reclaiming, and appliance repairs. The overall socio-economic impact will be positive. Under-served settlements and townships do not enjoy access to the global economy and opportunities. Enabling production, in this case with low input costs and by metabolising waste, is a way to enable economic participation and the creation of wealth. Because the programme detailed here is focused on almost cost-less ways of producing, it has major social justice benefits, albeit by the poor for the poor. The transformation of waste is another. Below, we will detail extensive engagement methods and note that this is also a way of governing food production and societies. The programme detailed here is consistent with a radical agenda to transform society and agriculture to a more sustainable system.

Entering the food system: What you need to know!

To be or to become a farmer is not a decision for many; it is a calling. Many of us are really suited to agriculture. However, do

not let this calling be your downfall: many have misjudged what

is required to become a farmer. To realise this dream is like building an aeroplane while you are already in the air. Make the best decisions that you can. The kind of farmer that you could

become would depend on the ideas that you have, the financial

and other resources available, the land that you could get hold of, and many other things like market conditions etc. These

decisions influence each other all the time and it is a shifting target. Be prepared for flexible thinking.

You have to take responsibility for everything, and you need to be strong to do so. You need to build an organisation

– your enterprise – that creates a net-positive benefit, and the

key choices which you have, revolve round how to maximise

this net-positive benefit.

The recommendations detailed in this book revolve

around four themes. These are grouped together into four fields

of action that together constitute a comprehensive business plan and programme for enterprise development, and a way to think about the kinds of enterprises presented here. Together,

these offer a viable way for urban farmers to get ahead and build

viable businesses that can deliver a livelihood for the farmer and their workers. These operationalise the best practices for circular and regenerative enterprise development.

Biological production

In the next chapter, I detail several technologies and production means that can enable a small farmer to produce with low input costs. These start with composting, but composting, for

instance, includes several different technologies, including

compost teas, extracts and specialist liquid manure technologies. It leads to mulching, to small-scale irrigation, to tunnels and other technologies. Seeds, and planting, and integration with animals, amongst others, are also mentioned. These can be integrated into cycles of production where the waste from one feed the next. It also integrates with a food-for-waste exchange, and these create the production sub-system of the enterprise. Farmers need to build such systems with the elements listed in the next chapter. This needs technology development, but also enterprise systems, and community engagement. In Chapter

Four, I detail how to put this all together…

Technology

Much of the technology that would be needed to establish a viable urban farm would need to be developed in situ. Very little of this needs to be high-technology. A simple food waste bin that is rat-proof can be developed by local farmers or inventors. Industrialised high-tech solutions are available, as well as low-tech and cheap solutions. In the next chapter, I mention how these can be constructed, and these include reference to high-tech, intermediate and appropriate technology.

The food system includes biological and physical resources, production and, ultimately, retail sales and wastes. The length of this value chain determines the share that farmers may receive but much of the unsustainability of the food system

– food miles and excessive processing – draw value from

lengthening this chain.

Local producers need to intervene and develop short and immediate value chains and consider engaging with retail and waste. Means need to be found to make wastes in all forms available for processing by local farmers and to communicate this to customers, increasing the competitiveness of production. This can be achieved through communication technology, events and tech such as food waste bins that can safely process food wastes. These food waste technologies have been developed by the enterprise Compost Kitchen in Johannesburg and this shows how such an input-generating system can work in an urban context.

We need to further consider recycling as another ancillary enterprise to the urban farm, as food can also be exchanged for recyclable waste, which in turn can be sold. This strategy includes food waste-for-food, recyclables-for-food and labour

for-food that can ensure customer loyalty, as customers benefit

from collecting. This will secure an inclusive relationship with customers and enable a farmer to become a recyclable material aggregator, and sell in bulk, or process this waste further.

What we need is a bit of experimentation and adjustment

amongst food producers, collectors and households, hawkers and reclaimers, and such an opportunity can be facilitated in a public event so that we can maximise the learning and activities that are possible.

Information and communication technologies on our cell

phones enable a democratisation of innovation, and these afford

great functionality to any user. WhatsApp and other platforms, as well as mainstream social media, enable anyone to create and manage networks and groups. These are excellent marketing, community education and enterprise promotion tools that enable an entrepreneur to contact customers directly and is appropriate for a locally based enterprise.

Social media and engagement

Social media constitute a new means of engagement, but these can be blended with real face-to-face engagement opportunities. We will detail how to host a community event at your farm, where you introduce your enterprise and all its production systems, waste exchange systems and bulk-selling specials to the community. The aim of these is to create a local waste exchange for food, loyalty amongst customers, and this lies at the circular and regenerative systems of the enterprise. Social media can bind all these together with good communication.

Enterprise development: Stacking enterprises on the farm

The farm’s enterprise development will be anchored by a system of biological production. Hence, we emphasise the harvesting of waste, as this creates inputs and also capital that can be used very productively on the farm. Biological production and waste harvesting will lower input costs but then produce needs to be sold at highest retail price, and we recommend a pricing strategy, grading strategy, bulk-selling strategy, food, labour and education for waste discounts, and integration with linear retail sales. We can also mention the creation of new products, like seedlings and liquid manure, and paid-for training. Loyalty programmes and community events are also needed to promote and build the enterprise.

To create robustness and resilience, ancillary enterprises need to be created on the farm, and product and service design needs to be blended with these, so that the “farm” is a contained enterprise unit. Collecting recyclables and bio-waste, and exchange this in a food-for-waste system, can maximise the value of produce. The exchange of second-grade quality food-for-waste and recyclables will likely give the farmer best value. Households will exchange that which they usually throw away, and gain value in that way.

When food is exchanged for recyclables, the farmer can

manipulate the prices of food so that benefit is gained through

the further sale of recyclable materials. The exchange of locally produced food for such a commodity will invoke local savings and create a new avenue to turn local production into capital value. Each farmer must become a waste manager, as waste holds the value that they need for fertility, and, to attract customers through recycling.

Should locally available open space be used for this (the City of Johannesburg’s policies have mentioned this), the urban farm will become a means to effect waste planning, food production, and limited industry if the plastics, glass and metal are further processed. All these materials are currently discarded and reclaimed, and the urban farmer can streamline value chains. They form the base of an income-generation system that needs very little capital. The inclusive relationships between the farmer, reclaimer and customers forms the basis of the viability of this enterprise model and is the means to market its products. Interventions should, thus, focus on enabling greater experimentation and adjustments between such groups

of enterprises. In this book is a comprehensive programme of enterprise

development that aims at creating viable and profitable urban

agricultural enterprises. The last chapters detail how such an

enterprise can be built, from the first sales to a comprehensive

permaculture design. We ground this in leading thinking about enterprise and new venture creation and adapt this body of knowledge to urban agriculture and the reality of under-served

settlements in the Global South.

Conclusion

The key market opportunities for urban agriculture revolve around the ability to deliver food at below-market prices. This

has food security, economic development and local area effects

and can enable the circulation of capital multiple times in local contexts before it leaves the area. Food can be made available fresh and nutritious and with great convenience in local areas.

This is enabled by waste harvesting and this further offsets prices, enabling an urban farmer to corner a significant set of the

local market for food. Waste harvesting is a way to lower prices

and create local effects. This will make available significant

quantities of biological materials that can be transformed into

an input for production. This is the key opportunity – low capital intensity and high value food production – that will

create capital in under-served areas. Recyclable materials that

are harvested will have income-generating effects and also

make an impact on local waste management and local incomes. Organising these systems will rely on community engagement, and this creates ways to manage and govern urban agriculture.

These engagement systems will benefit community education

and knowledge of nutrition. We are, thus, confronted by a wholistic system of food production that can be extended to

creating bulk-buying offers to communities, and further to

loyalty programmes.

This chapter detailed the background information which you need to have before you start farming, and it presented a structure for the book. The next chapter lists the essential technologies, both hard and soft, that you need to consider in planning and creating your urban agricultural enterprise.

Chapter Three

Thinking about biological technologies

To realise a sustainable food system, we need to build the capacities of farmers to farm sustainably, as this brings forth resources and makes enterprises more robust. This can be achieved by building knowledge and capacities to use biological

technologies to great effect. Farming biologically allows a

farmer to manufacture inputs themself, and this is perhaps the

greatest benefit of biological agriculture. It de-links the farmer

from expensive input markets and allows the farmer to produce

food much more profitably, albeit at slightly lower volumes. There are many names for this, from ‘organic’ agriculture, to ‘permaculture’ , ‘regenerative farming’ or circular agriculture.

There are also movements, like the Zero Budget Natural Farming movement in India and Via Campesina in Latin America. NGOs also proliferate , but many are searching for an alternative

agriculture that has promise for local jobs, food and income.

A community-based agricultural strategy builds relationships between the farmer and local actors who can exchange resources for food. A biological approach allows a farmer to guarantee the quality and safety of food, as no chemicals are used, and this

has immediate health benefits. Biological systems are accessible

and inherently safe, and it is in the ability to understand and manipulate them that the farmer can protect and extend their own ability to produce. Biological systems have the capacity to process wastes, and this enables inputs to become cheaper.

This creates a new dynamic of profitability around inputs and outputs, and this is where opportunities for profitability lie.

If waste harvesting from consumers can be linked to food sold at below-retail prices, they will be involved in the lowering of their own food prices. This is a real competitive advantage and differentiates urban agriculture from current retail and commercial agriculture. This will create incentives for the exchange of biological resources for food and is a key operation for an urban food enterprise. This creates sustainability and a new value and revenue stream. This illustrates how a biological

approach can be beneficial, not by virtue of its biological distinctiveness, but by virtue of the beneficial relationships

that it creates with the local community. People need to see that their “waste” creates a locally produced and competitive product. Biological systems need to deliver value to the farmer and customers, and this can only be achieved by constructing a very advanced and interlinked system of production that exploits consumers’ own waste habits and builds biological productivity through an agricultural ecosystem.

Below, I will emphasise the basic technologies that a farmer can construct on their farm to produce at maximum volume whilst building the ecological base of the farm. These technologies all draw on locally available materials and are offered as means to stimulate debate and further innovation in implementing these. Once a farmer is able to use these technologies effectively, they will be able to use additional help and newer technologies even better. However, it really is necessary that the basics of engagement with technologies are understood before substantive assistance can be used properly.

When technologies are combined, or converged, circular systems can be created, and benefits start multiplying. When one process feeds a next one, it reduces reliance on financial capital, and this is important. It is necessary to build a netvalue-creating enterprise before you accept a financial injection for your farm. The construction of an enterprise is dependent on the identification of a simple net-value-creating transaction structure. You need to see how to put together the first “deal” by streamlining systems and processes, as this transaction, and the enterprise itself, is in fact a number of systems built to ensure this simple transaction. Once you have identified this net-value-creating transaction, you can then build circular and productive systems of resource use on top of that, and once this is achieved, the organisation can respond to new finance. This is because of the productive arrangement between the systems: this will mean that finance will lead to greater sales, but the systems must be there. Never accept finance until you have these systems in place, and until you have traded for at

least six months. You may only be able to repay the funds, if these systems and transactions are in place. If you receive funds before you are able to construct systems, you may lose a lot as you need time and resources to experiment with making these

systems and transactions work! You want to be ready to repay a

loan before you apply for one.

Enterprise Design

The enterprise design of the farm is where all the recommendations below converge. I set out what this could look like in the next and in the last chapters of this book, where I discuss enterprise development. To make the farm work, a number of key things need to be in place. Small farms are in competition with large supermarkets and their systems. To beat them, a few complex suggestions need to be made, and farmers need to take heed of this.

The reason that supermarkets dominate the food

landscape is because they can efficiently organise collective

action amongst their suppliers, workers, inputs, technology, labour contracts and employment schemes. Large organisations like supermarkets can interlink this with technology and management styles and draw on a base of commercial farmers. These farmers produce in such high volumes that they must sell their crop as soon as they harvest, if not before. This

then builds the wholesale food market, and this is beneficial

to supermarkets. Urban farmers will not beat this system, but they can

find value in hidden niches in an economy dominated by

large players. The cost of buying, transporting, distributing and selling kitchen vegetables is expensive and complex for supermarkets to undertake, as we discussed in the previous chapter. Urban farmers can deliver these kitchen vegetables at a lower price, and this is the key point of entry into the market. Farmers all need to understand what creates and makes possible this niche and opportunity in the economy, ecology and society. It is by working to protect this space that urban agriculture, as it emerges at the moment, will thrive.

Below, I present these technologies as a list of things that you can do. However, these actions take place in four fields: Enterprise Development, Production, Technology and Engagement. These themes overlap and they inform each other, and you as the farmer need to see how they interrelate.

The Essential Technologies

Design and planning

Animals

Tunnels and infrastructure

Safety and security

Biosafety is important, but less of a concern if integrated biological systems are developed. Integrated biological systems

maximise the flow of organisms and is “dirty”, but this “dirt”

also creates a diversity that minimises the occurrence of any single pathogen. However, it may be good to think about the following:

of the field, and encourage people to harvest those outside

your fence. Try to bring them into the garden by explaining what you are doing and make the food waste exchange known to them.

• Your fencing is a marker of the limits to your farm, and it is important. Try to build a neat fence that will also contribute to your branding.

Enterprise development

From a farm to an enterprise: Farmers need to understand that the way that they sell is most important in their business development, and this is even more important than how you produce. The next chapter offers more details. The key features

of such an enterprise will be the following:

weight just like supermarkets do so that you can show

people how they themselves lower the price of foods. You

need to invest in a scale!

• A traceability system: let people know how you produce and where their foods come from. Mention that you obtain seeds

from a seed library!

• Connect nutrition and good living with the foods that you sell and produce. Take a look at the previous and next chapters to see how we integrate the product design with

enterprise development!

A retail system

Distribution and logistics and marketing

Logistics is how you organise the complex activity of distributing your produce. The logistics system has to be focused on the customer of urban agriculture. Because their behaviour needs to feed into the enterprise, it has to be based on relationships and synergies with your own enterprise development. These relationships can be built by using engagement methods and an urban farmer should consider hosting an event on the farm to build these relationships that would become the logistics system that will distribute the produce.

The first thing an urban farmer wants to do is to reduce food miles – the time and distance that food travels to the

customer. By eliminating these, the urban farmer becomes competitive. This is important, as urban agriculture can only produce low volumes of food, but at highest quality, and this is

what needs to be promoted in marketing – freshness. Logistics

need to enhance this by eliminating food miles and to make “same day” deliveries.

Urban farmers need to identify their markets, and it may pay to focus on immediate markets as this is where the logistics

can make a difference. This needs to dictate the ways that the

logistics will operate and where the food will be distributed to

amongst customers. Find the local market!

Here, customers are important, but additional relationships with hawkers, informal traders, formal traders and others like ward counsellors also count, and engagement methods can create these relationships. Social media can be used to manage and maintain this system, and the functionality of a business account needs to be exploited, as this gives insight into customers and their behaviour. Blend this with an electronic payment system. An electronic payment system can create a database of customers that can be coordinated with other social media services, and this is how a customer database can be created and maintained.

The engagement methods can also “sub-contract” logistics, say with hawkers, and this will also force urban farmers to professionalise their offering. Because someone else may be selling on behalf of the urban farmer, it may be important at this point to develop a brand so that people can know where the food comes from.

This is the selling point that urban farmers need to develop further. A farmer could sign up to a standard like the Participatory Guarantee Scheme (see: https://www.pgssa.org. za/ ) for organic produce and this could build a reputable brand.

The use of social media can help a lot, as farms can be

plotted on Google Maps and farmers can coordinate from here.

This will also place the farm on a larger map, and this could reach new customers.

The distribution system will also bring in wastes – through an exchange programme – which can now be identified and re-processed into valuable products, like animal feed or compost or worm casings. Once a farmer is on the map and able to trade, they can use current apps to reach additional markets.

An electronic payment system will also professionalise the sale

and leave an electronic trace from the customer on the app (if it has this functionality), which enables a customer to be reached

again for new sales.

WhatsApp. The ICT Promise

A good farmer will keep a list of customers on a WhatsApp group, and this will be the basis of sales, consumer education and events, and the waste-harvesting strategy. On social media you can also present your branding: With a beautiful name, everyone will know you and you will sell more. A social media presence doubles up as a communication and education channel. It is key to marketing, and to your loyalty programmes. Bulk specials can be communicated through this channel.

Social media is a great way to advertise and to build a reputation as a farmer with high-quality produce. A farmer is a leader in their community, as the farmer is the one producing food, and one who accepts wastes as inputs, contributing to the health of the township or local area and the health of the people. Advertise this and make yourself heard!

Consider changing your WhatsApp or other account to a business account. Start playing with the analytics of the service. This will tell you where people come from and will reveal many things about your customers. React to these and build a comprehensive social media presence in your area.

Events: Engagement and inclusion of stakeholders

Most businesses would see inclusion, trust and engagement as

“nice to haves” but not essential for the pursuit of profit. From

the above, it is clear that engagement is a key consideration for urban farmers. There may be many other things that make

profit possible, but the development of a sustainable and

circular business needs to place inclusion, trust and stakeholder engagement at the core of the enterprise. This is because of the convergence of technologies, wastes and by-products, systems and behaviour, and relationships and interests that are combined in a sustainable and circular enterprise.

Engagement opportunities are a lot like a group discussion on an important topic. Anyone can do this, and it could become a feature of your enterprise if you host regular community education days. In this way, you will always be ready to develop new products or services for the customer, and customers will become familiar with how you work, and become active in helping you in developing new products and services.

This approach shows us how an enterprise can incur savings by reorganising people and society. In a sense, the operations of the enterprise, like collecting recyclable materials, takes place outside the enterprise (as customer behaviour does this). However, engagement methods bring this outside behaviour within the sphere of control of the entrepreneur, and this then extends the activities that enrich the enterprise.

