Focus | 21 Apr 2012
How to succeed in your agro-enterprise
Processing mushrooms is giving dividence to Cameroon enterprises
The agric and livestock sectors offer the most lucrative opportunities for entrepreneurs in Cameroon.
It is easier to create and run an enterprise in these sectors because of the usual ready market, the fertile soils, easy formalities to create the enterprises and the comparatively few direct taxes involved in the creation and running of such enterprises.
Yet, a good number of enterprises created in this sector are stagnating. There must therefore be a of given that agriculture and livestock products are in very high demand. The products are basic needs. This can be seen in the amount of rice, sugar, milk, maize and fish imported by government to feed Cameroonians in a country where all these can be produced.
Although one cannot under look the nonchalant attitude of government, to provide direct subsidies and modernize this sector, a close examination at the existing enterprises (CIG, Unions, cooperatives…) shows that there is a complete lack of entrepreneurial spirit. That is, most of the groups purportedly formed by many members are in the first place owned by a single individual or co-owned with family members. The spirit of partnership is not really there and sometimes those who try to work together often break away. In this way it is difficult to raise the necessary finance to operate. Sometimes the social economic group is abandoned. Sometimes promoters end up writing projects not for the group members to manage but to look for so-called ‘funding’ that never comes.
Some agro entrepreneurs prefer business enterprises like business establishments (Ets), Limited liability companies (like SARL, SA…) or economic interest groups. In this way they are not only faced with the numerous costly papers for their creation but are entitled to pay higher direct taxes. They are thus faced with larger business structures to manage that need a lot of capital.
An agric entrepreneur who starts to manage a CIG well will definitely find the reason to grow to a company so as to benefit from the advantages of high protection. If at creation, you opted for a large structure without the capital with the hope of getting contracts or having partners join you, with little managerial skills, there is the risk of having problems.
In TFV 159, we gave you modalities to create, run and control general business enterprises after giving you all you needed to create social economic enterprises in previous issues. The aim of all this was to spur you create some private businesses that would help you create wealth and improve on your living conditions.
Vigilant as you are, most of you created social economic enterprises like CIGs, Cooperatives, Economic interest groups and even big agro companies.
Although some of you have gone far, others are still to know what to do. In this issue we are not only encouraging you to create but to run them as business set-ups so as to create wealth. Rather than struggling to see what amount of money can be given as subvention to the groups, group members can work in synergy and make their business boom.
You will also have testimonies from some successful entrepreneurs and those who have failed so that you can easily correct your own errors.
“To create a successful enterprise; have the spirit of an entrepreneur”,
Nomo Julien Pierre, Regional Chief of Service, Social Economy, MINPMEESA,
What does it take for a small farmer to create an enterprise?
Farmers have created CIGs, Unions of CIGs, cooperatives, economic interest groups but many of them are not conscious that these are enterprises. This is because most of them don’t have the spirit of operating like entrepreneurs. The first step to create an enterprise is to have the spirit of an entrepreneur. This means that you should be motivated to create an enterprise that is not yourself, that is like a child to be born. So many farmers have created enterprises that they have put in the cupboards. The enterprise should be borne, fed like a child to grow and then allowed now to produce. This is not the case with millions of Economic interest groups or CIGs created by most farmers. I believe that the beginning of a good enterprise in agriculture is a CIG, then Unions and cooperatives. This will facilitate labour, reduce the risk and facilitate production management. CIGs are enterprises because they are moral bodies. If they want to create big business companies they will be required to have a capital which they wouldn’t get. To create a CIG you don’t need any social capital as a requirement. You don’t need a bank account to create a CIG which is needed for Ets, SARL and SA.
What about those in agriculture that need capital from banks that require business companies?
Members of a CIG, Union, or cooperative represent a financial power to the organization. They can mobilize the capital amongst them and any financial house will give them loans without hesitating if they are really working together. The money raised and saved can also run small projects for the cooperative till they get big.
Some farmers say banks require business companies before granting business loans?
Yes, because they have not realized that the CIG they created is a tool for them to make money. They don’t consider it as an enterprise.
How can these farmers get organized in other to function as a group?
Most farmers’ groups are not organized; they work like individuals rather than groups. They lack the spirit of group work. Some just created the groups because they heard that there were funds to support groups and since the money is not coming, they are discouraged. That is not the spirit of entrepreneurship. Farmers should know that they are powerful economically. Ninety per cent of Cameroon’s economy is based on agriculture where most Cameroonians are found. We have been organizing meetings with them to inculcate the enterprise spirit but most of them are not interested. We organized a workshop on projects, running an enterprise but participation remains very low. We have projects that are helping farmers move from just producing to transforming their crops.
What is the model for running an enterprise well?
The ministries of small and medium size enterprises with the ministry of finance have put forth a framework for Accredited Management Centres, created by business persons and run by them. Farmers by the strength of their numbers can mobilize to get information on modern methods of running an enterprise. The state has already created a framework for this. This is free.
Will this solve the problem of taxes which many entrepreneurs complain of?
These centres are charged with administrative and financial aspects of the affiliated companies. Ones these centres have been created; our ministry and the ministry of finance will put resource persons at their disposal. It is at this level that they have the fiscal advantage.