This way of organising the community also allows them the opportunity to shape your enterprise and the services and

products that you offer. They will feel that they have a say in

your enterprise, and this means that you can develop further programmes like loyalty programmes and also organise events like a harvest day.

An entrepreneur should organise an event at the enterprise, and this will set up a system of engagement. In this event, the entrepreneur could aim to set up a recycling facility or food-for-waste system at their enterprise. An event could be organised that would have to start with the basics of consumer education about good food. This is ‘fresh food’, and every urban farmer should realise this is the unique advantage that they have in society: to be able to sell food at retail level that is very recently harvested. The consumer education should go further and show the importance of conserving and enhancing the soil, as this guarantees good fresh food (and deals with waste in general). This can be achieved by processing food waste into compost, and people need to be shown how this takes place. When they see the dark compost, that smells rich and hearty, they immediately see the difference with stinky rotting food.

You, as the entrepreneur, need to start a process of education on how they can contribute to the improvement of their own quality of life by cooperating with you, the urban farmer. This sequence of events and incentives that you create, is in fact, the core operation of your entire enterprise. You build the enterprise based on the behaviour of your customers. You want to keep them close and secure their inputs into your enterprise, as this will sustain you over time. A food-for-waste system that would enable the entrepreneur to collect recyclable materials in exchange for discount on food sold would realise this new process in your enterprise, and this can be set up with an engagement process.

In proposing this offer, people could be organised into a workshop. This workshop could ask the following questions to your customers:

not bewitching them by processing their food waste!

• What would the enterprise need to accept recyclable materials in an acceptable way? Do you have the right

technology to accept these (and this would mean acceptable containers for the recyclables and the food waste). Build a

steel cage to process compost safely.

• What else can be “doubled up” to ensure savings for the

customer and loyalty for the enterprise? (After asking this

question, you can start introducing your food-for-waste

offer.)

Environmental and social governance and “community benefit”

Many farmers aim to “benefit” the community with their farms.

Please note that the most important impact that you can create for your community is to sell food at a competitive price. This must be the highest achievement that you can make, and this enables people to thus spend their own money much wiser.

Engaging with the community is, however, important and this is undertaken to ensure future sales and customers. Many farmers use such engagement to educate learners about good food as the learners perform some labour for the farm. The organising of such community events can mobilise labour for things like planting, and this brings people into the farm. Integrate this with your loyalty programmes so that learners and their families receive good value and training from you for the labour performed. This process can release labour to beautify your farm, and the place, often a school, that gives you the land.

Do not sell yourself short when organising such events but also invest in the community, as they are key in your profitability. Keep in mind your leadership position as a farmer in the community: you can help with waste, beauty, education, learning and eating.

Compliance land and access: informal and formal tenure

The most important part of an urban farm is the access to land. Many can help in this regard, and keep in mind the by-laws of your city, as there may be some support for gaining access to land.

Many farmers succeed in signing a lease contract, often with schools, to gain access to land. Try to gain security by having the lease run for more than 10 years and speak to farmers who have succeeded in concluding leases to gain access to land. When concluding a lease for land, make sure that you can transfer the lease to someone else. This will allow you to “sell” your farm – at the cost of building deep trench beds and infrastructure.

When concluding a contract to gain access to land, note the following:

how much you deliver for record-keeping and to justify

your involvement in the school.

• Teachers: Link with teachers so that you can use your garden for entrepreneurship education, nutrition education and to build relationships with the teachers. Teachers are a

first customer!

• Learners: Learners can be used as a form of labour but note

that this will have to be reciprocated. Give training and food

in exchange for labour.

• SGBs: Let the school governing body or authority know what you are doing and let them understand the impact that you are making. Organise activities like refuse collection, to

benefit the school.

• Parents and learners as clients: Parents and learners can be easily linked to food-for-food-waste and recyclables schemes, and the bulk-buying schemes.

The above constitutes the minimum that any local, township or emerging farmers can do to be productive and capable. In the chapters that follow, we will detail how to implement the systems spoken of above. In the next chapter, we take a look at

the four fields where action is required to set up a viable urban

agricultural enterprise.

Chapter Four

Introduction: Thinking about product and service design for urban agriculture

We have discussed the overall approach to enterprise development and mentioned the idea of a unique value proposition for urban agriculture. The UVP and your enterprise, including its systems, operations, resources and opportunities,

how the enterprise should be designed, and how it fits in with

society, should guide us in building it. The previous chapter detailed the technologies and social arrangements that you can use in building this enterprise. This chapter and the next focus on starting and developing the enterprise, and after that, the next two chapters focus on building the enterprise further, and its compliance to laws and regulations and the strategic

management of the enterprise, including its finances.

The overall approach that we are chasing is enabling local

capital – and value – to circulate several times in the local area,

before it leaves through spending on distantly produced goods and services, especially food. This is one of the keystones of the strategy that is detailed in this book and underlies the longterm viability of the enterprise. This calls for the development of local systems of circulation and exchange. This is the Nxazonke: the individual systems should all interrelate and build value between these sub-systems.

The suggestions that I make come from time spent in interaction with farmers. Many of these suggestions come from them. Many others are gleaned from the Internet and other publications. How I combine them is, of course, my own creative work, but the way that I articulate it is also mindful of a critical analysis of the food marketing system, and the

place of small-scale and urban farmers in it. I am trying to find

and create a niche market for them in the gaps in the market and the ecological failures of the current system. Here, where informality, ecological opportunity, economic productivity and food intersect, an alternative system is possible. This system can metabolise and process urban wastes into agricultural

inputs. It can sell effectively. This system would have to

organise communities, both as customers and suppliers of such urban wastes, as part of the enterprise. Its sales, marketing, branding and identity, and products and services, are deeply intertwined with these communities, and it is this that brings a competitive advantage.

The local production and processing of wastes need to be seamlessly integrated with enterprise development. The form of the enterprise that results from this integration of waste processing with sales will have regenerative and circular features. To do this, we discuss the process of enterprise development and how you should go about building this enterprise. I have proposed a retail model for this urban agricultural enterprise that adapts and implements the idea of a circular enterprise to local conditions. This is the material which we will work with, but this chapter will describe the processes that you should set up in your enterprise. In a separate chapter, I detail what you can do to start such an enterprise.

We will describe careful steps , one forwards, and two back, in setting up the enterprise. We will emphasise the opportunity for learning in developing these new approaches. Urban agriculture is unusual, and communities will take some time to become familiar with it. The way that we will do this is by careful experimenting with product and service design, by implementing it, and then reflecting and learning about these new interventions. This is a careful, safe and low-risk approach that will stand urban farmers in good stead as they attempt to build and expand their enterprises.

Retail development: Building the UVP of urban agriculture

To really “build” a business we have to understand how a

business figures in society, as society gives it a reason to be and creates the needs that business satisfies. In the chapter

on compliance, I detail the social contract that underlies the need for compliance and registration. The social contract is an “unsaid” arrangement that underlies society and our consent to be part of it. We give our consent to those in power, but in

return we expect benefits from society. The most important benefit is that society should protect you and all of us. That is

why we need to regulate business, so that it creates value for society and not only for the entrepreneur. For urban agriculture, it is the farmer who has to pioneer this contract and create the

benefits and trust that are needed to trade.

What a business offers, stands in a certain interaction with what other businesses offer, in addition to being in

interaction with social needs, and customers. The way that

a business defines itself is in interaction with others, but the dynamics of this interaction favours difference and the creation

of something unique to each business. This uniqueness could be part of any feature of the business, and could include the

product, price (often most important), or even something like

location and appearance.

The creation of a business and its identity depend very much on the consistency between the activities that occur in

the business and the product or service on offer. If one wants

to create an “organic” product, there has to be consistency

between this final “result” and the ways that it is created.

The “unique value proposition” of a business is the unique selling point and advantage that the business has, and this shapes the interaction between the business and its customers, and the interaction with other businesses. It guides the entrepreneur, the business plans of the enterprise, and the way that the enterprise functions in society. In this chapter we will discuss this UVP for urban agriculture. What is it that urban agriculture can offer the world? What about this UVP is important and how can we build and enhance this?

This competitive advantage is the source of community

and human benefit, both in the form of products – food –

and the value and processes that they can command. It is by lowering food prices that deepest impacts on food security, hunger, cuisine, industrialisation and human development can be felt. To sustain such below-and competitive-with-market prices would need the farmer to be skilful in harvesting inputs from the community, and exchange these for the value that they pay for food. Somewhere in the farmers’ value chain, inputs or processes are needed that deliver outputs at below-market prices. The craft of enterprise development is to sustain this below-market price throughout the value chain and deliver a product or service cheaper than competitors. An urban farmer has many opportunities in the value chain to lower the cost

of a product lower than what others offer, and this is the key

competency of an entrepreneur: you need to tinker and adapt

each process in your business until you find this below-market

point and sustain this saving throughout your enterprise.

The economic opportunity for alternative production means for fresh “kitchen vegetables”, is also created by the long supply chains of industrial agriculture. These may be appropriate for grains and high-value fruits, but add an unnecessary logistic

cost – transport, processing, or distribution, to vegetables that

can be grown in a wide variety of places. These vegetables are also the cornerstone of a good human diet, and lowering their

costs, offset by free ecosystem services (which will produce

at below-market rates, as commercial farmers do not use

biological technologies extensively), will have clear human and

economic impacts. Farmers in industrial agriculture receive a small fraction

of the final value of these products. Urban agriculture can be independent of these systems, provided that it finds a way to

manufacture its own inputs and commands the whole value chain from production to retail. This is when prices can be lowered, beating those of established retail. However, to establish a lower-than-retail price, the service of the ecosystem needs to be linked to the enterprise model. This is how the niche for urban agriculture can be created.

Urban agriculture’s unique value proposition

The unique value proposition for urban agriculture, can thus only be:

The creation of a price-reduction mechanism for urban agricultural produce through the local recycling and repurposing of waste.

The ways in which the community is engaged in this model

is important. To continue with this model, the benefits to the

consumer of participating must outweigh what they would

receive elsewhere. The benefits to the farmer would lie in

receiving the waste at better-than-market rates, and hence, this advantage must be carried through the whole value chain. It is necessary, if a biologically based means of food production

is adopted, to secure significant and abundant quantities of

biological matter. The relationship between the urban farmer, their customers -and some other stakeholders -is important

here. This waste exchange relationship must harvest significant

quantities of waste, at lower-than-market replacement costs,

to offset the reduction in price that the customer will receive. This will be beneficial if a fair price between these interests

can be achieved, and this can only be established through trial-and-error by farmers, in an engagement process with their communities.

Integrating the unique value proposition with your urban farm and shop

The above exchange schemes, together with the price at which you sell, is the heart of the value proposition that your farm

makes to society. This arrangement is very different than a

normal consumer could expect from a supermarket. What is important here is that you are enabling the consumer to lower the prices of their own food by their own behaviour – by bringing recyclable, food and other waste to the farm. Note that each person consumes more than R800 of food per month, and we have calculated that up to R304 per person per month is available to spend on vegetables and fruit. This indicates what could be spent on the kitchen vegetables that you grow on your farm. This transaction mechanism underlying the waste exchange, I believe, will enable you to gain access to and keep

the majority of customers at your farm. Be aware at all times

that you have a clear competitive advantage over supermarkets because the large and costly value chains that they have established. In addition to this, you have quite a few additional strategies and tactics at your disposal to either lower prices of inputs, or to optimise a process in your enterprise in order to cement and consolidate your position as a leading producer or retailer in your area.

Starting the business: Do not start with a “big bang”, where your enterprise is completely built and structured. Start with the first transaction and build upon this. Start with what you have! In the next chapter, I discuss how to start an urban farm with very little money. You can use and try these suggestions. You can also use this to start a new revenue stream on your farm and note that the act of enterprise creation is very much the same as the creation of a new product or service. If you want to know more about the approach to enterprise development that inspired me, take a look at the idea that we need to “effect” our enterprises .

Focus on these first transactions that you can make, and do not take any unnecessary risks when you start your enterprise. You have to keep yourself safe. Only “wager” what you are prepared to lose. This means that you should invest and take some risk but only take a risk with an amount of money that you are prepared to lose. This is how you lower risk – by not going for a ‘big bang’ enterprise launch. Start one day, say, with buying food in bulk and selling it like a hawker. Do this not to make money, but to understand how people spend money on food. Do this as a way to learn about customer behaviour.

If you see this is “working” for you, then you can establish it properly, and consider how you can expand this system and save even more. A next step would be to collect recyclables, for instance, until you have enough to finance seeds and labour. Take a look at the next chapter that details how you can start an urban agricultural enterprise. You should go forwards in careful steps, and retreat and learn, before you either expand or stop this new way of selling. This will lower risk and if it does not work out, you will not lose everything.

When you fail in selling or recruiting a customer, do not despair, but see what you can learn from this failure. Let’s say that you tried to sell seedlings. You invested in trays and effort and now have a lot of seedlings. No one came to buy from you, and now you have a lot of unused seedlings available. Immediately stop and reflect what you can do. The seedlings have great value. You could simply plant them, but you may have already planted in your own garden. There may be many options still to safeguard the value in these seedlings. You could give them to another farmer and arrange to get 50% of the crop sales at this neighbouring farmer. You could also bring a new piece of land into production. You could also make these seedlings available to the community surrounding the farm, so that people can grow them at home. You could do this, as you can then sell your liquid manures to these farmers. In effect, you are creating a market for your liquid manures by giving the seedlings away for free. This may still pay you some profits!

The farm / shop enterprise

You should be thinking of yourself as a producer or retailer, and this hints at the character of your business. You need to integrate the food exchange schemes with your food production systems, and supplement this with your pricing strategy,

your grading of the produce (first-, second-and third-grade.

Third-grade should be given to animals and second-grade for

the waste exchange schemes), your bulk-buying events, your

loyalty programme, and the events that you hold. It is in the integration of all these functions, and the development of multiple enterprises or multiple revenue streams, that you will create this unique value proposition. The suggestions below should be implemented as experiments and create time

for yourself to reflect on how this takes place and be ready to

change and optimise these activities.

The brand and name of the farm

You should have a beautiful name for your farm, and this anchors your farm in the minds of your customers. Try to add a phrase that indicates that you are collecting waste, and that this can be used to lower food prices: “Jabulani Farm and Waste exchange”. Something like this will create an imagery in the minds of your customers and this is the cue that you need to build on this imagery. This imagery comes from your UVP and elaborate and build upon this. Once again, implement this, and

then reflect on it.

Your shop

The presentation and experience of buying at your shop is

important, and you will get the customers back if they enjoy

spending time with you. Organise activities at the shop, from food education days to bulk selling opportunities. Your shop must become a place of celebration and good food. Once you

are ready, start to introduce new products (also convenience products like any other spaza shop). You could do this in partnership with a neighbouring spaza shop or do it alone. Once again, start small, and do not wager too much money on this.

Buy some of these products, try to sell them, and reflect on how

this took place.

Selling and the customer experience

This may be one of the most important aspects of your business.

Customers need to enjoy the time spent at the farm. You can

enhance the experience by making it look neat and tidy and presentable. You need to look like a decent shop and use the

space available to maximum effect. You are a farmer and what you sell is very different

than what we may expect that a normal shop would do. The experience of retail buying from a farmer in an urban setting is

unusual, but we want to find a way to institutionalise this. You

thus need to make the most of the beauty and appearance of the farm. Take the time to talk to your customers, as there may be small things, like opening hours, or time spent in waiting, that may not appeal to them. This could help in setting up hours for sales on your farm. You need to structure your time well, so that you have enough time to both sell and work on the farm.

Here, you would need to experiment a lot to find the best way

of selling. You will also be hosting events where you sell in bulk and

educate the community on the benefits of local food production

and the nutritional advantages of eating fresh produce. This needs to be integrated with the customer experience. When people buy, let them learn a little bit about the plants and

animals that supply them, let them see the beauty of the flowers

and produce that you grow. Let them understand the intentions of the urban farm: to deliver good food and bring additional

benefits to the community. You can experiment with facilitative

methods at such an event, and you can use the interaction at such an event to gain great insight into how your customers would want to buy.

Integrate the customer experience with how the plants grow, how the waste is processed, and with the impacts that the farm makes on the community. Develop a little tour of your farm so that customers know what they get from you, and how they can contribute to lowering their own food purchase costs. This will release a lot of information, and you can react to that.

Packaging and presentation – even with nothing

Why? This is an important feature of your business and even if you simply tie bunches of spinach with a string, the reason why must be clear. It is good to sell without packaging but the reason for this must be clear. This will lower costs, pollution and waste, and this must be emphasised together with the impact that the enterprise aims at. This enterprise must put the community’s health and well-being at centre, and this is a unique selling point.

The food exchange service

You are now providing both a service and products to your customers. The service is the management of the waste of your

customers. This service flows into your production system, and the system of exchange and processing (composting) is the link

between the service and the product price.

This system will be unusual for your customers. What you need to do is to showcase this system to them in an event at your farm or shop. You have to show your customers what happens to their food waste, and the recyclables that you harvest. They must see how your compost pile or cage works, what your wormery looks like and how you use the compost in the soil. This will show them how you turn their waste into value, and this will integrate them into your enterprise. This can be extended so that they also understand how the biological systems stimulate fertility and, hence, higher production. They

need to see how they influence this higher production, as this influences the price that they will pay for food. Now you have a

system in place that you can enhance, maintain, and establish with community engagement methods.

Production systems and sequences of biological cycles

The sequencing of biological cycles is what creates fertility and moving material, like food waste, from one sequence to

another builds value. You should first of all, feed food waste to

animals. Animal manure should be composted or fed to worms, creating another cycle. After the worms have processed the waste, extract the tea, and sell excess worms. Take the casings to either a liquid manure system or compost it. A part of the

final compost should always be used to make a liquid manure or

compost extract, and to stimulate the new batch for the future. Many add several additional systems. Animal manure

will attract flies, and the manure can be left out in the open to

attract them. After one to three days, the worms will emerge,

and this can be given to chickens who will find the worms and

eat them. After this, earthworms can receive the manure, and value can be extracted from this as well. After removing worms

(which can be fed to indoor chickens) and the tea, sell them,

and the rest can be used for compost in the soil.

Showing customers how these systems work, and their place in it, will convince them of the acceptability of this way of producing food. This system includes the customers and their experience of engagement with the enterprise, which is what will keep them as customers. This experience can be created and enhanced by hosting events at the farm.

Bulk buying / selling days

If you establish a retail presence by developing a shop, you have a base to work from. From this base, a lot is possible and can build on and be combined with the events that you host.

Consider hosting a bulk selling day where you sell staples in bulk at a low mark-up in order to attract customers to your own produce. Try to sequence it with a harvest day when you may have a surplus of say, spinach, or a day when wages are paid. People will need spinach to eat with the staple. You can build clientele and loyalty, and market the day as a “food for the community” day.

To organise this, you need space and perhaps other amenities like tables and chairs. You would need money to buy the staples in bulk, but if you do not, consider this as an exercise in finding a way to host such a day without money. Below are a few options to consider when planning this. If you do not have money, do not despair, as you will never have enough money to expand unlimitedly. Learn how to deal with insufficient money and improvise!

Some of the many alternatives include:

1. Partner with a bakkie trader to get the staple delivered. You

could, as an experiment, offer them to sell this at their price

at your event. This will be market-related price but could build customers.

2. Partner with a bakkie trader, after you have built up enough customers. Now you can negotiate a reduced price from the bakkie trader because of the numbers of customers. Now

you can offer real good value to your customers.

so, but you may find the right one at the right time. Try this

with green mielies, maize meal, potatoes, or any other crop. It may be that farmers have surplus to sell, and you may get it at a very low price.

After you try the above, reflect on how this took place. You will

identify challenges and bottlenecks, and in a next round, try

to fix these. Give yourself enough time to find the sweet spot where this is working! Spend time with the bakkie trader and discuss this opportunity. You may both together find the right

solution in no time.

Additional enterprises at the farm

Your events act as a way to educate the community about

the benefits of your produce. You should be aware that you

as an urban farmer can deliver highest quality of the kitchen vegetables which we consume, better than anyone else. Your freshness is one hallmark of your UVP and emphasise this. You have now established a base upon which you can build a loyalty

programme (for surplus harvests), a bulk-staple buying club,

and in fact an enterprise.

Establishing an enterprise – a shop – enables you to sell consumer goods in addition to bulk specials and other offers. This enterprise will grow and sell food, harvest food waste, collect recyclables, collect high-value biowaste, host events and make available special deals like bulk buying specials, in addition to consumer products. You could be very creative in setting this up.

You could host other enterprises at your shop as well. Note that there are quite a few local industries in our townships, from furniture manufacturers to clothing manufacturers. They may be interested in occupying space at your farm, and this will be possible if you can attract sufficient numbers of people to your farm. Your farm may become a community centre or a “corporation” …

A database of customers

When you are selling to a small number of local customers, the nature of your communications changes. You are primarily interested in contacting and communicating with people who live close to your farm, and who live closer to your farm than to any other farm or shop. In the future, we may see many new urban farms emerge, and you want to keep your customers. You need to develop a database of these customers, and this is best done electronically.

WhatsApp and SMS systems limit the number of people who you can contact and message. In these cases, you simply have to develop more than one distribution list, and the database of all your customers is the consolidated distribution list. You can also broadcast on WhatsApp. Note that if you keep only someone’s phone number without a name on a database, it does not incur any compliance with the POPIA (Protection of Personal Information Act), and you are free to keep people’s phone numbers without names. However, if you keep names and phone numbers together you incur compliance with the POPIA. Two things are important: You can keep information if it serves the purpose to which you will use the information. Hence, if someone gives proper POPIA-compliant permission to keep and process this information to make sales, then you are free to do so. If you record sales, what people buy etc., without any identifying details, then you are also free to do so.

Engagements and events: how to keep it all together

To organise an event, you do not need to be an expert in

engagement. Give your customers a free lunch – and make it a salad! Organise an event that includes a tour of the farm or

shop and all the systems. Take a group of people through your farm and show them how you produce food. Show them your food exchange systems, including the recycling systems. Show them the shop. Talk about your intentions to produce food,

allow customers to influence the price, and set your price point. Talk about the deeper effects of operating a farm in this way:

over time, food prices can be lowered and the general human development of the community, as well as waste management, will improve.

You should extend your face-to-face events to social media. Even SMS is relevant here and is sometimes a cheaper option than WhatsApp. You need to establish some kind of online relationships with your customers and a message service like SMS and WhatsApp may be all that you need. Should you engage with platform social media like Facebook, Instagram etc., you need to note the data costs, but this can also be effective.

Use these forms of advertising and sequence them with buying behaviour. In South Africa, social grants are paid in the first

week of every month. Wages come in at the last week of the month. Government employees are paid on the 15th. These dates are important for planning your sales and sequence your harvests and your events with these days. On these days, you need to catch people before they spend their cash. If you have a big harvest outside of these days, you will need your

distribution lists!

Social media, business accounts and record analysis

WhatsApp and SMS systems themselves do not record analytics, but if you have a business account on WhatsApp, then the account will allow you to analyse the information from those who have contacted you and with whom you are dealing on WhatsApp.

However, you can do very well with paper-based records, and you should always have this as a primary register of transactions and as a back-up if you transfer all to electronic records. Electronic payment machines also keep a record of transactions, but no notes and details. If you are a registered company, you need to keep records, and simple income and expenditure records will be sufficient. If you can add details on these records, it will be better, but if you use a registered auditor for this, they will be able to tell you what they need you to do, in order for them to do your books for you.

When you make sales, try to, in addition to recording this on your income sheet, note the following:

Take a look at your records every day, every week, and every month. You need to take a look at these to see if any trends or patterns emerge. This is important for your sales strategy. For instance, you will probably notice that you get lots of people buying right after the social grants’ payday on the 1st of every month. You will notice an uptake also on the 15th and onwards, when government employees receive wages. The last week of the month is when wage earners will normally receive their wages, and you can expect sales to pick up on these days too. This can enable you to adapt your harvesting and other calendars, and you will see on what days sales will be low, and on these days, you need to double up and work in the garden.

Knowledge always creates new opportunities!

If you have a business account on WhatsApp, and if you use a Facebook account to contact your customers and stakeholders, you can analyse the data that this generates on the analytics feature of these computer programs. This will be very useful, and you can gain a lot of insight from this. Play around and see what you can learn and see how you can react to this in your business operations and systems.

Partnerships

Partnerships will be key in setting up the systems above, particularly in the early days of the enterprise. Partnerships need to be approached with some thought and circumspection.

They are experiments that need to be implemented, reflected

upon, and then changed if needed.

You have to understand the interests of your potential partner and understand that they are also seeking value in such a partnership. You should also know your own interests in approaching a potential partner and be aware of what you are

able to offer, and what you need to get in return. It may benefit us to think of the “game theory” of

partnerships. In a partnership one partner may exploit the other partners, or you could compromise your own interests. You should approach the partnership in such a way that you want

to find the “sweet spot” where your interests and the interest

of the partner is secure, otherwise there would be no reason to engage in such a partnership. Be aware, however, that one partner may compromise their interests in this partnership, and this could undermine the whole deal.

You need to know what would benefit your partner, as you need to know what lies in your own interest. Approach this negotiation with integrity and honesty, as this will condition the relationship. However, keep your eyes on the business that this may generate, and let the business, and making the deals, lead this relationship. This is not about “getting” something from the other party, but the creation of new opportunities that would not be there if both of you were alone.

Stakeholder engagement

In this chapter, we have spoken mostly about customers. Customers are direct stakeholders to your business and farm, but there may be very many important indirect stakeholders. These indirect stakeholders could include your “landlord” from whom you gain access to land, the teachers at the school where you rent land, the ward councillor, or a farmer who supplies bulk staples. It is important that you cultivate good relationships

with these stakeholders. They will influence your business significantly, as they talk to others in circles that are outside

your local area. This will build general societal support for your urban farm, and for urban agriculture in general. Note that, in a real sense, the partnerships are also part of your business.

Contracts and enterprises

Engaging in a partnership will introduce you to the world of contracts. The terms of the partnership should be seen as a form of contract. It is important in this regard to honour the written and spoken word, and to build your integrity and trust based on this contract.

You will have to deal with contracts, particularly for land, sooner or later. It is possible to gain access to land for an extended period, but this should be secured in a contract. Make sure that the language and terms of this contract is “enforceable” by a court, and the contract must be “professional” otherwise you may lose your land after a dispute. Be mindful of those who used the land before you, and the interests of the landlord.

In a subsequent chapter, I talk about compliance, and part of this is engaging on the social contract with politicians, officials and others in civil society. Urban farmers need to be prepared to do this, and this creates their “licence” to operate in society. This social contract is a different contract than a legal contract and has a lot to do with the blessings that your community gives you to use the land. These can help to smooth disagreements and build the trust that you need to continue trading well into the future.

The above constitute the key themes that you need to engage with in enterprise development. We now turn to the waste exchanges that are a key part of this enterprise. All these need to be approached as experiments and pilot projects and give yourself time to reflect and amend these arrangements until you find a working arrangement. Your most important experiment is your food-for-waste harvesting systems. You need to set these up as soon as possible. We now discuss these below.

Setting up food-for-waste exchanges

We can distinguish between different wastes, and each one

has value. An urban farm can become a place where all these can be reclaimed and recycled, and you can do this at lower cost than reclaimers. There is already a well-developed sector of reclaimers in most of our townships, and the harvesting of waste brings them into the ambit of the urban farm. Reclaimers

gain significant incomes and save municipalities lots of money in landfill costs. They recycle a large part of our plastics.

Reclaimers frequent the iZindaba Zokudla and they are able to gain livelihoods by recycling waste, and this means that there is enough value in waste to start a farm. Take a look at the next chapter where I discuss ways to start urban farming by harvesting waste. Urban farmers can “go it alone” in harvesting recyclable waste, but it might be good to consider how a partnership with a reclaimer can work, even if you are “going alone”.

Reclaimers will know the relative prices that recyclable waste can command in the open market. You have to engage with them in order to establish what would be the right price for recyclables that you can harvest from communities. It is important that these prices are set correctly at both parties’ benefit. The prize that you are chasing is the low-cost harvesting of waste, and this may be more beneficial to both of you if customers bring this waste to the farm, as the high cost of searching through rubbish is avoided. Note that this “institution” of reclaiming waste will change as you engage with the reclaimer.

To establish what these prices should be, would need quite a bit of interacting and discussion between the reclaimer and the farmer. However, approach this on a trial-and-error basis and give yourselves a few weeks to establish how this scheme will work. If this does not benefit both, you would have to either find another solution or “go it alone”. Studies of reclaimers have indicated they are able to command incomes that are above the median in South Africa, and the sector has a few development programmes in place. They are reforming the buy-back centres that structure this sector in the economy. Now is the time to engage with these processes.

Sorting recyclable plastics

Reclaimers hold a lot of knowledge about the sorting and value of recyclables . Plastics, especially, are manufactured in many

different kinds, and each receives a different price on the

open market. By simply sorting plastics and other recyclables, a higher price can be commanded. It is important to separate these plastics at source, either at your farm or by your customer, and this can increase its value. In fact, all recyclable materials need to be sorted into their different types , and this is very important even for metals.

The kinds of plastics that can be recycled include the following:

Note that recyclable plastics have to have a mark on it that indicates what kind it is. These are indicated by numbers and this may facilitate the handling of plastic wastes. This needs to

be brought to the attention of your harvesters – the customers

– as this is a way for them to increase the value that they gain

from harvesting waste.

There are some plastics that are not recyclable, and you may likely receive quite a bit of this. These would have to be discarded in the normal waste management system. To make

this harvesting scheme effective, you need to develop an

education programme with your community and include in the information on how to sort all recyclable materials. You will need to decide whether your customers will sort these recyclables, or if you will sort them on the farm. It may be better that you do it and form a partnership with a reclaimer to

make this effective.

To educate the community you would most likely need a reclaimer to be involved, as they hold the knowledge that the community needs to know, to effectively supply you with recyclables. This means that a secondary enterprise will be located on your farm, and this will also create value on site. What may happen is that some people will almost exclusively supply you with such recyclables and it is with such persons that a partnership can be formed. There will be a lot of labour and time involved in setting up such a system, and it may be best to form a partnership so that you as the farmer can concentrate on growing food.

Recycling metals

Metals are a little bit less complicated, and the major categories include aluminium and steel (which includes almost all metals other than aluminium). Hence, a metal recycling system

is much easier to set up, but you would have to consult your reclaimer. This information also needs to be brought to the information and education sessions that you hold with your community. By making it known to them what metals they can exchange for food, you will create a supply chain that will bring these materials to your farm. Your reclaimer partner can lead

this discussion!

Once again, you need to ascertain the prices that these recyclables can command on the open market. You have to exchange them for less than you can get on the open market and, hence, a discussion and interaction with the reclaimer is important. Then you need to establish the price that you will give for the recyclable materials, and make sure that this does benefit you. However, you may also want to enter an interaction with the customer, to ensure that they also benefit. This is a complicated affair, and I recommend that you discuss all these in a community event that you hold at your farm. In such an event you can establish a process that all the stakeholders to this endeavour will follow and I discuss that below.

High-value biowaste

Some biowastes have high value and it will pay to collect these.

Biowastes can always be composted (“dust to dust”), but this

may take a long time. High-value biowastes include:

1. Old cooking oil: This can be processed to biodiesel and on the Internet, several tutorials and guides can be found on how to make it. Should sufficient high-value cooking oil be harvestable, a new enterprise can be created.

2. Abattoir and butchery waste: Butchers often pay others

to discard their wastes. Bones are a very effective bottom

layer of a deep trench bed, and are full of calcium and also some nitrogen. This is super valuable, and farmers need to make dedicated arrangements with butchers and abattoirs to collect and use this waste.

3. Bulk food waste: At the fresh produce markets and other

places – especially from large commercial farmers, and

also from supermarkets and wholesalers, biological waste is often generated. A good farmer will have arrangements with such entities to receive and use this waste in deep trench beds and in composting systems. At times, you would

be able to find bulk quantities of waste, and this is a real

source of nutrients for your soil.

4. Animal waste: Kraal manure is gold for an urban farmer. Many cattle farmers do not see value in kraalmis or manure and approach them about receiving this waste. This waste can be exchanged for food, and I am sure that a beneficial relationship can be found. Such a farmer will be interested in receiving the third-grade produce that is unfit for human consumption to feed to their animals, and here, an exchange relationship can be built.

are some good examples to see at the Siyakhana Garden

in Bezuidenhout Valley. These may be costly, but some

are certified that they can safely compost human waste.

This may be a solution for some who are able to invest in this. However, this kind of solution should also involve

the state. Until there is a clear technology on offer, and an

accompanying policy, this is a distant dream, but some may be able to realise it. Should you embark on this course of action, do your homework, but remember, this is possible and will emerge at a higher level in policy discussions soon. When this happens, urban farmers need to be ready, as this will immediately secure their viability in the urban area.

7. Human urine is a good source of nutrients as urine turns

into urea, but this may take a long time (about 48 hours).

Note that urine will start to break down immediately after passing and will break down quickly in the soil. Urine may

contain pollutants – that is why we pass it, and you should be careful. Always use it only in conjunction with soil. If

you mix urine with manure, the bacteria in the manure will start metabolising heavy metals and contaminants. The

‘dust to dust’ process will safely process the urine if you

leave it for a week before selling. There are some farmers who exchange urine for food, and they can harvest quite a bit from customers. This is unusual, but note that these materials are all biological and if the urine is, say, added to compost, manure or soil, it would be safe to use, as it will break down quickly in a compost pile or in the soil.

people basics about farming, like composting. Note that these emergent farmers would, in all cases, be willing to

buy seedlings etc. from you, and here, a very beneficial

relationship can be established.

Food-for-food waste: set the prices

Food-for-food waste is a way to increase your penetration into your markets and generate the inputs that you need to sustain your farm. Remember, if you do not institute such programmes

you are competing (on a non-level) playing field with others

who sell foods, as you would need to source these inputs from somewhere.

The way that you price the food or biowaste is important. A R5 cost for 25 litres of waste translates as follows:

The 25 litres will reduce to 7 litres of compost after processing. A 7-litre volume of compost weighs about 5kg depending on moisture content. 30dm square compost bag on the market equals to 30 litres in volume, and weighs about 18kg. It retails for between R30 and R40 on the open market. This translates to R1.66 per kg. R5 for 25 litres of fresh waste is more or less R1 a kg of finished compost, just a bit less than a store-bought bag. This exchange price is thus comparable and, hence, you are not exchanging at a loss.

The above prices are a benchmark, and you can use this to guide your decisions as you enter into negotiation with customers and reclaimers on the price that you will pay for food waste. I would recommend not to give more than R5 for the food waste, but you would have to establish this price by negotiating with your community. This can be best done in a community event at your farm, and I will discuss this below. Note that the saving lies not in the price of the waste, but in eliminating the opportunity cost of finding and buying the waste.

Food waste composting

Once you are harvesting food waste, you need to safely process it. The best way to process such waste would be to do so in a container that keeps pests like rats out but allows insects and smaller creatures to enter the composting area. A compost cage can easily be constructed by an inexperienced welder. You can also drill holes in a rubbish bin lid. Remember, the food that is being composted does not really know where it is, and keep in mind that everything will turn into compost after some time. Should you not have a compost cage, you can simply build a

neat pile – or a cage with old pallets, neatly in a square, until

you can get such a cage.

Another solution is to soak food waste in water until it is rancid and then removing it and then mixing with leaves etc. as part of composting it. Rats will not eat rancid and rotten food. I use my municipal skip to do so, and I mix this food waste with cardboard and leaves to grow my compost pile. You will soon realise what kind of biowaste you can process, and over time, the same wastes will be used in your composting. Note what you get and adapt your composting to what you are processing.

The safe composting of food waste will create a clear image of your farm. The acceptability of this will make a big inroad into convincing your customers that your food is their preferred choice. Please note that Pick `n Pay has started with such a system to compost their own food waste, and they give this to one of their suppliers, a piggery. This kind of process will soon become mainstream, and an urban farmer is in fact positioned much better than anyone else to set up such a system.

Your food waste system does not have to include a compost cage. However, you need a strategy to deal with this waste, and this is a key opportunity that you need to address in setting up your business. My own strategy in dealing with food waste is a three-step process.

1. I first of all soak the food waste, with leaves, cardboard and cartons, in my wheelie-bin which is full of water. I add milk regularly to stimulate Lactobacillus bacteria in this mix and to ensure that Lactobacillus bacteria dominate my composting. This is the source of the bacteria and, hence, I add a lot of milk to condition the downstream processes. These materials will immediately turn rancid in the water. The cardboard bulks up the water and is a source of carbon.

Cardboard, newspaper or paper in general is always added to the wheelie-bin as this is hard to compost. It is not very nutritious, and worms will eat it, but they prefer what we ourselves eat. However, the food waste enriches the waste with nitrogen and prepares the cardboard and other waste for the composting bin.

2. The composting bin is a two-stage bin. It is made up of two rubbish bins, with one suspended above the other, and holes drilled into the top bin. Waste from the wheelie-bin is added to the top rubbish bin, and I also add leaves and other biomatter (as I have a lot). This is similar to a wormery, and this produces lots of worms. The cardboard and food waste are by this time starting to decompose rapidly. The top bin has holes, and some compost falls to the bottom bin, but every two weeks or so, I empty the top bin into the bottom bin, and it would take about three months for the bottom bin to be full. By the time the bottom bin is full, the compost is ready and is highly fertile. This is, however, very concentrated, and to maximise the value of this, I will mix it once again with biomass (lots of leaves) in the next stage.

3. I add the compost from the bottom bin to my open-air compost heap, made mostly from leaves. Because most of my compost is made of the same leaves of London Plane trees that grow in my road, I am expecting it to be low in nutrition and possibly acidic. Adding the bottom bin compost to this pile enriches it and gives the opportunity to build it even bigger with new leaves. The nitrogen from the bins stimulates bacteria and fungi and this processes the compost faster. I leave this for two weeks and by then the whole pile is close to being very mature. I keep this pile covered with see-through plastic to speed up the process as this warms the pile and keeps moisture in.

What I did here is to build several interlinking cycles of nutrient use in this composting process. These Nxazonke build value in each cycle. In building such a system, I am able

to add unprocessed – dry – leaves to each cycle and this mix

increases the volumes and speeds up the process and builds on the nitrogen from the food waste. In this way, a pretty good compost can be made.

However, from this example a few lessons can be learned. We will mostly use the same material for compost, as this would be the most prevalent source in your area. This bulk material will most probably be leaves and sticks and these are rich in carbon, but you need nitrogen in the mix. Hence, the food waste will supplement the carbon, and you should aim for a carbon: nitrogen ratio of 7:1 in your compost. Of course, it will be

difficult to ascertain this without expensive analysis, but keep

in mind that you need quite a bit of nitrogen in your compost to complement the inevitable high quantities of carbon in the leaves and wood that you will be composting.

Reflecting on waste for food harvesting

With the wastes that you gather, note the following:

• Plastic: there are many kinds, and it would be best to partner with a reclaimer in setting up this facility. Separating the different kinds increases their value.

• Biowaste: Certain kinds of biowaste are very valuable on their own. Old cooking oil can be converted to biodiesel (there are several individuals on YouTube who readily convert old cooking oil to biodiesel and use it to fuel expensive cars). If you are able to collect this and keep it separate in a container, you may be able to sell this on. Many people do produce such old cooking oil, spaza shops and caterers, and this could be an important revenue stream. There may be other valuable biological wastes that you could access and look around for them. Even if you are able to only gather fresh green grass clippings, you could use that to start a liquid manure business on your farm.

• Batteries: Batteries are an important and high-value form of waste. Batteries are mostly metal and many metal recyclers will accept batteries. If you can collect and keep batteries separate, you may find a buyer if you can collect in bulk. The same could go for old cell phones and electrical appliances. These contain rare metals and have a high price on the recyclables market.

• Old electrical appliances. Think about setting up your farm as depot where people can bring old appliances for exchange or repair. Partner with someone who can repair these and give them a little space in your shop. Now you are offering an additional service at the farm, and this will attract people. These people can become new customers. Now your farm is a community centre!

• Abundant biowaste: You will gather a lot of food waste through the exchange programme. Note that you need to find and process a very large amount of biowaste if you want your farm to be sustainable. You need to find a source of abundance. Biological waste is your future earnings. Look around and see if you can secure a source of biowaste. Your city’s parks and recreation department may be able to give you all their biowaste. A nearby cattle farmer may be able to give or sell to you their kraal manure. You want to be able to source waste from a factory that, say, produces fruit juice. They may have a lot of biowaste that they pay to get rid of. Restaurants always have food waste – we call it swirl – and this can be used to feed pigs or chickens. If you secure such a source of biowaste, and you have the systems to process it, you will be doing very well.

Conclusion

This chapter details the interesting and “strategic tactics” that an urban farmer can follow to build their urban agricultural enterprise. Only a few of these suggestions have been tested in real-life, and some may or may not work. Success cannot

be fixed on a set of recommendations, and you have to adapt

everything to your farm. These have to be tried in real life and

adjusted as we go along. In the next chapter, we discuss ways in

which a farmer can establish a formal business; how this should

be done, and the benefits of doing so.

Chapter Five

Engaging with state policy and programmes

As a small-scale farmer, you occupy a privileged political position. State programmes in South Africa have a clear emphasis on small-scale farmers and this is politically motivated. However, policy in its entirety is contradictory, and there is a clash between how the state promotes small-scale farmers and how it promotes large-scale commercial farmers.

Large-scale commercial farmers can afford the expensive inputs

for modern commercial agriculture, and the technologies, from seeds to mechanisation to pesticides to irrigation are developed with a large-scale farmer in mind.

A key risk in dealing with small enterprise development programmes is that the approach underlying them could be appropriate to large commercial operations, and not small farms. The state has a vested interest in promoting smallholder participation in global food trade, but may aim to build smaller enterprises into large ones.

The approach in this book wants to identify both an alternative to this and establish a more appropriate alternative path to market for smallholders. We advocate for a low-cost, low-input and capex (capital expenditure) approach to enterprise development. This is why it is necessary to sell yourself, as you will earn very little selling to middlemen who have to take their own cut.

It is important to understand what happens in the global food trade to understand why a large-scale approach is not feasible for a small-scale farmer. First of all, a large-scale approach neglects the savings that any enterprise would have to make to improve productivity on the space available. Commercial agriculture conducts things in “largeness” and such small savings are outside of its view. Hence, we lose the opportunity to build more efficient systems that conserve and repurpose waste as a farming input.

Secondly, farming on a small scale will set you up to successfully farm a larger landholding one day. As mentioned,

all enterprises must seek efficiencies, and a small-scale farm is

the best place to learn to make this work. Should you be able to successfully farm at this scale, larger landholdings will be much easier. However, note that a large landholding will be far away from urban areas, and in this case, you may have to engage with wholesalers. It might be a much better business proposition to stay on a small scale and innovate in this small enterprise.

Small enterprises need to diversify their product

offerings to make it work. A third reason to engage in small-

scale farming is because the means to diversity and to develop processing technology, services and products is much easier on a small scale. Markets are also retail markets, and this ensures higher revenue albeit at higher organisational costs. If you

will be selling only crops, you might find it harder to achieve

a livelihood than if you sell crops as well as seedlings, liquid manures and animal products like meat. Harvesting waste and producing with it may only enable a singular livelihood, and

the enterprise must significantly diversify to achieve some kind of profitability. Experimenting at this scale is much less

risky than trying to set up an enterprise with one “big bang”. The creation of multiple revenue streams, say from growing feed hydroponically, for your own animals and for sale, is one example. This creates value and reduces inputs. Designing your wormery to also capture liquid manures, and blending this liquid with urine and chicken manure, and selling it at high price, may be the only way to make a living from urban agriculture.

Hence, the path to profitability on a small piece of land depends

on you being able to multiply the value of a singular process of resource use. For instance, hydroponic feeds can be used for animals. The manure that results from this needs to be processed. Flies will lay eggs in the manure, and chickens will

find them and feed on this. The processed load of manure can

be given to earthworms, and the liquid can be extracted from this process, and blended with manure to make a liquid manure for sale. The casings can be added to the soil for vegetables. This will thus enable vegetable production at almost no cost, whilst chickens are already produced and fed.

It is by constructing these Nxazonke that profitability can be achieved. It is by moving materials – manure – from one cycle to the next that value is created. The overall design of these processes is easier at small scale – and possibly more effective, as you can intervene easily. This heuristic of interacting cycles of resource use must guide your planning, design and research, and we discuss this in here, and in a latter one where we consider sources of knowledge for urban agriculture.

Where do you want to be in five years from now?

How your enterprise develops depends on how it interacts with those around it, from other businesses to customers and stakeholders. However, develop a mission and vision for your farm, and base this on the unique value proposition that urban agriculture can realise. This UVP is not only your vision and mission, but also the framework which you will use to guide you in setting up your enterprise. Think of what your enterprise

could look like in five years’ time. Create a vision of what you can achieve and think big! Once you have this vision in mind,

work “backwards” from this vision, and develop detailed action

plans (tactics) that will realise this vision step-by-step.

When you develop this vision, note what we discussed in previous chapters. You would want to include a “permaculture” design as part of this vision. Spend time in developing this design, and make sure that you design for water harvesting and orientation to the north. Design the layout of infrastructure (even if you can only build it later on) and design for the movement of materials across the site. Build this vision as a picture, drawing or sketch, or text (or both), and add to it as you go along. This vision can direct your own enterprise development strategies and tactics, and keep it close to you, and adapt it regularly.

When you do set up this enterprise, you will have to engage with many others. This interactive engagement creates space for you to experiment and try new ways of producing and selling. Use this to-and-fro of engagement with others to develop prices, selling strategies, engagement means, communications, and your own systems. Keep your five-year vision in mind, as you will use this to-and-fro interaction to realise this vision.

The most difficult activity is to start the enterprise by producing, trading, engaging and implementing technology, and all this has to be done more or less at the same time to establish the enterprise. How can someone go about doing this from nothing?

Understand what you are aiming for: a small enterprise

with a steep profit structure and almost zero input costs. Such

an enterprise will have the following

education and infrastructure and find a way to set this

up. Make sure that the exchange takes place at the same moment that a sale is made, to reinforce the connection between sales and waste harvesting. Now the customer will immediately see what value waste brings, and immediately

the connection will be made!

to develop these products and services (a waste exchange service). Here, you would need both community education,

partnerships with bakkie traders, and also clear products and services based on this waste exchange mechanism.

customer. Remember this when you reflect on the impact of

your enterprise.

As you can see, the vision and mission accompanying the UVP is quite comprehensive, and this can lead you in developing the enterprise. Once you have established a base for trading, the above-mentioned systems, and others, can be created by working “backwards” from the vision to current reality.

This is what your enterprise may look like eventually. However, this still leaves open the question of how to start if we have very little means.

Before you start: preparation

Your first steps must always be undertaken very carefully, and

you need to keep your risks low to succeed. Think of failure

and what you will do if you “fail”. All you can do is reflect and

learn on what you have done and try again. When starting to

trade, always engage with the customer. You need to find out

how they feel about this particular transaction. Focus on what they want and enquire about their habits. For instance, if you are developing a product for “customers coming home from work”, you could consider many things: you could have such customers on a database, and this can ensure that they receive their product every day at a designated time. Make sure that they understand the payment and pick-up for the product. You may even want to allow them to pay at the end of the month. You could also create a pre-payment system. Remember to

integrate this with waste harvesting!

You can learn a lot by talking to a potential or actual

customer and use the conversation to find out exactly why your

products were not sold, or why they were indeed sold. Engage with them, as there may be a particular way that they would like to receive their produce, and you can be very imaginative in selling it to them. Customers will appreciate this attention, and this is the beginnings of a marketing strategy.

When you think of your enterprise, think of how you can sustain low prices. This can only be achieved in one way: Somewhere in your own supply chains you need inputs to be available at below-market prices. The practice of selling competitively depends on sustaining a below-market price for an input throughout the whole value chain, so that it translates to a below-market price for a product. The importance of below-market prices, both for produce and inputs into the enterprise is supremely important.

Business competitiveness is nothing but sustaining below-market prices in the enterprise. How to sustain a below-market price for goods and inputs? This can be achieved by the waste exchange mechanism, and the savings from this input must be sustained right through to the final price of the produce. The value of the biological waste for your production needs to be more than the discount that you give. This is hard to determine, as your production system is without cash, and it is difficult to see how much it would cost you to produce. However, this can be determined in interaction with a reclaimer and passing this information to the customer, so that we can arrive at the right price for waste. Also look out for prices on the open market, and adjust your offering based on this. This must benefit the farmer, the customer, and the reclaimer. This can only be achieved with a long process of interaction where we compare and evaluate prices over time. This would need some adjustment to take place, but this may just enable you to find the sweet spot amongst these competing interests for the right price for waste exchange and sales.

Starting the business

Start with planning: planning will enable you to make investments on the farm, mainly to acquire the materials needed for a deep trench bed. You should accumulate the materials for a deep trench bed all the time, but you should plan to build your trenches with all materials available when you do. This could

take time and effort, but the local environment must be scoured

for inputs, and you should be familiar with what is available in your area.

The planning, however, should focus on the immediate problem: how to mobilise capital and value to engage in investments on the farm so that trade and production can commence? Your investments will be in labour: training workers, preparing the ground for planting and investing in a deep trench bed and other technology.

To commence with the enterprise, you need a source of

value. You also need land, so, first find land and see if you can

secure a lease for this land. Value can be found in the form of

lots of waste (see the planning above), but this may have to be

converted to cash. As reclaimers are able to do this, you could simply aim to collect a lot of waste and sell this as cash as a

first input in the enterprise.

Below, I describe ways in which you can start the farm. Mix these recommendations so that they work for you. In all cases, a unique approach must be found, and this depends on the wastes and labour that is available to you. Adapt the approaches to what you have available. You have to be imaginative in how you mix these recommendations, so that they work for your farm and your site.

Option no 1: Investing in seeds and seedlings

One way to mobilise enough value to start an urban agricultural enterprise is to invest in seeds, and lots of them. In your planning you should have noted the proliferation of spinach,

Brassica species, like Chomolia or Muchaina seeds (Brassica rapa, or Chinese mustard cabbage -rape), amongst others,

at the end of the winter season. Make a point to harvest very large quantities of seeds, in anticipation of starting a farm next season. Acquiring lots of seeds, and there are many ways that this can be done, sets you up to produce a lot of value that can be exchanged. This is the value that you need to start the enterprise.

Sprouting lots of seeds thus opens up two possibilities:

1. To sell seedlings (a lot). To do this you may have to invest in seedling trays, or you could use newspapers and compost to make seedling punnets. These are sold for cash to mobilise enough money to invest in deep trenches for the next season; and/or,

2. To plant large quantities of easy-to-grow crops, like spinach, Chomolia and Muchaina, or grains, like sorghum and maize, with beans and pumpkins. If you have lots of seeds from other plants, use them! Plant in unimproved soils to save labour costs, and hope for rain and for a sufficient crop from this. You will be hoping for rain, and this is done in absence of the ability to build a deep trench. This is to gather enough value to build the trench in a next round of development. Do not invest a lot of time or effort in this planting, as you would rather plant more plants on more land than planting a few in a fertile deep trench bed. Here, you are focusing more on volume than on effort, and the idea is to sell this to mobilise capital to sustain you so that

you can invest in deep trenches. See option no. 2 below!

Selling seedlings to other farmers is very important. This creates a system of mutual exchange amongst farmers. If you grew a lot of seedlings, and are selling them to mobilise capital, note that those who buy these seedlings will be looking for additional products to use to grow the seedlings. Compost, worms, liquid manure and other technologies can now be sold or exchanged with these farmers. This will create a system of mutual interaction, and you could be the apex farmer who supplies seedlings to others who then sell food to the community. Such a group will be in the market for sophisticated products like liquid manure. Such complex systems are very resilient. Having someone regularly supplying seedlings and fertilisers will stimulate additional farmers. This will create a system that is robust, and multiple farmers will be producing, and they will be supported by secondary activities like seedling and fertiliser production. To be viable, you may decide to only grow seedlings

in your enterprise!

Option no. 2: Plant lots of crops on 90% of the land and invest in a deep trench on 10% of the land

Another strategy that can build on the above is to use 90% of the land to grow a lot of low-input rain-fed crops, as

described above. The 10% left out, will be subject to significant

investment in the form of a deep trench bed. You will also start with lots of seeds, either bought or harvested. You will grow a lot of seedlings and plant as many of them on 90% of your land, and sequence this with the rainy season. The idea is to spend

as little effort as possible on the 90% of land, hope for a good

crop, and aim to sell these rain-fed crops. This is the capital needed to invest in the deep trench.

As you sell the rain-fed crops, you are creating space and cash for yourself to invest in the deep trenches on the 10% of land that you have. The sales of these rain-fed crops must sustain your gathering of inputs for the current and next deep trench and the technology that will accompany it. This is a multi-year strategy that depends on the harvesting and planting of lots of seeds and seedlings as a short-term measure and investment in a deep trench as a long-term measure.

In subsequent years, you need to expand the 10% used for deep trenches, so you create more of them, which are more fertile and will multiply your own efforts on the ground. However, as you move forward, you could find ways to stimulate the rain-fed crops, which you will be planting for the next few years until you have enough deep trenches to focus only on those. Here, you could use compost extracts and liquid manures and also consider irrigation or even chemical fertilisers. The point is to gain a profit from the low-input rain-fed crops so that you can invest in deep trenches and additional technologies that bring higher returns. These higher returns enable the creation of an enterprise.

Option no. 3: Recycling and waste accumulation

From the above, it is clear that the way to start the enterprise is to accumulate lots of value before you farm. As you will be harvesting wastes as inputs for farming, you may decide to either accumulate enough to start a farm, or you could decide to focus only on waste processing and include compost and liquid manure production in this enterprise.

One way to do this is to gain exclusive rights to people’s

waste. You will then sort and separate the different wastes of a

household, and sell this on to reclaimers, or buy-back centres, and sell on organic waste to farmers, or use it yourself. You will be linking reclaiming with farming.

This approach will enable you to accumulate enough biomass to start a deep trench bed. You could at this point elect to focus on a wormery, liquid manure production and compost production. This may make available enough for a livelihood provided that you have access to sufficient households. In this way, you can accumulate enough resources to start a farm, and you can then use one of the options above.

Building the enterprise further

It is important to build the base of the urban agricultural enterprise described above, so that this creates enough value to invest in the future productivity of your farm. This base will need you to engage in sales, and you should thus start setting up the systems of the enterprise as soon as you are starting

to sell. The first transaction may not include waste exchange, but encourage this. The price of this first transaction will be important. Make it low so that the process starts! You will

quickly see how this transaction works. The food sold needs to be balanced with the harvesting of inputs and focus on harvesting as much waste as possible in the beginning, so that

you are safe. Establish this in the minds of the first customers,

until you are ready to host a community event where you can

present this system to the customers and find the right price for

this exchange.

Use the event to then also establish a system of recyclables harvesting, and for this you really only need a big box to place the cans and other recyclables in. People’s understanding of how this works is the gold standard. If they understand, then you have set up this system. Note that the key here is to separate at source, so it is ready to sell, and do not incur additional costs after harvesting.

Once you have established a tradition of hosting community events, you can also start setting up an engagement system with SMS or WhatsApp. This then immediately becomes a loyalty programme and database of customers.

Start processing waste into products: Build compost cages either with metal or with old pallets, and make that sure it looks good. Build a wormery, not only for processing waste and creating liquid manure, but also as an educational installation so that people see what happens with their food waste once they exchange it. You can also start making a liquid manure, and this can be sold firstly to those who bought your seedlings. You thus may want to invest in two rabbits or two chickens at this stage. In all your activities, you should be mindful that you are not only selling but creating the market wherein you operate. The more information that you give to customers, the more layers of farmers and suppliers, the more activity there is, the more dynamic the market will be, and with this, the potential for higher returns.

The future of the enterprise

It is important to always plan ahead and think of the future. Any enterprise is a lappieskombers or Bricolage of activities,

systems, people and things. Keep it like this, as this is flexible and allows you to change things. Be flexible in the way in which you interact, as a flexible organisation can respond better to

new opportunities.

Think of the future when you set up your enterprise. The future systems need to be birthed early in the game: Set up waste exchange, set up community events, set up selling strategies, set up your investments, particularly in deep trenches and irrigation. Invest in a record-keeping system, as you can learn a lot from records. However, to guarantee your future enterprise, it may be better to focus on your ability to change society and people’s behaviour than your ability to control things. We do not know what the future holds, but it

will certainly be different.

Chapter Six

Registering the business,

compliance and finance

The registration of a business is a really important issue to attend to for any entrepreneur. It is necessary to register a business, and it is important to understand what goes on in the background to this registration. Accompanying registration

are many other issues, from compliance, to tax, to finances.

In this chapter, I will set out how to go about thinking about and registering a business. I will also detail what is necessary to register and what the “compliance” universe for an urban farmer looks like. There are many things to attend to in this regard, and in this chapter, I set out some answers.

What happens when we register a business?

Registering a business is part of a more complicated contractual arrangement between the entrepreneur and society. Society allows us to do business, and gives us certain advantages, but also needs something in return in order to give the entrepreneur some advantage and protection as an entrepreneur.

This is part of the larger social contract between society and citizens. When a company is registered, we create a safe space for the business to operate in society. When we register businesses, we register them as “limited liability” entities and organisations. This is to protect the entrepreneur and to give the entrepreneur space to operate the business. This limited liability is a real thing. It means that the entrepreneur and the company are liable to pay damages that come about through the workings of the business, only to the value of the business itself. There is, thus, a limit to damages that anyone can claim from an entrepreneur, and this is the protection that an entrepreneur needs to take risks and start a new venture. Think of it as being married “out of community of property” with your business.

Let’s say that you sell food, and someone becomes really sick from consuming your food. They may sue you for damages caused by the sickness. Say that this person was a billionaire and because of sickness missed an opportunity to build another billion-dollar business. You are liable for these damages that the billionaire suffered. However, if you are registered as a company, your liability is “limited” to the value of your business. Say your chesa-nyama was worth only R10 (what someone would pay for the business). This R10 is thus the limit of your liability, and the billionaire can only sue you for the value of the business, which is R10. Registering a business triggers this kind of protection for the business owner.

If the business was not registered, it becomes, almost by default, a personal liability company, and the liabilities of this company are unlimited, because of not being registered or being formed only as a “sole trader”. In this case, you will be liable for the billions that the billionaire lost, but would most probably be found insolvent, as the business, and you yourself, are not worth as much as the billionaire lost.

As you can see, there are benefits to registering a business. However, to register and enjoy the protection of the state as a limited liability company, you have to subject yourself to governance by the state and society. We, as society, simply cannot let you go and trade with limited liability and not receive

any benefits in return. To be registered, and enjoy protection, we, as society,

need to know that you are conducting business in an honest and accountable way. We need to know that you are following laws, that you protect your customers, and that you are paying taxes. To ensure that companies do behave like good citizens, we thus

subject them to regulation. Each company needs to have their finances audited by an independent auditor. You have to pay for

this service, and it is unallowed for an auditor to do this for

free. This is to ensure that no “favours” or conflicts of interest

enter the space where the company operates. You will pay for the auditing according to how much money you have generated.

Auditing is the cornerstone of how we regulate companies. Auditors look at more than mere finances and will ask questions on B-BBEE (Broad-Based Black Economic Empowerment) status, on how you deal with thefts in your company, how you deal with laws and compliance, and they have the opportunity to express an opinion on your business. They can help you but note how important it is for your own integrity and reputation that you have an INDEPENDENT auditor. You do not need to do much to be audited. The most important thing is to keep a record of all income and expenditure and the auditor can complete your books if they have full access to your records. It will be simple to do so, and it is important, also for yourself, to keep records.

When should you register a business.

Businesses need to be registered, but you have to exercise

judgement on when it is the best time to register your business.

You should register your business only after you have traded

already, and it is not a good idea to register first, before you

have traded. Registration should come after you are trading, have clients and after you have paid your own personal income tax.

In all tax regimes there are minimum thresholds to cross before you need to register. You have to manage these thresholds and await the best time to register your business. Note also that there are different tax categories that you should keep in mind. You are firstly liable for personal income tax, and here there is also a threshold. Your company is also liable to pay tax when thresholds are crossed.

My personal opinion would be to start trading and to keep records. Start accumulating money and save it in the bank,

but hold off on company registration until you have a large

turnover, in the region of a few hundred thousand rand per year. When you start receiving an income, and if it is regular and large enough, register for personal income tax. At this stage, you and the business are probably losing money, as the business may not be paying you “enough”. In a real sense, you are not liable for tax, as you are losing income to the business, which is itself not yet solvent. You have invested your time and your own money in setting up the business, so in a sense, the business owes you money, and, thus, the business is not yet solvent. You are, thus, underpaid, as the business owes you money. No one needs to pay tax in such a scenario.

I would consider registering the business if the money that you receive from the business is sufficient to start paying personal income tax. At this stage, the business may only just be solvent, and turnovers may be very low. At this point, you should register for Turnover tax for the business , and try to keep the business afloat without any undue and large profits, as the business is probably still underpaying you. Turnover tax is an opportunity for emerging business to pay only 1% to 3% tax up to a turnover of R3 million. This is available in South Africa, but similar clauses may be found on other tax regimes.

When you are trading and you are earning sufficiently to trigger tax laws, register for turnover tax for your business. This is a way to enable small business to trade with no undue tax burdens, and this can help you up to the point where your business turns over up to R3 million per year. You will pay a reduced tax (3%) and R300,000.00 on top of this. This is a lot better than the flat rate of 28% that you will pay as a company.

Once you breach the threshold of R3 million per year, you can also pay a reduced tax as a small business corporation and you have to register for this and the reduced rate will apply. This is possible in South Africa, but many other tax regimes may also have a concessionary tax for small business.

It is necessary to strategise how to register a business. It should only be done when you clearly are earning enough money from the business, and tax should not unduly burden you. You should have at least six months of records and trade behind you before you register. You are, in fact, earning the funds for the nation, so be responsible but also mindful of your own interests in this regard.

With the above said, it is best to delay your registration until the moment is right. Selling good food produced in biological ways is a very low-risk activity, with a low likelihood of something calamitous taking place. However, it may be possible for some urban farmers to earn in the region of R3 million per year, and this is important. Registering, paying tax, and receiving some protection from the state, will have deep

effects on society. Establishing local food production and retail

shops as legitimate businesses will place urban agriculture on the agenda as a viable and legitimate path for economic development. Urban agriculture is seen by many as a marginal activity that cannot be taken seriously. If urban farmers do not

build proper enterprises, with services, products, and benefits

for the community, it will always be seen as a marginal activity that is only survivalist.

It is possible that we can create new enterprises that combine production and retail, and these could expand much further. There are many middle-size smaller towns in the world where these ideas really come to fruition. The harvesting of waste and its incorporation into business processes will leave us with a new value and enterprise proposition. It is possible that a few farmers or retailers can expand these ideas further and construct large enterprises that serve specific communities.

By being compliant and by registering, we signal to the world that an urban farmer or retailer is a viable economic proposition and that this can lead to improvements in the food system.

What forms of enterprise are relevant to urban agriculture?

The form of the enterprise, firm or business is an important

issue to think about. It is preferable to have limited liability in any business endeavour. However, the actual form of the business is only partially determined by its form, or category of registration. The intricacies of a business, particularly a partnership, is the intricacies of the contracts underlying the business.

Public and private companies will have contractually

defined trade with their suppliers and clientele. These

determine the actual processes in the business. As soon as

you cross a threshold of size, you will become ‘defined’ in this

way. However, this takes place in a registered business, and leading companies are either private or publicly owned and traded businesses. Publicly traded companies are those that trade shares on a stock exchange, and they have to make their

finances public, so that public investors can make the right

decisions on buying shares or not. Private companies are private

and do not have to disclose their financial statements, but are

regulated. The interests of shareholders govern the company.

Urban agricultural enterprises are small, and have to make clear and good decisions on their registration, and the arrangements that will govern the company. The main choices would be between a private company, a cooperative, a

partnership with others, a corporation for public benefit, or a non-profit organisation. We discuss these below.

Cooperatives

There are many agricultural cooperatives in existence out there in South Africa, and many prefer this enterprise form for agriculture, particularly for small farmers. A cooperative

is defined as an: “autonomous association of persons united

voluntarily to meet their common economic, social and

cultural needs and aspirations through a jointly owned and democratically-controlled enterprise” by the International Cooperative Alliance . This definition could apply to many kinds of activity, but the joint ownership is important. A cooperative should benefit from that which is owned communally, like a piece of land, and it should be the joint ownership, as opposed

to linking together lots of individual ownerships, that should give it an advantage in the market.

For instance, if five persons own four sewing machines, the joint ownership can make the four sewing machines work like five (by structuring the use of the machines) and this should be evident in a cooperative. They thus beat the competition by having to buy only four machines instead of five.

Many cooperatives in South Africa do not own anything jointly, and often, when they do, the use of this joint property is done as if each had individual ownership of a part of this joint

property. This is where disputes and disagreements emerge. It may be better to form a partnership and not a

cooperative and do so based on a joint memorandum of

understanding. Partnerships do not have to be audited, and cooperatives have to, and this can incur savings. You would have to get a lawyer to draw up the memorandum of understanding or incorporation, to avoid disputes later on. However, the mere fact that you are a cooperative will not make you work harder, nor will it let your plants and animals grow faster. Owning

four machines and using them as five will, however, put you

ahead. Most cooperatives do not understand what they have in common, and how to use such a common property as if each had full access to it. Rules and regulations need to be established for the sustainable use of a resource by many. Cooperatives fail because there is no real cooperation, and often people are

merely organised like a bunch of potatoes in a sack!

It may be important to note that the idea of a cooperative

can be further specified. A ‘production’ cooperative will produce

together and aggregate production. This will be sold together, but if the agreements between cooperative members are not right, it may be that those who make a large contribution to aggregate production may not be equitably rewarded, and the gains may be divided equally and not proportionally. All co-ops

would have to have these benefits very narrowly prescribed for

them to function.

It is better to form a ‘marketing’ cooperative than a ‘production’ cooperative. They have to be structured in such a way that each co-op member benefits from communal ownerships, but you have to guard against some “free riding” on the efforts of others. This shows how complicated things could become, and most co-ops are not able to deal with and pre-empt such highly specific conflicts. This is why they fail, as the way that the arrangements are to be made need to reward the individuals, offer them incentives, but still protect the communal base from which all this activity comes.

A partnership may be a better idea. However, partnerships are only the second in the line of enterprise forms that you should be aware of.

A personal liability trader

When you trade, you establish yourself as a personal liability

trader, or ‘sole trader’. This is the most basic form of enterprise and can only be manually registered at the CIPC (Companies and Intellectual Property Commission). You would be liable for any eventuality in this scenario, as you do not enjoy limited liability,

but note that selling unprocessed and fresh foods is not high

risk…. However, everyone has to start here. The unbroken line

of transactions that is your enterprise starts here.

Partnerships

When you trade with others, as “co-owners”, you are engaging in a partnership. Partnerships are governed by contract, verbal or written. It is better to have written contracts and clear

specifications of what is expected of each partner. Partnerships

do not need to be registered at the CIPC, and they are not liable for company tax until they reach a certain threshold. This is a good way to avoid auditing fees, but each member is

liable for personal income tax. A partnership is also subject to unlimited liability, and does not enjoy protection like a limited

liability company.

Private companies

When you are serious about forming your own company, you would have to register as a private company. It is private in the sense that it belongs to you. You do not have to disclose

your finances or anything about the business except to the auditor and the revenue service. You will pay the flat rate 28%

company tax and have to also register for VAT, should you cross a threshold of income. Below, I set out what a company should do to be compliant, and you would have to follow all these prescripts. This company will be limited in its liabilities, and this is appropriate for the large-scale trade that it will do.

Public companies

If you want to seek investors on the stock market, you will form a stock exchange-registered publicly listed company. Because investments are sought from the ordinary public, and to protect the ordinary public who invests in these companies, these public

companies have to make their finances and communications

open to the public. This is to ensure that the public can make an informed choice about investing in these companies, and so society can see that they conduct their business honestly and with integrity. The price of these shares is thus public knowledge, and they can be traded immediately. These

companies also enjoy limited liability.

Corporation for public benefit and non-profit organisations

South African law allows “NGO”-type registration of corporations. Under the Companies Act, you find a category called “Corporation for Public Benefit” and under the

Department of Social Development you can register for a non

profit organisation (NPO). Both these organisations do not

pay tax, and any surplus has to be either reinvested into the organisation or paid out as salaries. Both these organisations need to be audited. However, it is not correct to register here in order to avoid paying tax. This is not really intended for

profit-seeking enterprises. Many, however, do use this, and

present their enterprises as “for the public good”. You should note that, eventually, you would want to register for the right category of organisation, as you want to develop it into a professional organisation.

Other forms of economic organisation

Besides these forms of the “firm”, we can also identify

mutual societies and “clubs” as organisational forms that may be relevant to urban agriculture. A club will function like a partnership but would be structured by the membership contract or constitution. The law will force you to be consistent with your own constitution, and this is how we can regulate business, by insisting on the integrity of conduct.

A mutual society is very much like a cooperative, except that members do not contribute any capital or property to the society. They contribute through their custom, and what they buy. For instance, when you buy a life insurance policy from a mutual society, you become a part-owner of the society. This idea may help with a buying club, which is similar to a stokvel. This is governed by the contract between the members, and we thus say that it is governed through private law – the agreements that people make between themselves.

Being audited

Auditors perform a very important function, accounting for money, but they do so in a way that brings integrity and honesty to dealing with money. They have to be independent of the client, and they express an independent opinion. They will cost you money, and that is why it is important to approach them only when it is needed. You could do so when you are

in a partnership, to bring integrity to the finances and the

relationships between the partners. Note that as soon as you register an organisation, be it a private company or an NPO, the clock starts ticking on day one for your annual audit. Hence,

only register once you have earned enough money to justify the

auditor’s fee, and the tax that you may be paying.

To engage the services of an auditor you need to keep records. Record-keeping will allow you to analyse your sales and activity at the farm, and please see the previous chapters

where we discuss how you should keep records so that you can analyse them.

The services of an auditor will propel your enterprise to a new level of integrity and compliance. However, sequence the services of an auditor with how you are planning the registration of your company. The decision to register, be audited and become compliant in all other aspects needs to be planned and worked towards. Also consider a bookkeeping service, and coordinate this with your audit, as this way may be slightly cheaper.

What must I do to register the business and be compliant?

There are more-or-less 12 steps to follow in registering a business and becoming compliant, according to my colleagues . However, this is a shifting target, and new forms of compliance may emerge at any moment. Compliance is broader than registration and there are many state departments that we need to answer to, to be compliant. It is simply not possible to do this as a one-stop shop, as you would have to assure many entities that you are capable of running the business properly. Engaging with our customers is one way to be compliant to their needs, and you are also governed by this engagement. Some of the things that you can do revolve around customer engagement and education. The Companies and Intellectual Property Commission in South Africa is only one entity that you need to satisfy, and there are very many regulations that you need to be mindful of. You have to note that there is a “universe” of compliance that you have to satisfy, and you would have to be mindful throughout the life of your enterprise to changes in this area.

The main aspects of registration and compliance include the following:

1. Your business needs a name. This name must be unique, and at the CIPC or authority, a search will be conducted to see if this name is unique. A name links with marketing and this name will have to inform your branding.

2. The type of enterprise is also important. You will only be engaged in registering at the CIPC if you want to form a cooperative, a private company, or a publicly listed company. A personal liability business and a partnership do not need to be registered as such at the CIPC, but a partnership needs a written or verbal contract to commence. To do this registration, you need to have an address and premises. You will also have to make available your identity number and many other documents in this regard, as you need to have the legal capacity (18 years or older) to register a business. When you do so, you will be asked for a Memorandum of Incorporation that sets out the enterprise form, officers of the enterprise, and many other aspects, like how you will make decisions and conduct meetings.

3. Should you be using proprietary technology, like patents, trademarks and designs, you have to declare this. Those who own this intellectual property need to be notified that you will be using it. In most cases, you will make such an arrangement when you acquire technology, and this really only applies to high technology that is protected in some way. When you do your own DIY technology, it is not necessary to declare this, as it is not protected by any entity nor belongs to any specific person.

4. If you make claims about products, like skin creams or

herbal remedies, you have to have your claims verified.

Many are in the business of manufacturing their own creams and cosmetics with herbs and plants, and the point is to only make a claim about this that has been tested

and verified scientifically. This is to protect consumers.

If you are making a cream or cosmetics, sell this without making any claims, and this would be acceptable practice. However, note that if anything happens to your customers through the use of these products, you may be liable. It is best to sell them with no claim and to make the customer understand that the product does not make any claims

– even if you believe that it is useful. If you make such

creams and ointments, ensure that you use only natural and benign ingredients.

Market’s “Participatory Guarantee Scheme” for organic

produce. This is producer-friendly and enables smaller

producers to achieve an organic certification at low cost. The certification process will enable you to achieve

organic production, and this is part of the UVP that

you offer, and they will also supply you with a branded label. They will help you to achieve this certification.

This increases the value of your produce, and this is very much worth considering.

5. Local authority trading licence (if applicable). If you sell food, you have to apply for a local authority trading licence. This may be a sufficient form of registration, if you also register for personal income tax and your business operates at volumes lower than tax thresholds. Obtaining such a licence will stand you in good stead in engaging with the local state. The kinds of enterprises that must have a Local Authority Trading Licence , for example, in Johannesburg, are listed below:

• Food provision: You need a licence to sell or supply

meals, take-aways or perishable foodstuff. When the

local authority trading licences were designed, urban agriculture was not on the agenda, and they did not foresee these enterprises to emerge. However, as such a farm trades in food, it seems appropriate to adopt a local trading licence. Please speak to your local ward councillor about this. If you adopt the suggestions in this book, please note that you will be a food trader and you would need a local authority trading licence. This is easy to obtain and mostly needs a payment and there should be no trouble with this. Note that once you have this, you

are “FORMAL”!

6. The revenue service: Everyone and any entity that earns money needs to register for employee tax, company tax, Value Added Tax (should you cross certain thresholds), and owner’s personal income tax. When you register your business at the South African Revenue Services, you have to also register employees as taxpayers. You may have to register to pay VAT, and you yourself have to pay personal income tax. Read this provision with the suggestions that I made above on how to register your business and plan the time and ways that you will register, as this will bring tax obligations. In most cases of UA enterprise development, you will only use temporary labour and you yourself may not earn enough to pay tax. However, it is important to know about this, as you may be asked one day by an inspector…

7. Unemployment Insurance Fund (UIF): South Africa has provision for unemployment insurance, and many other countries do so as well. You yourself and your workers are able to register for the Unemployment Insurance Fund or UIF. This is triggered when you pay them sufficient wages and if you employ people full-time. By paying a UIF contribution (that can be included in the wages of your workers), you can give them some form of protection from unemployment. Should you be a registered business, this can be made available to workers and note that this is a benefit that you give them, and this enhances the value that they receive from your labour contract. Should you not have the funds for this, then you need to employ people only part-time.

8. South Africa provides for injury protection during employment, and many other countries do so as well. COIDA , The Compensation for Occupational Injuries and Diseases Act is a social security measure that protects workers from accidents whilst on duty. Once you are registered as a company, you need to register for this provision. Once you register, you receive a letter of good standing. When one of your workers suffers an injury, this protection will be triggered, and the worker will receive compensation and provision is also made for medical expenses like hospitalisation. Once again, this is a benefit that you extend to your workers and is a bonus in the labour contract.

9. Manufacturing enterprises: In South Africa, enterprises that manufacture must register at the Department of Trade and Industry as a manufacturer. This will bring about important benefits. Manufacturing is a key sector that enjoys priority in state policy, and there are several multi-stakeholder initiatives in place that can help you to build such a business. I am thinking of those that are able to manufacture technology for urban and other farmers.

10. Many opportunities for business incubation transpire in the manufacturing space, and many kinds of enterprise development are organised in a similar way. In these multi-stakeholder groupings, opportunities for funding, mentoring and coaching, and enterprise development opportunities are made available. Once you are reaching revenue that makes you eligible to register your enterprise, find a development programme that can assist you in building your business further. The suggestions made in these pages are different to how agricultural development agencies conceptualise development of new entrepreneurs. Make sure that these development programmes serve the ideas that you want to follow and let them support you instead of them leading you.

11. A compliance universe: Any business has to comply with the rules and legislation appropriate to them. You need to constantly keep an eye out for new developments and legislation that will affect your business. This also includes keeping an eye open for new innovation: technology, production systems, and techniques. To operate a business is not to be taken lightly, and you have to constantly endeavour to ensure that you are able to respond to any and all future challenges. Develop a system of information-gathering and analysis that will help you to stay abreast of new developments. This is a formalisation of your own enquiries into the world, and it helps to systematically keep an eye open for new information that may affect you and your business.

12. Labour relations: Contracts, labour rights, BCEA (Basic Conditions of Employment Act), Skills Development Act, B-BBEE: Employing someone is more than just a labour contract. Your workers have to develop your business for you, and you need to treat them accordingly. They are the means to build your business, and you will benefit if their own learning, skills and competencies improve.

13. All formal employment has to have contracts, even if they are verbal, with your workers. A contract is also the information that the worker needs to do the job best. However, you really have to appreciate your workers, as they are the means for your business to get ahead in the future, and it pays to invest in them. Develop a labour contract together with your workers in an open session where you discuss it together. Give your workers the rights that they are due but also note that you have to create a culture amongst your workers that emphasises their responsibilities to keep the farm and enterprise going. Give them rewards and they will create a culture that supports your enterprise. Do not cast their position as opposing your business but find the sweet spot where they see the value which they receive from the business, and how the business, through their work, creates this value for them and society.

14. It is important to streamline your workers’ culture also with the overall culture and orientation of the farm. You are there to build value for the community in producing food and in producing this food by harvesting the waste in the community. Through your endeavours, you are lowering

food prices and enabling communities to influence their

food choices in a positive way. This is the culture that you are creating, and this leads to your UVP which needs to be part of the labour culture on your farm. By creating such a culture, you will motivate both your workers and the community and build a system that creates value for all. Try this, when you succeed, it will take care of itself.

15. Economic and social governance: As an emergent entrepreneur, you should involve yourself with others, either in a dedicated multi-stakeholder enterprise development programme or with others like you who are also farming. Many of these arrangements will be governed by the Sustainable Development Goals, which we discussed in the beginning. These will be prevalent amongst agencies that can help your business grow, and the state will always have an eye on them. In these stakeholder engagement processes, and in the economy in general, people are attentive to transforming society through business. As an urban farmer who farms sustainably and regeneratively, you are, in fact, a highly lucrative prize and “statistic” for development agencies.

16. You yourself may be female, African and farming sustainably, and you should be selective as to what stakeholder engagement process you become involved in. Do not simply get involved in such processes and think if it does indeed benefit you. As a farmer, your first loyalty lies in your own sales and your own customers. This is why you farm. Get involved in a stakeholder engagement process only if you have a clear objective in mind by getting involved. This could be expanding to new markets, adopting technology or being involved in a development programme that will advance your business. Many will want you to become involved, but remember, you are a farmer to sell food and not to mingle and chat about ideas that may not help you.

Conclusion

Business registration and compliance is your signal to society that you want to be a responsible participant and citizen. However, practice your contribution to the social contract in spirit before you engage in the paperwork or registration. Be compliant to good norms and morals, and place the health of your community, the ecosystem and society foremost in your endeavours.

Registering a business and becoming compliant is a responsible endeavour. The greatest part of this is being financially solvent, and we will discuss that after the next chapter, where we examine sources of knowledge for urban agriculture.

Chapter Seven

The proliferation of new media and an alternative agriculture

With the rise of the Internet, we have seen a proliferation of

media – stories, videos, books and writing, often referred

to as “user-generated content”, and a lot of this is about agriculture. Although these alternative approaches are critical of conventional agriculture, they also sometimes advocate for an uncritical adoption of “new” approaches to agriculture. It may be unclear what is true and what is not.

What should you read and view in this situation? What is important, is not to necessarily spot untrue or misleading or “fake” news – this is also important, but to develop an approach to learning from scientific research and popular innovation, and to identify new themes and approaches to developing your own farm. In this situation, it does not matter if the media is false, what you will be doing is to simply exploit it for useful information.

Hence, in this chapter, we will give an overview of how you should develop your own knowledge and skills on urban agriculture enterprise development, how you should interpret and engage with these sources of knowledge, what you should be looking out for, what would be worthwhile considering, and how you will implement these ideas.

In this book, we are concerned with the development of small enterprises. Often, these cannot be “scaled out” and the option to expand the enterprise may, in most cases, point to moving to a larger landholding. The approach in this book focuses on getting the most value out of a small piece of land, and, hence, the approach detailed here necessarily will focus

on building efficiencies inside the enterprise and making the

most of the “smallness” of the enterprise. Save one rand a

million times!

Most approaches to enterprise development presuppose the opportunity to always “grow” the enterprise to a larger enterprise. Financial support, for instance, supposes that this is the path of enterprise development, and such finances can most often be repaid only if the enterprise becomes “larger”. It is the “larger” volumes of trade in the future that justify extending credit. This growth to becoming larger supports the way that we incubate and finance new enterprises. Recommendations from this camp will only make sense if this is assumed. This prices urban agriculture out of the financing market. This approach is useful only if you have access to enough land to become “big”.

Obtaining and reacting to new knowledge is important. However, when considering knowledge, it will be important in

all cases to understand the necessary natural scientific basis of

the knowledge. If you cannot trace any claim or new knowledge

back to a natural scientific phenomenon, the claims are probably

false. Sometimes claims are made in such a way that they can be tested, and in such cases, you must test the knowledge. However, you must be alert that the knowledge that you want to obtain should be “extendable” right through to retail sales. In such cases, you must be alert to the social cues that would make the sales of a product worthwhile. For instance, you may be selling food at low volumes and even if you sell everything on the farm you may not achieve a livelihood. In these cases, you need to diversify your strategies and develop higher value products, like liquid manure, or chickens, that you can sell

at a higher profit. Chickens will eat what you cannot sell. In

such a case, you need to sharpen your waste harvesting so that you can process the chicken waste to a liquid manure that commands a high price on the market that would make your

efforts worthwhile. You could also grow food for your chickens with sprouting seeds, and this will be very effective, as you

can grow a lot of food for animals by sprouting seeds. In this case, the activity of sprouting seeds makes it worthwhile to grow chickens.

You should also keep in mind your labour productivity and its convergence with the use of technology. By linking your workers with technology, or, animal production, you can increase the return on this labour investment. By using labour to move, say, animal manure from pigs, to chickens (to eat the worms in the dung), then to earthworms, and then to the soil, the labour will be part of a Nxazonke – or cycle – of resource use, and the returns in this cycle to labour will include the pigs, the chickens, the earthworms and the soil. Because of the smallness of the enterprise, we need to intensify the movement of materials between the plants and animals on the farm. What you need to do is to read media for insights, clues and new approaches with the above in mind.

In this chapter, we will thus be focusing on the following:

the life-long calling should be cultivated!

• Implementing the ideas you find on the Internet. What should you do when you implement these ideas? What

process of testing and refinement will be necessary?

Strategic planning

Your approach to implementing these ideas is important. You should understand that some actions that you take will have

“strategic” benefits in the future, and some actions are relevant

as a tactic that will, over time, contribute to your strategic goals. Most urban farmers will attract the attention of well-

intentioned government officials, NGO workers and community members. They may offer all kinds of help and advice, but it

will be important for you to be able to identify what support will be conducive to your own strategic interests, and what will

detract you from what lies in your interest and what will benefit

you. If you do not know what lies in your interest, you will be

shunted along by anyone who offers “help”. It is up to you to make the most of this help and note that those offering help

will not know what lies in your own interest.

Your strategic interest should “filter” the kind of help that outside agencies offer to you, so that you can select or influence these agencies to do what really benefits you. If you know where you are going, it is easier to see what you need. Your interests would be guided by the unique value proposition that urban agriculture is able to satisfy. Any support or help that does not directly contribute to your UVP needs to be carefully evaluated.

You may be based on a school where your farm, and you, will often be asked to help with the feeding scheme. This may be important to do, as you may not be paying rent to the school, and they would need something in return for the access to land. In such cases, it would certainly be strategic to accommodate the request, but this may undermine your enterprise in the long run if this is not clearly negotiated. When you enter into a lease contract, try to specify what contribution you should make to the school and/or the feeding scheme. Try to find a way to benefit yourself in return, and keep in mind that you could train students, say, in seedling production, and in return, they will plant many seeds for you. You must certainly assist but note that the biggest impact that you can make on your community is to make food available at lower-than-supermarket prices. Hence, any help that contributes to this UVP would have the highest impact on the community. We have proposed the following as a UVP for urban agriculture:

The creation of a price-reduction mechanism for urban agricultural produce through the local recycling and repurposing of waste

What this calls for is for you to channel and re-direct any support to you towards this UVP. Should you have to assist in the feeding scheme, try to link this with waste harvesting, seedling production, or to recruit parents for increased sales, so that your help with the feeding scheme comes back and supports your enterprise.

Should you be talking to parents, try to impress on them how your farm functions, and emphasise sales of low-priced produce, and the waste harvesting that offsets this reduction

in price. You can also contemplate a full training programme,

and learners will work in the fields in return for training

in agriculture. Should the state be willing to help you, try to redirect their attention to the waste management system, and try to get them

to deliver biowaste from parks and fields to your enterprise. Do

not simply do what they want you to do but try to reorient their activities, so that it supports your enterprise. The realisation of what is in your strategic interest, and

the development of tactics (smaller actions that contribute to your overall goal) to achieve it, is perhaps the key skill that you

need to build your enterprise. When you are in control of where you want to go, you can enhance this with a bit of a look at entrepreneurship theory.

Engaging with media

Searching the Internet is not as clear-cut as we may think, mainly because we are looking for something that the media

may not offer. You will find it hard to identify media that links

retail and production. Engaging with the Internet also means

engaging with artificial intelligence (AI). You need to “train” your profile on the Internet so that it knows what kind of

information you want. Once you start viewing the right videos,

and liking them, the AI will quickly respond and find additional related media for you. You would have to have sufficient data

and time, but eventually the machine will realise what you like. You should also do your own searches, so that you can direct the AI even better.

Some of this will be “fake”, and some of it will be useful. Once again, you could learn a lot from “fake” information if you know what it is that you need, which would be your own strategic interest. Hence you need to read “selectively” or “between the lines” to arrive at something called the “truth” or what you need to know. Remember, we can fool some people some of the time, but not all people all of the time. You need to opportunistically read the Internet for things that will contribute to the increased functioning of your enterprise.

What would be “true”? This idea drives philosophy and there are very many competing explanations of what “truth” is. Some think of truth as a correspondence to reality – a mirror of nature – but this is not so easy. We often do not deal with nature itself, but with a human-constructed reality in the social world.

In this regard, some conceive the truth to be that which all people will agree upon if they can clearly and freely communicate their thoughts to others. Upon resolving differences, a truth that all will agree on will come out. This is also unrealistic, as we often disagree with each other, but in the end, we have to decide for ourselves in a particular society what is valuable and “true”.

There is no easy resolution to these differences. What you need to focus on is the usefulness and applicability of knowledge for your own farm. Should you know, what would contribute to your farm, its UVP, and the daily activities done there, you need to filter all support, help, information, and advice for its contribution to your strategic goals.

Sources of knowledge on the Internet

The Internet has become a “library” to all of us, and it is

currently the first port of call for information. Note the differences in character of websites: some are clearly for

entrainment purposes, some are serious academic sites, and some are even more serious governmental or international sites. There is a lot of disinformation available, and some of it is

driven by ideological means. In the field of agriculture, there is

certainly a “mainstream” discourse evident, and an alternative. You will be consulting both. The spread of an alternative agriculture can be predicted

by critical theory. Agricultural R&D (research and development)

is decisively supported by the mainstream strategic

considerations of large agribusiness and state planning – mostly for food security – and this has delivered a kind of knowledge

with distinct features. However, as this R&D system drives out alternatives and smaller players, we see them emerge in new contexts and with new styles and ways of communication. We will be looking mostly at these alternatives, as these are often more appropriate to small-scale agricultural production.

Small-scale farmers, particularly in areas that are not well integrated with the global food marketing system, have proliferated on the Internet. Below, we will look at some of these farmers, and also look at more scientifically informed sources, to emphasise the scientifically valid approach to increasing the biological-base of our food production.

User-generated content media

Kataps Community Farm Africa. This site is perhaps the most important for an urban farmer. This farmer has investments in the game and many of his lessons can be readily transported to urban townships. I found his videos on chickens insightful, but sometimes some information is lost in the way that their English is used. He is clearly knowledgeable and there are lots of tips on how they make money out of farming. What is noticeable is his vertical integration. He manufactures many inputs for his animals on the farm. Doing so conserves value and allows you to produce higher value products, often from animals.

Elaine Ingham and the Soil-food-web School . Elaine Ingham and her co-workers are leaders in the study of soil biology. In

her work, she has identified the importance of bacteria and fungi

in the metabolism of plants and crops. She also runs a YouTube channel and her most accessible material will be found there.

Her work has led to the appreciation of this soil biology. Others have taken these ideas further and applied them and developed composting extract technologies. These compost extracts have the potential to replace a significant portion of chemical fertilisers on the farm. In this regard, see the Su-Johnston Bioreactor . Someone who has taken this one step further is Jay Young , and he has developed ways to use compost extracts on large landholdings. Build your own Su-Johnston Bioreactor!

JADAM Organic Agriculture https://en.jadam.kr/

JADAM Organic Agriculture is perhaps the most important source of knowledge for small and urban farmers. I found out about them by viewing their videos on making pesticides that do not need protective gear when applying them. I immediately realised that they have the right orientation behind their approach, and I noticed the emphasis on low-cost production. Their website is full of information, and I would recommend taking their suggestions to heart and implementing them.

Spend lots of time on this site!

Andrew Millison is a permaculture designer and instructor from the Oregon State University . His work on YouTube is

very impressive. Here, you will find not only interesting

videos on permaculture and alternative ways to farm, but also a comprehensive course in permaculture design . You can view these videos and equip yourself to undertake your own permaculture design of your farm. You can even earn credits from these courses.

Living Seeds Heirloom Seeds. Living Seeds Heirloom Seeds and their farm is an enterprise clearly focused on the urban and small farmer and the urban gardener. This highly professional organisation has developed videos on sales for small farmers, how to make your own tunnels, and they purvey a host of open-

pollinated seeds that can be saved and re-used in the future. Garden Fundamentals Some sites approach things a little more critically and sceptically than most. Garden Fundamentals often explicitly aim to investigate new approaches, technologies and crops. This healthy scepticism is important, and it is, in fact,

not too difficult to spot disinformation when you can cultivate

this attitude. In most cases, advice is only partially relevant to

emerging farmers in the Global South, and identifying what is

appropriate and what is not, starts with this scepticism. Diego Footer Diego Footer offers a critical but productive view of many new technologies, and his contributions will enable you to cultivate a healthy scepticism. I found his analysis and use of the Su-Johnston Bioreactor highly informative and useful. Take

a look! Another site that regularly de-bunks claims and brings

some realism is The Hobby Farm Guys . Food Forest Namibia. This is a classic “user-generated content” site. These videos tell the story of how a Namibian farmer designed and constructed a permaculture garden in driest Namibia . What struck me was the amounts of water that he could harvest during the rainy season in Namibia. He obviously spent a lot of time designing his garden, and he paid for his farm selling earthworms, often for as little as N$1 per worm. It is clear that this farmer is “farming” social media and donations with this site. This is one interesting way to capitalise the improvements on the farm.

On this farm, he created biochar, swales and ponds and technologies and labour regimes that are of some interest for us. It is also noticeable the many misunderstandings that emerge between him, a Namibian, and developed nations’ audiences.

This site shows us what is possible with some planning and knowledge. The creator obviously has a source of income elsewhere, but he clearly makes income from his farm. In these videos, you will see how to make biochar (by making “fire”!), how to plan and design the flow of water, and how to integrate this with animals.

Amongst his videos, is a full tour of his farm, and it is really insightful what one can do to harvest water, even in one of the driest parts of the world.

Emma Naluyima

Emma Naluyima is famous for her one-acre farm, and her TEDx talk is really important. She also features in the video by the Ellen MacArthur foundation that shows what is possible on a small site. This video shows us how related challenges can all be overcome by integrated biological farming.

The key message of her videos is how she builds value with a vertically integrated farm. Much of what she produces is used again in the farm, and eventually, she sells only the high-value produce, like meat, whilst the crops are mostly used on the farm itself to feed animals. This is an interesting variation of the enterprise form and shows us why a vertically integrated system is justified.

In the Ellen MacArthur Foundation video, she shows us how she built an integrated system of production. This is where she divided her farm into four areas, and it is the interaction between these four areas, and the interaction from hydroponic fodder production right through to compost application in the soil that we need to notice. This hydroponic fodder production is the below-market inputs on her farm (and the source of abundance), and this is sustained right through the value chains right up to the high-value products. This is how profit is made. Here, we see how to construct a system of interrelated cycles of resource use, or Nxazonke. Discover Permaculture https://www.discoverpermaculture. com/ https://bit.ly/3OZv4Ce . Geoff Lawton is an eminent permaculture designer and practitioner, and he trained under Bill Mollison the “father” of permaculture. Here, you will see what you can accomplish by designing for the flows of water, energy, materials and people, amongst others, on the farm. This site details both macro- and micro-interventions that you can make on your farm, and going through this site will be an education in itself.

The Market Gardeners Institute https://www.youtube. com/@TheMarketGardeners . This is a North American site, and note the differences with South Africa when you view this, and any other site. This site is focused on small farms, and the technologies and techniques can be readily adapted to South Africa. The technologies that they showcase are particularly interesting. Many of them you can make yourself.

No Till Growers https://bit.ly/4sBz76j . This is similar to the Market Gardeners Institute’s site and is also North American. However, the techniques and technologies do not always seem to include retail sales. However, this site has videos made by farmers, intended for farmers.

The North American Experience

America and Canada have a notable small farming sector, and they are quite vocal in the media. For many, small farming is a political issue, and this is understandable, given the concentration of large corporates in American agriculture. There is also a well-developed system of support, devised and

conceived through the so called “food stamps” programme (see Wholesome Wave at https://www.wholesomewave.org/history). In a nutshell, American municipalities subsidise food purchases at local farmers’ markets. The farmers give a 50% discount on the use of American “food stamps” and are reimbursed by the municipality. Hence, the farmer receives increased sales and the customer receives a 50% discount. They found this worthwhile as farmers would spend most of that money in the local area, generating tax revenue. This is the base of the North American small farm movement.

In this “movement”, there are clear leaders, including Elaine Ingham above, but take a look at the following sites:

Joel Salatin is a farmer who pioneered a profitable and vertically integrated farm in the east of the USA. See him at: The Lunatic Farmer: https://www.thelunaticfarmer.com/ and on YouTube: https://www.youtube.com/@farmlikealunatic .

This movement is wide, and consider: Seven Sparrows Farm: https://www.youtube.com/@SevenSparrowsFarm

Curtis Stone https://www.youtube.com/@offgridcurtisstone

Curtis Stone made a name as an urban farmer and his video on making “$100K” on a quarter acre is a true classic.

Traditional Media

Farmer’s Weekly South Africa: https://www.farmersweekly. co.za/ Farmer’s Weekly have archived all their articles on their site. This is a substantial resource for farmers. Note that this long-running weekly publication caters to all kinds of farmers, so some advice is aimed at larger commercial farmers. However, reading the Farmer’s Weekly, we immediately realise the diversity amongst farmers in South Africa, and they carry highly pertinent articles that appeal to smaller farmers.

Farmers Weekly UK: https://www.fwi.co.uk/ There is also a Farmers Weekly publication in the UK. This publication is good to mention as it will give you a glimpse of farming in other areas of the world.

A notable resource, even if it would be quite extensive, is the website of the United States Department of Agriculture: https://www.usda.gov/ . Much of this information may be inappropriate or irrelevant to a small-scale farmer, but it is worthwhile to note what this site would contain. The USDA conducts market research and intelligence and forecasting, and here you will find information on global trade and production. The SA Department of Agriculture’s site is: https://www.nda. gov.za/ . Please note that South Africa has multiple departments that are involved in agriculture, and departments that deal with land reform, forestry, fisheries and environment are often combined with agriculture. You should also note that we have Provincial Departments of Agriculture, and many Local Governments have food security, home gardening and agriculture programmes. Agricultural agencies, like the ARC. https://www.arc.agric.za/ Pages/Home.aspx The Agricultural Research Council (whom I also serve) is a prominent agricultural research and development agency. After World War II, the world witnessed the proliferation of these, and the ARC was established in 1992/3, when research units of the then Department of Agriculture were consolidated into one agency. The ARC specialises in agricultural research and development. Some of this is highly relevant to small farmers, but they serve everyone and conduct all kinds of

research, from genetic modifications, right down to deep trench

bed construction. I, in fact, drew on a research report on deep trenches before I started advocating for them. I could not trace this research report again, but I remember it successfully controlled nematodes but had a 300% increase in tomato yield.

This was my inspiration! You will find a lot of additional information on the

information super-highway that is the Internet. The Internet is

today not what we imagined it to be, and it reflects basic human

nature, and unfortunately is not the solution to our information and democratic needs. However, it is super useful and is full of

information. We need to enable ourselves to benefit from the

Internet, and the way to do this is to strengthen our wisdom and ability to spot untruth. There is a lot of truth buried under untruth, and it is always accessible if we are able to critically

strengthen our ability to interpret!

The Water Resources Commission is the source of much of the material that I consulted on deep trenches .

International NGOs also have made space available on the Web for agro ecology. The Global Resilience Design is one such site, but I could not find any information there on retail sales…

What should we be looking for when we view media?

As important as the videos that you view, are the themes that you have in your own mind when you watch them. The development of a perspective on these videos must run along with your own strategic interest, and, hence, we need to now identify the things that you will be looking for when you watch this media. Look for ways to save one rand a million times.

There are extensive themes that you need to keep in mind when viewing media. These categories of interpretation need to be relevant to your UVP, which includes:

There may be other categories, like marketing or digital services, and you need to develop the key themes relevant to your enterprise in your own mind and interpretation. Before you view media, clarify in your mind what you are looking for. This ensures that you will be in control over the ideas and suggestions made and note how these could contribute to your own strategic interest. Your strategic interest is determined by what you want from the enterprise, and this is increased sales and higher earnings. Anything that you do has to contribute to this strategic goal.

Once you know what areas you need to focus on, we can read this media even more deeply, so that we can obtain pertinent information and insights. You are looking at ways to optimise your processes, by eliminating unnecessary steps, for instance. You could also be seeking lower-cost inputs like seeds and note the benefits of bulk buying. Bulk buying will make seeds available for direct sales and boost seedling production. So, searching for a “buy bulk and save” deal is worth it.

Below is a list of themes that you need to look out for when you consult media. These themes will enable you to identify what you need to look for and will also enable you to re-interpret what you see so that it fits your own enterprise.

flow in an operational farm. Note what can be done to create such cycles – mostly the moving of materials from one operation to another – waste from one cycle feeds

another. In this theme, look out for ideas like “multiple enterprises” or “multiple products”, and note that these

can be effectively produced by creating these cycles. This

means that your farm will have multiple products and multiple cycles of resource use and repurposing. You will, thus, be selling both crops and animals, and also products like technology and you will be giving a service, like a training service.

• Agro ecology. Agro ecology is the ecology that results from how you construct processes on the farm and is the all-encompassing science behind the idea of Nxazonke. For conventional agriculture, the ecology is often based on a single crop and its production over the course of a year. An ecology results from the creation of interrelated cycles of resource use. You should construct an agro ecology on your farm that mimics or emulates the cycles of nature. In all these cycles, investments in the soil that you can make are fundamental. Read media with this in mind and try to spot what you can do to make these interrelated cycles of resource use efficient with no leaks between the cycles. Also keep an eye out for how you build the ecological foundations of your enterprise, and note a strong, robust ecology is what will produce for you in hard times.

• Vertical integration. When you manufacture all the inputs for your farm yourself, then you are vertically integrated. By being horizontally integrated, you will have to buy all inputs for the farm, and this will not be possible for a small farm. For a small farm, you simply have to build the interrelated systems of resource exchange, and this can make you vertically integrated. In Emma Naluyima’s farm, it seems that she feeds all produce back into higher-order processes on the farm, and thus mainly sells her top products, pigs. It is noticeable that she does not sell a lot of the milk that she produces on the farm, but rather feeds it to her pigs. She thus avoids the profits that pig feed middlemen take, before the feed even reaches the farm. She also avoids the profit that milk-buyers will make when selling to the final consumer. By using the milk for her pigs, this profit is built into the final price of the pork. If this milk is produced by cows on the farm, eating farm-produced grass, the

value chain is highly vertical and locks value into the final

product. This enables the small farmers to capture all the value in the value chain. This creates higher value as we go up in the food chain, and the inputs that she manufactures that are used mostly in the farm, ensures the production of

a high value product – pork – at low to no cost for the farm. Almost all of the sale is thus profit.

• Middlemen, and intermediaries. As you need to build as much value yourself on the farm, and sell at the highest possible price, you need to understand the impact of middlemen on your profitability. In all cases of selling wholesale to middlemen, you lose value. The alternative is always to sell your products at retail level. The cost of these retail sales needs to be considered, and sometimes it may be better to sell to middlemen. Because you are operating on a small scale, you need to note this, as this is one sure way to lose value. Note the influence of middlemen, and work towards eliminating them in your farming operations, especially your sales.

the magnitude of your investments indicates responsibility and commitment to your farm. Investments are made so that return in the future will be higher. Be very careful with your investments and note your strategic interests. Think of your farm as a pyramid. The top cannot be there if there

is not a sufficient base for the operations to achieve what

you want at the top. Hence, build deep trenches. Acquire animals. Build compost piles that you will use in the future. Invest in technology. It is by making investments that future production costs are lowered.

• Soil is your first investment, but note also investments in training labour, in acquiring technology and in developing a sales presence. Identify what is foundational – deep trenches, a shop and technology – that are needed for future sales of a high-value product, like liquid manures. Investing in seedling production is also good, as you will need them, and they can be sold to farmers, which will create a need for services in the future, like liquid manure production, aggregate sales, or training.

• Multiplying efforts. When you combine skilled labour, using effective technology, under good infrastructure, planting good seeds in good soil, you multiply your efforts. A Nxazonke is one such combination, and this is the way to gain a good return on investment – by maximising productivity on minimum space. Note how others have combined systems. Note how individual systems work and sequence them with the next so that the wastes from one feed the next.

• Making small adjustments inside the enterprise. All enterprises evolve, and you as the entrepreneur must direct and guide this evolution. Once you have established your core transactions, and the operations and system that feed it, you have to constantly make these procedures more efficient. Eliminate steps in production. Sequence steps in your enterprise so that you have as few as possible. The best step, is no step. Eliminate unnecessary procedures and activities. This is how you save one rand a million times.

Conclusion

Reading the world is like reading a poem, and we often don’t know what the real meaning is behind what we see. Often, there is no need for a “real” meaning. When reading, analysing and

interpreting media – which are part of this world, it matters

what you read it for, and what you want to gain from it. As a farmer and entrepreneur, you need to be goal-

directed. You need to identify your strategic interests – aligned with the unique value proposition that your farm can offer and

translate this to a set of themes that you need to search for in the media. In this way, your “system of innovation” is informed by relevant and accomplishable tasks, from designing your farm, to developing and implementing your production system, to creating a waste exchange mechanism, technology and using social media.

Chapter Eight

Business and personal finance

Musimuni Dowelani and Naudé Malan

Setting the scene

“An enterprise is a broad term that refers to any activity or business venture undertaken to generate income” Ahmad and

Seymour (2008)

In Chapter Eight: Business and Personal Finance, we explore the

fundamental financial aspects of an enterprise. An enterprise

encompasses activities such as selling products or services, managing resources, and meeting customer needs. Essentially, an enterprise is a structured organisation with the primary goal

of generating profit and providing value to its stakeholders. This chapter delves into financial planning and accounting, and this

is necessary for your own strategic planning. You need to know how much money you make, how much money is used by the business, and how to strategically use the money that you have.

Strategic planning

Strategy and strategic planning are important aspects of

financial planning. Finances need to be used to ensure the

functioning of the business, and many of these decisions will be tactical decisions, or decisions that you make that are immediately implemented to achieve the overall strategic vision of the enterprise. The way in which you use your money is important. You need to understand that money must be spent

first of all to secure the functioning of the enterprise. Hence,

you need to invest enough to build the base of the productive systems of the enterprise. Remember, that you can only market what you produce, so to develop a marketing system, you must

first ensure that you have a productive base. You also need

enough produce to sell if you have a marketing campaign, and

hence, you must first invest in this productive base.

Your strategic investments in the enterprise must be to secure the ability to deliver your UVP. Hence, you need to invest in production systems, like deep trench beds, you would need to establish a food-for-waste harvesting system, and you need to build a retail presence. Technology supports this. These are strategic investments, as investments in, say, a deep trench will pay off over many years. Once these are in place, it will be strategic to invest in marketing, but not before the productive base is built.

Hence, the sequence and order in which you make investments or purchases is important. You need to sequence the implementation of these systems in a strategic way, so that you achieve your vision of what you want your enterprise to be.

Hence, you will sequence your investments as you design your enterprise. Think about the following:

1. Your overall design of the enterprise is a priority, and designing your enterprise with your vision in mind can

enable you to create savings just by how you lay out the

farm.

2. Your productive potential: Invest in deep trenches, or,

in rain-fed fields, and then plan for implementing deep

trenches as you grow.

There seem to me to be more important issues that need

attention first before you market your produce. A farm is

a productive enterprise and can produce, manufacture and create new products and services. This must receive strategic priority over engagement and marketing as this is the base of the enterprise.

Moving from strategic planning to financial management

Financial management concerns the allocation of resources

(money) at the right place at the right time in an organisation. We will examine how these processes contribute to the financial

health of a business, focusing on the critical relationship

between business operations and financial management and

allocations. Ultimately, the success of an enterprise is gauged

by its ability to generate profit and sustain growth over time,

ensuring that both the business and its stakeholders thrive. This

needs to be secured, as the profit that you make enables you to offer a waste exchange mechanism that indeed creates your UVP for the enterprise. Hence, your financial planning must

prioritise the realisation of the UVP, and it is in this context that you must make your choices on where and when you invest the resources that you generate in the business.

Business finance

An enterprise provides a service or sells goods, which are physical items. An example of a service enterprise would be an

agricultural consulting firm, while a farm supply store is an

example of an enterprise that sells goods. An enterprise that sells goods can also be referred to as a merchandising enterprise.

A farm sells produce, and you also offer waste services to your customers. Strategic and financial planning must ensure the

protection of this productive base of the enterprise.

Six words that are commonly used in financial

management will structure this chapter. There are many other

ways to account for your finances and ultimately you would

need a bookkeeper or accountant to “graduate” to a proper bookkeeping system where you keep a “general ledger” and all your sub-ledgers that would account for individual items and categories of accounting.

However, understanding these six financial words will enable you to understand the financial standing of your enterprise. This knowledge of how much money you can make, how much is tied up in purchases and capital expenditures (capex), and how much cash you have to make these expenditures is needed to decide strategically what you pay for first and what you pay for later. The sequence of how you make these purchases matters, as a capex purchase should enable you to implement a new procedure or process in the enterprise, and this procedure or process must result in net value generated. Hence, an investment in an irrigation system is perhaps more important than investing in videos that aim to promote sales. Before you invest in videos to promote sales, make sure that you have enough deep trenches, irrigation, tunnels and seeds, for instance, to produce enough to market and sell.

You accounting depends, first of all, on your record-keeping. Start with a simple list with income and expenditure. Try to do more as we explained in Chapter 4, but a simple list will do. Once you have enough, start to develop a sheet with the six categories below. Take a look at the table reproduced and copy it or draw up your own.

The six words

These six words that you need to master interrelate and together form a bookkeeping system that enables you to stay on top of your enterprise’s operations, income, and expenditure. This is a rudimentary system aimed to enable you to know what is going on in your enterprise. At a minimum, keep records of all expenses and income. If you can, record also what the income and expenses are, as this will enable your bookkeeper or accountant to complete your books, as they need to itemise each expenditure under a sub-ledger in your accounts.

The six words and concepts that you need to internalise and know about are the following:

• Revenue / Sales Income – The money that you make from each thing you sell or each service you sell. This is all the money that you receive from sales. This is, in most cases, all the money that the enterprise brings in. If you are selling seedlings, all the money that you receive from seedling sales, indeed all the money from all sales constitute your sales income or revenue. If you are an enterprise that only gains income from sales, this will be your only income.

This income can easily be accounted for by simply adding up all sales incomes. If you do not receive any other income, this will be the overall turnover that you receive. Some are able to gain additional income from land rents for instance, and this also needs to be accounted for as this is also income.

• Turnover – The total amount of money that you get when you add all the sales income amounts together, and all other income. It shows you the total amount of money that you received from customers, and others. Some of you will gain income, say, from renting out your shop to a spaza shopkeeper. This is not sales income, but is income, and this contributes to revenue.

If you receive a grant from an enterprise development agency, this is part of turnover. Hence, your income in this year will be much higher. You would have to account for this money in

a very careful way and note that it may affect how you make

decisions on expenditure. You now have a large amount of money available, and it must be used for its intended purpose. Should you receive a grant or a gift, you need to enter it

into the books to see how it affects your enterprise. Now you

must use this money to build your business, and you thus need to distinguish your own strategic interests from the interests of the development agency. They want to see you succeed, but you have to do the right things with this money in order to succeed. However, for you to succeed, you need to be aware of the importance of this grant in your enterprise. This grant needs to be used to further the productive potential of your enterprise

– and is not intended for you to live off this grant. Hence, you

would need to carefully use this grant. In most cases, this will be for a capital expenditure, like a tunnel or machinery or tools. This money must be used for what it is intended, but you need to identify what is most important in spending this money. Take a look again at Chapter 4, where we discuss record-keeping,

amongst others. Grant money must be spent as a priority!

• Cost of sales – You must pay these expenses to make a sale. The things that you sell have to be acquired. You will be producing at almost zero cost but somewhere you have to buy things. If you buy seeds to produce seedlings, you are incurring an expense. If you sell seedlings in the tray, the cost of the tray is part of cost of sales.

We have already calculated the overall turnover, including sales income and other income, and we know how much money

is flowing into the business. If it is products, like wigs or

vegetables, then the “cost of sales” is what those things cost you to buy or sell. Any marketing you do, is part of operating cost, but if you have a permanent sign advertising your farm, it is part of infrastructure. If you buy a bakkie, it is part of overheads, but the fuel that you use is part of cost of sales. Now we can start to calculate the overall amounts of expenditures in the business.

The cost of waste exchange sales will be hard to calculate. This is a cost of sales, as the sale costs you 30% more than if there was no exchange. One way to account for this is to account for the sale as sales income and then account for the R5 discount is accounted for as a cost of sales of R5.

Hence, cost of sales will have to include this discount that you give, and from here we will thus be able to internalise these costs and come to a conclusion that will be accurate. We have calculated the cost of this discount, and it is marginally on par with compost on the open market. Please also note that the opportunity cost of sourcing compost is outside the scope of calculations so far. We will account for transport costs to buy from compost sellers as part of overheads. This is where you save. At this stage of the enterprise development journey, you will not have time to go and buy compost on the open market. Even ordering online and paying for delivery is an opportunity cost. Harvesting and processing waste on site will avoid this opportunity cost, and hence, the profitability of harvesting waste and processing it to compost increases. This intangible calculation is one of the arts of enterprise development.

Sometimes you will know that you are making a profit even

though you do not know the exact amounts of value.

• Gross profit refers to the money that you have left after deducting the cost of sales from sales income and turnover

amounts. You have to calculate your gross profit to know

already at this early stage of your enterprise development

journey if you are making a profit. Here, you will deduct your cost of sales from your turnover (which includes gifts and grants). Now you will see if there are reasons to

continue with the enterprise. If you are making a loss at this stage of your trade, you need to lower your cost of sales, and/or gain income from another source, like a grant. You would have to source seeds, for instance, from a cheaper supplier or harvest them yourself. If you cannot show a

profit here, you need to consider changing the business

or terminating it. You cannot yet pay yourself from this money.

• Overheads or fixed expenses – You have to pay for these expenses even if you do not sell anything, such as electricity, water, rent, and wages.

It is often hard to distinguish overheads from cost of sales. Labour for digging deep trenches, infrastructure like tunnels and irrigation systems, equipment and tools that you need before you make a sale, are part of overheads. This also includes rent that you may have to pay for the land. Equipment, from tools to personal protective equipment is part of overheads. If you pay for Wi-Fi at the farm, this is part of overheads. You should note and keep records of all food that you donate to a school where you may be farming, as overheads, as this is a form of rent. Note the amounts of food donated and record the retail price that you could have received for these donations. Now you can understand what amount you in fact pay for “rent” at the school. This is important information that you need to note for when you engage in negotiations to renew your lease.

Your overheads list will be long and by noting and calculating the costs of your overheads will enable you to understand how many resources you need to continue operating. This list will also show you what you use to keep the business going, and at this point you can perhaps eliminate unnecessary spending. There must be some kind of “balance” or relationship between your spending on overheads and your cost of sales and turnover. Generally, you should invest more in overheads than cost of sales, but this will depend on where you are in your enterprise development journey. In the beginning, you will spend more on overheads (and specifically on infrastructure) than on cost of sales, but over time, you would be spending more on cost of sales (and specifically marketing) as you establish your infrastructure and are producing. Some costs, like labour, will be influenced by your planning and when you plan to build, say, your deep trenches, as these are labour intensive.

This “balance” is thus not a 50/50 balance but is rather a strategic choice. Here your strategic interests must count,

and you should juggle your spending and investments, so that

you always build and enhance the basis of your productivity on the farm. One of the most strategic investments that you can

make is to pay your workers without cash, say, by offering them a meal for labour, that is made entirely from produce off

the farm. Because you cannot command economies of scale, avoiding cash inputs and using your own resources instead of cash is perhaps the most strategic choice that you can make. In this way, you de-link from the global market system, and create a local market of resource exchange. This is cheaper for you, as you always lose when buying on the open market, and you

acquire the profits that you would have received, by “paying”

with your own produce. You are paying them with the value that you have created.

• Net profit or loss – This is the amount left after deducting your overheads or fixed expenses from your gross profit.

You have already deducted your cost of sales from turnover to

arrive at your gross profit. If there was a profit here, you will again deduct your overheads from your gross profit to arrive at net profit or loss. This is the money that you have earned,

and you can pay yourself only now. However, at this point in

the enterprise, you need to exercise your strategic judgement. This figure is your EARNINGS BEFORE INTEREST, TAXES,

DEPRECIATION and AMORTISATION or EBITDA. Should you be a

fully fledged company, your accounting will now deduct interest on credit, taxes, depreciation of assets and amortisation (the amounts that you use when you pay off debt). You should not have any credit and should be paying minimal taxes (but your cost for a local authority trading licence is a tax). As you build

your own infrastructure and DIY technology, they will not really

depreciate, and you may not be paying off a mortgage on your land (accounting for this as rent rather). However, once you

start to grow, your EBITDA will become an important feature of your accounting system. You can, strictly speaking, only pay yourself after accounting for your EBITDA.

The only way that you can improve your enterprise is

to take some of this net profit and reinvest it in the business.

You can also source at lower cost from suppliers, or eliminate them, such as when you sell seedings in hand-rolled newspaper punnets instead of trays. This is how you will improve the functioning of the enterprise, and this money needs to be

invested to optimise or improve a current system (say, the

upgrading of seedling production by building a small tunnel

dedicated to seedling production), or to create a new production

line. Should you have all of your land under deep trenches, you have already optimised your production potential, and then a better choice would be to invest in marketing, by, say, building a spaza shop and renting that out to a shopkeeper. These decisions you need to make on your own and no enterprise development agency can help you. These decisions are best dealt with by yourself and a business mentor, or by consulting a trusted fellow farmer.

Think of the sequences of production and enhance the base of this so that the whole system can deal with higher volumes of goods going through it. To make these kinds of decisions, go through a market opportunity analysis, as we did in Chapter 2. This analysis should indicate to you where is the best place to invest in your business.

The journey to net profit

When an enterprise is established, it is for making money. This

money is referred to as revenue (sales income). The primary goal of an enterprise is to maximise profits. After generating revenue or sales income and generating a turnover, an enterprise will make a gross profit after paying for all cost and expenses directly related to creating the good sold. Operating income or profit or nett profit or loss will be made by the enterprise when the enterprise has paid its operating expenses from its gross profit. Cost of sales and operating cost or overheads are essentially the total costs that arise from the enterprise carrying out activities related to the farming process and the selling of goods and services.

Let’s use the case of Lungelo, who is the sole owner and manager of a small-scale farm in Soshanguve, to illustrate. The farm produces all kinds of kitchen vegetables which are sold on site by Lungelo. Lungelo’s onsite shop is open at least six days a week, from 8 a.m. until 5 p.m. and the whole farm and shop employs one to three other persons. Lungelo received a R5,000 grant from a business incubator and is beginning to build his production system. He has decided to invest most of his time and money in laying out the whole garden and building deep trenches along the contours of the garden. He will build infrastructure later but will try to invest in an irrigation system from the start. He will build a small retail area where he will also exchange waste, and keep his rabbits and chickens close to the retail area.

Lungelo can achieve sales of R1,000 a day, sometimes about 75 bunches of vegetables. However, let’s say 25 of these are with a R5 discount for food exchange. He has one person working full-time and two other employed for five days a week at R100 a day to dig and fill his trenches. Because his farm is on the family home and land, his parents allow him to pay land rent of R100 and R200 in water and electricity a week. At the end of each year, he makes a summary of operations in the income

statement for the enterprise. He owns enough equipment to make them work and has collected enough waste and discarded

materials to fill the trenches and to build a small place for retail

sales and recycling. His rabbits are in donated cages, and the chickens are free to roam in the space surrounded by the rabbit cages. He is already producing on some additional land and

enough is available for the season, as it rained a lot (see the Chapter on How to Start).

Let’s describe Lungelo’s farm’s operations for one week as we

describe the financial processes above.

There are a few things to note with this financial statement:

You should note that the grant income skews the meaning of the table. This indicates income that should be used for more than one week, and mainly for infrastructure, to ensure that the farm can produce. This farm can make only about R850 a week profit, which may be enough considering the low expenses. Three workers also earn wages. This has strategic importance. The grant could be used to pay for two workers to dig trenches in order to safeguard future productivity. One worker should generate sales in order to safeguard cashflow.

This farm produces only a little as income. This may mean that the farm has not invested in enough products (it only sells vegetables) and is not getting enough productivity from the land that is farmed. This calls for investments in infrastructure, and product development. The recycling station should be adapted to make seedlings or liquid manure. It is clear that marketing should not yet take priority. At the moment, the farm relies on the rain-fed fields and has very little to sell. It must have another product available very soon, as the field crops will diminish. Investing now in seedling production is a good thing.

It will take time to produce these seedlings, but there are funds available for compost and seedling trays.

This means that the grant money should be used, but now this is a strategic decision based on what the enterprise needs at the moment. The funding is enough to continue with the deep trenches, and this is important. The production of seedlings is also done for own planting, and these need the trenches to make it worthwhile. Without this funding, and without knowing where the money is going, this decision would have been difficult.

Personal finance

Planning for the future

You should be thinking about your farm as a first step in one

day acquiring a proper rural farm. However, no matter what you do in life, one day you will be too old to work, and it is good to save money for retirement. All that matters is your pension

plan! Consider a retirement fund, or a savings platform like SATRIX. Do a lot of homework before you start saving and note the projected interest rates. Speak to your accountant.

Starting an urban farm may be done just to survive. However, it is a doorway to the real world of business and agriculture, and you will be able to determine your own life path by engaging with agriculture. Here, we build on the uncountable savings and productivity that nature gives us and it is by being prudent, future-oriented, and resource-conserving that an urban farm will thrive. Financial planning is not only about the money, but it also enables you to strategically see what you can do to change your circumstances. The above is only the first step in managing the finance of the business. With good record-keeping and close scrutiny of your finances, you will be able to make the right choice and decisions for your business.

Chapter Nine

Circular enterprises

The idea of a circular enterprise, in a circular economy is the new perspective and innovation I want farmers to take at heart. The video by Dr Naluyima is a great illustration of it. However, there are others, and take a look also at Joel Salatin’s website, ‘Farm like a lunatic’ for additional ideas.

The transformation of waste to food for another organism or cycle is the bedrock of a biological production strategy. In this strategy, you would want to mix crops and animals, as these two form a natural circle. Exploit the accumulation and movement of materials and harvest them regularly from your environment. Create systems where waste from one feeds another. Also note that any biological production strategy must identify and utilise a source of abundant biomatter. You need to find this abundant source near your farm and move all these materials to your farm. You want to add more biomass than can be produced on your farm, and the more that you add, the higher the capacity of your soils will become.

This abundant matter can come from anywhere. Note the foliage and trees in your area. Find a farmer who may

have excess biowaste on their farm. Go to butcheries and

abattoirs and receive their waste and move it to your farm. Form a partnership with the parks department so that you can receive their grass clippings etc. Form close relationships with customers and harvest all their waste. You need a dependable stream of biowaste, and this must be processed on the farm,

and this is the future productivity and profits of the farm.

Conclusion

The approaches and programme sketched in this book is at the moment only partially realised. Many of the things that I describe have been implemented by farmers, but this really only creates a base for a new practice that is open to being studied

scientifically. It is important to establish improved practice before we conduct scientific research. Scientific research cannot

tell us what will work in the future and can only tell us what

did work in the past. Hence, to gain scientific credibility, a concerted effort between scientists and practitioners is needed.

Practitioners need to develop and pioneer new approaches, and only after this is accomplished can we study these practices

scientifically. Of course, we can use science to make predictions

about the future, what could work, but this is a guess based on fact and is better than a guess based on another guess. However,

to create a complete scientific and action research cycle between scientists and practitioners, we first have to creatively develop new approaches and then test them. ‘Testing’ them can be accomplished by farmers, and in the scientific research project, the farmer will still have to grow and develop – and ‘test’ these

crops. The scientist does nothing but observe and interpret. In all cases, it is the creative development of answers that sets in motion the opportunity to conduct a form of action research.

I hope to do so in future with iZindaba Zokudla and present this upgraded material in the iZindaba. Farmers need to implement these recommendations and ascertain whether they will work. This can then be taken up by research, and even probing and collecting what farmers feel about these new approaches would suffice. If farmers feel that this works, it works, and the iZindaba Zokudla that I host alongside this book

is designed to accommodate these insights, share and spread

them amongst others, and reflect and test them in a dedicated

way. What is needed is for urban farmers to boldly implement these ideas, evaluate them, change them, and continue until it

works. Never look back!